Safeway Ltd v Newton & Anor, Court of Appeal - Civil Division, October 05, 2017, [2017] EWCA Civ 1482

Issuing Organization:Civil Division
Actores:Safeway Ltd v Newton & Anor
Resolution Date:October 05, 2017
 
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Case No: A3/2016/1518

Neutral Citation Number: [2017] EWCA Civ 1482

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

MR JUSTICE WARREN

HC2015000392

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 05/10/2017

Before:

LORD BRIGGS OF WESTBOURNE JSC

LORD JUSTICE LONGMORE

and

LORD JUSTICE FLOYD

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Between:

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Mr Brian Green QC and Mr Sebastian Allen (instructed by DWF LLP) for the Appellants

Mr Andrew Short QC and Mr Michael Uberoi (instructed by Burges Salmon LLP)) for the First Respondent

Mr David E. Grant (instructed by Eversheds Sutherland International) LLP) for the Second Respondent

Hearing dates: 4-6th July 2017

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JudgmentLord Briggs of Westbourne JSC:

Introduction

  1. This is the judgment of the court. This appeal from the order of Warren J made in the Chancery Division of the High Court on 29 February 2016 raises for determination the date upon which the Normal Pension Ages (``NPAs'') applicable under the occupational pension scheme for employees of the Safeway Group, the Safeway Pension Scheme, (``the Scheme'') were equalised at 65 years old for both men and women (having previously been 65 years old for men and 60 years old for women). The appellant, Safeway Limited, which is the principal employer under the Scheme, contends that NPA equalisation occurred on 1 December 1991, that being the date notified to Scheme members for that purpose by a prior written announcement, and the date by reference to which a subsequent formal amendment of the Scheme by deed was stated to be retrospectively effective. The first respondent, Mr Andrew Newton, who acts in a representative capacity for members of the Scheme with an interest in doing so, asserts that the judge was right to conclude that NPA equalisation did not occur until 2 May 1996, that being the date of execution of the deed by which the Scheme was formally amended. If that is correct, it follows that the NPA for men had also to be treated as 60 rather than 65 for the period between December 1991 and May 1996. The aggregate financial consequence of the determination of this issue is estimated to amount to more than £100 million.

  2. The correct choice between those dates depends upon the resolution of# two issues. The first is whether the power to amend the terms of the pension scheme could be exercised by the principal employer, with the agreement of the Scheme trustee, otherwise than by deed and, in particular, by a written announcement of the terms and commencement date of the proposed amendment. The judge decided that it could not.

  3. The second issue is whether, if the power of amendment could only be exercised by deed, the power to do so retrospectively, for the purposes of equalisation of NPAs, was prohibited by the directly applicable EU principle of equal treatment then enshrined in Article 119 of the Treaty of Rome (now Article 157 of the Treaty on the Functioning of the European Union) to which, like the judge, we will refer as ``Article 119''. The judge decided that Article 119 did have this prohibitory effect, with the result that he held, and so ordered, that NPAs under the Safeway Scheme were only equalised at 65 years with effect from 2 May 1996.

    Disposition

  4. For the reasons which follow, we have concluded that the judge was correct in his determination of the first issue. The power of amendment conferred by the then applicable provisions of the Scheme, namely clause 19 of the Definitive Trust Deed dated 1 April 1984, could only be exercised by deed, and not by written announcement.

  5. As to the second issue we have, unlike the judge, come to the conclusion that its determination raises a question of EU law which needs to be referred to the Court of Justice. Since the application of the correct principle to the facts of this case will therefore remain to be determined by this court in due course, we prefer to express no firm view of our own about its merits. Nonetheless we will explain why, in respectful disagreement with the judge (expressed both in this case at first instance and in Harland & Wolff Pension Trustees Limited v Aon Consulting Financial Services Limited [2006] EWHC 1778 (Ch)), we do not consider the question of EU Law to be acte clair.

  6. The Scheme was originally established and regulated by an Interim Trust Deed dated 16 March 1978 (``the 1978 Deed''). It contained, at Clause 11, the following power of alteration:

    ``(A) The Principal Company may by deed at any time and from time to time before the execution of the Definitive Deed but subject to the consent of the Trustees alter or add to all or any of the trusts powers and provisions of this deed provided that no such alteration or addition shall be inconsistent with the provisions of clauses 2, 5(1) and (2) and 13 hereof.

    (B) After execution of the Definitive Deed the power of alteration of and addition to the trusts powers and provisions of this deed the Definitive Deed and Rules and deeds supplemental thereto shall be as set out in the Definitive Deed.''

  7. As anticipated in Clause 11(B), a Definitive Deed and Rules for what was then described as the Argyll Foods 1981 Pension and Life Assurance Plan was executed on 1 February 1982 (``the 1982 Deed'') by Argyll Foods Limited as employer and Argyll Foods Group Pension Trustees Limited as trustee. The 1982 Deed contained, at Clause 19, the same amendment power as that which I am about to describe, as having been in force at the material time in the 1990s.

  8. The 1982 Deed was replaced on 1 April 1984 by a Trust Deed and Rules between the same parties (``the 1984 Deed''), which contained the following power of amendment, again at Clause 19:

    ``POWER OF ALTERATION OF DEED AND RULES

    The Principal Company may at any time and from time to time with the consent of the Trustees by Supplemental Deed executed by the Principal Company and the Trustees alter or add to any of the trusts powers and provisions of the Scheme including this Trust Deed and the Rules and all Deeds and other instruments in writing supplemental to this Trust Deed and the Deeds specified in the Second Schedule hereto and may exercise such powers so as to take effect from a date specified in the Supplemental Deed which may be the date of such Deed or the date of any prior written announcement to Members of the alteration or addition or a date occurring at any reasonable time previous or subsequent to the date of such Deed so as to give the amendment or addition retrospective or future effect as the case may be.''

  9. At all material times until (at least) November 1991 the Scheme was expressed as providing NPAs of 65 for men and 60 for women. By 1991 this was to be found expressed by way of definition of Normal Pension Age in Rule 2 of the Scheme's Rules. Rule 23 gave the principal company a widely drawn power by notice in writing to the Trustee to augment the benefits conferred by the Rules either for all beneficiaries or in respect of any specified beneficiary or class of beneficiaries under the Scheme. The Rules were annexed as the Third Schedule to the 1984 Deed.

  10. The Second Schedule to the 1984 Deed sets out a convenient list of instruments which had the effect of amending or supplementing the terms of the Scheme, including the 1978 Deed, the 1982 Deed and various Deeds of Amendment, including two between 1978 and 1982, and no less than seven between the dates, respectively, of the 1982 and 1984 Deeds.

  11. On 19 May 1990 the European Court of Justice delivered judgment in Barber v Guardian Royal Exchange Assurance Group (Case - C262/88) [1991] 1QB 344, holding that the direct effect of Article 119 made it unlawful discrimination within the community for pension schemes to provide for different NPAs for men and for women. But the Court of Justice held that (because of the absence of any sufficiently clear prior jurisprudence) the direct effect of Article 119 could not be relied upon to claim a pension entitlement by reason of that discrimination with effect prior to the publication of that decision on 17 May 1990. Subject to that restraint upon retroactivity, imposed in part because of concerns expressed by the United Kingdom as to the large financial consequences for pension schemes which commonly discriminated between men and women in that way, the Court held that it was for national courts to apply Article 119 so as to safeguard the equal treatment right in relation to pensions thereby conferred.

  12. In common no doubt with many others, those responsible for the Safeway Scheme set about responding to the need to equalise NPAs by amendment of its terms. On 1 September 1991 there was published to all members of the Scheme an announcement (``the 1991 Announcement''), to the effect that the Trustee had decided to amend the Scheme by introducing a single NPA for men and women set at age 65, following what it described as a trail blazed by the European Court in the Barber case.

  13. The following are extracts from the 1991 Announcement:

    ``Changes To Your Scheme Benefits

    This announcement brings you advance news of two significant changes to the Safeway Pension and Family Benefits Scheme which the Company and Trustee intend to introduce with effect from 1 December 1991.''

    The first change, about automatic annual increases to pensions in payment is not material to this case. The passages quoted below relate to the proposed equalisation of NPAs:

    ``A common Normal...

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