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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Safeway Ltd v Newton & Anor  EWCA Civ 1482 (05 October 2017)
Cite as:  Pens LR 2,  EWCA Civ 1482,  Pens LR 116
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ON APPEAL FROM THE HIGH COURT OF JUSTICE
MR JUSTICE WARREN
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE LONGMORE
LORD JUSTICE FLOYD
| SAFEWAY LIMITED
|- and -
SAFEWAY PENSION TRUSTEES LIMITED
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
Crown Copyright ©
Lord Briggs of Westbourne JSC:
"(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."
"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."
"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 Pension Age for men and women of 65 – Treating men and women differently in employment practices has long been outlawed. Surprisingly, in the pensions area it has been possible to allow different treatment, especially with regard to pension ages. A recent case in the European Court is set to change all that…"
"European Court blazes new pensions trail
You may have heard about a case recently which involved Guardian Royal Exchange (GRE) and one of their former employees, a Mr Barber. He claimed he had been a victim of sex discrimination when refused a pension from GRE following redundancy at an age when a woman would have received one. After a lengthy battle which ended up at the European Court, the case was settled in favour of Mr Barber. This is an important judgment as it means that changes are now inevitable in many company pension schemes with regard to different retirement ages for men and women.
It is still somewhat uncertain as to how the court decision will work in practice. However, the Company and the Trustee have decided that it is right to act now to equalise Normal Pension Age. They are continuing to monitor the situation and will make any further changes which may be required as a result of clarification of the effects of the judgment."
The 1991 Announcement contained the following footnote:
"It is emphasised that the Trust Deed and Rules are the legal basis of [the Scheme], and that this announcement is intended only for the purpose of general guidance and information. You should note that the changes described in this leaflet represent an alteration to your Terms and Conditions of employment."
Construction of Clause 19
i) A distinction was to be drawn between purely textual amendments to the documents setting out the terms of the Scheme which, he accepted, had to be made by deed, and substantive amendments which, regardless of the text, nonetheless altered the terms of the Scheme with immediate effect upon the trusts affecting the fund, the duties of the Trustee and the rights of members, which could be altered by announcement.
ii) Clause 19 expressly contemplated that alterations of the substance would, or at least could, occur before alteration of the text.
iii) There was a widespread practice within the pensions industry to announce alterations and then implement them prior to reflecting such alterations by formal revision of trust deeds and rules. Clause 19 should be interpreted as having been designed to authorise the adoption of that practice in the administration of the Safeway Scheme.
iv) An interpretation of Clause 19 which prohibited alteration of the substance by announcement would leave a trustee which implemented an announcement in advance of a formal amendment by deed in breach of trust, and therefore vulnerable to personal liability, in the event that no valid retrospective amendment to the text was made. This was, he submitted, an unreasonable, impracticable and therefore unacceptable interpretation.
"… I bear in mind that a pension scheme is likely to continue for a substantial period of time and that those most affected by them and entitled to protection from the trustee, the employer and indeed the court, will be people who are comparatively poor, who will not have easy access to expert legal advice, and who will not know what has been going on in relation to the management of the Scheme. In those circumstances, it seems to me that protection of the beneficiaries requires the court to be very careful before it permits a departure from the plain wording and plain requirements of the trust deed…"
Although in the different context of the requirement for a written record (satisfied in a sense by either of the rival interpretations in this case), we regard that dictum as fully applicable in the present context and as reinforcing the requirement to give plain language its plain meaning.
The Article 119 Issue
"Accordingly, the court should, where possible, give effect to Barber rights by adhering to the provisions of the relevant scheme where it is possible to do so in preference to some other approach. If some departure is required, it should in general, so far as practicable, represent the minimum interference with the scheme provisions."
"It follows that, as far as those latter periods are concerned, Community law imposed no obligation which would justify retroactive reduction of the advantages which women enjoyed."
The "latter periods" to which reference is there made appear to be the periods between 17 May 1990 and 1 July 1991, and the period prior to 17 May 1990: see paragraphs 18 and 19.
Section 62 of the Pensions Act 1995