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Nicolas Stallworthy QC & Simon Oakes succeed in pensions scheme case


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On 27 June 2016, the High Court handed down an interesting (albeit unsurprising) decision on the substitution of principal employers and the validity of pension scheme deeds in Shannan & Ors v Viavi Solutions UK Limited & Ors, Re: the Wandel & Goltermann Retirement Benefits Scheme [2016] EWHC 1530 (Ch). The judgment is available to read here.

Of central importance was the identity of the Scheme’s principal employer at various points in the Scheme’s history, all the way back to 1994.

The wide-ranging judgment of Timothy Fancourt QC, sitting as a Deputy Judge of the High Court, examines issues including:

  • the formalities required for the exercise of powers in particular a power to substitute the principal employer: Betafence Ltd v Veys [2006] PLR 137 considered;
  • the retrospective scope of powers in particular a power to substitute the principal employer: Bank of New Zealand [2003] UKPC 58 considered;
  • the application of the principle in Re Duomatic [1969] 2 Ch 365 to satisfy consent requirements;
  • imputed intention to exercise powers: Davis v Richards and Wallington Industries Ltd [1990] 1 WLR 1511 and Briggs v Gleeds [2015] Ch 212 considered (in conjunction with the Duomatic principle);
  • recitals in deeds acting as an imputed exercise of power to give effect to a prior purported, but ineffective, amendment: Shinorvic Trust [2012] JRC 081 considered; and
  • estoppel by deed and the extent to which members may be bound through the estoppel’s operation on the trustee.

On the most significant issues – concerning whether a 1999 Deed was valid – the Judge found in favour of the arguments presented on behalf of the Scheme’s members.

It is worth noting the use of the Duomatic principle in determining that:

  • consent given (in the 1999 Deed) by a parent company to a change in principal employer also imported the consent of its wholly-owned subsidiary company (which was not itself a party to the 1999 Deed); and
  • an intention to exercise a prior power, in order validly to exercise a further power, could be imputed where the parent company’s exercise of power also constituted a binding agreement by or on behalf of its wholly-owned subsidiary.

Nicolas Stallworthy QC and Simon Oakes of Outer Temple Chambers, acting for the Representative Beneficiary, were instructed by Stephenson Harwood LLP.

The Trustees were represented by James McCreath, instructed by TLT Solicitors LLP; the Company was represented by Jonathan Evans QC and Bobby Friedman, instructed by Shoosmiths LLP.


Barristers: Simon Oakes | Nicolas Stallworthy QC
Categories: News