British Airways Plc v Airways Pension Scheme Trustee Ltd [2018] EWCA Civ 1533 (05 July 2018)

British Airways Plc v Airways Pension Scheme Trustee Ltd [2018] EWCA Civ 1533 (05 July 2018)

The Court held that the Trustees' amendment of Rule 15 and subsequent exercise of discretionary pension increase power were not ultra vires the Trust Deed, did not constitute benevolent or compassionate payments, and were not exercised for an improper purpose. The discretionary power was validly conferred and exercised subject to professional advice and a two-thirds majority, and the payments were within the legitimate scope of the scheme's purposes. The challenge by British Airways failed on both grounds.

Citation
[2018] EWCA Civ 1533
Parties
Appellant/claimant: British Airways PLC; Respondent/defendant: Airways Pension Scheme Trustee Limited
Jurisdiction
England and Wales
Judgment Date
05 July 2018
Procedural Posture
Appeal / Court of Appeal (civil Division), Post High Court Judgment
Outcome
Appeal dismissed
Legal Topics
Pension Scheme Amendment Powers, Trustee Discretion, Proper Purpose Doctrine, Ultra Vires, Employer Funding Obligations
Trusts and Pensions Company Law Administrative Law Pension Scheme Amendment Powers Trustee Discretion Proper Purpose Doctrine Ultra Vires Employer Funding Obligations

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Parties

British Airways PLC

Appellant/claimant

Airways Pension Scheme Trustee Limited

Respondent/defendant

Procedural Posture

Appeal / Court of Appeal (civil Division), Post High Court Judgment

Legal Issues

  1. 1 Whether Trustees validly exercised power of amendment under clause 18 of APS Trust Deed
  2. 2 Whether Trustees validly exercised amended Rule 15 discretionary pension increase power
  3. 3 Whether amendment or exercise was ultra vires or for improper purpose

Ratio Decidendi

The Court held that the Trustees' amendment of Rule 15 and subsequent exercise of discretionary pension increase power were not ultra vires the Trust Deed, did not constitute benevolent or compassionate payments, and were not exercised for an improper purpose. The discretionary power was validly conferred and exercised subject to professional advice and a two-thirds majority, and the payments were within the legitimate scope of the scheme's purposes. The challenge by British Airways failed on both grounds.

Court Disposition

Appeal dismissed

Orders

  • Trustees' amendment to Rule 15 and exercise of discretionary pension increase power upheld
  • No declaration of ultra vires or improper purpose