Avon Cosmetics Ltd v Dalriada Trustees Ltd & Ors (Re Pension Scheme) [2024] EWHC 34 (Ch) (17 January 2024)

Avon Cosmetics Ltd v Dalriada Trustees Ltd & Ors (Re Pension Scheme) [2024] EWHC 34 (Ch) (17 January 2024)

Assuming the CARE Amendments are invalid as against FS Winners due to breach of the Fetter, the amendments are not wholly void but are severable and remain valid as regards Revaluation Winners, whose accrued rights are not prejudiced. Severance is permissible because the valid application to Revaluation Winners does not substantially alter the purpose or effect of the amendment as it applies to them.

Citation
[2024] EWHC 34 (Ch)
Parties
Claimant: Avon Cosmetics Limited; First Defendant: Dalriada Trustees Limited; Second Defendant: Michelle Parczuk; Third Defendant: Karol Lewandowski; Fourth Defendant: Anna Tolley; Fifth Defendant: Nereu Daltin Neto; Sixth Defendant: John Paul Watson; Seventh Defendant: Richard Pinnock
Jurisdiction
England and Wales
Judgment Date
17 January 2024
Procedural Posture
Pension Scheme Amendment Validity Proceedings / Judgment on Preliminary Issue Regarding Severability and Effect of Amendment on Revaluation Winners
Outcome
CARE Amendments valid and effective for Revaluation Winners; invalid as against FS Winners to the extent of prejudice to accrued rights.
Legal Topics
Pension Scheme Amendments, Severance of Invalid Amendments, Scope of Trustee Powers, Accrued Rights Protection, Interpretation of Trust Deeds
Trusts Pensions Equity Pension Scheme Amendments Severance of Invalid Amendments Scope of Trustee Powers Accrued Rights Protection Interpretation of Trust Deeds

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Parties

Avon Cosmetics Limited

Claimant

Dalriada Trustees Limited

First Defendant

Michelle Parczuk

Second Defendant

Karol Lewandowski

Third Defendant

Anna Tolley

Fourth Defendant

Nereu Daltin Neto

Fifth Defendant

John Paul Watson

Sixth Defendant

Richard Pinnock

Seventh Defendant

Procedural Posture

Pension Scheme Amendment Validity Proceedings / Judgment on Preliminary Issue Regarding Severability and Effect of Amendment on Revaluation Winners

Legal Issues

  1. 1 Whether the CARE Amendments to the Avon Cosmetics Pension Plan are wholly invalid or severable such that they remain effective for Revaluation Winners but not for FS Winners
  2. 2 Whether the exercise of the power of amendment in breach of a fetter (proviso) renders the amendment void in its entirety or only to the extent of the breach

Ratio Decidendi

Assuming the CARE Amendments are invalid as against FS Winners due to breach of the Fetter, the amendments are not wholly void but are severable and remain valid as regards Revaluation Winners, whose accrued rights are not prejudiced. Severance is permissible because the valid application to Revaluation Winners does not substantially alter the purpose or effect of the amendment as it applies to them.

Court Disposition

CARE Amendments valid and effective for Revaluation Winners; invalid as against FS Winners to the extent of prejudice to accrued rights.

Orders

  • Declaration that the CARE Amendments are valid in relation to Revaluation Winners' accrued rights.
  • Declaration that the CARE Amendments are invalid as against FS Winners' accrued rights to the extent they are prejudiced.