Gallaher Ltd. v Gallaher Pensions Ltd. & Ors

Gallaher Ltd. v Gallaher Pensions Ltd. & Ors

The court found that, despite the clear wording of Rule 7A, there was convincing evidence of a continuing common intention by GL and GPL that guaranteed annual increases should apply only to pensions in excess of the GMP. The 1987 Deeds did not reflect this intention due to a mistake. Rectification was therefore ordered to align the Deeds with the parties' true intention. Delay and bona fide purchaser defences failed.

Parties
Claimant: Gallaher Limited; First Defendant: Gallaher Pensions Limited; Second Defendant: C Foster; Third Defendant: D Silver
Jurisdiction
England and Wales
Judgment Date
21 January 2005
Procedural Posture
Civil (pensions/trusts) / Judgment After Trial
Outcome
Rectification granted
Legal Topics
Rectification of Deeds, Interpretation of Pension Scheme Rules, Mistake in Voluntary Transactions, Trustee Duties, Hastings Bass Principle
Trust Law Pensions Law Equity Rectification of Deeds Interpretation of Pension Scheme Rules Mistake in Voluntary Transactions Trustee Duties Hastings Bass Principle

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Parties

Gallaher Limited

Claimant

Gallaher Pensions Limited

First Defendant

C Foster

Second Defendant

D Silver

Third Defendant

Procedural Posture

Civil (pensions/trusts) / Judgment After Trial

Legal Issues

  1. 1 Proper interpretation of Rule 7A in the 1987 Deeds regarding pension increases and the GMP element
  2. 2 Whether the 1987 Deeds should be rectified to reflect the parties' common intention
  3. 3 Whether the 1987 Deeds should be set aside for mistake

Ratio Decidendi

The court found that, despite the clear wording of Rule 7A, there was convincing evidence of a continuing common intention by GL and GPL that guaranteed annual increases should apply only to pensions in excess of the GMP. The 1987 Deeds did not reflect this intention due to a mistake. Rectification was therefore ordered to align the Deeds with the parties' true intention. Delay and bona fide purchaser defences failed.

Court Disposition

Rectification granted

Orders

  • Rectification of the 1987 Deeds in the manner stated in paragraphs 2, 3 and 4 of the prayer in the Particulars of Claim.