Mitchells & Butlers Pensions Ltd v Mitchells & Butlers Plc [2021] EWHC 3017 (Ch) (12 November 2021)

Mitchells & Butlers Pensions Ltd v Mitchells & Butlers Plc [2021] EWHC 3017 (Ch) (12 November 2021)

The court found that there was a continuing common subjective intention among the relevant decision-makers that the pension increase provisions would guarantee increases in line with RPI up to a cap, and that the Trustee would retain the index selection power (ISP). The introduction of the employer's increase alteration power (IAP) was a mistake and not intended. The 1996 and 2002 deeds and rules should be rectified to restore the ISP and remove the IAP. The bona fide purchaser defence did not apply to M&B's assumption of the Principal Employer role. The 2006 deed and rules also failed to reflect the parties' true intention and should be rectified accordingly.

Citation
[2021] EWHC 3017 (Ch)
Parties
Claimant: Mitchells & Butlers Pensions Limited; Defendant: Mitchells & Butlers Plc
Jurisdiction
England and Wales
Judgment Date
12 November 2021
Procedural Posture
Civil Pensions Rectification / High Court Trial Judgment
Outcome
Claim allowed in substantial part; rectification granted.
Legal Topics
Rectification of Pension Scheme Rules, Equitable Remedies, Bona Fide Purchaser Defence, Interpretation of Trust Deeds, Power of Amendment in Pension Schemes
Pensions Law Equity Trusts Rectification of Pension Scheme Rules Equitable Remedies Bona Fide Purchaser Defence Interpretation of Trust Deeds Power of Amendment in Pension Schemes

Case Brief

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Parties

Mitchells & Butlers Pensions Limited

Claimant

Mitchells & Butlers Plc

Defendant

Procedural Posture

Civil Pensions Rectification / High Court Trial Judgment

Legal Issues

  1. 1 Whether the pension increase provisions in the 1996, 2002, and 2006 deeds should be rectified to restore the Trustee's index selection power (ISP) and remove the increase alteration power (IAP) granted to the employer.
  2. 2 Whether the defendant (M&B) is protected as a bona fide purchaser for value without notice against the Trustee's claim for rectification.
  3. 3 Whether the removal of the ISP and inclusion of the IAP infringed the power of amendment and section 67 of the Pensions Act 1995.

Ratio Decidendi

The court found that there was a continuing common subjective intention among the relevant decision-makers that the pension increase provisions would guarantee increases in line with RPI up to a cap, and that the Trustee would retain the index selection power (ISP). The introduction of the employer's increase alteration power (IAP) was a mistake and not intended. The 1996 and 2002 deeds and rules should be rectified to restore the ISP and remove the IAP. The bona fide purchaser defence did not apply to M&B's assumption of the Principal Employer role. The 2006 deed and rules also failed to reflect the parties' true intention and should be rectified accordingly.

Court Disposition

Claim allowed in substantial part; rectification granted.

Orders

  • Rectification of the 1996, 2002, and 2006 deeds and rules to restore the Trustee's index selection power (ISP) and remove the employer's increase alteration power (IAP).
  • Declarations that the removal of the ISP and inclusion of the IAP were invalid for failure to comply with the power of amendment and section 67 of the Pensions Act 1995.