Trustee Solutions Ltd & Ors v Dubery & Anor

Trustee Solutions Ltd & Ors v Dubery & Anor [2006] EWHC 1426 (Ch)

Is a case involving the valid amendment of the Rules of a pensions fund.

Lewison J held that there were a number of reason why Deeds of Variation need to be in writing and signed by the Trustees and other parties.

At [34] Lewison J stated:

“As it seems to me there are a number of possible reasons (each of which I would regard as being at least rational):

  • i) as a means of definitively authenticating documents amending the rules;
  • ii) as a means of preserving evidence of amendments long after trustees have ceased to hold office;
  • iii) as a means of reminding signatories of the importance of the decisions they are making;
  • iv) as a means of ensuring that the trustees act and are seen to act unanimously;
  • v) as a means of protecting the beneficiaries under the trust.

I was taken to the decision of Neuberger J in Bestrustees v Stuart [2001] Pens LR 283. Neuberger J was considering the requirements of a document that was said to have altered the rules in accordance with a power of alteration contained in clause 16 of the scheme under consideration in that case.

Neuberger J said in para 33 of his judgment:
“I bear in mind that a pension scheme is likely to continue for a substantial period of time and that those most affected by them and entitled to protection from the trustees, the employer and indeed the Court, will be people who are comparatively poor, who will not have easy access to expert legal advice, and who will not know what has been going on in relation to the management of the Scheme. In those circumstances, it seems to me that protection of the beneficiaries requires the Court to be very careful before it permits a departure from the plain wording and plain requirements of the trust deed. Further, it is not as if this was a case where at the date of the trust deed there was a difference of identity between the trustees and the employer: they were the same person even then. Accordingly, I think the Court should be particularly careful before effectively overriding the requirement that there is some sort of written record which can be said to amount to an authority within the meaning of clause 16 of the definitive deed.”
“I refer back to the point to which I have already made reference, namely, that bearing in mind that this is a trust, and bearing in mind the likely long life of this trust and the ignorance as to what has been going on on the part of the beneficiaries, it seems to me that the Court should not be too ready to waive a requirement of written documentation when the Scheme, and the trust deed under which it is set up, specifically require it. Of course, in this sort of case one often finds oneself treading the somewhat blurred line between requiring the terms of a particular deed to be complied with, while not being too pedantic and exacting in one’s requirements.”

I do not regard these observations as suggesting that the court has power to sanction any departure from the requirements of the deed as properly construed. An avoidance of pedantry, and the need to protect beneficiaries may well be powerful factors in choosing between rival constructions; but once the requirements of a valid means of alteration of the rules has been determined as a matter of construction, either a document satisfies those requirements or it does not. Nor do I think that Neuberger J can have meant that the court had power to waive requirements of the deed as properly construed. It is always open to the parties to a contract to waive one of its requirements, but that is a matter for them; not for the court.”

At [37] Lewison J stated:

“Had I reached the opposite conclusion, I would have held that in any event the documents relied on were inadequate to amend the rules. The memorandum from the trustees did not purport to amend the rules. On the contrary, it set out three possible options. The announcement did not purport to come from the trustees. It came from the board of the company. It did not say that the trustees had decided anything; it said that the board had made the decision. The board was entitled to act in the interests of the company. The trustees were required to act in the interests of the beneficiaries. Those interests might well have conflicted. A statement that the board had reached a decision is, in my judgment, inadequate to count as a decision by the trustees. I would also have had considerable difficulty in reading the announcement with the memorandum; since the latter did not refer to the former. But even if they were read together, the memorandum only sets out choices; and consequently it cannot show what the trustees (as opposed to the board) actually decided”.

 

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