The PNPF Trust Company Ltd v Taylor & Ors, Court of Appeal - Chancery Division, June 28, 2010, [2010] EWHC 1573 (Ch)

Reporting Judge: [2010] EWHC 1573 (Ch)

President: The PNPF Trust Company Ltd v Taylor & Ors

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The PNPF Trust Company Ltd v Taylor & Ors, Court of Appeal - Chancery Division, June 28, 2010, [2010] EWHC 1573 (Ch)

Neutral Citation Number: [2010] EWHC 1573 (Ch)

Case No: HC08C02054

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 28/06/2010

Before :

MR JUSTICE WARREN

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Between :

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Mr Michael Tennet QC and Mr Jonathan Hilliard (instructed by Hogan Lovells International LLP) for the Claimant (as Trustee of the Pilots'National Pension Fund)

Mr Christopher Nugee QC and Mr Jonathan Evans (instructed by Linklaters LLP) for the 1st Defendant

Mr Andrew Spink QC and Mr Nicolas Stallworthy (instructed by CMS Cameron McKenna LLP) for the 2nd Defendant

Mr Paul Newman QC and Mr James Walmsley (instructed by Morgan Cole LLP) for the 3rd Defendant

Mr Brian Green QC and Mr Andrew Mold (instructed by Sacker and Partners LLP) for the 4th Defendant

Mr Robert Ham QC and Mr Richard Hitchcock (instructed by Nabarro LLP) for the 5th Defendant

Miss Sarah Asplin QC and Mr Fenner Moeran (instructed by Eversheds LLP) for the 6th Defendant

Mr Michael Furness QC and Miss Emily McKechnie (instructed by Lawrence Graham LLP) for the 7th Defendant

Mr John Martin QC and Mr John Stephens (instructed by Dickinson Dees LLP) for the 8th Defendant

Hearing dates: 20th, 21st, 22nd, 25th, 26th, 27th, 28th, 29th of January 2010 and 1st, 2nd, 3rd, 4th, 5th, 8th, February 2010

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Judgment

Page 13

Contents table for Pilots Judgment

Mr Justice Warren :

Introduction

1. The Claimant, the PNPF Trust Company Limited (the ``Trustee''), is the trustee of a pension scheme, the Pilots' National Pension Fund (the ``PNPF'' or the ``Scheme''), with a substantial funding deficit. The latest figures (as at 31 March 2009) show a deficit on the buy-out basis (ie on the basis that the Scheme's liabilities are discharged by purchase of annuities) of just over £285m. By the Part 8 claim form, the Trustee seeks the guidance of the Court on the questions set out in paragraphs 1 to 10 of the claim form. The Claim Form has recently been amended to add a new question 4A as an 11th question. Each question has been, in turn, subdivided into issues. There are a total of 39 issues on which a decision is requested.

2. With answers to those questions and resolution of the issues, the Trustee will be, it is hoped, in a position - it will certainly be in a better position than at present - to know how, if at all, it can go about repairing the deficit. In particular, it will be known what entities can be made liable to contribute to the Scheme to meet the benefits to which Members are entitled under the Rules.

3. There are two potential ways of redressing the deficit:

a) amending the Scheme to seek deficit repair contributions from those who have adhered to the Scheme. This raises issues as to the scope of the power of amendment; and

b) applying the statutory provisions designed to remedy deficits in occupational pension schemes, namely Section 75 (``Section 75'') of the Pensions Act 1995 (``PA 1995'') (which provides for lump sum payments from ``employers'' in certain events) and, on an ongoing basis, the scheme specific funding (``SSF'') regime found in Part 3 of the Pensions Act 2004 (``PA 2004'').

4. Unfortunately the scope of the Trustee's options under both the Scheme rules and legislation is unclear. This is due to a combination of:

a) the unusual nature of the Scheme;

b) the terms of the standard form deeds of accession executed by the entities participating in the Scheme; and

c) the complex history of the Scheme.

5. There is, in theory, a third way of addressing the deficit, namely the use of the existing contribution rules to require further contributions from active members and, in the case of members currently employed by a participating entity, their employers. However, the deficit is significantly greater than anything that might be expected to be addressed by ordinary ongoing contributions under the current contribution rule. As at 28 May 2009, there were only 197 active members but the deficit is the large figure which I have just mentioned.

An outline of the Scheme

6. The PNPF is the industry-wide scheme for UK marine pilots established on 1 April 1971. All members of the PNPF, save for a few persons providing administration services to the Trustee, or with ex-spouse pension credits in the Scheme, are marine pilots.

7. The primary responsibility of pilots is to ensure the safe navigation of vessels in their approach to, and departure from, ports. This requires expertise in ship-handling generally and particularly in manoeuvring vessels within ports.

8. While it has statutory origins and a lengthy history (which I will touch on later in this judgment), the Scheme is currently governed by deed and rules adopted on 25 May 1989 with effect from 1 October 1988 (the ``1988 Rules''), as amended from time to time.

The categories of perso...

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