Home Information Cases Trustees Of The Saffil Pension Scheme v John Mark Curzon (2005)

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Trustees Of The Saffil Pension Scheme v John Mark Curzon (2005)

Summary

The Pensions Ombudsman should not interfere with decisions of trustees in relation to claims for benefits under the rules of their particular pension schemes unless the decision was perverse. In the circumstances, ombudsman was correct in holding that an employee was entitled to an incapacity pension under the company's pension scheme where the trustees had come to a perverse decision unsubstantiated by medical evidence.

Facts

The appellant trustees (S) appealed against a decision of a Pensions Ombudsman requiring them to pay the respondent (C) incapacity pension. S were the trustees of a pension scheme of the company for which C had worked as a process operator. As a result of a fall at work C had suffered a back injury which required surgery. However due to his obesity C was unable to have the operation and it became increasingly unrealistic for C to do the physical work that was required of his job. Thereafter C left employment and applied for incapacity pension under the pension scheme. Under the rules of the scheme, C was entitled to the pension if S were satisfied that C had left employment by reason of a permanent incapacity arising from ill health which was likely to incapacitate him permanently or for an indefinite period from doing his ordinary work. S refused C's application. S argued that (1) the ombudsman ought to have held that the phrase "ordinary work" included work of a similar grade, status and salary as the job C was doing, including supervisory or clerical work; (2) the ombudsman was wrong in law in his approach to the question of whether C's injury was likely to incapacitate him "permanently or for an indefinite period"; (3) the ombudsman had no power to grant the pension but should have remitted the matter back to S for reconsideration.

Held

(1) The rule referred not just to "ordinary work" but to "his ordinary work". The expression meant work of the same general nature as that which C had done before he became incapacitated from doing it. It did not include work of a wholly different nature, even if the grades, statuses and salaries of the two kinds of work were similar. As the benefit under the rules was not a discretionary benefit S were under an obligation to pay it to C if he met the conditions for it. (2) In general, a court (and thus the Pensions Ombudsman) should not interfere with decisions which trustees take in relation to claims for benefits under the rules of their particular scheme. However if the trustees decide a question in a way which the court considered perverse the court would intervene, Harris v Trustees of the National & Provincial Building Society Pension Fund (1994) ICR 991 considered. Although there was medical evidence which made several references to C's obesity, it did not do so in the context of saying that he could cure it himself and thereby take a critical step towards ending his incapacity to do what had been his ordinary work. The ombudsman was therefore right to conclude that S had come to a perverse decision unsubstantiated by the evidence. (3) In view of his determination that S had acted perversely, the ombudsman had acted within his powers in deciding to grant the pension rather than remitting the matter back to S. The ombudsman had the statutory power under Pension Schemes Act 1993 s.151 to direct any person responsible for the management of the scheme to take such steps as he might specify in the written statement of his determination.

Appeal dismissed.

Chancery Division
Park J
Judgment date
2 February 2005
References

LTL 9/3/2005 : [2005] EWHC 293 (Ch) : [2005] PLR 267 : [2005] OPLR 113

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