Hudson & Ors v H. M. Treasury & Anor Rev 1

A claim may be struck out even within a developing area of law where it is plainly hopeless. A claimant relying on possible legal development must show at least a real prospect that the law may develop sufficiently before trial.

An amount notionally taken into account when fixing gross pay is not an employee contribution. Where employees receive all the pay to which they are entitled, that calculation neither transfers a benefit to the employer nor causes an enrichment at their expense. A sense of grievance, without a remediable legal injustice, cannot sustain a restitutionary, trust or fiduciary claim.

Former members of the armed services had left before the Armed Forces Pension Scheme introduced deferred pensions in 1975. They had not completed the service required for a pension under the earlier rules. They alleged that an abatement reflecting pension costs had been applied when their gross pay was fixed and that this amounted to a contribution to the Scheme.

They sought restitutionary relief and also pleaded breach of trust and fiduciary duty against HM Treasury and the Ministry of Defence. Stanley Burnton J struck out the action as bound to fail. The appellants appealed with the judge’s permission. The central questions were whether the alleged abatements could support any of the pleaded causes of action and whether the developing nature of restitution law made summary disposal inappropriate.

1. Appeal dismissed unanimously. Jonathan Parker LJ delivered the judgment. Judge LJ and Simon Brown LJ agreed. The restitutionary and trust claims were plainly and obviously doomed to failure.
2. A developing area of jurisprudence is not immune from summary disposal under rule 3.4 of the Civil Procedure Rules 1998. Courts should ordinarily decide uncertain, fact-sensitive questions after trial, but plainly hopeless claims should generally be struck out. A claimant who relies upon possible future development of the law must show at least a real prospect that the development will occur and permit the claim to succeed.
3. On a strike-out application, properly pleaded primary facts were assumed in the claimant’s favour. An assertion that the abatements were contributions, however, was a disputed legal conclusion rather than a primary fact. Pleading that conclusion could not defeat the application.
4. The appellants had received all gross pay due under the applicable regulations. They had no contractual, proprietary or other entitlement to an amount notionally taken into account when their gross pay was fixed. Considering pension costs before setting gross pay was legally different from deducting an employee contribution from gross pay. The Scheme was therefore non-contributory.
5. None of the three basic elements of unjust enrichment was present. The abatements transferred no benefit to the respondents. The relevant funds were already the respondents’ beneficial property, and the respondents merely avoided assuming an obligation to pay higher gross wages. Any resulting gain was neither at the appellants’ expense nor otherwise attributable to them. The appellants’ sense of grievance did not amount to an injustice for which the law provided a remedy.
6. The trust and fiduciary claims also failed. No property or benefit passed from the appellants to the respondents. Even assuming that fiduciary duties might exist, the pleaded facts disclosed no possible breach. Hopeless proceedings could not continue merely to give claimants an opportunity to air their grievances.

1. Court of Appeal (Civil Division): The appeal was dismissed unanimously. The court affirmed the order striking out the restitutionary, trust and fiduciary claims.
2. High Court, Queen’s Bench Division: Stanley Burnton J ordered on 14 March 2003 that the action be struck out as bound to fail. No citation is stated in the judgment.