Smith, R (on the application of) v Secretary of State for Defence & Anor

A pension-sharing order creates independent pension credit rights, but it does not require those rights to come into payment when the former spouse’s pension begins. Legislation may define the scope and timing of pension rights without depriving the beneficiary of possessions. A delay in payment may fall within the ambit of Articles 1 of the First Protocol and 8, and may constitute indirect sex discrimination under Article 14. It is nevertheless lawful where objectively and reasonably justified as a proportionate means of encouraging work until normal pensionable age and preserving income in later life. The divorce court must address earlier financial needs through other financial provision where appropriate.

The claimant, aged 56, obtained half of her former husband’s rights under the Armed Forces Pension Scheme through a pension-sharing order made on divorce. Her former husband, aged 59, was already receiving his pension. The scheme reduced his payments but deferred payment of the claimant’s pension credit benefits until she reached 60.

She challenged the statutory framework, principally sections 101C(1) and 101B of the Pension Schemes Act 1993, relying on Articles 1 of the First Protocol, 8 and 14 of the Convention. She also alleged sex discrimination under section 29 of the Sex Discrimination Act 1975. The central issue was whether deferring payment until age 60 was incompatible with her rights.

1. Human rights framework. The claimant’s pension credit rights were possessions from the date on which the pension-sharing order took effect. The former husband’s pension rights were also possessions because they formed part of the remuneration earned through military service. The legislation, however, defined the scope and timing of the rights created by pension sharing; it did not deprive the claimant of possessions.
2. Articles 1 of the First Protocol and 8. The court accepted that pension rights could engage Article 1 of the First Protocol and that financial support could fall within private life under Article 8. The impugned provision nevertheless caused no interference. It defined the pension credit entitlement and did not challenge the claimant’s need for support before age 60. The divorce court remained required by section 25(2)(b) of the Matrimonial Causes Act 1973 to consider that need when making other financial provision.
3. Article 14. The provision operated indirectly to disadvantage women in the relevant comparison with former husbands whose pensions were already in payment. A widow was not an appropriate comparator. The discrimination was justified because pension credit rights were intended primarily to provide income in old age, to encourage work until age 60, and to reduce the risk of later reliance on income-related state support. The rule was a proportionate and objectively justified general rule applicable across occupational schemes.
4. Statutory discrimination claim. The claim under section 29 of the Sex Discrimination Act 1975 failed because pension credit members of the Armed Forces Pension Scheme were not a section of the public and the impugned condition was justifiable.
5. Outcome and costs. The claim was dismissed. The claimant was ordered to pay the defendant’s and interested party’s costs on the standard basis. Permission to appeal was refused because the proposed appeal had no real prospect of success and there was no compelling reason for it to be heard.

This was a first-instance judicial review claim. The judgment records that permission to proceed had been granted by Mr Justice Mitting, but the claim was dismissed by the Administrative Court. Permission to appeal was refused.