Sovereign Trustees Ltd & Anor v Glover & Ors

A resolution of pension scheme trustees amends the scheme only if, construed objectively in its surrounding context, it demonstrates an intention to make the amendment immediately. A resolution adopting proposals for future implementation does not itself alter the trusts or rules. Where a trust deed requires notice of meetings, notice should ordinarily be given to every trustee. However, once a meeting is shown to have occurred and was attended by a quorum, the court may presume that proper acts were done where the circumstances justify applying the maxim omnia rite esse acta praesumuntur.

The claimants were trustees of the Oldham Signs Pension and Life Assurance Scheme. They sought directions concerning the winding up of the Scheme, including whether a money purchase section had been validly created in 1998.

The trustees relied on a minute recording acceptance of the employer’s proposals and purporting to authorise their implementation. The issue was whether that minute itself amended the Rules under the amendment powers in the trust documentation.

1. Validity of the meeting. The trust deed required due notice of a trustees’ meeting to be given to all trustees. Although there was no evidence that notice had been given to the absent trustee, the meeting was proved to have occurred and was attended by two trustees, constituting a quorum. In the circumstances, the court applied the presumption omnia rite esse acta praesumuntur and concluded that the meeting was properly convened and that the recorded business was conducted.
2. Construction of the minute. The minute had to be construed objectively in the light of the surrounding circumstances. The relevant question was whether the trustees intended by their resolution to amend the Rules, rather than merely to adopt a policy to be implemented by later amendments. The objective construction principles illustrated by Mannai Investment Co v Eagle Star Life Assurance [1997] AC 749 were applied.
3. The language of the minute referred to the employer’s proposals being accepted and vested the trustees and employer with powers to implement them. Those powers already existed under the amendment provisions. The wording therefore contemplated future implementation, not an immediate amendment. The complexity of the necessary amendments and the contrast with an earlier, detailed amendment minute reinforced that conclusion.
4. The court consequently declared that the money purchase section had not been validly created so as to confer entitlements in respect of transfer payments or contributions. Questions concerning employer consent, notification, excessive amendment and severance did not arise.