Catchpole v Trustees of the Alitalia Airlines Pension Scheme & Anor

An appeal from the Pensions Ombudsman was allowed. The Ombudsman must determine substantive pension disputes by applying established legal principles. Estoppel by representation requires a clear representation, reliance and detriment, assessed through the broader question of unconscionability. Reliance may consist of a failure to act, including failing to marry where marriage would have secured the benefit. A pension-scheme trustee’s misrepresentation may bind the trustees, their successors and the scheme’s beneficiaries where the claimant could and would have obtained the benefit as of right, without any discretionary decision or scheme amendment. The adverse effect on other beneficiaries did not, on these facts, make it unconscionable to give effect to the estoppel.

The appellant’s long-term partner was a member of the Alitalia Italian Airlines Pension and Life Assurance Scheme. In response to her request for clarification, an employee of the sponsoring employer, acting on behalf of the trustees, incorrectly stated that the scheme definition of spouse included a person living with the member as a spouse. The partner died before the appellant’s claim was resolved.

The trustees rejected his claim to a spouse’s pension. The Pensions Ombudsman found maladministration but concluded that it was not more likely than not that the couple would have married and that the maladministration had caused no compensable loss. The appeal concerned whether that conclusion was legally sustainable and whether the representation created an estoppel entitling the appellant to benefits.

1. Appeal allowed. The appellant was to receive benefits under the Scheme as if he had been lawfully married to the member at her death.
2. The Pensions Ombudsman’s jurisdiction required him to apply established legal principles rather than decide according to what he considered fair and reasonable. The substantive issue was therefore whether the trustees were bound by an estoppel, not whether a separate remedy for maladministration appeared fair.
3. On the evidence, the only proper conclusion was that the couple would have married had they known that marriage was required for entitlement. The Ombudsman’s contrary conclusion was unsupported by the evidence and could not stand. The reference to inheritance tax did not justify relying on a point that had not been put to the appellant.
4. Applying the principles of estoppel by representation, there was a clear representation made on behalf of the trustees, reliance upon it, and detriment. The reliance consisted in part of not marrying. The representation was made to the member, who relied on it, and the appellant could invoke the resulting estoppel because he knew of and relied on the representation and it was intended to secure a benefit for him.
5. An estoppel could operate within the Scheme so as to bind the trustees, their successors and the beneficiaries. Although providing the pension outside the Rules might adversely affect other beneficiaries, that did not outweigh the unconscionability of denying the claim. The decisive consideration was that the couple could and would have secured the benefit as of right by marrying; no trustee discretion or scheme amendment was required.
6. The court did not decide the alternative estoppel by convention claim. That claim faced the substantial difficulty of establishing the necessary subsequent mutual dealing.

• High Court (Chancery Division): allowed the appeal from the Pensions Ombudsman’s Determination dated 20 January 2010 and ordered that benefits be provided under the Scheme as if the appellant had been lawfully married to the member at her death.