Iles v Service Personnel and Veterans Agency & Anor

An appeal under section 151(4) of the Pension Schemes Act 1993 is confined to points of law. It may challenge the construction of a pension instrument and the legal consequences of facts found by the Pensions Ombudsman, but not the factual findings themselves.

Where the relevant pension rules distinguish service from enlistment, each period of reserve service begins when the reservist is accepted into service. A period beginning on or after 6 April 2005 therefore falls outside the 1975 Armed Forces Pension Scheme, even if the reservist’s engagement began earlier.

Pension entitlement governed by quasi-legislation under the royal prerogative does not ordinarily give rise to a separate contractual entitlement based on administrative correspondence.

The appellant, a former serviceman and army reservist, appealed under section 151(4) of the Pension Schemes Act 1993 against a written determination of the Deputy Pensions Ombudsman dated 7 December 2012.

The Ombudsman had upheld the complaint in part, finding maladministration in the communication of changes to the appellant’s pension arrangements and directing payment of £1,000 for distress. She rejected the appellant’s principal claims that his post-6 April 2005 service remained capable of increasing his pension under the 1975 Armed Forces Pension Scheme and that administrative letters created a contractual entitlement to that increase.

The appeal concerned whether article 19F of the amended Army Pensions Warrant 1977 closed the 1975 Scheme to the appellant, and whether the facts found by the Ombudsman established a contract.

1. Jurisdiction. The appeal was properly brought under section 151(4) of the Pension Schemes Act 1993. The article 19F ground raised a question of construction. The contract ground challenged the legal consequences of facts found by the Ombudsman. Neither ground amounted to an impermissible appeal on fact. Permission to appeal was not required, consistently with Colley v Council for Licensed Conveyancers [2002] 1 WLR 160.
2. Construction of the 1975 Scheme. Articles 19E, 19F and 19G of the Army Pensions Warrant 1977 had to be read together. The distinction between enlistment or re-enlistment and the giving of service was material. Article 19F was concerned with when service began, not merely when a person enlisted or re-enlisted.
3. Under section 59 of the Reserve Forces Act 1996, a reservist is separately accepted into service on mobilisation. Each of the appellant’s periods of service in Afghanistan and Iraq therefore constituted service beginning on or after 6 April 2005. The appellant was consequently closed out of the 1975 Scheme for those periods. Questions of fairness or parity between pension arrangements were matters of government policy outside the Ombudsman’s remit.
4. Contract. The 2003 letter accurately recorded the pension position at that time and did not promise that the terms would remain unchanged in future. The 2006 letter was inaccurate when written and was issued when the relevant service was substantially complete. Neither letter created a contractual entitlement. The pension entitlement was governed entirely by quasi-legislation promulgated under the royal prerogative.
5. The judge observed that estoppel might have arisen had the respondents sought to recover wrongly overpaid pension, but they had not done so and no estoppel issue arose for decision. No error of law was established. The appeal was dismissed.

• High Court (Chancery Division): The appeal from the Deputy Pensions Ombudsman’s determination dated 7 December 2012 was dismissed.