ICM Computer Group Ltd & Ors v Colin Stribley & Ors

In construing pension scheme documents, the court must read the document in its factual and legal context and adopt a practical and purposive interpretation. Where the document itself shows that something has gone wrong with the language, the court may add words necessary to give it the meaning that a reasonable reader would understand from the document as a whole and the admissible background. That exercise remains construction, rather than rectification, where it identifies the document’s meaning without rewriting it to reflect a different intention. The approach may differ from that applicable to a self-contained public instrument intended to inform third parties. A prior resolution expressly referred to in the document may form part of the relevant background.

The claimants sought summary judgment and a declaration concerning the construction of an amendment to the ICM Computer Group Pension and Life Assurance Scheme. The amendment concerned the normal retirement date for male and female members following the requirements of European law on equal treatment in occupational pension schemes.

The trustees adopted a neutral position. The fourth defendant represented the members and beneficiaries and did not oppose the application. The central issue was whether the February 1997 authority letter, read in context, amended the normal retirement date for future pensionable service to 65 for both male and female members, although that provision was not expressly stated.

1. Application granted. The court made the representation order and granted the declaration sought.
2. The governing principles of construction required the February Authority to be read in the light of the admissible background, with a practical and purposive approach rather than a narrow or purely literal one. The practical consequences of rival interpretations were relevant. The court adopted the principles summarised from Entrust Pension Trustees Limited v Prospect Hospice Limited [2012] EWHC 1666 Ch, Cherry Tree Investments Limited v Landmain Limited [2012] EWCA Civ 736 and Chartbrook Limited v Persimmon Homes Limited [2009] 1 AC 1101.
3. Construction is distinct from rectification. Rectification corrects a document so that it reflects the parties’ intention. Construction identifies the meaning conveyed by the document to a reasonable reader with the relevant background knowledge. Where the language itself shows that something has gone wrong and the intended meaning is clear, necessary words may be added as part of construction.
4. The February Authority attempted, within its own terms, to address normal retirement dates both before and after 28 February 1997. The references to dates, the use of the word deemed, the other provisions, the Barber and Coloroll background, and the trustees’ expressly referenced resolution showed that the omission of the future position was a drafting mistake. A reasonable reader would understand the document to provide for a normal retirement date of 65 for both male and female members in respect of service after 1 March 1997.
5. The case was materially different from Cherry Tree, where a self-contained registered charge contained no apparent linguistic mistake and was intended comprehensively to state the terms on which third parties could rely. The February Authority was necessarily referential and the necessary addition remained within its four corners. The written amendment therefore satisfied the amendment power.

First-instance decision. No prior appellate decision is stated in the judgment.