Prometric Ltd v Cunliffe

On a strike-out or summary-judgment application, the court may reject an alleged oral agreement where it is inconsistent with contemporaneous documents and wholly improbable, so that it has no real prospect of being proved. A contractual pension entitlement cannot be construed from words that do not objectively address what should happen if the employer leaves the relevant corporate group. Nor may the court imply a term requiring comparable benefits merely because the original pension arrangement has become unavailable. Implication identifies the parties’ objectively intended agreement; it does not create an agreement which they did not make.

Prometric appealed against the refusal by His Honour Judge Stephen Davies, sitting as a High Court Judge in the Manchester Mercantile Court, to strike out John Cunliffe’s employment claim or grant summary judgment. Mr Cunliffe alleged that an oral assurance made during Thomson Corporation’s takeover of his employer gave him a contractual entitlement to membership of Thomson’s defined benefit pension scheme, or later to comparable benefits when Prometric ceased to belong to the Thomson group. Prometric accepted, for the purposes of the application and appeal, that the conversation had taken place. The central issues were whether the pleaded conversation could have contractual effect and whether a comparable-benefits term could be implied.

1. Appeal allowed. The claim was struck out.
2. For the purposes of the appeal, the court assumed that the alleged conversation took place. Nevertheless, on subjects as complex as pensions, the absence of any contemporaneous written confirmation was highly significant. The parties were human-resources executives who would have appreciated the need to document a pension agreement. The contemporary documents did not support the alleged contractual entitlement.
3. The fact that Mr Cunliffe was treated as a member of the Thomson pension scheme while Prometric belonged to the Thomson group did not show that membership was contractual rather than discretionary. It also did not establish an obligation to enrol him in another scheme providing the same or similar benefits after Prometric left the group.
4. The alleged words could not objectively be construed as conferring benefits under a different pension scheme after Prometric ceased to be a Thomson company. The context made the continuation of membership dependent on the employer’s connection with the Thomson group.
5. A term requiring comparable benefits could not be implied. There was no objective intention that such a term should operate in the circumstances. The implication of terms does not authorise the court to impose a contractual term or make an agreement which the parties themselves had not made.
6. The result avoided a trial concerning a conversation said to have occurred sixteen years earlier and the uncertain meaning of benefits that were merely pleaded to be similar.

• Court of Appeal (Civil Division): allowed Prometric’s appeal and struck out the claim.
• High Court of Justice, Queen’s Bench Division, Manchester Mercantile Court: refused Prometric’s application to strike out the claim or obtain summary judgment, and granted permission to amend the Particulars of Claim.