McShee v MMC UK Pension Fund Trustees Ltd

An appeal from the Pensions Ombudsman under Pension Schemes Act 1993 is confined to points of law. Findings of fact may be disturbed only where no material supported them. Scheme literature may evidence the governing rules where the definitive deed is unavailable, and clear terms should not be discounted merely because they are more generous than statutory minima. However, a claimant must first establish membership of the relevant scheme. On an appeal from an investigative body, the ordinary fresh-evidence rule requires modification where the alleged error is failure to investigate material that could have been found. Late evidence remains subject to fairness, case management and finality.

Michael McShee appealed against the Pensions Ombudsman’s decision of 31 July 2015, which rejected his complaint that he was entitled to a deferred pension under the Duncan C Fraser Staff Pension Scheme, said to be succeeded by the MMC UK Pension Fund. His employment with Duncan C Fraser & Co was accepted, but the evidence indicated that he had been recorded as a member of the separate Heywood & Partners Ltd Pension Scheme.

The issues were whether the Ombudsman had correctly interpreted the DCF scheme booklet, whether Mr McShee had established membership of that scheme, whether the Ombudsman had adequately investigated the Heywood scheme, and whether further evidence should be admitted after the appeal hearing.

1. Appeal on the merits dismissed. The appeal under section 151(4) of the Pension Schemes Act 1993 was limited to points of law. The Ombudsman’s factual finding that Mr McShee was not a member of the DCF Scheme was open to him on the evidence and could not be disturbed.
2. The Ombudsman had erred in interpreting the DCF scheme booklet. Its reference to pensionable service including service from joining the firm indicated that, for employees already in service on 31 March 1978, service was not restricted to membership beginning after a one-year waiting period.
3. The booklet also clearly provided a deferred pension for a member leaving service before an immediate pension, while allowing a refund of contributions as an alternative for a member with less than five years’ pensionable service. The apparent generosity of those provisions did not make them unreliable. In the absence of the definitive trust deed, the booklet was ordinarily evidence of the scheme terms, and the missing deed could not be used against members.
4. Those conclusions did not assist Mr McShee because he had not established membership of the DCF Scheme. Possession of the booklet did not itself prove membership. Nor had he established that membership of the Heywood scheme created an entitlement under the MMC Scheme.
5. The alleged failure to investigate the Heywood scheme was not made out. The investigator had made relevant enquiries, and there was no material showing that further investigation would have produced additional evidence.
6. The principles in Ladd v Marshall [1954] EWCA Civ 1 required modification on an appeal from an investigative Ombudsman. The appellant could rely on newly found material to argue that the Ombudsman should have discovered it. Nevertheless, the evidence was introduced exceptionally late, could have been found earlier, changed the case being advanced, and could not fairly be admitted without reopening the appeal and prejudicing the respondent. The application to admit fresh evidence was refused.

• High Court (Chancery Division): Appeal from the Pensions Ombudsman dismissed. The application to admit fresh evidence was refused.
• Pensions Ombudsman: Complaint determined on 31 July 2015 and not upheld.