Saga Group Ltd & Anor v Paul

Rectification of pension scheme documentation may be granted summarily where the court has carefully examined the evidence, the claim has no realistic prospect of successful defence, and no other reason requires a trial.

For a document exercising a bilateral power of amendment, the relevant intention is the objectively ascertained intention of each party exercising the power. A communicated consensus is unnecessary. The absence of any discussion of an unintended change, together with continued administration on the former basis, may provide cogent evidence of the relevant intention.

Unopposed applications of this kind should ordinarily be heard in public, with relevant evidence and legal advice available openly. This differs from applications for approval of a representative compromise.

The claimants, Saga Group Limited and Saga Pension Trustee Limited, sought summary judgment for rectification of a 2003 deed governing the Saga Group Pension and Life Assurance Scheme.

They alleged that rule 57.2 contained a drafting mistake by referring to “Pensionable Salary” instead of “Final Pensionable Salary”. The defendant, a scheme member appointed to represent members who might oppose rectification, did not resist the application after receiving independent specialist advice.

The court considered representation, open justice, summary determination, the applicable rectification principles, the attribution of corporate intention, and whether the evidence established a common mistake.

1. The application was properly determined in public. In an unopposed summary judgment application for rectification of pension scheme rules, the representative defendant’s legal advice and relevant evidence should ordinarily be available openly. The confidentiality practice applicable to representative compromises under Re Moritz was materially different.

2. A representative beneficiary need not consult the represented class. Notification by the employer or trustees is good practice but is not mandatory. The communication to scheme members was adequate, and the defendant’s independent specialist scrutiny was sufficient.

3. Rectification is available summarily in an appropriate case. The court must itself give careful consideration to the evidence and be satisfied that there is a sufficiently strong legal and evidential basis, no realistic prospect of a successful defence, and no other reason for a trial.

4. The principles stated in Daventry District Council v Daventry and District Housing Ltd [2011] EWCA Civ 1153 applied. The parties must have had a common continuing intention at execution, objectively established, which the instrument failed by mistake to express. In the exercise of a bilateral power of amendment, it is unnecessary to prove a communicated contractual consensus. The court must establish objectively what each person exercising the power intended.

5. The absence of discussion of a proposed change may itself be evidence that no change was intended. Subsequent administration on the pre-existing basis may also illuminate the intention at execution. For a corporate party, the relevant intention is attributed to the decision-maker in the transaction, not necessarily the person who signed the deed.

6. The evidence showed that the 2003 deed was intended to consolidate the prior scheme provisions, that no change to the salary basis had been discussed, and that the scheme had consistently been administered by reference to final pensionable salary. The high evidential hurdle was comfortably met. Judgment was given for the claimants, the deed was rectified by adding “final” before “pensionable salary” in rule 57.2, and representative orders were made.