Unipart Group Ltd & Anor v UGC Pension Trustees Ltd & Anor

Rectification of a pension scheme deed requires convincing evidence establishing the factors supporting the remedy. The court need not recite each element separately where the evidence clearly satisfies the applicable test. Delay does not, in principle, prevent rectification, particularly where the mistake has been identified and the evidence remains compelling. In an undefended rectification claim, a confidential opinion from a representative party may assist the court in testing the evidence and submissions. The procedure is compatible with open justice where it constitutes only a limited and justified exception.

The claimants, employers connected with the Unipart Group Pension Scheme, sought rectification of the Scheme’s 2002 Definitive Deed and Rules. The deed followed the merger of two Partco pension schemes with the Unipart scheme. The intended effect was to preserve the existing benefits of Partco members, including their entitlement only to statutory revaluation, rather than confer the more favourable underpinned revaluation applicable under the Unipart scheme.

The claim was undefended. A trustee represented the relevant beneficiaries, and the court was asked to appoint a representative beneficiary and to consider the use of a confidential opinion from that representative. The central issues were whether the drafting errors were proved to the required standard, whether the court should exercise its discretion despite the passage of approximately 16 years, and whether the procedure adopted was consistent with open justice.

1. The court appointed the second defendant to represent the class of beneficiaries who might be affected. The representation order was appropriate because members had been notified of the proceedings and invited to comment, but no observations had been received.

2. The court accepted the established principles governing rectification, referring to Daventry District Council v Daventry and District Housing Ltd [2011] EWCA Civ 1153. Convincing evidence was required to establish the relevant factors. The court did not need to address the four parts of the test separately because the evidence plainly satisfied them all.

3. The evidence showed that the merger was not intended to alter the benefits of Partco members. The fourth and fifth appendices should have excluded those members from the operation of clause 14.7, but failed to do so. The omission resulted from drafting mistakes, rather than an intention to improve their benefits. The evidence identified the errors and the intended wording with a high degree of precision.

4. The court approved the use of a confidential opinion from the representative party, together with a private discussion where appropriate. It considered the procedure useful in an undefended claim because it allowed the court to test possible weaknesses in the evidence and gave the representative party an opportunity to raise concerns. Although the procedure had been criticised in Saga Group Ltd & Anor v Paul [2016] EWHC 2344 (Ch), the court disagreed with that criticism and held that the procedure did not offend open justice. It relied additionally on The Girls' Day School Trust v GDST Pension [2016] EWHC 1254 (Ch).

5. The lapse of approximately 16 years did not prevent relief. The mistake had been identified some years earlier, but the delay caused no legal impediment where the evidence remained compelling. Rectification was therefore ordered in the terms sought.