Viavi Solutions UK Ltd v Viavi Solutions Pensions Trustee UK Ltd & Anor

Rectification of a pension deed requires convincing proof that the document fails to record the parties’ true agreement. In assessing that question, the court may consider the parties’ communications and conduct before execution, the absence of discussion about a significant change, subsequent events, and the way the scheme was administered. Subsequent conduct may provide particularly cogent evidence of the parties’ intention at the time of execution. Where the evidence shows that pension increases were inserted by drafting error, and that the parties consistently treated the scheme as excluding those increases, rectification may be ordered.

The claimant, the principal employer under the Wandel & Goltermann Retirement Benefits Scheme, sought rectification of rule 61.4 of the scheme’s 1999 Deed and Rules. The rule contained minimum annual pension increases, or underpins, which the claimant contended had been inserted in error. The trustee and a representative scheme member were defendants. The claim was unopposed, but the court considered the evidence carefully, including the scheme’s earlier rules, drafting instructions, witness evidence, attempts to correct the error, a later deed of rectification, and subsequent administration of the scheme.

The central issue was whether the evidential threshold for rectification was satisfied.

1. Rectification ordered. The court held that the evidence convincingly established that the underpins in both limbs of rule 61.4 were included by mistake and that the rule should be rectified in the terms sought.
2. The governing principles were settled. A claim to rectify a pension deed must be established by convincing proof. The court may consider the absence of discussion about an important change as evidence that the parties did not intend it. It may also consider events after execution as evidence of the parties’ intention when the deed was executed, applying the principles identified in Mitchells & Butlers Pensions Ltd v Mitchells & Butlers PLC [2021] EWHC 3017 (Ch).
3. The evidence supported rectification. The pre-existing scheme did not provide mandatory increases, the instructions to the draftsman were to update the rules rather than improve benefits, and there was no evidence at execution of an intention to add the underpins. Shortly after execution, the parties identified errors in rule 61.4, attempted corrective steps, and executed a deed which recorded drafting errors in both limbs.
4. The later corrective documents and the scheme’s subsequent administration and funding without the underpins were especially cogent evidence of the parties’ original intention. The representative procedure was appropriate, and no scheme member objected to the relief.