Manolete Partners PLC v Ian Russell White

The High Court may grant an injunction requiring a judgment debtor to exercise pension rights so that pension benefits are brought into payment and used to satisfy a judgment debt. The prohibition in Pensions Act 1995, s. 91(2), is not engaged where the order requires payment into an account in the debtor’s name. The pension is then received by the debtor, although it may be applied towards the judgment debt. The jurisdiction derives from Senior Courts Act 1981, s. 37(1), and is exercised where it is just, equitable and convenient. The court may require preliminary steps needed to access the pension, but should not direct non-party trustees to take particular steps. The debtor’s impecuniosity is relevant, but is not necessarily decisive.

The applicant, an assignee of claims belonging to a company in liquidation, held a judgment for approximately £1 million against the respondent following findings of misfeasance and breach of fiduciary duty. The respondent had paid nothing. His remaining substantial asset was an occupational pension scheme containing a commercial property acquired with company funds. The applicant sought injunctive relief requiring the respondent to access the pension and apply the proceeds towards the judgment debt. The central issues were whether such relief was barred by s. 91(2) of the Pensions Act 1995, whether the respondent had sufficient rights under the scheme rules, and whether relief was just and convenient.

1. Jurisdiction. Section 37(1) of the Senior Courts Act 1981 conferred jurisdiction to grant free-standing injunctive relief requiring the respondent to exercise pension rights. The court was not confined to cases involving property over which a receiver could be appointed. The reasoning in Bacci v Green was preferred.
2. Scheme rights. The respondent had sufficient power under rule 6C(1) of the scheme rules to draw down his pension. If necessary, the court could require him first to request designation of the fund as a Drawdown Pension Fund under rule 6A(6). Any order was confined to rights the respondent already possessed or was entitled to exercise under the rules. The non-party trustees were not ordered to take particular steps.
3. Section 91. Although the court was free to depart from the first-instance reasoning in Bacci v Green and Lindsay v O’Loughnane because the issue had been approached partly on concession, that reasoning was persuasive and was adopted. An order directing payment into a nominated United Kingdom bank account in the respondent’s name would ensure that the pension was paid to him rather than left within the scheme. It therefore did not restrain him from receiving the pension within s. 91(2) of the Pensions Act 1995. The fact that the purpose was to satisfy a judgment debt did not alter that conclusion.
4. Discretion. It was just, equitable and convenient to require drawdown. The principal pension asset had been acquired entirely with company funds, while the judgment debt arose from the respondent’s breaches of fiduciary duty. The court accepted the respondent’s evidence about his financial and personal circumstances, but those matters did not outweigh the circumstances of the case. Section 91(5)(d) did not assist because it concerned charges, liens and set-offs, not injunctive relief, and addressed criminal, negligent or fraudulent conduct rather than director misfeasance.
5. Form of order. The respondent was to give written notice requesting, so far as necessary, designation of the remaining fund as a Drawdown Pension Fund, exercise his drawdown rights, and direct payment into a nominated sterling account in his name. The parties were invited to agree the detailed mechanics, including tax and default provisions; unresolved wording would be determined by the court.

First-instance decision. No appellate history was stated in the judgment.