Manolete Partners PLC v Ian Russell White

Section 91 of the Pensions Act 1995 protects a member’s entitlement or right to future benefits under an occupational pension scheme from creditor attachment. The court must assess the order’s real-world effect, including any pre-planned sequence of steps, rather than its formal mechanism. Receiving a pension means receiving it for the member’s own benefit. An order requiring a debtor to draw down future benefits into an account selected to facilitate enforcement of a judgment debt is therefore prohibited, even if the account is in the debtor’s name. The protection cannot be bypassed by dividing the result into successive orders. A late argument based on an employer’s statutory charge was refused where the factual foundation was unavailable and the issue had not been raised below.

Manolete, as assignee of claims belonging to an insolvent company, obtained judgment against Mr White for approximately £1 million. It applied under section 37 of the Senior Courts Act 1981 for an injunction requiring him to draw down his remaining occupational pension fund and direct payment into a nominated bank account, together with advance information to facilitate enforcement.

The High Court made the substantive order in [2023] EWHC 567 (Ch) and consequential orders in [2023] EWHC 1350 (Ch). Mr White appealed, contending that section 91(2) of the Pensions Act 1995 prohibited the order. Manolete also sought permission to rely late on an argument based on section 91(5)(d). The central issues were the order’s substantive effect and whether the new argument should be admitted.

Disposition. The appeal was allowed and the Order was set aside. Permission was refused for Manolete to rely on its late Respondent’s Notice.

1. Statutory purpose. Sections 91(1) and 91(2) of the Pensions Act 1995 establish a general protection for entitlements and rights to future benefits under occupational pension schemes. That protection reflects the policy that such benefits should support the member in retirement and remain immune from ordinary creditor claims, subject to specified exceptions.
2. Real-world construction. The court had to construe section 91 purposively and examine the substantive effect of the proposed order. It had to consider a planned sequence of steps as a composite whole, applying the approach in WT Ramsay v IRC [1982] AC 300, UBS AG v HMRC [2016] UKSC 13 and Rossendale BC v Hurstwood Properties [2021] UKSC 16.
3. Application. Mr White had no present right to immediate payment from the remaining drawdown fund. Payment depended on agreement with the trustees, or on a later annuity arrangement. The Order nevertheless formed part of a pre-planned sequence designed to secure the pension money for Manolete. Payment into an account in Mr White’s name did not alter that reality, because he was not intended to use the money for his own benefit. The Order therefore had the prohibited effect identified in section 91(2).
4. The reasoning in Bacci v Green at first instance, [2022] EWHC 486 (Ch), was incomplete because it focused on payment leaving the pension fund rather than on the member’s capacity to receive and use it. The Court of Appeal decision in Bacci v Green, [2022] EWCA Civ 1393, and Blight v Brewster [2012] EWHC 165 (Ch) concerned materially different circumstances, including actual fraud or the absence of an occupational pension section 91 argument.
5. Section 37. The discretionary power in section 37 of the Senior Courts Act 1981 cannot lawfully be used to achieve a result prohibited by section 91 or to thwart its statutory purpose. Such an order is not just and convenient.
6. Late point. The permission question was governed by the flexible approach in Notting Hill Finance v Sheikh [2019] EWCA Civ 1337. There is no general exceptional-case threshold. Relevant factors include the nature of the lower-court proceedings, the nature of the new point and prejudice. Here the absence of a reliable transcript or factual findings, and the fact that the point had not been raised below, made it inappropriate to allow the argument.
7. Section 91(5)(d). The court did not finally decide whether liability for breach of fiduciary duty could fall within the exception for criminal, negligent or fraudulent acts. It observed that the proposition was far from obvious. Breach of fiduciary duty is conceptually distinct from breach of a duty of care and may be strict and fault-free.

• Court of Appeal (Civil Division): The appeal was allowed and the Order was set aside. Permission to rely on the late Respondent’s Notice was refused.
• High Court of Justice, Business and Property Courts in Manchester: The substantive injunction was granted in [2023] EWHC 567 (Ch). Consequential notification and information requirements were made in [2023] EWHC 1350 (Ch).