Manolete Partners PLC v Ian Russell White

This appeal concerned whether a judgment creditor can obtain a mandatory injunction compelling a judgment debtor to draw down sums from an occupational pension scheme and to direct payment into a bank account notified in advance to the creditor.

The Court of Appeal held that such relief was prohibited by section 91 of the Pensions Act 1995 where, in the realistic and purposive view, the order would have the effect of preventing the member from receiving his pension for his own benefit. The court applied a purposive, "real world" approach to construction (following Ramsay and later authorities) and rejected an approach that looked only to the form of the order rather than its substantive effect.

The judge below had ordered the appellant to give notice to the trustees to draw down his remaining drawdown pension fund and to nominate a UK bank account in his name, together with advance information about a scheme property sale so the respondent could prepare enforcement. The Court of Appeal held that, in context, the order formed part of a pre-planned sequence designed to enable enforcement against future pension entitlements and so contravened section 91(2). The court also refused permission for a late respondent's notice seeking to rely upon Scheme Rule 11(5) and section 91(5)(d) because the point had not been argued below and required factual and legal inquiry not suitable for first raising on appeal.

This is an appeal from two judgments of HHJ Hodge KC in the Business and Property Courts at Manchester: the substantive judgment ([2023] EWHC 567 (Ch)) and consequentials ([2023] EWHC 1350 (Ch)). The respondent, Manolete, had obtained a judgment against the appellant, the former owner/director of Lloyds British Testing Limited, for misfeasance and breaches of fiduciary duty and applied under section 37 of the Senior Courts Act 1981 for injunctive relief to enable enforcement against the appellant's occupational pension scheme.

Background and facts

• The appellant was the sole member of an occupational pension scheme (the Scheme). On retirement he designated part of his fund as a Drawdown Pension Fund and took £250,000 as a lump sum, leaving about £750,000 in drawdown. The Scheme owns a commercial property.
• Manolete had obtained a judgment of about £996,014.22 against the appellant. It sought orders compelling the appellant to exercise rights under the Scheme to draw down his fund and to direct payment into a bank account nominated in advance so Manolete could enforce the judgment against those monies. The judge below ordered the appellant to give notice to trustees to draw down his entire remaining fund and to nominate a UK bank account in his name, and to provide advance information about the sale of the Scheme property so Manolete could prepare enforcement.

Relief sought and issues

• Relief sought: mandatory injunctive relief under section 37 to compel drawdown and nomination of a bank account and advance disclosure about the sale of Scheme property; alternatively a third party debt order.
• Issues framed by the court: whether section 91 of the Pensions Act 1995 (inalienability of occupational pension rights and prohibition on orders the effect of which would be to restrain receipt) prevented the court granting such relief; whether the court should authorise relief in the exercise of its discretion under section 37; and, in a late respondent’s notice, whether Scheme Rule 11(5) and section 91(5)(d) permitted a charge by the employer that Manolete could enforce.

Court’s reasoning

• The Court of Appeal took a purposive, realistic approach to statutory construction and to the orders sought. It rejected reasoning that focused only on the formal mechanism by which monies would be paid (for example, payment into an account in the debtor’s name) without considering the context and intended sequence of enforcement steps.
• The court concluded that the order below formed part of a pre-planned sequence designed to enable the creditor to execute against future pension entitlements and, in substance, would prevent the member from receiving his pension for his own benefit. That result is prohibited by section 91(2) of the Pensions Act 1995. The court therefore allowed the appeal and set aside the order.
• The court refused permission for Manolete’s late respondent’s notice to invoke Scheme Rule 11(5) and section 91(5)(d) because that point had not been argued below, the factual matrix (including the basis of the judge’s liability findings) was unclear (no transcript), and the legal question whether breaches of fiduciary duty fall within the statutory exception was not obvious and required fuller consideration.

Procedure and path

The appeal came from HHJ Hodge KC ([2023] EWHC 567 (Ch) and [2023] EWHC 1350 (Ch)). Permission to appeal was granted by Arnold LJ, the appeal was first listed and adjourned ([2024] EWCA Civ 356) and was heard in the Court of Appeal, which delivered the judgment allowing the appeal ([2024] EWCA Civ 1418).

Appeal allowed. The Court of Appeal held that section 91(2) of the Pensions Act 1995 prohibits the court from making an order the real-world effect of which would be to prevent a member from receiving pension monies for his own benefit; an order compelling the appellant to draw down his occupational pension and to nominate a bank account in those circumstances formed part of a pre-planned sequence to enable enforcement against future pension entitlements and so contravened the statutory prohibition. Permission to raise a new point based on Scheme Rule 11(5) and section 91(5)(d) was refused as unsuitable to be taken for the first time on appeal.

Appeal from His Honour Judge Hodge KC sitting in the High Court, Business and Property Courts (Manchester) ([2023] EWHC 567 (Ch) and consequentials [2023] EWHC 1350 (Ch)). Permission to appeal was granted by Arnold LJ; the appeal was listed and adjourned on 12 April 2024 ([2024] EWCA Civ 356) and then heard in the Court of Appeal leading to this judgment [2024] EWCA Civ 1418.