Sarah Margaret Ballard v Jonathan Buzzard

Defects in the execution of pension-scheme amendments may be cured by rectification where the evidence establishes a continuing common intention that the documents should take effect in the intended manner, and that mistake caused the documents to misstate that intention. In a pension scheme, the employer and trustees need not have reached an agreement if their subjective intentions coincided. Rectification may correct an execution block that accurately records one capacity but mistakenly fails to record another intended capacity. The remedy may also correct consolidated scheme rules that inadvertently omit an earlier valid amendment.

The trustees and principal employer of the Radley College Pension and Assurance Scheme sought declarations concerning three scheme amendment authorities and the 2006 trust deed. The authorities were intended to reduce pension increases from 5% to 5% LPI and then to 2.5% LPI, and to amend pensionable earnings. One 2001 authority could not be found fully signed. In all three authorities, one trustee had signed only under a block stating that he acted for the principal employer.

The claimants also contended that the 2006 rules mistakenly failed to carry forward the 2005 pension-increase amendment. The central issues were whether the execution defects invalidated the amendments and whether the court should rectify the authorities and the 2006 rules.

1. Outcome. The court ordered rectification of the signature blocks in the 2001 and 2005 scheme amendment authorities so that the relevant trustee was recorded as signing both for the principal employer and as a trustee. It also ordered rectification of the 2006 rules. The amendments were therefore valid from their original dates. Costs were awarded to the defendant, payable by the fifth claimant on the indemnity basis if not agreed.
2. The amendment power required three stages: written authorisation by the principal employer; consideration and decision by the trustees; and a written declaration under the trustees’ hands. The rule change took effect when all trustees had signed the declaration.
3. Secondary evidence was admissible to establish the existence and contents of the missing fully signed 2001 authority. The evidence overwhelmingly established that the remaining trustees had signed it and that the scheme had thereafter been administered on that basis.
4. The wording of the execution block created a genuine construction difficulty, but it did not prevent rectification. The court distinguished the contractual context in The Starsin and accepted that extrinsic evidence could be considered in determining the intended capacity of the signatory. The evidence showed a continuing common intention that the trustee’s signature should operate in both capacities.
5. The rectification principles summarised in Mitchells & Butlers required a continuing common intention concerning the particular matter, coincidence of the subjective intentions of the employer and trustees, continuation of that intention at execution, and a mistake causing the instrument not to reflect it. Those requirements were satisfied for the signature blocks.
6. The same principles applied to the 2006 rules. The undisputed evidence showed that the deed was intended to consolidate existing amendments and reflect changes in law, not to reverse the 2005 pension-increase amendment. The omission from Rule 16(e) was a pure mistake, and the rules were rectified to restore the 2.5% LPI provision.