Merchant Navy Ratings Pension Fund Trustees Limited v (1) Stena Line Limited (2) P&O Ferries Limited (3) Sealion Shipping Limited (4) International Marine Transportation Limited (5) Terence Brown
Merchant Navy Ratings Pension Fund Trustees Limited v (1) Stena Line Limited (2) P&O Ferries Limited (3) Sealion Shipping Limited (4) International Marine Transportation Limited (5) Terence Brown, [2015] EWHC 448 (Ch)
The mounting deficits in occupational pension schemes are important to members and employers, but in different ways. Companies will be concerned by the large pension deficits in their schemes, and want to have the flexibility to meet them over time in order to avoid putting an undue strain on their businesses. However, from the members’ perspective, they will want the deficit to be met as quickly as possible because if their employer goes under before the deficit is met, then they will not get their full pensions (in that situation, there is a statutory lifeboat fund called the Pension Protection Fund that will protect part of their pensions, but not all of their pension). Members are recognising this evermore, having thought for years that being promised a final salary pension meant that they would definitely get it in full.
The Merchant Navy Ratings Pension Fund case deals with how this balance should be struck between these potentially different interests. In particular, can trustees of occupational pension schemes take into account the interests of the companies funding the scheme when the trustees come to reach a decision on how such deficits should be met and over what period? While earlier cases have dealt with this issue in passing, this is the first case to face this issue head on. The specific case concerns the Merchant Navy Fund, which has a multi-£100m deficit.
The other issue that the case deals with is what happens when a scheme is closed to future accrual by an employer, which is increasingly happening in the marketplace as companies seek to limit their pension costs. How should the scheme be run after that point?”
Wilberforce Chambers are representing almost all of the parties involved: Michael Tennet QC, Edward Sawyer and James Walmsley (For the claimant Merchant Navy Ratings Pension Fund Trustee Ltd), Brian Green QC and Jonathan Hilliard (For the first defendant (1) Stena Line Ltd), Jonathan Evans QC (For the third defendant (3) Sealion Shipping Ltd) and Paul Newman QC and Emily Campbell, (For the fifth defendant Terence Brown)
Download the Judgment here (Crown Copyright)
The Chinachem Charitable Foundation
Chinachem is due to heard on 21st April 2015 Hong Kong Court of Final Appeal- the latest stage of litigation concerning the estate of the late Nina Wang, who died in 2007, reputedly the richest woman in Asia, leaving an estate leaving at HK $82.86bn.
Final hearing April 2015.
Brian Green QC and Mark Studer act for the appellant.
Secretary of State for Defence v Nicholas [2015] EWCA Civ 53
Jonathan Davey has just been successful in the Court of Appeal in the case of Secretary of State for Defence v Nicholas. This is the real estate / human rights test case regarding the compatibility of otherwise of the Crown Exemption in landlord and tenant legislation with the European Convention on Human Rights.
The facts of the case concern the rights of military personnel and their families under Articles 8 and 14 ECHR in relation to Ministry of Defence owned accommodation. In deciding the case in favour of Jonathan’s client, the Secretary of State for Defence, the Court of Appeal upheld the first instance decision of Mr Justice Burton: Secretary of States for Defence and Transport v Nicholas and Blake [2013] EWHC 2351 (QB). The case has potentially wide ranging implications for thousands of properties throughout the country.
The Defendant is seeking permission to appeal to the Supreme Court.
The decision : https://www.bailii.org/ew/cases/EWCA/Civ/2015/53.html
The full Judgment is available here [Download] (Crown copyright)
Juliet Bellis & Co v Challinor & Ors
Juliet Bellis & Co v Challinor & Ors [2015] EWCA Civ 59 Ian Croxford QC and Clare Stanley QC acted for the successful defendant in this Quistclose trust case, which saw the Court of Appeal provide welcome clarification that certainty of intention is an essential part of the test to determine when such a trust arises.
This week the Supreme Court has rejected the claimants’ application for permission to appeal meaning that the law in this area is now settled, bringing English law more into line with other Commonwealth countries which have categorised the Quistclose as a form of express trust.
Brudenell-Bruce v Moore & Cotton [2014]
The Earl of Cardigan’s case: removing trustees and equitable compensation
Clare Stanley QC and Jack Watson acted for: the professional trustee
Despite its somewhat Dickensian facts, the decision of Newey J in Brudenell-Bruce v Moore & Cotton [2014] EWHC 3679 (Ch), provides the setting for the latest substantial guidance from the High Court as to the approach that the courts will take to compensating beneficiaries for trustees’ breaches of trust, and to contested applications for the removal of those trustees.
Facts
Lord Cardigan is the 49% beneficiary of a bare trust established in 1951 (‘the 1951 Trust’) with the remainder being held for the benefit of a trust established for Lord Cardigan’s son upon him reaching the age of 40 (the ‘Children’s Settlement’). The Trustees of the 1951 Trust were John Moore, a senior barristers clerk, and Wilson Cotton, a highly experienced professional trustee and founder of STEP. Following the Trustees’ decision to sell a number of the paintings belonging to the 1951 Trust (which itself was the subject of a decision of the high court: [2012] EWHC 1024 (Ch)), Lord Cardigan embarked on a course of conduct designed to remove the Trustees by alleging substantial breaches of trust, dishonesty and a breakdown in the
relationship of trustee and beneficiary. In addition, Lord Cardigan sought in the region of £4million in compensation for alleged breaches of trust, the most significant of which was an alleged failure to maintain the Stable Block of Tottenham House, the seat of the Cardigan family for many generations.
Three important points come from the judgment.
Point 1: Assessment of Equitable Compensation for Breach of Trust
In a careful and detailed judgment, Newey J held that the claims for breach of trust substantially failed and, in particular, that the failure to weatherproof the Stable Block was a reasonable one in all the circumstances. However, he went on to consider the way in which damages ought to be assessed. On behalf of Lord Cardigan it was suggested that the measure of damages in a breach of trust case is the cost of reinstating the asset to the state that it ought to be in, rather than the diminution in value of that asset, even if the costs of reinstatement were significantly greater than the diminution in value of the asset.
Newey J had little hesitation in rejecting this submission. He held instead (citing the decision of the Supreme Court in AIB v Mark Redler [2014] UKSC 58 and the line of breach of contract cases following Ruxley Electronics and Construction Ltd v Forsyth [1996] AC 344) that the measure of damages was the diminution in value of the asset, thereby reinforcing the fact that while the rules of remoteness of damage do not applying to compensation for breaches of trust, the rules of causation certainly do.
Point 2: Who to pay and how much?
Newey J did, however, find that on certain minor issues, the Trustees had acted in breach of trust. Yet it appeared that Viscount Savernake, who would be the sole entitled beneficiary of the Children’s Settlement upon his reaching the age of 40, had acquiesced or concurred in the breaches of trust. Accordingly, two issues arose: (1) whether Lord Cardigan could require the Trustees to fully reconstitute the 1951Trust or, given the potential acquiescence of Viscount Savernake, whether Lord Cardigan could only require the payment of 49% referable to his share (2) relatedly, whether payment should be made to the 1951 Trust or directly to Lord Cardigan as an absolutely entitled beneficiary.
Applying the AIB decision, the Judge held that Viscount Savernake was not an absolutely entitled beneficiary (having not achieved the age of forty) and therefore that full reconstitution of the 1951 Trust was required. He suggested that there may be scope for dealing with Viscount Savernake’s actions by impounding his interest by way of indemnity to the trustee (see section 62 of the Trustee Act 1925 and Underhill and Hayton, at paragraphs 97.1, 97.21 and 97.22).
The counter-argument to this approach is that while the beneficiaries of the Children’s settlement were not absolutely entitled, the trustees of that settlement were so entitled and appeared to have simply followed Viscount Savernake’s directions, thereby adopting his acquiescense/concurrence.
Nevertheless, it appears that the court will, even where there is potential acquiescence by some of the beneficiaries, be reluctant to reduce the award (or award damages directly to the beneficiary) and that, instead, a trustee should make a claim under s.62 Trustee Act 1925 to impound the acquiescing beneficiary’s interest. Of course there may be practical difficulties with such an approach (such as where a trustee has since retired) and the judgment of Newey J does not preclude a claim that damages should be paid only to the beneficiary in circumstances where the acquiescing beneficiary is absolutely entitled. Accordingly, the argument that damages ought to be referable only to the non-acquiescing beneficiary’s share and ought to be paid directly to that beneficiary may meet with greater success on more appropriate facts.
Point 3: Applying the test for removal of trustees
On the issue of removal, the judge started with the classic distinction between a breakdown in relations between trustee and beneficiary (which would justify the removal of the trustee) and mere friction which would not.
In Mr Moore’s case, he had made several criminal complaints against Lord Cardigan. As a result, Newey J reluctantly held that Mr Moore ought to be removed as a trustee as a result of the irretrievable breakdown in relations and the effect that would have upon the appearance of impartiality necessary to perform the office of Trustee ([257]- [262]). However, in the case of Mr Cotton, the judge declined to order removal, finding instead that while Lord Cardigan had made several complaints in relation to Mr Cotton’s conduct, those complaints were unfounded ([263]-[269]). In particular, the court noted that the cost of appointing new trustees was a significant factor (in the context of a Trust in serious financial difficulty) which weighed against removal (at [263]).
Newey J’s approach suggests that the court will adopt a robust approach to applications for the removal of trustees. In particular the courts will be wary of beneficiaries seeking to manufacture a breakdown in relationships in order to secure the appointment of replacement trustees. Accordingly, in the case of experienced professional trustees, given the significant expense involved in removing and replacing them, it will likely to be necessary to demonstrate either a significant breach of trust or a complete breakdown in relations in order to justify that expense.
1) Reachlocal UK Limited 2) Reachlocal Europe B.V. v Your Online Digital Agency Limited & Others
Nikki Singla acted for the successful Claimants in ReachLocal UK & Anr v Bennett and Others [2014] EWHC 3405.
Through the use of Facebook, Twitter and other social media, the Defendants conducted a media campaign against the Claimants’ business. The Claimants succeeded obtaining relief for defamation, malicious falsehood and breach of confidence. The case is an interesting development in the law of assessing special damages and general damages
The full Judgment is available here [Download] (Crown copyright)
BBC News Coverage: https://www.bbc.co.uk/news/uk-england-london-29712816#
(1) Amanda Stephanie Clutterbuck (2) Ian Scranton Paton v Sara Mohammed Saleh Al Amoudi 2013-2014
Jonathan Seitler QC and Emer Murphy successfully represented the defendant Ms Al Amoudi, dubbed ‘the Vamp in the Veil’ by the Daily Mail, in this explosive claim brought by two high-profile Central London property developers, a common law wife and husband.
The Claimants alleged that Ms Al Amoudi pretended to be an immensely wealthy Saudi Arabian princess, and persuaded them to transfer to her millions of pounds in cash and property in the expectation of carrying out joint high-end property developments in Knightsbridge.
Defending the claim, Ms Al Amoudi asserted that she had been in a relationship with Mr Paton (the common law husband), and that the cash and property transfers complained of were repayments of monies she had previously loaned to him in the context of their affair.
A four week trial involving over 30 witnesses took place in July and November 2013, raising issues of property joint venture, fraud, misrepresentation, contract and trust. Mrs Justice Asplin’s judgment dismissing the claim was handed down in February 2014: Clutterbuck v Al Amoudi [2014] EWHC 383 (Ch)
Download the Judgment (Crown copyright)
(1) Cavendish Square Holding BV (2) Team Y&R Holdings Hong Kong v Talal El Makdessi and (1) Cavendish Square Holdings BV (2) WPP 2005 Ltd
(1) Cavendish Square Holding BV (2) Team Y&R Holdings Hong Kong -v- Talal El Makdessi -and- (1) Cavendish Square Holdings BV (2) WPP 2005 Ltd
Appeal October 2013 – Going to the Supreme Court in July 2015
As the Supreme Court’s first opportunity to consider the law of penalty clauses, whether they should have any application in the modern commercial world, and if so what the extent of that application should be, this is likely to be a case of considerable interest and importance.
It arises out of the acquisition by the WPP group, the world’s leading marketing communications services group, of the majority of the shareholding in the largest advertising and marketing communications group in the Middle East for a sum, depending on the performance of the business, of between around $80m and $150m.
The issue is whether clauses in the agreement providing that in the event that the seller later competed with the business he would (i) not be entitled to any further payment and (ii) would be required to sell his remaining shares for a specified price are unenforceable as penalty clauses.
Opinion in the Courts below was split, with Burton J holding that they were not and the Court of Appeal disagreeing. The Supreme Court’s judgment will be eagerly awaited by practitioners in many fields of law.
Tindall Cobham 1 Limited and others v Adda Hotels and others [2014] EWCA Civ 1215
Court of Appeal addresses issues left unresolved by K/S Victoria v House of Fraser
The Court of Appeal has handed down an important judgment relating to leasehold guarantees and intra-group transfers. Julian Greenhill of Wilberforce Chambers appeared as junior counsel for the successful respondents in an expedited appeal in Tindall Cobham 1 Limited and others v Adda Hotels and others [2014] EWCA Civ 1215.
The Court of Appeal held that a provision in a lease entitling the tenant to assign to a group company on condition that the tenant procures a continuing guarantee from its existing guarantor is invalidated by section 25 of the Landlord and Tenant (Covenants) Act 1995. This case addressed important issues that were left unresolved by the earlier decision of K/S Victoria v House of Fraser [2012] Ch 497 and is of major significance to all property practitioners.
Download the judgment here (Crown copyright)
The Manchester Ship Canal Company Ltd v United Utilities Plc [2014] UKSC 40
United Utilities Plc has won its appeal to the Supreme Court in its long-running case against the Manchester Ship Canal Company concerning discharges into the Canal. See The Manchester Ship Canal Company Ltd v United Utilities Plc [2014] UKSC 40. United Utilities counsel team included Julian Greenhill and James McCreath of Wilberforce Chambers, under the leadership of Jonathan Karas QC of Falcon Chambers.
In a decision of major significance to all sewerage undertakers across England and Wales, as well as to owners of canals and other private watercourses, the Supreme Court unanimously held that sewerage undertakers have an implied statutory right to discharge surface water and treated effluent from sewer outfalls that were in use on or before 1 December 1991 when the Water Industry Act 1991 came into force.
Download the Judgment (Crown copyright)