Canada: Police And Crime Commissioner In High Court Win After Pensions Ombudsman's Intervention

The High Court has today overturned a Determination of the Pensions Ombudsman (PO-6773) in the case of Catherine Butterworth and Police and Crime Commissioner for Greater Manchester and the Pensions Ombudsman (as intervener) which had directed the Police and Crime Commissioner for Greater Manchester (the "Commissioner") to pay a "bridging pension" from its own funds to the claimant.

Gowling WLG acted for the Commissioner.

The claimant was formerly employed by the Commissioner's predecessor, the Greater Manchester Police Authority (the GMPA). She left the GMPA's employment in 2011 pursuant to a compromise agreement. The present case turned on clause 4.2 of this compromise agreement which said:

"To the extent that it is and remains lawful for the Employer to do so and upon receipt of a written request from the Employee in accordance with the Local Government Pension Scheme (Benefits, Membership and Contributions) Regulations 2007 (or any other provision having similar effect which is in force at that time in relation to the Scheme) the Employer will allow the Employee to access her Greater Manchester Pension Fund pension without reduction or abatement when she reaches 55 years of age on 22 February 2014..."

In anticipation of her 55th birthday in 2014, the claimant requested an unreduced pension. The Commissioner notified her that the GMPA had not been legally entitled to give the commitment contained in clause 4.2 because, under the relevant Local Government Pension Scheme (LGPS) regulations, the award of an unreduced pension required not only the employer's consent, but also a determination that "on compassionate grounds" the pension should not be reduced. The Commissioner said that, having considered the arguments advanced by the claimant, there were no sufficient, compassionate grounds and the unreduced pension would not be awarded.

The claimant complained to the Pensions Ombudsman, who investigated the complaint and issued two Preliminary Decisions before giving his final Determination on 21 April 2016.

In his final Determination, the Ombudsman held that clause 4.2 was void and unenforceable because it amounted to an unlawful fetter on the exercise of a public authority of its own discretion. He went on to find that nonetheless a contractual estoppel had arisen, the effect of which was that the Commissioner could not go back on the promise to provide the benefit. On that basis, the Ombudsman directed the Commissioner to pay, from its own funds, a bridging pension equivalent to the unreduced benefit with retrospective effect from the claimant's 55th birthday. He also directed the Commissioner to pay £2,000 for the distress and inconvenience caused to the claimant as a result of the GMPA's maladministration in promising to confer on her a benefit which was not in its power to provide.

The Commissioner appealed on five grounds:

  1. the Ombudsman's reliance on estoppel was misconceived because (i) a party cannot achieve by estoppel what it could not achieve by express agreement, and (ii) in any event estoppel has no role to play in public law;
  2. on the correct interpretation of clause 4.2, the GMPA had in any event not contracted to do anything that was unlawful;
  3. the circumstances of this case did not give rise to any contractual estoppel (assuming the doctrine was in principle capable of applying);
  4. the Ombudsman's direction required the Commissioner to commit an ultra vires act, in that he had no power to make pension payments, or their equivalent, from his own funds;
  5. the award of £2,000 for maladministration was misconceived.

The claimant did not participate in the appeal but the Ombudsman was given permission to intervene (pursuant to a more activist policy announced on 27 July this year).

The Ombudsman provided written and oral submissions on some of the issues raised by the Commissioner. He also asked the Court to uphold the Determination on a new ground (namely, that clause 4.2 was not, as a matter of private law, unenforceable) or alternatively to remit the matter back to him to consider a new point (namely, whether the claimant had a complaint based on legitimate expectation).

Jonathan Crow QC, sitting as a Deputy Judge of the High Court, held that the Ombudsman had misinterpreted clause 4.2 of the compromise agreement. He decided that by clause 4.2 the GMPA had irrevocably agreed to give the claimant access to an unreduced pension at age 55, but only to the extent it was lawful for the GMPA to perform that commitment when the time for performance arrived. As such, the Commissioner had not breached the contractual commitment in 4.2 when he refused the claimant's request for an unreduced pension.

The High Court therefore didn't need to expressly consider whether the Ombudsman should be allowed to introduce into the appeal a new argument which he had not identified in producing his determination.

In relation to the Ombudsman's finding of a "contractual estoppel", the High Court found that the necessary elements of this were missing. There was no warranty by the GMPA that it was, or would be, legally empowered to facilitate guaranteed access to an unreduced pension at age 55. In fact, the commitment in clause 4.2 was expressly contingent on its ability, lawfully, to provide such access when the relevant time arrived.

Separately, the High Court found that the Determination was flawed because it mandated a result which was entirely different from the contractual commitment (a bridging pension paid from the employer's own funds instead of a pension from the pension fund).

Although it was strictly unnecessary for him to do so, the Deputy Judge also expressed the following views:

  • contractual estoppel could not be used to give effect to a commitment which the GMPA had no power to give;
  • the GMPA had no power to make pension payments from its own funds; and
  • the Ombudsman's direction to pay a bridging pension from the Commissioner's own funds was unlawful because the Ombudsman has no power to order public authorities to make pension payments that they have no lawful power to make.

Finally, the High Court overturned the finding of maladministration (and the order to pay £2,000 compensation) and declined to remit the matter back to the Ombudsman to investigate a new issue (legitimate expectation) which had not been raised by the claimant at any point. This would amount to substantially "re-litigating" the matter on new grounds.

What it means

The case has numerous interesting features. Having been given permission to intervene in the appeal, and consistent with his stated aim of seeking to assist the Court, it was notable that the Ombudsman made written and oral submissions to the Court which he accepted were contrary to the legal analysis he had adopted in the determination being appealed.

Accordingly, parties wishing to appeal from the Ombudsman's determinations should be mindful of the possibility that, on appeal, the Ombudsman may seek to run arguments which did not form the basis of his original decision.

However, the Ombudsman will no doubt have observed (in considering in future whether to intervene in appeals) that the High Court ordered him to pay the costs the Commissioner had incurred in bringing the appeal.

Find out more about Gowling WLG's pensions services.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
14 Sep 2017, Seminar, Birmingham, UK

Has Cloud replaced traditional outsourcing models? We will compare cloud to outsourcing, consider whether they have effectively become the same thing for many solutions and assess some of the advantages and disadvantages of each model.

18 Sep 2017, Seminar, London, UK

Our annual event as part of the London Design Festival is now in its fifth year. We would be delighted if you are able to join us again.

21 Sep 2017, Seminar, London, UK

Has Cloud replaced traditional outsourcing models? We will compare cloud to outsourcing, consider whether they have effectively become the same thing for many solutions and assess some of the advantages and disadvantages of each model.

 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.