UK: Gone But Not Forgotten: Can a Deleted Provision be Implied Back Into a Document?

Last Updated: 2 June 2011
Article by Stuart Pickford and Susan Rosser

Originally published June 1, 2011

Keywords: deleted provision, Court of Appeal, pension scheme, interpretation of documents

Important guidance from the Court of Appeal on the interpretation of documents which have been amended or re-adopted over a period of time

In Stena Line Limited v (1) Merchant Navy Ratings Pension Fund Trustees Limited and (2) P&O Ferries Limited, the Court of Appeal has given important guidance on how documents should be interpreted where provisions have been amended or re-adopted over time, in this case in the context of a pension scheme trust deed and rules. The particular issue in this case was whether a "right" contained in a provision which had been deleted should be implied back into the document through the interpretation of the re-adopted (but unchanged) trustees' power of amendment. The guidance on interpretation will also be of relevance in other situations where one or more provisions of a document have been amended or deleted, but other provisions have been retained or re-adopted unchanged.

Key Points

  • Where a document has been amended so that a new provision has been added or an existing provision has been modified, those provisions should be interpreted against the relevant factual context at the time the amendment was made rather than looking back to when the original document was first executed.
  • Where certain provisions of the document have been left in place as they stand when other provisions have been added or modified, the meaning of the provisions which are retained or re-adopted in the same terms may change if the context is now materially different. The interpretation of the unchanged provisions has to be considered in the light of the factual context when the amendments to other provisions were made.
  • The implication of a term is not an addition to the document. It only spells out what the document means (per Lord Hoffmann in Belize Telecom).

Facts of the case

The Merchant Navy Ratings Pension Fund ("MNRPF") is an industry-wide occupational pension scheme, constituted in 1978, with a large number of participating employers. The scheme is governed by a trust deed and rules. The trust deed and rules have been amended or replaced from time to time.

There was a provision in the rules which provided that if there was a deficiency in the scheme's funding and there were "no agreed measures acceptable to the participating employers" for overcoming that deficiency, then the scheme would come to an end. The significance of this provision was that it could potentially give participating employers a veto over the trustee's proposals for meeting a deficiency.

In 2001, the MNRPF's trustee adopted an arrangement to meet a deficit in the scheme's assets (the "2001 Arrangement"), which involved the deletion of the above "veto" provision. One class of employer – known as the current employers – was invited to approve the 2001 Arrangement and to make deficit repair contributions; thus not all participating employers were directly affected by the 2001 Arrangement at the time.

Later, again faced with a deficiency in the scheme's assets, consideration was given to whether the trustee could impose deficit repair contributions on all participating employers, not only the current employers invited to approve the 2001 Arrangement and required to contribute to it.

The appellant was a participating employer who had not consented to the 2001 Arrangement. It had conceded at first instance that the "veto" provision had been validly removed in 2001 but argued that it was a fundamental protection for participating employers and that the trustee's power of amendment was subject to an implied restriction that it could not implement a new deficit repair proposal which affected all participating employers without restoring the "veto" provision for the benefit of the class of participating employers which had not been invited to approve the 2001 Arrangement.

Interpreting documents which have been amended over time

It is a well-established general legal principle that the court's task when interpreting a document is to ascertain what a reasonable person, having regard to the factual situation at the relevant time, would have understood the document to mean.


The Court of Appeal upheld the general principle that where a document has been amended so that a new provision has been added or an existing provision has been modified, those provisions should be interpreted against the relevant factual context at the time the amendment was made rather than looking back to when the original document was first executed.


The specific issue in this case was whether the power of amendment, which was originally drafted in broad terms - and which was re-adopted without amendment as part of the 2001 Arrangement - could take on a different meaning as a result of other amendments made in 2001. In particular, did the deletion in 2001 of the "veto" provision mean that the power of amendment was now subject to an implied restriction so that certain amendments could only be made if that deleted "veto" provision was also restored?

The Court of Appeal accepted the general principle that even where the very same clause is effectively re-adopted in the same form, its meaning may change on each re-introduction if the context in which it is re-adopted is materially different from when it was first adopted. Its meaning may be narrowed, or it may equally well have been widened, because of changes in the relevant background circumstances and/or the scope or effect of some other clause which have to be taken into account when interpreting the document.

Although the case concerned the re-adoption of a provision when the rules were replaced, the principles seem also to be applicable where a document is amended (and some clauses are left as they stood) as well as where a new or updated document is put in place which re-adopts provisions from its predecessor.


In relation to the implication of terms, Lady Justice Arden cited Lord Hoffmann's opinion in the Privy Council case of Attorney General of Belize v Belize Telecom Ltd [2009] UKPC 10 in which Lord Hoffmann held that the implication of terms is an exercise in interpretation, not rewriting the parties' agreement: "the implication of the term is not an addition to the instrument. It only spells out what the instrument means".

Lady Justice Arden found that the removal of the "veto" provision was "an integral part of the package of measures deemed necessary for the purpose of dealing with the then deficit" and it would have been inconsistent with the way the 2001 Arrangement was described in a circular to current employers at the time if the "veto" provision were to survive by way of implication. Thus the trust deed and rules adopted as part of the 2001 Arrangement could not have been reasonably understood to mean that there would in future be implied a provision equivalent to the "veto" provision which had been expressly removed. When reaching this conclusion, she commented that it did not matter whether this was approached by considering whether a term should be implied or as a matter of interpretation of the trust deed and rules – both are directed at ascertaining what the document should reasonably be understood to mean.

Implications of the decision

Although the Court of Appeal rejected the argument that the meaning and scope of the power of amendment had changed in this case, the possibility that the meaning of a particular provision can change over time as other amendments are made has important implications not just for occupational pension scheme documentation but for the interpretation of contracts and other documents more widely.

Not only must each provision be considered within the factual context when it was introduced, but it is also necessary to consider the impact of subsequent updates or amendments – the circumstances they are made could well affect the proper interpretation of provisions which have been left unchanged.

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