Facts:
The case was brought by a specialist insolvency litigation and assignee of claims on behalf of Lloyds British Testing Limited. Mr. White was a director of Lloyds British Testing Limited from June 2002 until December 2016. The company entered into administration in November 2016 and into voluntary liquidation in November 2017. 

In March 2016, the company was granted a lease of land and buildings for a term of ten years. The landlords were the trustees of the Lloyds British Small Self-Administered Pension scheme who, at that time, were Mr. Hayden Davis, Mr. White and Mr. Trevor Dale. Upon reaching the age of 55 in 2017, the respondent withdrew the 25% tax-free part of his pension by taking some money from the scheme and all of the money from his Standard Life scheme. 

In August 2020, Manolete Partners alleged that Mr. White had breached his fiduciary duties owed to the company by causing it to make various payments in the period of some 20 months leading up to the company entering into administration. Those payments included the purchase of five luxury cars (2 Bentleys, 2 Lamborghinis, and a Porsche) and also luxury holidays to the Maldives and Caribbean, the acquisition of a helicopter and payments towards his property and his son’s rent. He also made some substantial payments into his bank account. Some five hundred creditors lost money due to the liquidation.

Decision: 
The CoA was asked whether section 91(2) of the Pension Act 1993 prohibits the Court from making an order, pursuant to section 37(1) of the Senior Courts Act 1981, requiring a judgement debtor to exercise a right to draw down money from an occupational pension scheme so that those monies can be made available to pay the judgement debt against him. At first instance, HHJ Hodge KC decided that section 91(2) did not prohibit such an order. 

Lord Justice Snowden had to adjourn the appeal due to Mr. White not having any legal representation and wanting to act in person. The reason is because he had run out of money. The solicitors for the respondent have advised him to ask the pro bono charity of the Bar. Due to the shortness of time, Mr. White was unable to obtain assistance with the appeal. The Court basing itself on the pre-reading submissions drafted by the previous counsel for the appellant agreed that the appeal raised some good points. Moreover, the Court already highlighted the importance of the case for occupational pensions in general. 

The respondent agreed with the adjournment but asked for the rehearing to be without undue delay. Moreover, if there is a change in the skeleton argument, they should be informed no less than 14 days before the adjourned hearing. 

Implications:

At first instance, this case raised important points by ordering Mr. White to draw down on his pensions even in a non-fraud case to pay the creditors. It also highlights that a breach of fiduciary duty could have far-reaching consequences. From this short ruling, it seems that the CoA opined that mistakes were made in the first instance decision. This is not the last time we will hear about this case. 

Source:EWCA | 21-05-2024