There have been a number of recent cases where the courts have been very strict in requiring trustees and employers to follow the procedural requirements of the scheme’s amendment power to the letter. Failure to do so has resulted in the purported amendments being struck down. In the case of HR Trustees v Wembley [2011] EWHC 2974 (CH), Mr Justice Vos found that amendments to the scheme rules could stand, despite the amending documentation being incomplete. This argument is only likely to work where the attempted amendments are entirely in favour of the members.

The facts, very briefly, are that the employer decided to amend the rules in relation to annual increases and revaluation. The power of amendment required the trustees “to declare any such amendment in writing under their hands”. The trustees approved the changes but only four out of five of them signed the declaration.  

Vos J found that the trustees had not completed the declaration as the amendment power required each trustee to sign. Signature by a majority was not sufficient. This meant that the amendment had not been effectively made. Counsel for the employer then argued that as the fifth trustee had given evidence that she was happy with the amendment and would now sign it, the maxim that “equity looks on as done that which ought to be done” should be brought into play (in other words the fifth signature should be treated as having been added). Having considered a number of pension cases when this maxim had been raised, Vos J concluded that it was appropriate to use it here, but warned that the maxim can only be applied in favour of the persons entitled to enforce the provisions of the deed (i.e. the members).  

“In my judgment, this is a classic case in which the maxim of equity can and should properly be and equity would be made to look ridiculous if it were powerless to correct what has been an obvious administrative error.”