Mr Weale was a member of the Cubic pension scheme. The Scheme rules provided that the trustees and company had to consent first of all to whether a member could take his pension early and, if so, whether or not to apply an actuarial reduction to a pension received once a member became 60.
Mr Weale claimed that under the scheme from which he transferred his benefits in 1997, he had an absolute right to take a pension unreduced on turning 60 and that, when he agreed to join the Cubic Scheme, he received documentation saying that his benefits would be of the same overall value and that there would be no reduction on retirement from age 60.
An announcement and a summary of benefits were sent to Mr Weale on the same date. The stated intention in the announcement was that benefits would be provided in the Cubic Scheme equal to the transferring scheme. The summary stated that company and trustee consent was needed for early retirement but that retirement after 60 for transferring employees would be paid without reduction. However, the summary also stated that it was not a full description of the Scheme, which could be found in the Scheme rules (which later introduced a need for consent for benefits to be paid after 60 without reduction), and the form of election Mr Weale signed agreeing to transfer his benefits into the Scheme stated that he understood that the summary was subject to the Scheme rules.
Shortly after Mr Weale’s 60th birthday the trustees and company granted consent but on the basis that Mr Weale’s pension would be reduced in accordance with the Scheme rules given the then financial position of the Scheme and the additional strain which an unreduced pension would place on the Scheme.
Mr Weale complained to the trustees and, in due course, to the Pensions Ombudsman. The Ombudsman held on the basis of evidence that Mr Weale transferred into the Scheme on the basis that his benefits would be as they were under the old scheme and that he had an absolute right to an unreduced pension in relation to his service prior to the date of the inception of the Cubic Scheme.
The trustees and company appealed in the High Court. Mr Justice Field held that an ombudsman is wrong in law to look at some documents issued at a time of entering the scheme in isolation from the others especially where the form of election and the summary stated that the benefits to be provided were effectively set out in the subsequent Scheme rules.
Reading all of the documents together, the judge held that there was no clear representation to Mr Weale that he would be entitled to benefits equal to the benefits in his old scheme. Such a representation would be needed to establish an estoppel or contract that could prevent the company and trustees relying on the Scheme rules. In addition, Mr Weale could not show a further requirement for estoppel, namely detrimental reliance on the representation, because he had the benefit of accruing benefits in the Cubic Scheme that he would not have accrued if he had not transferred his benefits.
The decision demonstrates that the courts will apply the requirements of law to what may seem a matter of fact. In this case it was not enough to rely on representations made, the member also needed to establish how those representations created an estoppel.
The Ombudsman must approach cases in the same way as the courts would and has no jurisdiction to do otherwise.
The courts interpret representations to members in the context of all materials and representations made at the time and this case reinforces that it is essential for members and schemes to keep full and proper evidence of all changes and decisions that they make.