Healy v Irish Life Staff Benefits Scheme No.2
| Jurisdiction | Ireland |
| Judge | Ms. Justice Donnelly |
| Judgment Date | 25 July 2018 |
| Neutral Citation | [2018] IEHC 483 |
| Court | High Court |
| Docket Number | [RECORD NO. 2017 11398 P] |
| Date | 25 July 2018 |
[2018] IEHC 483
THE HIGH COURT
Donnelly J.
[RECORD NO. 2017 11398 P]
AND
Bankruptcy – Pension – Loss – Defendants seeking orders dismissing proceedings on grounds that they were unsustainable, frivolous, vexatious and bound to fail – Whether the plaintiff had a cause of action
Facts: The plaintiff, Mr Healy, redrafted claims for loss arising out of change in how his work related pension from his employment with the second defendant, Irish Life Assurance, was treated for bankruptcy purposes in the UK. Both defendants sought orders, pursuant to the High Court's inherent jurisdiction, dismissing the proceedings on grounds that they were unsustainable, frivolous, vexatious, and bound to fail. Those arguments were put forward on the basis of the documentation before the Court, and the interpretation of the relevant section of the Insurance Act 1990, especially as regards what constituted a benefit under the old and new schemes. It was also submitted that the claims of the plaintiff were statute barred. The second defendant also submitted that a settlement agreement entered into by the plaintiff with the second defendant concerning the termination of his employment precluded the plaintiff from taking any proceedings concerning his employment. The second defendant also submitted that for the plaintiff to establish it was an implied term of his employment contract that the second defendant was required to ensure that the new scheme was treated for UK bankruptcy law purposes as an approved pension, then the plaintiff had to show such a term was necessary; the plaintiff did not and could not establish that it was necessary and therefore any claim in law was bound to fail. The second defendant also submitted that no cause of action could be established in tort. The first defendant, Irish Life Staff Benefits Scheme, separately submitted that, on the basis of the pleadings, the plaintiff's claim did not disclose any reasonable cause of action and that it was frivolous or vexatious and should be dismissed in accordance with O. 19, r. 28 of the Rules of the Superior Courts.
Held by Donnelly J that, in circumstances where there was at the very least a credible argument that the lack of approval status by Her Majesty's Revenue Commissioners was a term less favourable, the plaintiff's case could not be said to be bound to fail due to the interpretation of the 1990 Act and the documentation setting up the old and new schemes. Donnelly J held that the statement of claim, when considered as a whole, did reveal a cause of action as against the first defendant. Donnelly J was of the view that the statement of claim set out in a more specific way the general claims that the plaintiff made against the first defendant in his plenary summons.
Donnelly J held that she would refuse the relief sought by each of the defendants in their notices of motion.
Relief refused.
In an ex tempore judgment delivered on 26th January 2018, I dismissed the majority of the claims made by the plaintiff because the High Court had to recognise the opening of bankruptcy proceedings in relation to the plaintiff in the United Kingdom of Great Britain and Northern Ireland ('the UK'), by virtue of the provisions of Regulation (EU) 2015/848 of the European Parliament and of Council of 20th May 2015 on insolvency proceedings, and must not scrutinise those proceedings. I permitted the plaintiff, a lay litigant at the time, to redraft his remaining claims. These were claims for loss arising out of change in how his work related pension from his employment with the second named defendant was treated for bankruptcy purposes in the UK.
When the second named defendant became a publicly floated company, the plaintiff was transferred as a member of the original Irish Life staff pension scheme ('the old scheme') to a new scheme sanctioned by the High Court by Order dated 6th November 1990 ('the new scheme'). The plaintiff's claims arise from the fact that the old scheme, pursuant to UK law, was an approved scheme for the purpose of bankruptcy proceedings by the UK revenue authorities known as Her Majesty's Revenue Commissioners ('HMRC'). An approved scheme is excluded from consideration as an asset in UK bankruptcy proceedings. The new scheme is not so approved. It appears that to be an approved scheme, an application for approval must be made by the scheme.
The plaintiff, who had worked in Ireland for the second named defendant up until 2011, went to the UK in 2011 and was adjudicated bankrupt there in 2013. His pension is not excluded from the UK bankruptcy proceedings because the new scheme is not an approved scheme for that purpose.
Both defendants sought orders, pursuant to the High Court's inherent jurisdiction, dismissing the proceedings on grounds that they are unsustainable, frivolous, vexatious, and bound to fail. These arguments were put forward on the basis of the documentation before the Court, and the interpretation of the relevant section of the Insurance Act, 1990 ('the Act of 1990'), especially as regards what constituted a benefit under the old and new schemes. It was also submitted that the claims of the plaintiff were statute barred.
The second defendant also submitted that a settlement agreement entered into by the plaintiff with the second defendant concerning the termination of his employment, precluded the plaintiff from taking any proceedings (including these proceedings) concerning his employment. The second defendant also submitted that for the plaintiff to establish it was an implied term of his employment contract that the second defendant was required to ensure that the new scheme was treated for UK bankruptcy law purposes as an approved pension, then the plaintiff had to show such a term was necessary. The plaintiff did not and could not establish that it was necessary and therefore any claim in law was bound to fail. The second named defendant also submitted that no cause of action could be established in tort.
In addition to the foregoing submissions, the first defendant separately submitted that, on the basis of the pleadings, the plaintiff's claim did not disclose any reasonable cause of action and that it was frivolous or vexatious and should be dismissed in accordance with O. 19, r. 28 of the Rules of the Superior Courts.
As the reliefs sought by the defendants are based upon the case being made by the plaintiff, it is necessary to look at the statement of claim in a little detail. Paragraph 2 refers to the first defendant as follows:
'The first Defendant is a pension scheme set up by the second Defendant to administer its staff pension scheme. Pursuant to his former employment with the second Defendant, the Plaintiff is a member of the pension scheme administered by the first Defendant.'
Paragraph 4 refers to the plaintiff becoming an employee of the second defendant and states that pursuant to his contract of employment with the second defendant, the plaintiff was a member of the Irish Life staff pension scheme, i.e. the old scheme, and was entitled to the benefits of that scheme. It then states:
'It was an express and/or implied term of the Plaintiff's contract of employment that:
(a) The Plaintiff would be entitled to a pension scheme on terms no less favourable that (sic) the benefits and entitlements under the old scheme.
(b) The second defendant would not reduce or in any way restrict the Plaintiff's entitlements and benefits under the Old Scheme.'
Paragraph 5 refers to the fact that in the course of public flotation of the second defendant, the members, assets and liability of the old scheme were transferred to the new scheme (the first defendant). Paragraph 6 refers to the transfer being carried out pursuant to s. 6 of the Act of 1990.
Paragraph 7 refers to the transfer being given effect to by Order of the High Court made on the 6th November, 1990. Paragraph 7 also goes on to state that the members' liability and assets of the old scheme were thereafter transferred to the new scheme in terms which obliged the defendants to ensure that any benefit to which a member was entitled under the old scheme, including the plaintiff, would also be enjoyed by that member under the new scheme.
Paragraph 8 refers to the approval of the old scheme by HMRC. This meant that any member of the old scheme could petition for bankruptcy in the UK and that pension would not form part of the bankruptcy estate.
Paragraph 9 states:
'Negligently, in breach of contract, in breach of duty, and in breach of statutory duty the second named Defendant did not ensure that the Plaintiff was entitled to the same benefits under the New Scheme as he was entitled to under the Old Scheme. Specifically, the New Scheme is not approved by HMRC and any pension under the New Scheme is subject to UK bankruptcy proceedings.'
Thereafter, para 9 sets out particulars of negligence, breach of contract, breach of duty and breach of statutory duty.
Paragraph 10 refers to the plaintiff leaving the employment of the second defendant in May 2011 with an entitlement to a deferred pension under the new scheme. It is pleaded that he then moved to the UK in or about October 2011 and that at the time of moving to the UK, the plaintiff understood he would be entitled to his pension under the new scheme under terms not less favourable than the old scheme, and that included claiming his pension while resident in the UK.
Paragraph 11 refers to the petition for bankruptcy being made in April 2013 and the order of adjudication of bankruptcy in July 2013; in or about November 2013, a trustee in bankruptcy of the estate of the...
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