Vidette Molyneaux v Financial Services and Pensions Ombudsman

• Jurisdiction: Ireland
• Judge: Mr. Justice Garrett Simons
• Judgment Date: 19 November 2021
• Neutral Citation: [2021] IEHC 668
• Court: High Court
• Docket Number: 2020 No. 245 MCA

Between

Vidette Molyneaux

Appellant

and

Financial Services and Pensions Ombudsman

Respondent

Trustees of the Analog Devices International Investment Partnership Plan

Notice Parties

[2021] IEHC 668

2020 No. 245 MCA

THE HIGH COURT

Pension scheme – Payment of benefits – Trust deed – Appellant appealing against a decision of the respondent – Whether the trustees of the pension scheme were obliged to make a lump sum payment in a particular amount

Facts: The appellant/complainant, Ms Molyneaux, appealed to the High Court against a decision of the respondent, the Financial Services and Pensions Ombudsman. The decision under appeal had been made in respect of a complaint concerning the payment of benefits pursuant to a pension scheme. The complaint related to the extent of the benefits payable upon the death in service of a member of the pension scheme. The complainant was the widow of a deceased member of the pension scheme. The complaint centred on the question of whether the trustees of the pension scheme were obliged to make a lump sum payment in a particular amount, or, alternatively, exercise a discretionary power as to the amount, if any, of the payment. The complainant contended that the trustees were obliged to pay out the full amount of the figure notionally attributed to a member under what was described as their Retirement Benefit Account.

Held by Simons J that the Ombudsman erred in law in his approach to the interpretation of the pension scheme; in particular, the Ombudsman mistakenly considered that a particular rule under the trust deed was of no assistance to the question of interpretation (rule 5(a)(vi)). Simons J held that the rule was of central importance. Simons J held that this was a serious and significant error of law and vitiated the decision.

Simons J held that the appropriate order was to remit the decision to the Ombudsman for review, having regard to the court’s opinion on the matter, pursuant to s. 64(3)(c) of the Financial Services and Pensions Ombudsman Act 2017. Simon J’s provisional view was that the appellant/complainant, having been successful in her appeal, was entitled to the costs of the statutory appeal as against the respondent. Simons J held that this reflects the default position under Part 11 of the Legal Services Regulation Act 2015. Simons J held that the notice parties should bear their own costs.

Appeal allowed.

Appearances

Paul McGarry SC and Jack Tchrakian for the appellant instructed by Robert Emmet Bourke & Co.

Michéal O'Connell SC and Mark William Murphy for the respondent instructed by Eversheds Sutherland

Joe Jeffers for the notice parties instructed by Matheson

JUDGMENT of Mr. Justice Garrett Simons delivered on 19 November 2021

INTRODUCTION

1 This matter comes before the High Court by way of a statutory appeal against adecision of the Financial Services and Pensions Ombudsman (“ the Ombudsman”). The decision under appeal had been made in respect of acomplaint concerning the payment of benefits pursuant to a pension scheme. (Save when necessary to identify specific provisions of same, the shorthand “ the pension scheme” will be used throughout this judgment when referring to the trust deed and rules governing the pension scheme).

2 The complaint relates to the extent of the benefits payable upon the death in service of a member of the pension scheme. The complainant is the widow of a deceased member of the pension scheme. In brief, the complaint centres on the question of whether the trustees of the pension scheme are obliged to make a lump sum payment in a particular amount, or, alternatively, exercise a discretionary power as to the amount, if any, of the payment. The complainant contends that the trustees are obliged to pay out the full amount of the figure notionally attributed to a member under what is described as their Retirement Benefit Account. The resolution of this complaint requires consideration of a number of interlocking provisions of the trust deed and rules governing the pension scheme.

3 For reasons which will be explained in detail presently, I have found that the Ombudsman erred in law in his approach to the interpretation of the pension scheme. In particular, the Ombudsman mistakenly considered that a particular rule under the trust deed was of no assistance to the question of interpretation. In truth, this rule was of central importance. This is a serious and significant error of law and vitiates the decision.

4 Having found that the Ombudsman erred in law, this court is now faced with the dilemma of either remitting the matter to the Ombudsman for reconsideration, or reaching its own determination on the interpretation of the pension scheme and substituting its own reasoning for that of the Ombudsman. To resolve this dilemma, it is necessary to consider the nature and extent of the appellate jurisdiction conferred upon the High Court by the Financial Services and Pensions Ombudsman Act 2017.

PART I

THE LEGISLATIVE FRAMEWORK

OMBUDSMAN'S JURISDICTION

5 The Ombudsman's jurisdiction to consider and determine complaints is created by Part 5 of the Financial Services and Pensions Ombudsman Act 2017 (“ the FSPO Act 2017”). Unless otherwise stated, all references below to a section of an Act are intended to refer to the FSPO Act 2017.

6 The Ombudsman's jurisdiction to consider and determine complaints in respect of the conduct of a pension provider arises under section 44(1)(b) of the FSPO Act 2017 as follows:

“44. (1) Subject to section 51(2), a complainant may make a complaint to the Ombudsman in relation to the following:

[…]

(b) the conduct of a pension provider involving—

• (i) the alleged financial loss occasioned to a complainant by an act of maladministration done by or on behalf of the pension provider, or

• (ii) any dispute of fact or law that arises in relation to conduct by or on behalf of the pension provider;”.

7 The Ombudsman enjoys what might be described as a hybrid jurisdiction, whereby not only may he adjudicate upon alleged acts of maladministration, he may also make determinations in respect of any dispute of fact or law that arises in relation to conduct by or on behalf of the pension provider. The statutory language indicates that the Oireachtas intended that the Ombudsman should have jurisdiction to determine disputes of a type which would traditionally have been brought before the courts in plenary proceedings.

8 The potential for there to be an overlap between the issues raised on a complaint to the Ombudsman and those raised in legal proceedings before the courts is recognised at a number of points under the Act. The default position appears to be that the Ombudsman shall not investigate or make a decision on a complaint where there are or have been proceedings before any court in respect of the matter that is the subject of the complaint. This is subject always to the possibility of an application to stay the court proceedings under section 49 of the FSPO Act 2017. The test to be applied on such a stay application is whether there is sufficient reason why the matter in respect of which the legal proceedings have been commenced should not be investigated by the Ombudsman.

9 The Supreme Court has commented on the breadth of the jurisdiction enjoyed by the Ombudsman's statutory predecessor, the financial services ombudsman, in Governey v. Financial Services Ombudsman [2015] IESC 38; [2015] 2 I.R. 616. See paragraph 42 of the judgment as follows:

“[…] However, there are some cases where the sole, or virtually only, issue raised by the complainant may be one which is based on an assertion of legal rights. Such cases are, of course, within the jurisdiction of the F.S.O., and it is for the F.S.O. itself to decide whether to determine them. However, it is important to record that the F.S.O. does not have an obligation to determine by adjudication a complaint where the substance of the matters complained of is that a relevant financial institution has acted unlawfully in its dealing with the complainant and where, therefore, exactly the same issues of legal rights and obligations could be brought before a court. The legislation, therefore, permits, but does not require, the F.S.O. to deal with such complaints, being cases which are, in reality, matters which might otherwise be pursued by an appropriate form of court proceedings before whatever court might have jurisdiction to deal with the issues concerned.”

10 The remedies available in respect of a complaint against a pension provider are prescribed at section 61 of the FSPO Act 2017. The Ombudsman's decision may contain such direction to the parties concerned as the Ombudsman considers necessary or expedient for the satisfaction or the resolution of the complaint. The Ombudsman may order such redress, including financial redress, for the complainant as he considers appropriate. Any financial redress shall be of such amount as the Ombudsman deems just and equitable having regard to all the circumstances, but shall not exceed any actual loss of benefit under the scheme concerned.

11 The Ombudsman's jurisdiction to make directions is subject to the following express restrictions under section 61(3) of the FSPO Act 2017. A direction shall not require either:

• (a) an amendment of the rules of a scheme or the conditions of a scheme, or

• (b) the substitution of the decision of the Ombudsman for that of the pension provider in relation to the exercise by the pension provider of a discretionary power under the rules of the scheme.

12 The latter of these two restrictions is of importance in the present case. This is because the complaint centres on the question of whether the trustees of the pension scheme are obliged to make a lump sum payment in a particular amount, or, alternatively, exercise a discretionary power as to the amount, if any, of the payment. If, on the correct...