Vodafone Ireland Ltd v Farrell and Others

• Jurisdiction: Ireland
• Court: High Court
• Judge: Ms. Justice Eileen Roberts
• Judgment Date: 14 May 2024
• Neutral Citation: [2024] IEHC 280
• Docket Number: 2022 No. 215 SP

Procedure by Special Summons Under Order 3, Rule 6 and Order 54, Rule 1 of the Rules of the Superior Courts 1986 (As Amended)

And in the Matter of a Trust Deed and Rules of the Vodafone Ireland Pension Plan Dated 15 December 2005 and Made Between Vodafone Ireland Limited of the One Part and Celine Fitzgerald, Jan Mottram, Joseph Maher, Sarah Callery and Eamon Farrell of the Other Part

And in the Matter of a Deed of Amendment of the Vodafone Ireland Pension Plan Dated 5 April 2012 and Made Between Vodafone Ireland Limited of the One Part and Joseph Maher, Eamon Farrell, Mike O'Connor, John Keaney, Colm Lyons and Paul Ryan of the Other Part

Between

Vodafone Ireland Limited

Plaintiff

and

Eamon Farrell, Mike O'Connor, John Keaney, Katie Craig, Michael Farrell, David Harney and Irish Pensions Trust Limited Being the Trustees of the Vodafone Ireland Pension Plan

First Named Defendants

And (By Order of the High Court Made on 13 February 2023)

Gerard Fahy

Second Named Defendant

[2024] IEHC 280

2022 No. 215 SP

(2022 No. 109 COM)

THE HIGH COURT

COMMERCIAL

JUDGMENT of Ms. Justice Eileen Roberts delivered on 14 May 2024

Table of Contents:

1. Introduction	Page 2
2. The parties and the directions sought	Page 3
3. Background to the VIPP and Scheme C	Page 5
4. Background to the dispute on the Interpretation Issue and the Comparator Issue	Page 9
5. Evidence adduced by the Parties	Page 11
a. The evidence of James Magill on behalf of Vodafone	Page 11
b. The evidence of Patrick Foley on behalf of the Trustees	Page 15
c. The evidence of Barbara Browne on behalf of the Trustees	Page 16
d. The evidence of Eamon Farrell on behalf of the Trustees	Page 17
e. The evidence of Gerard Fahy on his own behalf and on behalf of the Scheme C Members	Page 17
f. The expert evidence	Page 19
6. The Law applying to contractual interpretation	Page 22
7. The varying interpretations suggested in respect of Rule 10	Page 24
8. Analysis of the Interpretation Issue	Page 28
9. Analysis of the Comparator Issue	Page 32
10. Decision and the Orders to be made	Page 35

Introduction

1 . In this case the court is asked, pursuant to its inherent jurisdiction and under Order 54, Rule 1 of the Rules of the Superior Courts (as amended), to interpret certain provisions of a pension scheme deed regarding the entitlement of certain members of that scheme to post-retirement increases in their pensions. Conflicting interpretations are advanced by the employer on the one hand and by the scheme trustees/ members on the other as to the proper meaning and effect of those provisions.

2 . The proceedings commenced by way of Special Summons on 25 November 2022. A considerable amount of materials and affidavits (including from experts) has been put before the court to advance each side's interpretation and to provide relevant “context” to the court of the circumstances surrounding the deed. Much of the legal argument at the hearing concerned the relevance and admissibility of those materials to the question of interpretation. Certain deponents were cross-examined on their affidavits, the parties having previously secured orders to permit such cross-examination.

3 . The proceedings seek in the alternative a declaration that the plaintiff is entitled to an order for rectification of the relevant wording to reinstate language contained in an earlier deed. However, this relief (which would require full pleadings and oral evidence) was not advanced at the hearing before this court and has been left over for further consideration pending the decision of this court on the interpretation questions raised.

4 . It is worth noting at this point that issues of misrepresentation, estoppel or legitimate expectation are also not before this court for determination, although material potentially relevant to such claims formed a considerable part of the exhibited documentation and the expert reports.

The parties and the directions sought.

5 . The pension deed at issue in these proceedings is the Vodafone Ireland Pension Plan (the “ VIPP”), which was formerly the pension scheme of Eircell Limited (“ Eircell”). The plaintiff (“ Vodafone”) is the principal employer under the VIPP (having taken on this role from Eircell on Vodafone's acquisition of Eircell in 2001). The first named defendants are the trustees of the VIPP (the “ Trustees”).

6 . The VIPP is a defined benefit occupational pension scheme with four schedules of rules each pertaining to different cohorts of employee members, namely: Scheme A (rules applicable to Vodafone and former employees of Eircell, Limited) (“ Scheme A”); Scheme B (rules of the spouse's and children's scheme applicable in respect of Scheme A members) (“ Scheme B”); Scheme C (rules applicable to Vodafone employees who were previously members of the eircom Scheme) (“ Scheme C”); and Scheme D (applicable to former members of the Cable and Wireless Limited Employee Benefit Scheme (“ CWEBS”) who transferred to the VIPP following the termination and wind up of the CWEBS) (“ Scheme D”).

7 . The interpretation issues in these proceedings arise in relation to Scheme C members only. 1

8 . The second named defendant (“ Mr Fahy”) is a member of the VIPP and has been appointed in a representative capacity to represent the interests of the Scheme C members of the VIPP. The vast majority of Scheme C members (including Mr Fahy) commenced employment as civil servants in the Department of Posts and Telegraphs (“ P&T”) before 1983.

9 . Eircell established its pension scheme (“the Eircell Scheme”) by Interim Trust Deed dated 2 April 1997 (the “ 1997 Interim Deed”) and it was governed by a Trust Deed and Rules

dated 31 March 1998 (the “ 1998 Deed”). The VIPP (including its predecessor the Eircell Scheme) was subject to six amending deeds during the period from 1999 to 2005 (dated 12 March 1999, 9 March 2001, 2 November 2001 (“ the 2001 Deed”), 14 March 2002, 24 June 2004 and 3 November 2004 respectively). In 2005, what is described by Vodafone as a “consolidating deed” was prepared, inter alia, to replace the multiplicity of deeds amending the VIPP. This exercise was achieved by way of Trust Deed and Rules dated 15 December 2005 (the “ 2005 Deed”)

10 . Prior to a revision referred to in a deed of amendment dated 5 April 2012 (the “ 2012 Deed”), Rule 10 of Schedule III of the 2005 Deed (“ Rule 10, 2005 Deed”), governed increases to pensions in payment and preserved pensions for Scheme C members.

11 . Rule 10, 2005 Deed provides that:

“ All Pensions under this Scheme C will increase in no less favourable a Manner than had the Member remained as a Member of the Eircom Scheme and will increase in line with the percentage increase in the relevant grade for that Member”.

12 . The first direction sought from the court is the proper interpretation of Rule 10 (the “ Interpretation Issue”). This essentially concerns whether or not Rule 10, 2005 Deed properly interpreted, provides for guaranteed pension increases to Scheme C members. Directions are sought from the court in respect of the proper meaning and effect of Rule 10, 2005 Deed as to:

“( i) Whether properly construed, Scheme C, Rule 10, does or does not provide for “guaranteed” pension increases for any Scheme C member or beneficiary claiming in respect of the membership of a Scheme C member (i.e. an associated dependant's or children's pension);

(ii) Whether or not the proper interpretation of the 2012 Deed is that it creates an additional benefit in the form of a “guaranteed” pension increase in respect of the portion of a Scheme C member's benefit which is attributable to pensionable service between 15 December 2005 and 20 May 2012 and that, as this is an additional benefit in the form of future increases, it applies to all Scheme C members (and related dependants' benefits) and not just Scheme C members who were active members on 5 April 2012 — the effective date of the 2012 Deed;

(iii) Whether or not the VIPP Scheme C provisions have been validly and effectively amended by the 2012 Deed for all Scheme C members, irrespective of the date on which they left service, with effect from 5 April 2012, such that for all Scheme C members increases to pensions in payment awarded on and after 5 April 2012 are to be determined as follows:

(a) pension increases for the benefits attributable to pensionable service prior to 15 December 2005 would be discretionary (i.e. were subject to the consent of the Company); (b) pension increases attributable to pensionable service between 15 December 2005 and 20 May 2012 would be granted by reference to the percentage increase of the remuneration of the applicable employment grade; and

(c) pension increases for the benefits attributable to pensionable service after 20 May 2012 would be discretionary (i.e. were subject to the consent of the Company).” 2

13 . In brief, Vodafone contends that Rule 10, 2005 Deed affords discretion to Vodafone in terms of pension increases and does not provide for guaranteed or so-called “pay parity” increases to Scheme C members. On the other hand, the Trustees and Mr Fahy argue that Scheme C members are entitled under Rule 10, 2005 Deed to guaranteed pension increases aligned throughout their retirement with salaries for the grade and point at which that member retired (i.e. pay parity increases), which they say follows from their transfer from the civil service on the basis that their entitlement to pay parity pension increases as civil servants was replicated in the VIPP. Both sides rely on the wording of Rule 10, 2005 Deed and also on a range of contextual material.to support their positions.

14 . The second related issue that this court is asked to determine is:

“ For the purposes of calculating any pension increases under Scheme C, Rule 10 (in accordance with the interpretation of...