Vodafone Ireland Ltd v Farrell and Others

• Jurisdiction: Ireland
• Court: Court of Appeal (Ireland)
• Judge: Mr. Justice Allen
• Judgment Date: 28 March 2025
• Neutral Citation: [2025] IECA 76
• Docket Number: Appeal Number: 2024/204

Procedure by Special Summons Under Order 3, Rule 6 and Order 454, Rule 1 of the Rules of the Superior Courts 1986 (As Amended)

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/Appellant

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

and

(By Order of the High Court Made on 20 February 2023)

Gerard Fahy

Defendants/Respondents

[2025] IECA 76

Whelan J.

Noonan J.

Allen J.

Appeal Number: 2024/204

THE COURT OF APPEAL

CIVIL

Pension scheme – Pay parity – Construction summons – Appellant appealing against a judgment and order on a construction summons – Whether the rules of a defined benefit pension scheme conferred an entitlement on the members of the scheme that their pensions would increase in line with the salaries paid by the employer

Facts: The appellant, Vodafone Ireland Ltd (Vodafone), appealed to the Court of Appeal against a judgment and order of the High Court on a construction summons. What was at issue was whether the rules of a defined benefit pension scheme conferred an entitlement on the members of the scheme that their pensions would increase in line with the salaries paid by the employer - a right to pay parity - or left the question of any increase in pension to the discretion of the employer. Eircell Ltd, following its establishment in 1996, established a pension scheme for its employees by interim trust deed of 2 April 1997 (with effect from 27 May 1996) and then by a definitive trust deed and rules dated 31 March 1998. The 1998 deed as amended by a 2001 deed (and other deeds) was replaced by a trust deed and rules made on 15 December 2005. The new rule 10 (Rule 10, 2005 Deed) provided: “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.” By special summons issued on 25 November 2022, Vodafone sought the direction and determination of the High Court regarding the proper interpretation of the Vodafone Ireland Pension Plan (VIPP). For the reasons given in a comprehensive written judgment delivered on 14 May 2024 ([2024] IEHC 280), the High Court (Roberts J) concluded that the correct interpretation of Rule 10, 2005 Deed was that it provided Scheme C members with a guaranteed entitlement to pension increases on a pay parity basis in line with the percentage increase in the relevant grade for that member. By notice of appeal filed on 21 August 2024, Vodafone appealed against the judgment and order of the High Court on ten grounds, each with a number of sub-grounds. In his oral presentation counsel for Vodafone identified four respects in which the trial judge was said to have erred in her approach to the documents and the background. First, it was said, the judge failed to properly understand and consider the legislative context. Second, it was said, she failed to analyse the totality of the relevance evidence of context. Third, it was said, the judge wrongly excluded admissible and highly relevant evidence. Fourth, it was said - to a slightly lesser extent - the judge afforded weight to marginal and sometimes irrelevant context.

Held by Allen J that Vodafone had failed to show that the High Court judge erred in the approach which she took to the construction of Rule 10, 2005 Deed, in her findings as to the admissibility of the evidence tendered on both sides, in her analysis of the admissible evidence, or in her conclusion as to the correct interpretation of the VIPP.

Allen J dismissed the appeal and affirmed the order of the High Court.

Appeal dismissed.

NO REDACTION NEEDED

JUDGMENT of Mr. Justice Allen delivered on the 28 ^th day of March, 2025

Prologue

1 . This is an appeal against a judgment and order of the High Court on a construction summons. What is at issue is whether the rules of a defined benefit pension scheme confer an entitlement on the members of the scheme that their pensions will increase in line with the salaries paid by the employer – a right to pay parity – or leave the question of any increase in pension to the discretion of the employer.

2 . If, loosely, the issue might be thought to be whether the members are or are not entitled to pension increases as a matter of right, that would not be correct. These proceedings are not concerned with the entitlement of the scheme members under their contracts of employment or by reason of their reliance on anything said or done by the employer. Nor are they concerned with whether the pension scheme rules correctly reflect the members' pension entitlements under their contracts of employment. As will be seen, the evidence and arguments on both sides was not always precisely focussed on what was and is the only issue: which is the correct construction of the scheme rules.

Introduction

3 . By special summons issued on 25 ^th November, 2022 Vodafone Ireland Limited (“Vodafone”) sought the direction and determination of the High Court regarding the proper interpretation of the Vodafone Ireland Pension Plan (“VIPP”). The special summons originally named the trustees of the pension plan as the defendants. Later, Mr. Gerard Fahy – one of the cohort of members concerned – was joined to represent the interests of those members of the plan whose rights and entitlements were liable to be affected by the outcome of the proceedings.

4 . Remarkably, although what was at issue was the construction of one of the rules of one of the four schemes provided for by the trust deed and rules, there was a protracted exchange of affidavits, exhibits and expert evidence which eventually ran to eight folders and the hearing occupied the High Court Commercial List for seven days.

5 . The special indorsement of claim on the special summons sought the determination of a number of questions as to the entitlements of the relevant scheme members or beneficiaries claiming in respect of the membership of those scheme members, and alternatively asked whether Vodafone was entitled to an order for rectification of the wording of the rule. Of course, the summary procedure was not appropriate for a claim for rectification and the question of rectification was not pursued: but its inclusion in the first place betrayed the existence of a larger dispute as to what the entitlements of the relevant scheme members – if they were not limited by the scheme rules to the extent contended for by Vodafone – should be. As the trial judge pointed out, the exchange of affidavits threw up issues of misrepresentation, estoppel and legitimate expectation which, although they might be relevant to the entitlements of the relevant members under their contracts of employment, were not before the court for determination in these proceedings.

Overview

6 . The VIPP is a defined benefit occupational pension scheme with four schedules of rules, each pertaining to a different cohort of members, namely: Scheme A, which provides for the entitlements of what might be described as ordinary employees of Vodafone and former employees of Eircell Limited; Scheme B, which provides for the entitlements of the spouses and children of Scheme A members; Scheme C, which provides for the entitlements of Vodafone employees who are described as employees of eircom plc who were previously members of the eircom pension plan and who transferred employment to Eircell 2000 plc; and Scheme D, which provides for the entitlement of former members of the Cable and Wireless Limited Employee Benefit Scheme.

7 . While the identification of the Scheme C members in the VIPP is clear, it is not immediately obvious. The Scheme C members are those employees of Vodafone who started their careers as civil servants in the Department of Posts and Telegraphs but eventually – in circumstances which I will explain – came to be employed by Vodafone.

8 . Historically, the responsibility for postal and telecommunications services in Ireland lay with the Minister for Posts and Telegraphs. The Postal and Telecommunications Services Act, 1983 provided for the establishment of two companies, An Post and Bord Telecom Éireann. The new companies – which at that time were State owned – were thenceforth to provide the services theretofore provided by the Department and were to be staffed by the staff theretofore employed by the Department, who were, in the main, established civil servants.

9 . Bord Telecom Éireann changed its name to Telecom Éireann and was later re-registered and floated as eircom plc.

10 . The mobile phone division of eircom was called Eircell and the mobile phone business was carried on by a company called Eircell Limited, which was established in 1996 as a subsidiary of the then Telecom Éireann. Some of the Eircell staff were directly employed by Eircell. Others were seconded from Telecom Éireann – and continued to be employed by Telecom Éireann – and some or all of those seconded staff were staff who had transferred to Telecom Éireann from the Department of Posts and Telegraph.

11 . The Eircell business was bought by the Vodafone group in 2001. The liabilities and assets of Eircell Limited were first transferred to eircom, and then by eircom to a company then called Eircell 2000 plc, which is now Vodafone Ireland Limited. With effect from...