George v Ford et Al

• Jurisdiction: Trinidad & Tobago
• Judge: Donaldson-Honeywell, J.
• Judgment Date: 07 January 2016
• Neutral Citation: TT 2016 HC 3
• Docket Number: CV 2013-04899
• Court: High Court (Trinidad and Tobago)
• Date: 07 January 2016

High Court

Donaldson-Honeywell, J.

CV 2013-04899

George

and

Ford et al

Appearances:

Claimant appearing in person and unrepresented.

Mr. Russel Martineau, SC and Mr. Ravindra Nanga instructed by Ms. Marcelle Ferdinand for the First defendant.

Mr. Jonathan Walker instructed by Ms. C. Gopie for the Second defendant.

Civil practice and procedure - Whether the claimant should have been barred from being granted the relief sought in this action due to unconscionable delay.

Trust Law - Whether Rules 23 and 24 of the pension plan were sufficient to negate any presumption of a resulting trust in favour of the defendant

Donaldson-Honeywell, J.

INTRODUCTION:

1 Until May 18, 2001 the claimant, Mr. Cleveland George, was an Insurance Salesman employed with the Second defendant, Guardian Life of the Caribbean Ltd [“GLOC” or “the Company”]. He had worked with GLOC for almost seven years. During that time he was a member of the Pension Plan Fund established by his employer GLOC [“the Pension Plan” or “the Plan”]. As a former employee the claimant remained a member of the Pension Plan even after his employment ended. The Pension Plan was a deferred benefit, non-contributory plan established for the benefit of employees to which only the Second defendant, as employer, made contributions. The Pension Plan was governed by Rules and a Trust Deed and the First defendants were the Trustees of the Pension Plan.

2 The Pension Plan was wound-up on December 31, 2004 after the Second defendant gave six months' notice and invited members to transfer to a new pension plan. By letter dated April 15, 2004 and a booklet entitled “Pension Fund Plan, Questions and Answers” (“Q&A”), the Second defendant had invited members of the Plan to transfer to the new Pension Plan. The vast majority of the members of the Plan elected to transfer to the new plan.

3 At the time of its termination the pension plan fund was in surplus and its Trustees, the First defendants paid the surplus of Three Hundred and Thirty Million Dollars ($330,000,000.00) [“the surplus”] to the Second defendant. The claimant, as one of the few pension plan members who declined to accept the transfer to the new plan, contends that since he remained a member of the plan and a beneficiary of the trusts established under its Trust Deed and Rules he was entitled to the surplus. Special reliance is placed on Rules 23 and 24 of the Plan. It was the claimant's contention based on Rule 23 that on termination of the Plan only Rule 24 governed how the fund should be utilized. At paragraph 5 of his Amended Statement of Case the claimant contends these rules should be interpreted as providing that on dissolution of the Pension Plan “all the assets of the Fund were to be applied in the purchase of additional benefits for the members of the Plan, so that the entire beneficial interest in the trust was to be exhausted.”

4 Accordingly, he seeks to have the Court declare that the First defendants acted in breach of trust by paying the surplus to the Second defendant. He further claims an order that the Second defendant account for and pay the surplus to him and other remaining Pension Plan members if any.

5 In Defence to the Claim, the claimant's interpretation of the Rules of the Plan as the basis for his entitlement to the surplus is challenged as being contrary to settled law. The defendants, by way of this challenge, underscored the need to read and construe the Trust Deed and the Rules of the Plan as one. In so doing, account had to be taken of the fact that the Trustees obligation to make payments to members from the fund was limited by the provisions of Rule 7. Based on that Rule there was a ceiling beyond which payments could not be made.

6 Accordingly, they contend that on the highest authority of the Privy Council's decision by Lord Millett in No 27 of 1998 Air Jamaica Limited et al v. Joy Charlton et al, the surplus of the Pension Plan Fund that remained after all obligations to the members had been fulfilled by the First defendants as Trustees, was correctly paid to the Second defendant. This payment was made by virtue of a resulting trust since the Second defendant was the sole contributor to the Pension Plan fund.

7 The defendants further contention is that the claimant failed to present any evidence that he had given early notice of his objection to the termination of the Pension Plan and his intention to make a claim for the surplus. The defendants allege that in the absence of such evidence the claimant is guilty of inordinate and inexcusable delay. The Second defendant contends that having heard of no objection to GLOC's receipt of the surplus from the Pension Plan there has been extensive re-investment of assets, fluctuation of investment values and comingling of funds over the years.

8 Accordingly, having been led to believe that there would be no objection to the termination of the Plan, the Second defendant was prejudiced by the claimant's delayed claim. Any payment of the surplus to the claimant after so many years would require difficult unraveling and/or reversal of GLOC's investment decisions over the years. The Second defendant submits the claimant is therefore barred by laches from maintaining his claim which was filed some nine years after the claimant was informed about the planned termination of the Pension Plan.

9 The claimant did not file a Reply so as to address the issue of laches raised in the Second defendant's Defence.

ISSUES:

10 The issues in the present case are as follows:

• a. Whether the claimant should be barred from being granted the relief sought in this action due to unconscionable delay; and

• b. Whether the surplus of the pension plan should be given to the remaining members, including the claimant, or whether on the basis of a resulting trust the surplus was correctly paid by the First defendants to the Second defendant.

PROVISIONS OF THE RULES AND TRUST DEED:

11 The May 5th, 1987 Trust Deed governing the Pension Plan sets out the purpose of the Second defendant GLOC in establishing the Pension Plan. The purpose is “securing pensions and other benefits for such of their present and future employees as under the rules hereto annexed and marked “A” shall be eligible and shall elect to participate in the same such persons being hereinafter referred to as the members.”

12 The Trust Deed further provides that:

• “1. The object of the Plan is to provide benefits for the Members by way of pension on retirement from service with the Company and ancillary benefits in accordance with the Rules.

• 2. The plan is established under irrevocable trusts to end in accordance with the Trust Deed and the Rules”

13 Clause 4 of the Trust Deed contemplates the possibility that contributions to the Pension Plan could be made by both GLOC and the members and provides that GLOC will pay to the Trustees in each year a sum of money equal to the total of the aggregate contributions of all Members and the aggregate contributions of GLOC as provided for by the Rules.

14 Although the prospect that Members could make contributions to the Pension Plan is provided for in the Trust, such an eventuality is subject to being provided for in the Rules. It is clear under Rule 6 of the Rules that only GLOC is required to make contributions. Rule 6 states that “The Company shall contribute all monies necessary to secure the benefits of the Members in the Plan.”

15 Rule 7 of the Pension Plan delimits as follows the amount of pension each member is entitled to receive at normal retirement date.

Pensionable Salary for a person in the claimant's former positions as a Salesman is defined in the Rules at 1.4(b) as “two-thirds of the average remuneration……such average to be taken over the five consecutive years which will provide the highest aggregate.”

• “7.1 The Plan provides for each member who has a minimum of 5 years' service an annual pension on retirement equal to 1/60th of his Final Pensionable Salary multiplied by the number of his completed years of service.”

16 Further limitations on pension entitlements that can be received are provided at Rule 7 as follows:

• “7.3 No Member shall be entitled to receive a pension which exceeds two-thirds of the highest Pensionable Salary except where such excess is approved by the Board of Inland Revenue.

• 7.4 The Company at its sole discretion may increase the annual pension of any or all Members (including Members in Receipt of a Pension) at any time provided that such increased pension does not exceed the maximum permitted by Rule 7.3.”

17 Termination of the Plan and dissolution of the Fund are governed by Rules 23 and 24 which provide:

[The fund is defined at Rule 1.5 as “the fund which comprises all contributions, all dividends and interest arising from investments of such contributions …….from which the pensions and other benefits of the Plan are to be provided.”]

• “23.1 Whilst the Company has every hope of maintaining its contributions to the Plan the right is nevertheless reserved to the Company:

• (a) To terminate the Plan by giving 6 months' notice in writing to the Trustees and in such event the Fund shall be dissolved and the provisions of Rule 24 shall apply.”

• “24.1 Upon the Plan being wound up and dissolved in pursuance of the provisions contained in Rule 23 hereof, the fund shall be realized and the net proceeds of such realization shall….be applied so far as the monies available permit in the manner following, that is to say:

• (a) First, in the purchase from an Insurance Company or Companies carrying on insurance business in Trinidad and Tobago of non-commutable and non-assignable annuities for the remainder of their lives for those persons who are then in receipt of pensions out of the Fund such annuities to be of amounts equal to the amounts of the pension allowances which such persons are then receiving and payable under the...