Hogan Lovells

Key Dates

Judgement issued on 28 March 2018.


The case concerned whether there had been a valid substitution of the principal employer of an occupational pension scheme. If the "new principal employer" had not been substituted for the "old principal employer" then a 1999 deed would not have been validly executed and benefit changes made by the deed would have had no effect. 

The provision of the scheme's trust deed and rules which allowed the substitution of a new principal employer did not require this to be done by any particular means. The High Court had held that for the purposes of this rule no formality was necessary and so it was not required to have a written agreement to substitute the principal employer.  It had also found on the facts that the terms of the relevant rule had been complied with on the execution of the 1999 deed and that it was therefore valid.

The Court of Appeal dismissed the appeal of the old principal employer.  It found on the facts that the conduct of the parties in the months prior to the execution of the 1999 deed was sufficient evidence from which to infer that the required agreement and consent for the substitution of the principal employer had been reached and given by the date of execution of the 1999 deed at the latest.

In reaching its conclusions, the Court of Appeal rejected the old principal employer's arguments that the parties had (mistakenly) all believed that the new principal employer had been substituted in 1994 and that, therefore, they could not have consented and agreed to the substitution taking place in 1999.  In relation to a recital to the 1999 deed which stated that the substitution had taken place in 1994, it must be inferred that the parties to the deed were either aware that the recital was not accurate if read literally, or that they did not consider it in any detail.  

Date Accessed: 03/12/2021