Industry-Wide Coal Staff Superannuation Scheme Co-Ordinator Ltd v Industry-Wide Coal Staff Superannuation Scheme Trustees Ltd & Anor [2012] EWHC 3712 (Ch)

Case No HC11C01092[2012] EWHC 3712 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Venue Royal Courts of Justice, Rolls Building, Fetter Lane, London, EC4A 1NLDate 20/12/2012
Before
MR JUSTICE MORGAN
Between
Industry-Wide Coal Staff Superannuation Scheme Co-ordinator LimitedClaimantIndustry-Wide Coal Staff Superannuation Scheme Trustees LimitedDefendantsTerence FoxDefendant
Mr Tim Kerr QC and Mr Paul Newman QC (instructed by Squire Sanders (UK) LLP) for ClaimantMr Jonathan Evans (instructed by Hogan Lovells International LLP) for First DefendantMr Nigel Giffin QC and Mr Nicolas Stallworthy QC (instructed by Stephenson Harwood LLP) for Second DefendantHearing Hearing dates: 23 and 24 October 2012
Judgment

Introduction

[1]This claim concerns the Industry-Wide Coal Staff Superannuation Scheme (“the IWCSSS”), which is a multi-employer, industry-wide, defined benefit pension scheme. The claim raises questions as to the construction of the Industry-Wide Coal Staff Superannuation Scheme Regulations 1994 (SI 1994/2973) (“the 1994 Regulations”), and also as to the construction of the Trust Deed and Rules dated 29th December 1994, in relation to the IWCSSS. The 1994 Regulations were made pursuant to schedule 5 to the Coal Industry Act 1994 (“the 1994 Act”). The Trust Deed and Rules were made pursuant to, and in accordance with, the 1994 Regulations.[2]Prior to the creation of the IWCSSS, there was an earlier coal industry pension scheme, which was called the British Coal Staff Superannuation Scheme (“the BCSSS”). The BCSSS was established pursuant to and in accordance with the Coal Industry Nationalisation (Superannuation) Regulations 1946 (SR&O 1946/2198). The 1946 Regulations were made pursuant to section 37 of the Coal Industry Nationalisation Act 1946. After the establishment of the IWCSSS, the BCSSS continued in effect, but in a modified form. The modifications were made pursuant to the British Coal Staff Superannuation Scheme (Modification) Regulations 1994 (SI 1994/2576).[3]In addition to the BCSSS and the IWCSSS, which were open to certain staff members employed in the coal industry, there were schemes which were open to mine workers employed in the coal industry. These schemes were the Mineworkers’ Pension Scheme (established under the Coal Industry Nationalisation (Superannuation) Regulations 1950 (SI 1950/376) and later modified under the Mineworkers’ Pension Scheme (Modification) Regulations 1994 (SI 1994/2577)) and the Industry-Wide Mineworkers’ Pension Scheme (established pursuant to the Industry-Wide Mineworkers’ Pension Scheme Regulations 1994 (SI 1994/2974)).[4]The Claimant is the Co-ordinator of the IWCSSS. It represents the interests of the employers (currently 46 in number) participating in the scheme. Each participating employer is required to be a member of the Co-ordinator. The First Defendant is the trustee of the IWCSSS and is responsible for its administration and management. The Second Defendant is a deferred pensioner in respect of the IWCSSS.[5]As will be explained in more detail later in this judgment, Rule 33 of the Rules of the IWCSSS provides for annual increases in the rate of every pension payable under the IWCSSS and in the amount of “frozen pensions” and in respect of certain other entitlements under the scheme. For the sake of convenience, I will (generally) only refer to pensions which are in payment and I will (generally) not discuss the position of frozen pensions and other entitlements.[6]Rule 33 provides for the rate of a pension to be increased on each 1st January, by reference to the amount of the increase in a cost of living index in the 12 months to the preceding November. Rule 33 does not expressly provide for the first such increase (on the 1st January following the date that the pension came into payment) to be apportioned pro-rata in line with the length of time between the date on which the pension came into payment and the following 1st January. Thus, if the amount of the increase in the cost of living index in the 12 months to November 2011 is 5%, then the rate of a pension in payment on 1st January 2012 will be increased by 5% on 1st January 2012. The increase of 5% will be applied on 1st January 2012 irrespective of whether the pension came into payment on 1st February 2011 or 1st June 2011 or 1st December 2011, or indeed any other date in 2011.[7]Although Rule 33 does not expressly provide for pro-rating of the amount of the increase in the rate of the pension, the Claimant contends that Rule 33 can be read, and should be read, as if it did so provide. The First Defendant is neutral as to this contention of the Claimant. The Second Defendant opposes the Claimant’s contention; he submits that Rule 33 takes effect in accordance with its express terms, which do not provide for pro-rating of the increase.[8]I am asked to appoint the Claimant to represent all the participating employers in the IWCSSS and all those members and beneficiaries of the scheme in whose interests it is to argue in favour of the declaration claimed by the Claimant. I am also asked to appoint the Second Defendant to represent all other members and beneficiaries of the scheme. These appointments are not opposed and I made the appointments as asked pursuant to CPR 19.7(2).[9]The precise relief which is claimed in these proceedings is: i) A declaration that on the true construction of the Industry-Wide Coal Staff Superannuation Scheme Regulations 1994, Rule 33 of the Rules set out in the Schedule to the Regulations is to be read as if the following words are inserted at the end of sub-Rule (3) (“the Words”): “In respect of the first increase applied, applicable to: (a ) in the case of a frozen pension, the period between the date when the member ceased to be a Contributor and the following 1st January; or, absent such a prior frozen pension, (b) the period between the date of the commencement of the payment of the pension and the following 1st January, each pension shall be increased by one-twelfth of the percentage determined in accordance with paragraph (2) of this Rule for each month (any part month being regarded as a complete month) occurring during that period.” ii) A declaration that, on the true construction of the Rules of the Scheme, Rule 33 should be read as if the Words are inserted at the end of sub-Rule (3).

The legislation

[10]The coal industry was nationalised by the Coal Industry Nationalisation Act 1946 (“the 1946 Act”). Section 37 of the 1946 Act provided for the making of regulations under which the National Coal Board could establish and administer pension schemes for its employees. Regulations were duly made under the 1946 Act and two pension schemes in particular were established. The first was the British Coal Staff Superannuation Scheme and the other was the Mineworkers’ Pension Scheme. I will refer to some of the provisions of these schemes later in this judgment.[11]The subsequent process of privatisation of the coal industry was carried out pursuant to the 1994 Act. The 1994 Act repealed section 37 of the 1946 Act. Section 22 of the 1994 Act gave effect to the provisions of schedule 5 thereto. Paragraph 1 of schedule 5 defined “existing scheme” to include a pension scheme which had effect by virtue of regulations made under section 37 of the 1946 Act. Paragraph 2 of schedule 5 permitted the Secretary of State to make regulations providing for an existing scheme to continue in force notwithstanding the repeal of section 37 of the 1946 Act and providing for modifications to such an existing scheme.[12]Paragraph 3 of schedule 5 to the 1994 Act permitted the Secretary of State to make regulations to make such provision “as he thinks fit” for securing that arrangements were made and implemented in relation to an existing scheme to enable participants in that scheme to become participants in a new scheme. The new scheme had to satisfy certain statutory requirements by reference to an existing scheme: schedule 5, paragraph 3(1)(a). By reason of schedule 5, paragraph 3(6), a new scheme satisfied the statutory requirements by reference to an existing scheme if it contained all such provision as might be prescribed for the purposes specified in paragraph 7 of schedule 5, together with such other provision as might be prescribed. The purposes specified in paragraph 7 of schedule 5 included the purpose of securing that the new scheme provided benefits to and in respect of participants in the new scheme which were “no less advantageous” than the benefits falling to be provided under the existing scheme, as at the time immediately before the restructuring date.[13]Paragraph 4 of schedule 5 contained further provisions for the protection of rights under a new scheme, established under paragraph 3 of schedule 5. In particular, the Secretary of State could, by regulations, impose such restrictions and obligations as appeared to him to be appropriate for the purpose of securing that no person entitled to protection under a new scheme was to be placed in a worse position by reason of an amendment to the new scheme, resulting in benefits under the scheme being reduced, or contributions by employees being increased, otherwise than in prescribed circumstances.[14]Paragraph 5 of schedule 5 provided that the power to make regulations was exercisable by statutory instrument, subject to annulment in pursuance of a resolution of either House of Parliament. By paragraph 5(2), the Secretary of State had power to make such supplemental, incidental, consequential and transitional provisions as he considered appropriate.

The Regulations

[15]Pursuant to paragraphs 3 and 5 of schedule 5 to the 1994 Act, the Secretary of State made the 1994 Regulations. These Regulations were made on 22nd November 1994 and came into force on 15th December 1994. Regulation 2 defined “the Co-ordinator” as the Claimant, Industry-Wide Superannuation Scheme Co-ordinator Limited. Regulation 3 provided that the Co-ordinator should establish, by means of a trust deed entered into by the Co-ordinator and the First Defendant, a pension scheme in which participants in the scheme set up under the 1946 Act (being an existing scheme within the meaning of schedule 5 to the 1994 Act) would be able to participate. Regulation 4 provided that the pension scheme required by Regulation 3 should be in the terms of a trust deed, as set out in the schedule to the 1994 Regulations, which trust deed contained provisions, as specified in paragraph 3(6) of schedule 5 to the 1994 Act, satisfying the statutory requirements by reference to the existing scheme.[16]The schedule to the 1994 Regulations contained the terms of the trust deed (more accurately, a draft trust deed) to be entered into pursuant to Regulation 3. By clause 1 of those terms, the Co-ordinator was to establish the Industry-Wide Coal Staff Superannuation Scheme, to appoint the First Defendant as the first trustee of the scheme and to covenant with the First Defendant and successive trustees to observe and perform the provisions of the Trust Deed and the Rules. By clause 2(3) of those terms, the management and administration of the scheme, in accordance with the provisions of the trust deed, was to be vested in the First Defendant as trustee. Clause 46 of the terms dealt with the possible amendment of the trust deed and rules. It was provided that it was not to be possible to amend the trust deed or rules under clause 46 so as to have the effect of reducing the amount of any superannuation benefits payable to a member of the scheme.

The Rules

[17]The Rules of the scheme were to be set out in the trust deed, to be entered into pursuant to the 1994 Regulations. The draft rules were annexed to the draft trust deed which was set out in the schedule to the 1994 Regulations. The draft of rule 33 was headed “Provisions for Annual Increases” and was in the following terms:
“(1) The rate of every pension payable under the Scheme shall be increased annually by such percentage (if any) of the rate at which it is payable immediately before the increase takes effect as is ascertained in accordance with the following paragraphs of this Rule. (2) (a) The percentage by which increases are made in any calendar year shall be the percentage ratio (calculated to the nearest one place of decimals) by which the cost of living index for the month of November in the previous calendar year exceeds the cost of living index for that month in the year before that Provided that if in any year such percentage exceeds 5 per cent, the excess increase over 5 per cent shall not, without the consent of the Employer, exceed such amount as the Actuary shall have declared to be the maximum sustainable in respect of such year by the funds of the Scheme without any additional deficiency contribution or other additional payment being made by the Employer. (b) The Actuary shall, in making his declaration under this paragraph, also declare the maximum sustainable in respect of such year by the Scheme Funds without any additional payment being made by the Employer. (3) Every pension (including a frozen pension) payable under the Scheme shall be increased on 1st January in each year. (4) Paragraph (1) of this Rule shall apply to frozen pensions and to widow's or widower's prospective pensions as well as to pensions which are actually being paid, and, for the purpose of calculating the increase of any such pension for any year, the rate before the increase takes effect shall be taken to be the rate at which the pension would have been payable had it become payable immediately before the increase date in that year. (5) In this Rule:– “the cost of living index” means the General Index of Retail Prices for all items shown in the monthly Digest of Statistics published by the Central Statistical Office or, in the event of that index ceasing to be published, such other national index as the Committee shall determine to be most suitable; “frozen pension” means a pension which will become payable to a former Contributor by virtue of Rule 24 or 25; “pension” does not include a lump sum, children's benefit under Rule 30, Equivalent Pension Benefit as defined in Rule 20 any Guaranteed Minimum Pension under Rule 21 where no other pension is payable under the Scheme or any additional amount of pension payable under Rule 21 of the Rules of BCSSS as they had effect immediately prior to 21st June 1990 as a result of the exercise of an option under paragraph (b) of that Rule or paragraph (9) of Rule 23; and “widow's or widower's prospective pension” means a pension which will become payable under Rule 29 to a widow on the death of her husband or to a widower on the death of his wife. (6) Without prejudice to paragraph (5) of this Rule, if and in so far as the Employer may from time to time determine:– (a) the rate of:– (i) a pension payable to a Contributor or former Contributor at the date on which he attains the age of 65 (60 for women) or, if later, on which that pension first becomes payable; and (ii) a pension payable to the widow or widower of a Contributor or former Contributor (including a widow's or widower's prospective pension) at the date on which his Contributing Service ceases or, if later, the date on which he attains the age of 65 (60 for women) or dies under that age shall not for the purposes of paragraph (1) of this Rule include the amount of any Guaranteed Minimum Pension payable or prospectively payable to the Contributor or former Contributor or his widow or her widower, as the case may be, by virtue of the combined provisions of Rule 21 and the Contracting-out Rules; and (b) the rate at which such pension is payable at any subsequent date shall for the purposes of paragraph (1) of this Rule be calculated accordingly.”
[18]On 29th December 1994, the Claimant as the Co-ordinator and the First Defendant as the first trustee entered into a Trust Deed in all respects in accordance with the draft trust deed in the schedule to the 1994 Regulations. The Trust Deed incorporated the Rules in all respects in accordance with the draft rules which were referred to in the draft trust deed as set out in the schedule to the 1994 Regulations.[19]It is common ground that, absent a construction of Rule 33 which allows the court to read in additional wording and then interpret Rule 33 together with that additional wording, the effect of Rule 33 is as I summarised it in paragraph 6 above. In short, in the case of the first increase taking effect on the 1st January following the date on which a pension came into payment, the amount of the increase is not pro-rated in line with the period of time between the date on which the pension came into payment and the following 1st January. It is not argued that any of the language of Rule 33 as it stands allows the court to arrive at a result which results in such pro-rating of the amount of the increase.

The Rules of the BCSSS

[20]In advancing this claim, the Co-ordinator has drawn attention to the rules from time to time of the BCSSS, that is, the scheme established under the 1946 Act which was “the existing scheme” as defined in paragraph 1 of schedule 5 to the 1994 Act, before the new scheme created pursuant to the 1994 Regulations. I will therefore summarise the position in that respect.[21]I will begin by describing the rules of the scheme established under the 1946 Act as they existed prior to 1st January 1992. At that time, Rule 33A provided for annual increases in the rate of every pension payable under the scheme. The amount of the increase, expressed as a percentage, was to reflect the increase in a cost of living index and was to be calculated in accordance with Rule 33A(2). Pursuant to Rule 33A(3), the effective date of any such increase, was “the increase date for that pension in that year”. Typically, the increase date was the first day of the month in which there occurred the anniversary of the day with effect from which the pension was payable. Accordingly, there was a specific date in the year which was the increase date for a particular member’s pension. Further, there would always be a full year between the date the pension came into payment and the first increase payable under Rule 33A. The position under Rule 33A at that time was a little more complicated than I have described but the above description will suffice for present purposes.[22]Rule 33A of the scheme established under the 1946 Act was amended with effect from 1st January 1992. Under the amended Rule 33A(3)(a), with effect from 1st January 1992, every pension payable under the scheme was to be increased on 1st January in each year. The obvious purpose of this amendment was to provide for a fixed date of increase for every pension in payment, rather than a date of increase which was specific to each particular pension.[23]The new Rule 33A(3)(a) was supported by three particular provisions, which were contained in Rule 33A(3) (b), (c) and (d). Rule 33A(3)(b) dealt with the case where, before 1st January 1992, a pension had been increased from a date other than 1st January. The intention was that if the pension had been increased less than one year before 1st January 1992, then in relation to the increase which would take effect on 1st January 1992, the amount of the increase would not be the full amount of the increase appropriate where the previous increase had been one year earlier. Instead, there would be a pro-rata increase calculated so that each month (or part thereof) which had elapsed between the earlier increase and 1st January 1992 would attract 1/12 of the annual increase. Because Rule 33A(3)(b) only applied to the increase which would take effect on 1st January 1992, it was in the nature of a transitional provision and was not applicable in relation to any later year.[24]Rule 33A(3)(c) was another transitional provision which only applied in the case of a member’s service in eligible employment ending before 1st January 1992 and only dealt with the amount of the increase with effect from 1st January 1993.[25]Rule 33A(3)(d) provided:
“Where a Member’s service in Eligible Employment terminates on or after 1st January 1992 his pension shall be increased on the following 1st January by one-twelfth of the percentage determined in accordance with paragraph (2) of this Rule for each month (any part of a month being regarded as a complete month) occurring between the date from which the increase would have been payable under the Rules as they had effect immediately prior to 1st January 1992 and the following 1st January.”
[26]It can be seen that, unlike Rules 33A(3)(b) and (c), Rule 33A(3)(d) was not a transitional provision. It applied to the termination of a member’s service happening in any year on a day other than 1st January in that year. In the course of argument, Rule 33A(3)(d) was described as “a pro-rating provision”. There is no express pro-rating provision in Rule 33 of the IWCSSS. The Claimant’s purpose in bringing this claim is to obtain the result that Rule 33 of the IWCSSS will be read and have effect as if Rule 33 of that scheme did contain a pro-rating provision.[27]I was also referred to the modifications of the BCSSS which were effected by the British Coal Staff Superannuation Scheme (Modification) Regulations 1994, which were made pursuant to paragraph 2 of schedule 5 to the 1994 Act. As explained above, the BCSSS provided for pro-rating in Rule 33A(3)(d). This Rule was not modified by the modification regulations. Those regulations did however modify the operation of the proviso to Rule 33A(2). The unmodified Rule 33A(2) provided for the amount of the percentage increase in the rate of the pension to be calculated in accordance with a cost of living index. The unmodified Rule 33A(2) was subject to a proviso that if the percentage so calculated in any year exceeded 5%, then the excess increase over 5% should not, without the consent of the Principal Employer under the scheme, exceed such amount as the scheme actuary declared to the be the maximum sustainable amount, by reference to certain criteria. I will not set out the full terms of the proviso but it may be noted that the proviso was in very similar terms to the proviso to Rule 33(2)(a) and (b) of the Rules of the IWCSSS (which I have set out above). However, the proviso to Rule 33A(2) of the BCSSS was modified by the Modification Regulations, so that the proviso did not apply from a certain date. Thus, there were two differences between Rule 33 of the IWCSSS and Rule 33A of the modified BCSSS. The first difference was that Rule 33 of the IWCSSS did not have an express pro-rating provision, whereas Rule 33A(3)(d) of the modified BCSSS did have an express pro-rating provision. The second difference was that Rule 33 of the IWCSSS was subject to the proviso in Rule 33(2) whereas Rule 33A of the modified BCSSS was not subject to such a proviso with effect from a certain date.

The mineworkers’ pension schemes

[28]I referred earlier to two schemes which had been established by regulations which had been made under the 1946 Act. The first such scheme was of course the staff scheme, the BCSSS. The second such scheme was the Mineworkers’ Pension Scheme. Pursuant to paragraph 3 of schedule 5 to the 1994 Act, Regulations were made which provided for the establishment of a second new scheme which was to be called the Industry-Wide Mineworkers’ Pension Scheme and that scheme was duly established. I was referred to the provisions of the mineworkers’ scheme established under regulations made under the 1946 Act and the new mineworkers’ scheme established under regulations made under the 1994 Act. Both of those schemes provided for the rate of pension to be increased on a specified date in the year (the 1st October in each year): see Rule 26 of the original mineworkers’ scheme and Rule 28 of the new mineworkers’ scheme. These Rules are expressed in different language from that used in the Rules of the BCSSS and the IWCSSS, dealing with increases in the rate of the pension. However, I was asked to note that in both the original and the new mineworkers’ schemes, there was no provision for pro-rating of the amount of the increase which was calculated by reference to the annual change in a cost of living index.

Other material

[29]In addition to the above material relating to the history of the various schemes, I was provided by the Claimant with a considerable amount of other material. Indeed, the Claimant sought to make a virtue of the fact that it had carried out extensive research into the history of the matter. As a result of that research, the Claimant put before the court parliamentary material, consisting of statements made in both Houses of Parliament, and also material as to statements made during a period of consultation which preceded the enactment of the 1994 Act and the 1994 Regulations, which established the IWCSSS. The Claimant also relied upon two witness statements of Mr Haigh, who had been involved with the British Coal Corporation and who was later the secretary to the First Defendant until April 2011.[30]The Claimant’s case was that this material showed that the 1994 Regulations, which established the IWCSSS, omitted the words (which the Claimant has identified in the declarations which it seeks in these proceedings) as the result of a mistake in drafting. The Second Defendant submitted in return that much of the material relied upon by the Claimant was not admissible for the purpose of construing the 1994 Regulations or the Trust Deed and Rules and, further, that this material did not show that the alleged mistake in drafting had been made. I will, in due course, have to consider the admissibility and relevance of the material relied upon by the Claimant but, in the first instance, I will attempt to summarise it as briefly as possible.[31]I will start with the consultation exercise which took place before the introduction of the Coal Industry Bill. In September 1993, the Department of Trade and Industry published a consultation paper entitled:
“The Government’s Proposals for British Coal Pensions after Privatisation”
. This paper described the existing schemes, both the BCSSS and the Mineworkers’ Pension Scheme. The description did not go into the detail of the schemes and did not refer to the way in which pro-rating of increases was, or was not, dealt with in the Rules of either scheme. The paper referred to the pension arrangements which were made in relation to other privatisations. In relation to the water industry, the paper stated that:
“new “mirror image” schemes were created for each water authority with benefits no less favourable than those in force …”
. The paper proposed two new pension schemes for the coal industry which would follow on from the existing schemes and that statutory regulations would be made:
“to provide the same package of benefits for past and future service as the corresponding existing main scheme”
. Later in the paper it was stated that there would have to be certain differences between the rules of the new schemes and the existing schemes; in this context, there was a specific reference to the fact that the role of British Coal as principal employer would end. It was then stated that the Government believed that it was important that the rules of the successor schemes “should mirror those of the present schemes as far as is appropriate”.[32]The Committee of Management (i.e. the trustees) of the BCSSS made a detailed written response to the consultation paper. The response referred in a number of places to the operation of the BCSSS as regards annual increases in pensions. Concerns were expressed as to the possible options for the proposed new scheme as regards the amount of the increase and how it would be calculated. Rule 33A was referred to in this context but no mention was made of the pro-rating provision in relation to the first increase after the pension came into payment. The response welcomed the proposals in the consultation paper that the new scheme would be a “mirror image” scheme and that the Rules of the new schemes should “mirror those of the present Scheme so far as appropriate”. The response stated that “the changes to the existing Scheme should be kept to the absolute minimum”.[33]On 2nd December 1993, Mr Eggar, the Minister for Energy, announced in the House of Commons the Government’s decision in response to this consultation exercise. The Minister stated that the Coal Industry Bill would provide for new pension schemes for staff and mineworkers. He stated that the new schemes would “follow on, separately” from the existing schemes and “would be required by statutory regulations to provide the same package of benefits as the corresponding existing scheme”.[34]Counsel for the Claimant relied, in particular, on three statements made in Parliament in relation to the Coal Industry Bill (apart from the announcement on 2nd December 1993 to which I have referred). The first such statement was made by Mr Heseltine, the President of the Board of Trade, during the second reading of the Coal Industry Bill in the House of Commons on 18th January 1994. He said: “[t]he new industry wide schemes will provide the same package of benefits as the corresponding main scheme”.[35]The second statement in Parliament relied upon by counsel for the Claimant was made by Lord Strathclyde, Minister of State at the Department of Trade and Industry, on the second reading of the Coal Industry Bill in the House of Lords on 11th April 1994. Lord Strathclyde used the identical language to that used by Mr Heseltine on 18th January 1994.[36]The third statement in Parliament, relied on by counsel for the Claimant, was a statement made by Mr Taylor, Parliamentary Under-Secretary of State for Trade and Industry, during an adjournment debate in the House of Commons on 16th December 1994. He referred to British Coal employees who transferred to new employers being able “to continue to accrue pension benefits equal to those available in the existing schemes”.[37]I was not shown the provisions of the Bill as it progressed through Parliament. The Bill received the Royal Assent on 5th July 1994. I have earlier referred to the fact that paragraph 3(7)(c) of schedule 5 to the 1994 Act required that the benefits under the new scheme were to be “no less advantageous” than the benefits under the existing scheme.[38]Working drafts of the Regulations which became the 1994 Regulations were placed in the libraries of both Houses of Parliament on 22nd February 1994 and 21st July 1994. The draft which was placed in the libraries in February 1994 is no longer available for inspection. The draft placed in the libraries in July 1994 has been inspected and I was told that the drafting of Rule 33 at that time was the same as Rule 33 in the 1994 Regulations as they were later made, save for one minor respect which, I was told, was not relevant to the present issue. The Regulations were drafted by solicitors, Clifford Chance, instructed by the Department of Trade and Industry.[39]Counsel for the Claimant also relied on other statements made in 1994. The June 1994 edition of the BCSSS Pensions News newsletter which was distributed to members of the BCSSS contained an illustration depicting the word “BCSSS” reflecting in a mirror as the word “IWS” (the initials of “Industry Wide Scheme”), described the common intention of the Government and the Committee of Management of the BCSSS as being to create “a new scheme which was a mirror image of the existing Scheme” and stated that the benefits to be provided by the new scheme would be “virtually identical to those in the existing Scheme”. The newsletter also stated that many of the details of the new arrangements had not at that point been finally settled.[40]Also in 1994, Sir Norman Siddall, the then chairman of the BCSSS trustees, made a speech at the annual general meeting of the BCSSS on 18th November 1994. He referred to the fact that the Coal Industry Bill had been published in December 1993 and that, as published, it did not meet all of the concerns of the Committee of Management. He stated that the Bill had been amended at almost every stage of its progress through Parliament and that it was not until the Bill reached the Committee stage in the House of Lords that the Energy Minister wrote to the Committee of Management with his final proposals which were thereafter accepted by the Committee of Management. It seems likely from Sir Norman Siddall’s description of the matter that a major point in the discussions related to the amount of the annual increase and how it was to be calculated. It will be remembered that the treatment of that subject under the modified BCSSS differs from the position under the IWCSSS. Sir Norman Siddall referred to an “improvement” to the BCSSS. He then stated:
“[The British Coal Scheme members who transfer to the private sector] will have a statutory right to join a “mirror image” of the Staff Scheme … they will have the right … to build up pension benefits on the same basis as in the existing scheme.”
[41]The Claimant also relied upon two witness statements of Mr Haigh who had been involved in the history of the matter in 1994 and who was the secretary to the First Defendant until April 2011. He referred to the material from the period 1992 to 1994 which I have now summarised. He expressed the view that the drafting of the IWCSSS Rules mirrored the BCSSS Rules so closely that the draftsman of the later Rules must have used the earlier Rules as a template. Mr Haigh stated that his belief was that the pro-rating provision contained in Rule 33A(3)(d) of the BCSSS Rules was not repeated in the IWCSSS Rules because the draftsman thought that it was a transitional provision which was no longer applicable, similar to the transitional provisions in Rule 33A(3)(c) and (d), which were also not repeated in the IWCSSS Rules. Mr Haigh also explained that from 1994, the IWCSSS was operated on the basis that a pro-rating provision such as Rule 33A(3)(d) applied to the scheme. This seems to have been because the administration which was in place for the BCSSS simply continued as before in relation to the new scheme. The absence of a pro-rating provision in the IWCSSS was noticed by Mr Haigh himself in 2005 when he examined the relevant Rules in relation to an unconnected matter. The IWCSSS has continued to be administered as it was before 2005 pending the outcome of the present proceedings.[42]I was given evidence as to the effect of the court’s decision on the participating employers and the members of the IWCSSS. If the Rules are construed in the way contended for by the Claimant, then matters will simply continue as before; there will not be any claim for repayment of sums earlier paid to members as the outcome will be in accordance with the way in which the scheme has been administered to date. Conversely, if the Rules are construed in the way contended for by the Second Defendant, then it will follow that some members have been underpaid in the past. If their cases are reviewed and balancing payments made to them, the cost of those balancing payments will be of the order of £200,000. As for the future, payments made to members will be some £4.8 million higher if the Rules are construed as contended for by the Second Defendant as compared with the position if the Rules are construed as contended for by the Claimant. The financial burden will fall on the participating employers. It will not be a case of a member being benefited to the disadvantage of another member.[43]The Claimant’s evidence provoked evidence in response from the solicitor (Mr Goodchild) acting for the Second Defendant. Mr Goodchild commented upon the issue arising in these proceedings and, based upon his experience as a specialist pensions solicitor, he referred to the differing terms of various pension scheme rules which he had encountered. The Claimant submitted to me that I ought to exercise caution in relation to Mr Goodchild’s evidence as he was not independent of the parties to the dispute and there was no order permitting expert evidence to be called in this case.[44]Mr Goodchild explained that he had 14 years experience as a specialist pensions solicitor. He commented that Rule 33 of the IWCSSS dealt not only with increases in pensions in payment (which he described as “escalation”) but also with increases in the amount of deferred pensions (referred to in the Rules as “frozen pensions”); he described an increase in the amount of a deferred pension as a “revaluation”. He suggested that it was unusual to have both escalation and revaluation dealt with in the same clause. He then commented on other provisions he had seen in other pension schemes in relation to escalation and revaluation.[45]Mr Goodchild suggested that Rule 33 of the IWCSSS was not unique in not containing any pro-rating provision in relation to escalation. He referred to other schemes which similarly did not contain a pro-rating provision in an escalation clause. He identified the Industry-Wide Mineworkers’ Pension Scheme as such a scheme.[46]As to revaluation of a deferred pension, he stated that most schemes are modelled on the statutory method introduced by the Social Security Act 1985 and refined in the Pension Schemes Act 1993, Part IV, chapter 2. Rather than providing for annual increases which are compounded, the statutory mechanism revalues accrued pensions over the full period of deferment (from the date of leaving the relevant employment until the date of retirement) in accordance with a single percentage prescribed by annual revaluation orders made by the Secretary of State. He suggested that the effect of this method would be that members would only get revaluation for complete calendar years that elapsed in their period of deferment because revaluation orders were only made once a year. For that reason the increases were not pro-rated for parts of a year.[47]I have now referred to all of the material which was relied upon by one or other party. In due course, I will have to consider whether this material assists me in deciding the issue in this case and I will then refer to the question whether some of that material is inadmissible for the purpose of construing the relevant Rules.

The relevant principles of statutory interpretation

[48]The parties agree that the first thing which I have to do is to construe draft rule 33 as it appears in the draft rules annexed to the draft trust deed as set out in the schedule to the 1994 Regulations. They also agree that this involves construing something which is a regulation, rather than a contractual (or similar) provision. It is also agreed that the legal principles which apply to the construction of this regulation are basically the same as those which apply to the construction of an Act of Parliament.[49]The parties also agree that the principles of statutory construction which apply in this case include the principles helpfully summarised by Lord Nicholls of Birkenhead in his speech in Inco Europe Ltd v First Choice Distribution [2000] 1 WLR 586, with which the other members of the House of Lords agreed.

(g) As to that, Lord Nicholls said at 592C – 593A:

“I freely acknowledge that this interpretation of section 18(1)(g) involves reading words into the paragraph. It has long been established that the role of the courts in construing legislation is not confined to resolving ambiguities in statutory language. The court must be able to correct obvious drafting errors. In suitable cases, in discharging its interpretative function the court will add words, or omit words or substitute words. Some notable instances are given in Professor Sir Rupert Cross's admirable opuscule, Statutory Interpretation, 3rd ed. (1995), pp. 93–105. He comments, at p. 103: “In omitting or inserting words the judge is not really engaged in a hypothetical reconstruction of the intentions of the drafter or the legislature, but is simply making as much sense as he can of the text of the statutory provision read in its appropriate context and within the limits of the judicial role.”
This power is confined to plain cases of drafting mistakes. The courts are ever mindful that their constitutional role in this field is interpretative. They must abstain from any course which might have the appearance of judicial legislation. A statute is expressed in language approved and enacted by the legislature. So the courts exercise considerable caution before adding or omitting or substituting words. Before interpreting a statute in this way the court must be abundantly sure of three matters: (1) the intended purpose of the statute or provision in question; (2) that by inadvertence the draftsman and Parliament failed to give effect to that purpose in the provision in question; and (3) the substance of the provision Parliament would have made, although not necessarily the precise words Parliament would have used, had the error in the Bill been noticed. The third of these conditions is of crucial importance. Otherwise any attempt to determine the meaning of the enactment would cross the boundary between construction and legislation: see per Lord Diplock in Jones v Wrotham Park Settled Estates [1980] AC 74, 105–106. In the present case these three conditions are fulfilled. Sometimes, even when these conditions are met, the court may find itself inhibited from interpreting the statutory provision in accordance with what it is satisfied was the underlying intention of Parliament. The alteration in language may be too far-reaching. In Western Bank Ltd v Schindler [1977] Ch 1, 18, Scarman L.J. observed that the insertion must not be too big, or too much at variance with the language used by the legislature. Or the subject matter may call for a strict interpretation of the statutory language, as in penal legislation. None of these considerations apply in the present case. Here, the court is able to give effect to a construction of the statute which accords with the intention of the legislature.”[50]As Lord Nicholls’ reference to Cross on Statutory Interpretation and two earlier cases makes clear, Lord Nicholls was not making new law but was expressing the established approach of the courts in a certain class of case. Lord Nicholls referred to this approach as being “long … established”. Lord Nicholls referred to “obvious drafting errors” and to “plain cases of drafting mistakes”. He said that the court must be “abundantly sure” of various matters, including the fact that “by inadvertence” the draftsman and Parliament had failed to give effect to the intended purpose of the provision.[51]It is not necessary to go back to cases decided before Inco Europe. As it happens, since that decision, there appear to have been an increasing number of cases in which the principles in Inco Europe have been discussed. Counsel have referred me to a large number of such cases. However, it was not suggested that any of the later cases have changed in any way the principles helpfully identified in Inco Europe, although counsel for the Second Defendant suggested that one later case provided a gloss, and possibly a limitation, on those principles. In another later case, Director of the Serious Fraud Office v B (No. 2) [2012] 1 WLR 3188, Gross LJ at [21] said, having cited Inco Europe:
“Further citation of authority is unnecessary in this regard. The principles set out by Lord Nicholls have been considered in a number of subsequent decisions; unsurprisingly, rectification was possible in some cases but not in others, depending on the individual facts. It may be noted that the question of the standard of proof (i.e. that the court should be “abundantly sure” that the threshold conditions were met) was real, important and, in some cases, decisive.”
[52]I agree (with respect) with Gross LJ’s comment in Director of the Serious Fraud Office v B (No. 2) as to the need to cite further authority. However, out of deference to the detailed submissions of counsel who cited many cases which discussed Inco Europe I will mention some, but not all, of the cases cited to me. Further, even if those cases do not change the legal principles summarised in Inco Europe, it may be helpful in the present case to refer to those decisions which provide useful illustrations of how these principles have been applied.[53]In R (Passenger Transport UK) v Humber Bridge Board [2004] QB 310, the Court of Appeal applied the principles summarised in Inco Europe to the construction of three statutory instruments dealing with the charging of tolls for traffic crossing the Humber Bridge. It was held that the Humber Bridge Board was not entitled to charge tolls in respect of large buses unless there was clear and distinct statutory authority to do so. It was argued that the operative parts of the first two statutory instruments did not include a specified charge for a “large bus” and so no charge could be made for a large bus. In the case of those two statutory instruments, it was held the words “large bus” could be read into the operative provisions, as the three requirements identified by Lord Nicholls were satisfied in that respect. In the case of a third statutory instrument, those principles were also applied although the construction which corrected the mistake in drafting took a somewhat different form. The Court of Appeal held that it could take into account material extraneous to the operative provisions of the statutory instruments as an aid to their construction. This material consisted of explanatory notes to the statutory instruments, and an inspector’s report and the Secretary of State’s decision letter arising out of a public inquiry which preceded the making of each statutory instrument.[54]The principles summarised in Inco Europe were applied in R (Kelly) v Justice Secretary [2009] QB 204 in relation to a statutory instrument dealing with the release of long term prisoners on licence. It was therefore a case which concerned the liberty of the subject. The Court of Appeal commented that there had to be very clear and unambiguous words in a statute before a court would construe it as empowering the state to deprive an individual of his liberty: see at [26] per Laws LJ. Nonetheless, the application of the principles in Inco Europe allowed the court to read into the relevant provision an appropriate reference, which preserved the effect of an earlier statute, contrary to the contentions put forward on behalf of the prisoners. In his judgment, at [12], Laws LJ referred to the principles in Inco Europe being relevant to a case where the court was satisfied that there was a drafting error in a statute “such that the provision cannot sensibly take effect according to the meaning of the words used”. Later, at [18], he considered whether there was a mistake in drafting in the case before him. He said:
“Finding such a mistake of course requires us to exclude any other rational explanation for the omission.”
Counsel for the Second Defendant suggested that this wording introduced a further limitation on the principles identified in Inco Europe. I do not think that Laws LJ intended to apply any test which was different from the test identified in Inco Europe. It is clear from his judgment, read as a whole, that he was seeking to apply the principles identified by the House of Lords in the earlier case. I consider that if a party contends that there has been a mistake in drafting a provision, it will not be enough for a party resisting that contention merely to point to the existence of a conceivably possible explanation, if that explanation is a very improbable one. The test remains one, as explained by Lord Nicholls in Inco Europe, which requires the court to be “abundantly sure” that there has been a drafting mistake. It will be open to a court to feel “abundantly sure” that there has been a drafting error in a particular case even where there is a remote possibility of some other explanation in that case.[55]In each of the four cases cited above, the court felt able to arrive at a construction of the relevant provision so as to correct a drafting error. There have, of course, been cases where the court has not felt able to reach such a conclusion. I will refer to two of them in particular.[56]In Re Nortel GmbH [2011] Bus LR 766 Briggs J was invited to construe rule 13.12 of the Insolvency Rules 1986, in the form in which it was before it was amended (not retrospectively) in 2010, as if it had always had a meaning in accordance with the 2010 amendment. He declined to do so, giving a number of reasons for his conclusion. He held that although he thought that the failure to amend rule 13.12 in 2005, when the rules were amended in other respects, was probably a mistake, he was not “abundantly sure” of that.[57]In Enviroco Ltd v Farstad Supply A/S [2011] 1 WLR 921, the Supreme Court had to construe sections 736 and 736A of the Companies Act 1985, as amended by the Companies Act 1989. The leading judgment was given by Lord Collins of Mapesbury JSC. He considered the history of the relevant provisions at [44] to [47]. He considered that there was no relevant ambiguity in section 736. He considered whether there was a reason for the omission from section 736 or 736A of a cross-reference to another section of the Act. At [48], he said:
“It does seem likely that there was an error.”
He thought that “the more likely explanation” was that a suitable cross-reference had been incorrectly omitted. At [49], he concluded that there was no clear basis on which the court could be “abundantly sure” that there was a drafting error of the kind which the court could correct. He rejected the contrary submission on the ground that the acceptance of such submission would involve the court in “an impermissible form of judicial legislation”. At [73], Lord Clarke of Stone-cum-Ebony JSC specifically agreed with these comments.

Discussion

[58]Having identified the relevant legal principles, I will now seek to apply them to the construction of draft rule 33, as set out in the 1994 Regulations. Although counsel for the Second Defendant argued that some of the material relied upon by the Claimant was not admissible for the purposes of construing draft rule 33, as set out in the 1994 Regulations, and although counsel for the Claimant submitted that some of the material in Mr Goodchild’s witness statement was not helpful for that purpose, I will, in the first instance, approach the question of construction on the basis that I can take account of all of the material relied upon by the Claimant and that I should not take account of that part of the material in Mr Goodchild’s witness statement, which the Claimant submits is unhelpful. Having carried out that exercise, I will refer to the arguments as to the admissibility of some of the material relied upon by the Claimant.[59]The principles set out by Lord Nicholls in Inco Europe refer, first, to the court being abundantly sure as to the intended purpose of the provision in question. In this case, it is clear that the intended purpose of the draft rules in the 1994 Regulations was to give effect to paragraph 3(7)(c) of schedule 5 to the 1994 Act. That provision required the intended new scheme (which in the event was the IWCSSS) to provide benefits to and in respect of participants “no less advantageous” than the benefits falling to be provided under the existing scheme, the BCSSS. At the risk of stating the obvious, a requirement that the benefits be “no less advantageous” can be satisfied in two possible ways. One way is where the two sets of benefits are exactly the same. The other way is where the benefits for participants under the IWCSSS scheme are better than under the BCSSS.[60]It is clear that the draft rules for the IWCSSS satisfied the statutory requirements in paragraph 3(7)(c) of schedule 5 to the 1994 Act. In particular, draft rule 33, if given its literal meaning and without adding the words which the Claimant invites the court to add by way of a correcting construction, satisfied those requirements. In relation to the point which is relevant to this claim, the absence of pro-rating for the first increase in the rate of pension on the 1st January following the pension coming into payment is more beneficial to a participant in the IWCSSS, than was the position under the version of the BCSSS in force immediately before the introduction of the IWCSSS, and therefore is “no less advantageous”, as required by the statutory provision.[61]The requirement that the rules of the new scheme be “no less advantageous” is plainly not the same as a requirement that the rules of the new scheme be the same as the rules of the pre-existing scheme. The Claimant has relied upon the material which I have summarised above, prior to the enactment of the 1994 Act, which material contained references to the new scheme being a “mirror image” of the pre-existing scheme, or providing “the same package” of benefits, or providing benefits “equal” to the existing benefits or being “virtually identical”. On the assumption that such material is admissible as an aid to the interpretation of the words “no less advantageous” in the 1994 Act, and even if one ignores the other references in that material to the benefits being “no less advantageous” or to the scheme being a mirror image “as far as is appropriate”, the references relied upon by the Claimant could not possibly enable the court to construe the words “no less advantageous” as meaning that the benefits under the new scheme must be “the same as but not better than” the benefits under the pre-existing scheme. I so conclude because the words “no less advantageous” are clear and unambiguous and, in addition, their ordinary meaning is not in any sense in conflict with the intentions behind the expressions used in the material to which I was referred. That material shows that the participants in the existing scheme sought, and obtained, assurances that they would not be worse off under the new scheme. Statements were made to the effect that the participants would have effectively the same benefits as under the existing scheme. That did not mean that they could not be given greater benefits in some respects. When the legislation was drafted to give effect to the assurances that had earlier been given to the participants in the existing scheme, the words “no less advantageous” were considered to be the appropriate way to express the effect of the earlier assurances.[62]The second matter, as to which the court must be abundantly sure, is that there was a mistake in the drafting of the draft rules, in particular, draft rule 33. Although the draft rules for the IWCSSS, and the literal meaning of draft rule 33 in particular, fully comply with the requirements of the 1994 Act, that does not necessarily rule out the possibility that the absence of a pro-rating provision in rule 33 was a mistake. In principle it is open to the Claimant to show that the way in which draft rule 33 was intended to comply with the “no less advantageous” requirement was by repeating the pro-rating provision from the rules of the BCSSS, rather than by conferring on participants in the IWCSS a benefit which was more advantageous than was the position under the earlier rules. I will therefore consider whether I can be “abundantly sure” in this case that there was such a mistake in the drafting of draft rule 33.[63]The Claimant essentially makes two submissions. First, it submits that the references in the material, to which it referred, to the new scheme being a mirror image of the pre-existing scheme show that the failure to repeat in draft rule 33 for the IWCSS the pro-rating provision in the rules of the BCSSS was a mistake. Secondly, it relies on the suggestion made by Mr Haigh that the mistake came about when the draftsman of draft rule 33 for the IWCSSS, basing himself on the template of the rules of the BCSSS, wrongly did not repeat the effect of Rule 33A(3)(d) of the BCSSS, at the same time as he (rightly) did not repeat the effect of rule 33A(3)(b) and (c) of the BCSSS.[64]It seems to me that I should consider a number of matters on the way to determining whether I am abundantly sure that the omission of a pro-rating provision was a drafting mistake. I should consider, first, any internal evidence. Then I should compare the IWCSSS with the BCSSS and the modified BCSSS. I should also compare the IWCSSS with the two mineworkers’ pension schemes. I should then consider the other material relied upon by the Claimant.[65]In my judgment, there is nothing internal to the 1994 Act or the 1994 Regulations which supports the idea that the omission of a pro-rating provision from draft rule 33 was a mistake. In that respect, this case is to be contrasted with the many cases to which I was referred where the court was able to find an element of inconsistency in the relevant provisions, and/or ambiguity and/or some element of absurdity or unworkability and/or some other surprising element (such as a transitional provision making a significant substantive change).[66]As to the rules of the BCSSS and of the modified BCSSS, it is certainly relevant that both sets of rules contained a pro-rating provision. It can be said that when the draftsman considered what modifications to make to the rules of the BCSSS for the modified scheme, he did not alter the pro-rating provision. However, the force of the point that one would expect the rules of the IWCSSS to repeat precisely the rules of the BCSSS is considerably weakened by the point that the rules of the BCSSS were to take effect in a modified form and the modified rules of the BCSSS were not identical to the rules of the IWCSSS; I refer to the proviso which provided for a cap on the amount of the annual increase.[67]As regards the rules of the two mineworkers’ pension schemes, these are less relevant than the rules of the BCSSS and the modified BCSSS, as the ICWSSS was not the successor to the original mineworkers’ pension scheme. However, the fact that both the mineworkers’ schemes did not contain a pro-rating provision shows that a scheme which omits such a provision is workable and in no way absurd and it is perfectly rational to omit such a provision.[68]The Claimant submits that the external evidence shows that the new scheme was to be on the same terms as the pre-existing scheme. It is certainly true that there were many references to the new scheme providing the same package of benefits as the pre-existing scheme. However, the existence of the pro-rating provision was not referred to, one way or the other, at any time in the external material which is relied upon. Further, as I explained when discussing the phrase “no less advantageous” in paragraph 3(7)(c) of schedule 5 to the 1994 Act, the assurances which were contained in the external material were considered to be accurately expressed by that phrase rather than, for example, by saying that the benefits under the new scheme were to be “the same as but not better than” the benefits under the pre-existing scheme.[69]The Claimant relied on the fact that the external material did not at any time refer to an intention to improve benefits for participants by removing a pro-rating provision. It was suggested that if there really had been an intention to improve benefits in this way that intention would have been referred to and given wide publicity. As against that, I consider that it is entirely possible that a change in this respect would have been regarded as a very modest change. It might well have been considered unimportant and not significant enough to deserve separate mention.[70]As to Mr Haigh’s suggestion as to why a pro-rating provision was omitted, I accept that his suggestion might be right. His explanation is a possible one. However, it is also possible that the draftsman deliberately omitted a pro-rating provision. The draftsman might have thought that the presence or absence of a pro-rating provision was not very important. He might have thought that such a provision was not sufficiently important to be worth including. He might have been influenced by the fact that the mineworkers’ pension schemes did not have a comparable pro-rating provision. Furthermore, in the context of construing “a contract (or any other instrument or utterance)” it has been repeatedly said that the court does not “easily accept that people have made linguistic mistakes, particularly in formal documents”: see Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 at 913D and Chartbrook Ltd v Persimmon Homes Ltd [2009] 1 AC 1101 at [14]. I do not see why that approach should not apply to the construction of the 1994 Regulations. I accept that this approach might be less compelling where the alleged mistake consists of the omission of a provision but, nonetheless, this approach continues to be relevant even there.[71]Standing back, I am nowhere near “abundantly sure” that the omission of a pro-rating provision from draft rule 33 was a mistake in drafting. Indeed, if I were to apply a considerably more relaxed test and ask myself whether a mistake in drafting was more probable than not, I would consider that the Claimant has failed to show that such a possibility was more probable than not. I conclude that the important requirement, that the court is abundantly sure that there was a mistake in drafting, is not satisfied in this case. Putting it another way, this is not a case of an “obvious drafting error” or a “plain case of a drafting mistake”, as referred to in Inco Europe.[72]The third matter on which the court needs to be “abundantly sure” in this context relates to the substance of the provision which would have been made if a drafting error had not been committed. I do not consider that it would be helpful to discuss this requirement in this case where I have not been persuaded that there was a drafting error.[73]It follows from the above conclusion that I am unable to construe draft rule 33 for the IWCSSS on the basis that it contains a clear mistake in drafting. It follows that draft rule 33 falls to be construed and has effect in accordance with its express terms. It is agreed that the effect of those terms is that there is not to be any pro-rating of the first increase in the rate of pension on the 1st January after the pension comes into payment.[74]I have reached the above conclusion on the basis which is most favourable to the Claimant that it can rely upon all of the material on which it sought to rely and that I should not give weight to certain parts of the witness statement of Mr Goodchild with which the Claimant took issue. Counsel for the Claimant and for the Second Defendant made detailed submissions as to the relevant legal principles as to the admissibility of the parliamentary material in the present case, whether the test in Pepper v Hart [1993] AC 593 was satisfied, whether the decision in Pepper v Hart applied to a case where the court was asked to make findings as to the intended purpose of the relevant provision and as to whether there was a drafting mistake for the purpose of applying the principles in Inco Europe, whether statements as to the purposes of the 1994 Act were relevant as to the purposes of the 1994 Regulations and whether the non-parliamentary material was admissible or helpful. In view of the conclusion I have reached on the basis which is most favourable to the Claimant in all these respects, I do not consider that there would be any advantage to anyone if I were to discuss the many matters which were dealt with in submissions but which, in my judgment, do not now need to be decided.[75]Having construed draft rule 33 as it appears in the schedule to the 1994 Regulations, I next need to consider the meaning of Rule 33 as it appears in the Trust Deed and Rules which were entered into pursuant to the 1994 Regulations. It is the Trust Deed and Rules which were actually entered into which govern the operation of the IWCSSS.[76]The Claimant contended that Rule 33 in the Trust Deed and Rules had to be given the same meaning as draft rule 33 as set out in the 1994 Regulations. In this way, the Claimant contended for constructions of both draft rule 33 and the actual Rule 33 which were favourable to it. The Second Defendant submitted that even if I construed draft rule 33 in favour of the Claimant, I would not be able to reach a similar conclusion in favour of the Claimant when construing Rule 33. The Second Defendant submitted that the principles which applied to the construction of the Trust Deed and Rules were not the same as the principles which applied to the construction of the 1994 Regulations.[77]Regulation 4 of the 1994 Regulations expressly required that the intended new pension scheme should be in the terms of the draft trust deed and rules as set out in the schedule to the 1994 Regulations. That regulation therefore required the Rules of the IWCSS to use the language used in the draft rules. I consider that regulation 4 also required the language used in the Rules of the IWCSS to have the same meaning as the language used in the draft rules. The Trust Deed and Rules as entered into, and in particular Rule 33, use the identical language to that used in the draft trust deed and rules, as they were required to. When construing that language, and in particular the language of Rule 33, the meaning of draft rule 33 is obviously part of the relevant background which is admissible for that purpose. Indeed, because of the effect of regulation 4 of the 1994 Regulations the meaning of draft rule 33 is, at least, highly relevant. I consider that, in the absence of any other relevant matter, Rule 33 should be construed so that it means the same as draft rule 33. There is no other relevant matter in this case. It follows, in my judgment, that Rule 33 has the same meaning and effect as draft rule 33. Accordingly, I construe Rule 33 of the Trust Deed and Rules of the IWCSS in the same way as I construed draft rule 33 as set out in the 1994 Regulations. So construed, Rule 33 does not provide for pro-rating in the way contended for by the Claimant.

The result

[78]The result is that the Claimant is not entitled to the declaration which it seeks.

Cited in 1 later judgment