Ascham Homes Ltd v Auguste [2015] EWHC 3517 (Ch)

Case No CH/2015/0039[2015] EWHC 3517 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
ON APPEAL FROM JANE IRVINE
DEPUTY PENSIONS OMBUDSMAN
IN THE MATTER OF THE PENSION SCHEMES ACT 1993
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 4 December 2015
Before
THE HONOURABLE MR JUSTICE HILDYARD
Between
ASCHAM HOMES LIMITEDAppellantHASSETT AUGUSTERespondent
Wendy Mathers (instructed by DLA Piper UK LLP) for Appellant for The Respondent did not appear and was not representedHearing Hearing date: 19 May 2015Further written submissions: 21 and 27 May 2015
JudgmentMr Justice Hildyard :The question in the appeal
[1]By her Final Determination dated 30 December 2014 (“the Final Determination”) the Deputy Pensions Ombudsman (Ms Jane Irvine) upheld a complaint by the Respondent (“Mr Auguste”) that the Appellant (“Ascham”) had improperly rejected his application for early payment of an unreduced pension. She did so on the basis of her determination that Ascham had decided that Mr Auguste should leave its employment in its own interest and on the grounds of business efficiency, and that accordingly Mr Auguste was entitled to early payment of an unreduced pension pursuant to Regulation 19 (“Regulation 19”) of the Local Government Pension Scheme (Benefits, Membership and Contributions) Regulations 2007 (SI 2007/1166) (as amended) (“the 2007 Regulations”). The Deputy Pensions Ombudsman held that Ascham’s refusal to grant Mr Auguste an unreduced pension was perverse and constituted maladministration, causing him injustice.[2]The question in this appeal brought by Ascham is whether the Deputy Pensions Ombudsman misconstrued and/or reached a conclusion as to the application of Regulation 19 which was wrong in law and/or based on a view of the evidence which no tribunal acting reasonably and judicially could have reached.

The regulatory framework

[3]Regulation 19 provided as follows: “(1) Where(a) a member is dismissed by reason of redundancy; or(b) his employing authority has decided that, on grounds of business efficiency, it is in their interests that he should leave their employment; and(c) in either case, the member has attained the age if 55, he is entitled to immediate payment of retirement pension without reduction. (2) In the case of a person who is a member on 31st March 2008, and to whom paragraph (1) applies before 31st March 2010, that paragraph applies as if “the age of 50” were substituted for “the age of 55”.” (a) a member is dismissed by reason of redundancy; or (b) his employing authority has decided that, on grounds of business efficiency, it is in their interests that he should leave their employment; and (c) in either case, the member has attained the age if 55, he is entitled to immediate payment of retirement pension without reduction.[4]I should note at the outset that the 2007 Regulations were repealed with effect from 1 April 2014. However, they were the operative law at the material time and in the circumstances the balance of this judgment refers to the 2007 Regulations as if they were in force.

The nature of the appeal

[5]The appeal is brought following an application for permission to appeal pursuant to section 151(4) of the Pension Schemes Act 1993 and CPR 52.21(a). Section 151(4) provides for an appeal to this court on a point of law (which it is well established extends to a view of the facts which no reasonable tribunal could have reached, see Edwards v Bairstow [1956] AC 14 at 36 and Georgiou v Customs and Excise Commissioners [1996] STC 463 at 476). Barling J granted full permission together with a stay of execution by his order dated 28 January 2015.[6]There are eight grounds of appeal. These raise issues of some difficulty; and that has been exacerbated by the fact that Mr Auguste has not been legally represented. Further, by letter to the court dated 12 May 2015 he informed me that he could not afford to attend and participate in the appeal.[7]It is never satisfactory to have to deal with such points in the absence of a principal party. However, that was Mr Auguste’s choice, and I accept that it is difficult for a non-lawyer to present points of law. The absence of opposition presents difficulties for Counsel too; and I should like to record that Ms Wendy Mathers of Counsel, who appeared for Ascham, has provided me with valuable assistance. I am particularly grateful to her for the care with which she sought to ensure that I was made aware of points that might be available to Mr Auguste.

The Parties

[8]Ascham provides housing services on an arm’s length basis to the London Borough of Waltham Forest (“the Council”). Its sole source of income is from the Council.[9]Mr Auguste was employed by Ascham from 3 November 2003 until 30 November 2009 as its Chief Executive. When he joined Ascham he had had almost 23 years service in local government with the London Boroughs of Haringey, Hackney and Redbridge. When he left that employment Mr Auguste was aged 52.

Termination of Mr Auguste’s employment and resulting dispute

[10]It is not disputed that by November 2009 Mr Auguste had lost the confidence of the Council. Nor is it disputed that (in particular, at a Board meeting of Ascham on 5 November 2009) the Council made clear their preference that Mr Auguste should leave Ascham and be replaced, and reinforced this by specifying that this was a condition of it continuing to fund Ascham.[11]Mr Auguste ceased to work for Ascham on 20 November 2009. He was immediately replaced as Chief Executive. On 30 November 2009 Mr Auguste and Ascham entered into a compromise agreement (“the Compromise Agreement”), which provided (inter alia) for the payment to him of £202,224 as compensation for loss of office and employment. The Compromise Agreement was stated to be in full and final settlement of all claims in respect of his employment; but it was stipulated by proviso as follows:
“SAVE THAT it is agreed that the waiver and settlement of claims shall not apply to any claims that the employee has or may have in relation to personal injury or accrued pension rights relating to his years of pensionable service with the Employer (which commenced on 03 November 2003) on the understanding that the Employee warrants that he is not aware of any circumstances which might give rise to any such claims.”
[12]Mr Auguste’s concerns and complaints thereafter related to two matters concerning his pension entitlements. One (“the aggregation issue”) arose out of a refusal by Ascham to allow him (after he had not given a requisite notice in time) to aggregate his periods of membership of the Local Government Pensions Scheme (“LGPS”). The other related to the Board of Ascham’s decision not to exercise its discretion to permit Mr Auguste to take his pension either unreduced and early and as of right under Regulation 19, or early but actuarially reduced following an exercise of the Board of Ascham’s discretion under Regulation 30 (it being unnecessary to set out the terms of the latter, since the Board of Ascham’s decision in that regard was not addressed in the Final Determination and is not an issue in this appeal).[13]Mr Auguste first pursued these complaints through Ascham’s Internal Dispute Resolution Processes. Having exhausted those processes in early 2011 he complained to The Pensions Advisory Service (“TPAS”), which appointed an independent expert to investigate and discuss the issues with Ascham.[14]Ascham’s Board, having considered both matters, determined and notified Mr Auguste by letter dated 25 July 2011, that it would not allow Mr Auguste to aggregate his periods of pensionable service, on the bases that(i) his application was made after he had left its employment,(ii) the decision was a discretionary one, and(iii) the application (together with the application under Regulation 30) should be refused “primarily for costs reasons”.[15]As to Mr Auguste’s claim to an early unreduced pension on the grounds of business efficiency, the Board determined as follows:
“You were aged 52 when you left Ascham Homes in November 2009. Under the LPGS Regulations you would have been entitled to an immediate pension at this age (i.e. over 50) if you had been dismissed by reason of redundancy or business efficiency (regulation 19…) The Board has determined that you were not dismissed for reasons of redundancy or business efficiency. The reason for your dismissal was to satisfy the Council’s requirements, and to ensure its continued support of Ascham Homes. It was, in effect, a necessity and not a decision by Ascham Homes that “on the grounds of business efficiency, it is in their interests that [you] should leave their employment” as set out in the Regulations. This conclusion is supported by the paper dated 5th November 2009, a copy of which you have provided with your letter. Consequently there is no entitlement to an immediate pension…”
[16]Mr Auguste did not accept either decision. In a letter to the Chief Executive of Ascham dated 7 October 2011 he said:
“Everyone knows and accepts that it was performance issues that led to my having to leave the leadership of Ascham Homes…I am astounded that you now claim that this is not the case. I know and accept that almost all of the Board members have changed, but the truth surely still holds. The basis of my having to leave was to improve the performance of Ascham Homes.”

Applications to the Pensions Ombudsman

[17]In late 2011 Mr Auguste applied to the Pensions Ombudsman. On 6 February 2012 the Pensions Ombudsman accepted the application for investigation in respect of both of Mr Auguste’s complaints. The Deputy Ombudsman upheld both complaints in her Determination dated 27 March 2013 (“the March 2013 Determination”).[18]As to the aggregation issue, the Deputy Ombudsman’s determination was based upon the fact that her investigation revealed that the delays were due to administrative error on the part of the LGPS administrators (Capita) for which Mr Auguste should not in effect be penalised.[19]As to the early retirement issue, the Deputy Ombudsman, whilst recognising expressly that “whether Mr Auguste left service on grounds of business efficiency and also whether to grant him an early retirement pension on those grounds or otherwise are clearly matters for Ascham Homes”, also expressed herself not satisfied, in circumstances she described as unusual, that Ascham had properly considered Mr Auguste’s application for early retirement on grounds of business efficiency or otherwise.[20]She directed that within 56 days of the date of the March 2013 Determination the Ascham Board should reconsider Mr Auguste’s application and notify him of their decision.[21]On reconsideration of the aggregation issue, Ascham determined to allow aggregation of Mr Auguste’s periods of LPGS service. That “aggregation issue” is no longer a live one.[22]However, having reconsidered the matter, Ascham again refused Mr Auguste’s application for early payment of an unreduced pension on business efficiency grounds.[23]Mr Auguste then restored his complaint to the Pensions Ombudsman. It is worth quoting the following statement from Mr Auguste of the gist of his complaint, which the Deputy Ombudsman also quoted in paragraph 4 of her Final Determination:
“I was dismissed/required to resign/forced to go…There was no performance issue with my employer. None was raised with me…There was no adverse discussion on performance, leadership or any other aspect of my stewardship from/with my employer…My employer was wholly satisfied with my performance.”
[24]This contrasted with his earlier statement quoted at paragraph 16 above, which was in an important respect to the opposite effect, in that it identified “performance issues” as the reason for him having to leave the leadership of Ascham. The change of tack on Mr Auguste’s part is notable, and only marginally less so if, as Mr Auguste appears to maintain, he was referring to the performance of Ascham as an entity: for the fact remains that it was under his leadership that the performance issues arose, and it was the consequential need to change leadership which occasioned his being required to leave.

The Deputy Pension Ombudsman’s Final Determination

[25]Nevertheless, in her Final Determination made on 30 December 2014 the Deputy Ombudsman upheld Mr Auguste’s complaint. Whilst recognising that “it fell to Ascham to decide what constituted business efficiency”, she decided that since (so she concluded) there could be no doubt that Ascham’s business operated more efficiently in consequence of its dispensing with Mr Auguste’s services, it necessarily followed that the provisions of Regulation 19 were satisfied.[26]She concluded (in paragraphs 32 and 33 of her Final Determination) as follows:
“32. I have therefore decided that Ascham’s decision was so wholly against the weight of the evidence that it was perverse. Ascham’s refusal to grant Mr Auguste an unreduced pension constituted maladministration, causing him injustice. 33. Section 151(2) of the Pensions Act 1993 provides that I can direct a respondent “to take, or refrain from taking, such steps as [I] may specify”
. Having found as a fact that Mr Auguste’s employment ended on business efficiency grounds, Ascham’s decision needs to be quashed as perverse. I have considered whether to remit the matter for further consideration by Ascham, but bearing in mind the history of this matter, I have decided that to do so is unlikely to result in a just decision being made.”[27]Accordingly, the Deputy Ombudsman gave directions for Ascham, within 28 days, to put Mr Auguste’s LGPS early retirement benefits into payment on business efficiency grounds, backdated to his leaving service, with interest to be added “at the daily rate quoted by the reference banks, calculated from the due dates of payment to the actual date of payment”.[28]By this appeal Ascham seeks to set aside those directions.

Approach of the Deputy Pensions Ombudsman

[29]Before addressing in turn the various grounds of appeal, it assists their consideration to set out more fully the approach of the Deputy Ombudsman, as it appears from paragraphs 24 to 31 of her Final Determination. These paragraphs read as follows:
“24. The principal issue – whether Mr Auguste’s departure was on the grounds of business efficiency – concerns Ascham’s functions under or in relation to the LGPS, and so is a matter for me to decide. 25. The compromise agreement excluded claims related to Mr Auguste’s accrued pension rights, “on the understanding that the employee warrants that he is not aware of any circumstances which might give rise to any such claims.”
Mr L thinks that early retirement was included in the negotiations between Ascham and Mr Auguste, but Ascham says “there was no suggestion that he wished to retire on immediate pension.” That being so, the terms of the compromise agreement are not an impediment to Mr Auguste’s later application for early payment of an unreduced pension, and his subsequent complaint to me. 26. Ascham’s directors disagreed about Mr Auguste’s performance as Chief Executive, although it seems that those who had concerns did not raise them with Mr Auguste or the Board. However, the divergence of views amongst Board members did not cause Mr Auguste’s resignation. Mr Auguste and Ascham agree that Mr Auguste had to go because the Council had no confidence in him, and was unlikely to continue Ascham’s funding if Ascham continued to employ him. It might be said that ending someone’s employment is usually linked to business efficiency, but there is a difference between termination due to redundancy and termination on business efficiency grounds. There is also a common sense difference between business efficiency and performance grounds. If it is to function effectively, Regulation 19 cannot be taken to include all cases in which greater efficiency is a consequence of dismissal. Regulation 19 applies where there is no other significant reason than objective efficiency, for example, redundancy or restructuring, where the characteristics of the post holder are irrelevant. It does not automatically apply where the reasons for the gain in efficiency are closely connected to the individual employee – when the dismissal is subjective. 27. Ascham terminated Mr Auguste’s employment because the Council required it and Ascham could not survive without Council funding. This was not redundancy or restructuring, as Mr Auguste was immediately replaced by a new Chief Executive. There was no cash saving, indeed Ascham incurred the additional cost of paying Mr Auguste substantial compensation for loss of office. 28. In the absence of a definition in the LGPS Regulations, it fell to Ascham to decide what constituted business efficiency. However, Ascham’s decision making power was not absolute; it had to be tempered with common sense, and could not be one that no decision maker, properly directing itself, could reach. 29. I will not usually interfere with the weight given by a decision maker to different factors that it is entitled to take into account. (Edge v Pensions Ombudsman [1999] 4 All ER 456). The exception to this general rule is if the decision was perverse. The test for perversity was set out in Harris v Shuttleworth [1995] OPLR 79 which held that the decision maker must ask itself the correct questions, direct itself correctly in law and adopt a correct construction of the pension scheme’s rules, and not arrive at a perverse decision, that is, one which no reasonable body could reach, and must take into account all relevant but no irrelevant factors. 30. Ascham’s principal concerns were the cost of providing an unreduced pension, and ensuring continued funding from the Council. These were of course important matters, but Ascham did not ask itself what the cause of Mr Auguste’s departure really was, so far as the LGPS Regulations were concerned. Ascham’s understandable desire to protect its finances led to Ascham being quite sure from the start that whatever the reason for Mr Auguste’s departure might be, it was not going to be business efficiency. 31. The reasons for Mr Auguste’s departure were selective in that they were closely connected to his individual characteristics. But the circumstances were unusual and there was an objective element as well – Ascham’s survival was at stake. Mr Auguste’s employer got rid of him because the company’s sole shareholder demanded that it do so. The Board had not raised performance issues with Mr Auguste. This was not an employee being sacked for poor performance. Dispensing with Mr Auguste’s services enabled Ascham to get the funding it needed and improve its relationship with the Council. I have no doubt that Ascham’s business operated more efficiently as a result, and it follows that the provisions of Regulation 19 were satisfied.”[30]Thus, as it appears to me, the fulcrum of the Deputy Ombudsman’s decision was her findings that(a) Ascham’s Board did not properly consider what the cause of Mr Auguste’s departure really was (see paragraph 30 of the Final Determination as quoted above) and(b) the real cause was the Council’s demand that he be replaced, and not any performance issues (see paragraph 31 of the Final Determination as quoted above).[31]I turn to examine the grounds of appeal as elaborated in writing and orally by Counsel for Ascham. Grounds of Appeal Ground 1: interpretation

Grounds of Appeal

[32]Ground 1 of Ascham's appeal is that the Deputy Ombudsman's construction of Regulation 19 was wrong in law in four respects elaborated in Grounds 1.1 to 1.4. in its Notice and Grounds of Appeal.[33]I discuss each sub-ground in turn.

Ground 1.1

[34]Ground 1.1 is that the Deputy Ombudsman failed to construe Regulation 19 as requiring a positive and specific decision on the part of the employing authority (here, Ascham) at the material time that it was in their interests, on the grounds of business efficiency, that the member should leave their employment. The corollary would be that, in the absence of such a positive decision specifically invoking grounds of business efficiency at the material time (being when the decision was made), Regulation 19 can have no application.[35]In my judgment, Regulation 19 is not dependent for its application on the employing authority itself determining to invoke Regulation 19 by choosing to characterise its grounds for deciding that the member in question should leave its employment as being “grounds of business efficiency”.[36]As it seems to me, and given the different and serious consequences for the member of the pension scheme depending on the grounds for the cessation of his employment, the employing authority is bound to consider what are those grounds, and what in the light of them is the entitlement of the member (whether discretionary or not).[37]As the Deputy Ombudsman noted in paragraph 28 of her Final Determination, in the absence of a settled or prescribed definition of “business efficiency”, it falls to the employing authority to decide whether such grounds constitute “grounds of business efficiency”. However, if the employing authority, having settled on its grounds, determines that they do not amount to “grounds of business efficiency”, its determination may be set aside if shown to be perverse. Further, it seems to me that if the employing authority does not make any determination at all, then the true grounds of its decision that the member’s employment should cease may be investigated, and the question will fall to be considered whether the failure to determine that those amounted to grounds of “business efficiency” was perverse.[38]In the present case, there is no doubt that Ascham made the decision that Mr Auguste should be required to leave its employment. It made clear its grounds, which the Deputy Ombudsman summarised in paragraph 26 of her Final Determination (quoted above). The question therefore is whether the fact that Ascham’s Board did not consider and characterise those grounds to be “grounds of business efficiency”, or (as the Deputy Ombudsman apparently considered) determined to be “quite sure from the start that whatever the reason for Mr Auguste’s departure might be, it was not going to be business efficiency” (see paragraph 30 of her Final Determination), foreclosed the application of Regulation 19.[39]I do not think it did. I do not accept that the Deputy Ombudsman was in error in considering that she was entitled to review and determine whether Ascham was perverse in not characterising, or determining not to characterise, the grounds it relied on as “grounds of business efficiency”. She was entitled, and indeed bound, to do so in order to adjudicate whether or not Mr Auguste had any entitlement to an immediate unreduced pension pursuant to the provisions of Regulation 19. As it seems to me, to interpret Regulation 19 in the way contended for by Ascham would in effect give it discretion whether or not to invoke it, whereas the Regulation is cast in terms of an entitlement.[40]Accordingly, I reject Ground 1.1 of the Appeal.

Ground 1.2

[41]Ground 1.2 of the appeal is that the Deputy Ombudsman’s “implicit construction” of “business efficiency” was too widely framed, with the result that Regulation 19 could apply even where the subjective characteristics of the post-holder (such as poor performance) were the cause of the dismissal.[42]The reference to “implicit construction” signals the need to identify first what really was the approach of the Deputy Ombudsman and whether it is fairly described in this ground of appeal.[43]With respect, the Deputy Ombudsman is not entirely consistent in her approach. On the one hand, and as the quotation from paragraph 26 of her Final Determination (see paragraph 29 above) demonstrates, she considered that Regulation 19 could apply only where there is no other significant reason than objective efficiency, where the characteristics of the post-holder are irrelevant. On the other hand, and as the quotation from paragraph 31 of her Final Determination (see again paragraph 29 above) shows, she appears to have accepted that it could apply even where the reasons for the post-holder’s departure were “closely connected to his individual characteristics” but “there was an objective element as well”.[44]It may be that the reconciliation lies in the Deputy Ombudsman’s finding (also in paragraph 31 of the Final Determination) that in the “unusual” circumstances of this case the cessation of the post-holder’s employment was the result, not of any view independently taken by Ascham’s Board as to his performance but, rather, of the demand made by Ascham’s sole shareholder. In other words, she may have considered the employing authority to have been acting by reference to objective demands rather than subjective assessments.[45]On that basis, it is not clear to me that the Deputy Ombudsman did construe Regulation 19, implicitly or otherwise, as applicable even where the characteristics of the post-holder were the cause of dismissal. Indeed, as it seems to me, her preponderant approach as a matter of construction was to distinguish between “business efficiency and performance grounds” and to confine the application of Regulation 19 to circumstances where cessation of employment was driven by the former and not the latter.[46]However, there remains sufficient room for uncertainty and disagreement as to the Deputy Ombudsman’s approach (and later, its application) that, even if Ground 1.2 may mischaracterise it, I should in this context explain what I consider to be the true construction of Regulation 19. Two questions seem to me to require to be addressed in this context:(a) the meaning, in the context, of “business efficiency” and(b) whether the presence of a subjective or personal factor, not constituting a ground of “business efficiency” and which materially contributes to the cessation of employment, means that the requirements of Regulation 19(1)(b) are not satisfied.[47]Without attempting a definition, what the phrase connotes, in my judgment, is that the operative reason for bringing about the cessation of employment is to effect or facilitate some saving by a more efficient structure or system, or the better or more economic use of existing resources, as distinct from a reason that relates to the personal or subjective characteristics of the post-holder concerned. The contrast is between a systemic improvement and inadequate personal performance (even though of course, the hoped-for consequence of terminating an inefficient worker’s employment is likely to be greater business efficiency).[48]Thus, in my judgment, the test whether Ascham’s decision was on grounds of “business efficiency” is whether it was made pursuant to some change in the way of conducting the business and with a view to ensuring that the resources of the business could more efficiently be deployed and without regard (or determinative regard, see below) to personal or subjective characteristics or performance of the post-holder.[49]As indicated above, a second question arises when there are concurrent grounds. Ascham submits that the presence of another factor of more than trivial importance which materially contributes to the cessation of employment means that the requirements of Regulation 19(1)(b) are not satisfied, on the basis that that provision requires the cessation of service to be exclusively on the grounds of “business efficiency”.[50]I do not accept Ascham’s submission that Regulation 19 requires the cessation of service to be exclusively on the grounds of “business efficiency” and can have no application whenever there is also some more “subjective” or personal ground which is a factor in the decision. However, in my view, “business efficiency” must plainly be shown to be, if not the exclusive, the plainly preponderant reason. All that would be necessary to justify Ascham’s decision was that the main reason was not business efficiency. The burden of showing that it was would be on the member leaving employment. It would be a heavy one.[51]As the Deputy Ombudsman herself said in the case of Parish (22505/2) in 2011, in a passage closely reflected in paragraph 26 of her Final Determination in this case (quoted in paragraph 29 above) and which seems to support this approach:
“195. Although it might be said that dismissals usually take place for reasons of efficiency, there is in fact an essential difference between, for instance, a dismissal for reasons of redundancy and a dismissal for reasons of efficiency. This is why the Regulations distinguish between the two. There is, similarly, an essential common sense difference between a dismissal in the interests of efficiency and a dismissal on grounds of performance. Even though the Guidelines envisage situations where there might be an overlap, such situations must, logically, be the exception and indeed the Guidelines say retirements in the interests of efficiency ‘should be rare’. 196. For Professor Parish’s complaint to succeed, I would need to find that, on the balance of probabilities, the reasons for the termination of his employment fell so squarely into the category of ‘efficiency’ so that no reasonable employer could have decided as the Agency did.”
[52]That last point is worth re-emphasising in this case. There are indications in her Final Determination that the Deputy Ombudsman may have departed from it in suggesting that though she would not “usually interfere with the weight given by a decision maker to different factors that it is entitled to take into account” (she referred in that regard to Edge v Pensions Ombudsman [1999] 4 All ER 456) except if the decision was “perverse” (the test for which she considered to be set out in Harris v Shuttleworth [1995] OPLR 79), she also referred to Ascham’s power having to be “tempered with common sense”. For the avoidance of any ambiguity, I consider that “common sense” is altogether too broad and subjective a test or restraint, and might suggest more scope for review than can reasonably have been intended.

Ground 1.3

[53]Ground 1.3 of Ascham’s appeal is that the Deputy Ombudsman failed to consider the operation of Regulation 19 in the context of Regulation 29 and the 2007 Regulations in general.[54]The Deputy Ombudsman does not refer in the Final Determination to any other part of the 2007 Regulations. Of course, I accept that, as a specialist in the field, she may well have had them in mind: but it is a notable omission.[55]In that regard:(1) The requirement to interpret Regulation 19 in context and by reference to the Regulations as a whole is obvious. Ordinary principles of construction require that approach.(2) In the ordinary course, a member only becomes entitled to receive a pension at age 65, which is the LGPS normal retirement age ("NRA"). Any provisions for earlier pension or enhancements are carefully defined and controlled. That is especially so because the LGPS is a (largely) publicly funded defined benefits scheme in which the risks ultimately fall upon the tax-payer.(3) An example of such a provision is Regulation 29, which provides the default method for dealing with a member leaving service prior to NRA, providing as it does for a deferred pension. A deferred pension could be paid prior to NRA if the LGPS employer accedes to the request under Regulation 30. However, to reflect the additional cost to the Scheme by Regulation 30(4), that pension must be reduced in accordance with guidance from the Government Actuary.(4) Regulation 19 is plainly also an exceptional provision, which has the effect of conferring very substantial benefits on individuals who are within 10 years of NRA (or 15 years where Regulation 19(2) is applicable) and who lose their jobs as part of a redundancy process or an efficiency exercise. It should be restrictively construed and applied.(5) Indeed, set in the context of the Regulations as a whole, it seems to me that Regulation 19 was intended to apply only where the plainly and obviously driving reason for the decision that the member should leave the employing authority’s employment is that the extra cost of an immediate unreduced pension is outweighed by perceived business efficiency advantages. If there are other subjective or “performance” reasons such that the member’s conduct is in question, other Regulations are likely to be applicable, and not Regulation 19.[56]In such circumstances, although I have not accepted Ascham’s argument that Regulation 19 requires and is wholly dependent for its application on a positive decision on the part of the employing authority to the effect that the employee is being awarded early retirement on the grounds of business efficiency, the circumstances in which it will apply in the absence of such a decision seem to be very rare indeed. In light of the exceptional benefit provided by its application in comparison to the default and other benefits provided for by the 2007 Regulations, there should, in my view, be a special reluctance to interfere in the employing authority’s assessment whether there really are efficiencies in the conduct of the business to be obtained which merit the extra expense of the unreduced immediate pension for which Regulation 19 provides. Indeed, a similar approach is evident from the Deputy Ombudsman’s determination in the case of Parish: see paragraph 51 above.

Ground 1.4

[57]Ground 1.4 is that the Deputy Ombudsman wrongly equated “business efficiency” with the continuity of the business of Ascham.[58]Again I am not entirely convinced that this is a fair description of the Deputy Ombudsman’s approach. As it seems to me, she considered and concluded that the driver for the decision was to get the funding Ascham needed and improve its relationship with the Council and that since she had no doubt that Ascham’s business operated more efficiently “as a result” this was an objective ground which should properly be characterised as “business efficiency”. Whether her conclusion was correct seems to me to be more a question of whether she properly applied the interpretation she had purportedly adopted than a question of construction.[59]However, as a matter of construction, I accept that “business efficiency” is not the same as business survival. The continued existence of an enterprise says nothing about its business efficiency, still less does it, without more, demonstrate any improvement in it. If and to the extent that the Deputy Ombudsman equated the two, in my judgment she was wrong.

Ground 2: application

[60]Ground 2 of Ascham’s appeal is that:(1) the Deputy Ombudsman erred in law in determining at paragraph 31 of the Final Determination that “Ascham’s business operated more efficiently as a result” of Mr Auguste leaving service: the learned Deputy had no evidence before her to support such a determination; further(2) the Deputy Ombudsman’s findings at paragraph 27 of her Final Determination that “Mr Auguste was immediately replaced by a new Chief Executive. There was no cash saving, indeed Ascham incurred the additional cost of paying Mr Auguste substantial compensation for loss office”, point inexorably to the opposite conclusion.[61]As previously indicated in the context of Ground 1.4 above, this ground of appeal appears to me slightly to misstate the Deputy Ombudsman’s actual findings in paragraph 31 of her Final Determination and thereby misrepresents her approach.[62]What the Deputy Ombudsman actually said was that dispensing with Mr Auguste’s services enabled Ascham to get the funding it needed and improve its relationship with the Council, and that she had no doubt that Ascham’s business operated more efficiently as a result. It may be that there was no evidence of an improvement in efficiency; but for my part, like the Deputy Ombudsman, I would not doubt that the combination of the removal of the apparently inefficient Mr Auguste, the greater security of funding, and a better relationship with the Council made for a more harmonious and efficient functioning of the business. But in my judgment, that is ultimately beside the real point.[63]The real point, as the Deputy Ombudsman had herself earlier identified it, is not the result of, but the reason for, dispensing with the Mr Auguste’s services, and whether his services were dispensed with on grounds of restructuring or some other objective change in the manner of conducting Ascham’s business, rather than on grounds of his unsatisfactory personal performance. It is thus necessary to determine whether the operative cause of termination was(a) perceived shortcomings or lack of confidence in the individual concerned’s abilities or performance or(b) some systemic or structural change in the way that Ascham was to run its business whereby to enhance its efficiency.[64]As to (a), the Deputy Ombudsman sought to exclude unsatisfactory personal performance as having been the ground in finding that “The Board had not raised performance issues with Mr Auguste. This was not an employee being sacked for poor performance.”[65]With respect I cannot accept the latter part of that finding, which seems to me wholly inconsistent with the available evidence to the extent of being perverse. As noted previously (see paragraph 16 above), Mr Auguste himself had at an earlier stage (October 2011) unequivocally recognised that “it was performance issues that led to my having to leave the leadership of Ascham Homes…I am astounded that you now claim that this is not the case”. It is true that later he sought to disassociate his own performance from the performance of Ascham itself under his leadership and claimed (see paragraph 23 above) that there was no performance issue with his employer and indeed that Ascham was “wholly satisfied” with his performance; but that is to ignore the record, from which the concern of at least five of the Board members as well as the Council appears clearly, as indeed the Deputy Ombudsman recorded earlier, at paragraphs 5 to 8 of her Final Determination, as well as the obvious association between the performance issues of Ascham and his own leadership.[66]Put shortly, the Deputy Ombudsman’s finding that “this was not an employee being sacked for poor performance” is inconsistent with the recitation of the evidence earlier in her judgment, and in my judgment unsubstantiated and unsustainable. To echo paragraph [63] above, it was shortcomings or lack of confidence in his abilities or performance, rather than some systemic or structural change in the way that Ascham was to run its business, which necessitated him being required to leave.[67]That is so, in my judgment, even if it is the case (and it is not at all clear to me that it is) that ultimately “the divergence of views amongst Board members did not cause Mr Auguste’s resignation. Mr Auguste and Ascham agreed that Mr Auguste had to go because the Council had no confidence in him, and was unlikely to continue funding if Ascham continued to employ him”, the fact remains that it was Mr Auguste’s personal performance that caused the Council’s loss of confidence in him and the dénouement that followed which gave Ascham’s Board no real choice.[68]In any event, in my judgment, even had there been evidence to support and substantiate the finding that Mr Auguste was not sacked for poor performance, and even if it is accepted that it was pressure from the Council and the threat of loss of funding that ultimately decided the matter, that would not suffice. Ultimately, all that was ever necessary to justify Ascham’s approach was evidence that the main reason for the decision that Mr Auguste should leave its employment was not business efficiency. Put another way, unless the reasons for the decision revealed it to have been made primarily for the sake of business efficiency, there is no basis for invoking Regulation 19. As to that, continued funding was not conditional on any changes in the way the business was operated: only on the substitution of a new Chief Executive at the same salary, with the same responsibilities and operating in the same business structure.[69]In summary, the evidence is all one way: the ending of Mr Auguste’s employment was caused by serious doubts as to his personal performance of such gravity in the case of the Council that it felt constrained to threaten to turn off the financial tap unless he was removed. As those facts illustrate, his removal was not required because of any systemic or structural change in the way Ascham’s business was run. It was Mr Auguste’s personal performance which lay at the root of it all; it was for predominantly this reason that his employment was terminated; in any event, the primary ground cannot sensibly be said to have been business efficiency.[70]I would uphold Ground 2 of this appeal accordingly.

Ground 3: inconsistency in applying the law to the facts

[71]Ground 3 of the Notice of Appeal reads as follows:
“The learned Deputy Ombudsman erred in law in finding at paragraph 31 of the determination that: “I have no doubt that Ascham’s business operated more efficiently as a result, and it follows that the provisions of Regulation 19 were satisfied”
(emphasis added). Having correctly held at paragraph 26 of the determination that Regulation 19 applies “where there is no other significant reason than objective efficiency…where the characteristics of the post holder are irrelevant” (emphasis added), the Deputy Ombudsman was wrong in law to conclude at paragraph 31 that the Respondent fell within the provisions of Regulation 19 despite the fact that the “reasons for his departure were selective in that they were closely connected to his individual characteristics”. The later qualification in that paragraph that “there was an objective element as well” is not enough to meet the threshold for the application of Regulation 19 (which the learned Deputy correctly identified at paragraph 26) namely that there be no other significant reason than objective efficiency.”[72]There appears to me to be some overlap between this ground of appeal and Grounds 1.2 and 2 above. It is unnecessary to repeat or labour a point which I have already made in the context of those grounds: with all respect to the Deputy Ombudsman, whose analysis of the law in paragraph 26 of her Final Determination seems to me clear and substantially accurate, in my judgment she then, in paragraph 31 of her Final Determination, ignored her own distinction between business efficiency and personal or subjective performance grounds or confused the two in applying the law to the facts.[73]In addition, in my view, she fell into the trap she had herself (earlier in paragraph 26 of her Final Determination) warned against, of confusing(a) the fact of a likely link between ending someone’s employment and the achievement of efficiency with(b) a termination on business efficiency grounds.[74]Thus, she extrapolated from her assumption that dispensing with Mr Auguste’s services enabled Ascham to get funding it needed and improve its relationship with the Council, and thereby enabled Ascham’s business to be operated more efficiently, the conclusion that therefore it must follow that Mr Auguste was removed for reasons of business efficiency. But the one does not follow the other, as she herself had explained in her Final Determination and in an earlier case (the Parish case).[75]Perhaps recognising the difficulty, the Deputy Ombudsman sought to stress that in her view “the circumstances were unusual” (see paragraph 31 of the Final Determination), especially in that “there was an objective element as well – Ascham’s survival was at stake. Mr Auguste's employer got rid of him because the company’s sole shareholder demanded that it do so”. But, just as personal performance so pitiful that bankruptcy looms does not introduce any relevant objective element, the Council’s insistence and threat did not relevantly alter the subjective and personal nature of the reasons for termination.[76]In summary, in my judgment, the Deputy Ombudsman did not apply the law as she had explained it in paragraph 26 of her Final Determination to the facts as she had found or assumed them to be in paragraph 31 thereof. She was thereby materially in error. I consider that Ground 3 of the appeal has also been established.

Ground 4: no basis for finding at paragraph 30 of the Final Determination

[77]Ground 4 of the Notice to Appeal is that:
“The learned Deputy Ombudsman’s finding at paragraph 30 that “Ascham did not ask itself what the cause of Mr Auguste’s departure really was so far as the LGPS Regulations were concerned” was wrong in law, there being no evidence to support such a finding.”
[78]Ms Mathers submitted on behalf of Ascham that the conclusion that Ascham did not ask itself what the real cause was (for the purposes of the 2007 Regulations) of Mr Auguste’s departure was not one which was properly available to the Deputy Ombudsman on the evidence before her; and that she gave no, or no proper, consideration to the very substantial evidence that was before her as to the fact that Ascham’s Board had considered extensive material prior to its 20 May 2013 meeting to consider the reason for Mr Auguste’s departure.[79]Ms Mathers’ skeleton argument identified in this context a plethora of written material, including letters to Mr Auguste and to the Pensions Ombudsman Service which she submitted pointed inexorably to the finding that Ascham had considered what the cause of Mr Auguste’s departure was, to the extent that no tribunal properly directing itself could have made the finding at paragraph 30 of the Final Determination.[80]The relevant documentation makes clear that, at least when Ascham’s Board reconsidered the issue after the March 2013 Determination, Ascham’s Board did carefully reiterate its reasons for terminating Mr Auguste’s employment. For example, Ascham’s letter to Mr Auguste dated 23 May 2013 summarised its reasons for confirming the decision originally made in November 2009 as follows:
“It confirmed its decision that you did not leave service for reasons of redundancy or business efficiency. The reason that you left service was because Ascham Homes and the Council lost confidence in you as Chief Executive. You were replaced immediately and there were no cash efficiencies gained as a result of your departure. In addition, had you been departing for reasons of business efficiency, the Board feels that this would have been reflected expressly in your compromise agreement, but it was not.”
[81]These reasons were amplified in a letter from Ascham to the Pensions Ombudsman Service dated 22 July 2013. I accept that that letter gave a clear and full explanation of the grounds taken into account. It may be worth quoting the six reasons summarised:
“1. Documentation from a meeting on 5 November 2009 (referred to at paragraph 7 of the Determination) shows that the Council did not have confidence in Mr Auguste and that his departure was necessary in order to secure continued funding for Ascham Homes; 2. Mr Auguste left employment at the end of that month and was immediately replaced as Chief Executive. No cash efficiencies were gained as a result of his departure; 3. It is irrelevant what pension terms may have been granted to other senior members of Ascham Homes’ staff who have left employment. The decision is one for Ascham Homes to make based on the facts of Mr Auguste’s departure; 4. There are no Board papers or other documentation which suggest that Mr Auguste was assured that he would receive a full early retirement pension, or which document that he was leaving on the grounds of business efficiency. The Chairman specifically recalls that there was not an agreement of this nature; 5. The immediate unbudgeted cost if Ascham Homes were to decide that he had retired on the grounds of business efficiency would be £85,612 (assuming no aggregation of pensionable service) or £205,870 (assuming aggregation); 6. The Board may properly take account of its own financial position as one of the relevant factors when considering the exercise of its powers under the LGPS Benefit Regulations.”
[82]In the circumstances evident from the documentation (and there was no oral hearing before the Deputy Ombudsman) I cannot accept the Deputy Ombudsman’s suggestion that “Ascham did not ask itself what the cause of Mr Auguste’s departure really was, so far as the LGPS Regulations were concerned”.[83]Indeed, it seems to me that the real thrust of the Deputy Ombudsman’s approach was her conviction that Ascham’s Board were, in effect, determined a priori to decide that business efficiency was not the reason for his departure, since that would cost Ascham more, and were thus blinded, or at least, unable properly and fairly to consider what were the reasons before determining whether those reasons did or did not amount to “grounds of business efficiency”.[84]I accept that the cost of funding the generous treatment afforded to a member pursuant to Regulation 19 may well have been an important factor: indeed the Board has not pretended otherwise. It may even be, as the Deputy Ombudsman appears to have found, that Ascham’s Board never for one moment was prepared to contemplate that there was any “business efficiency” ground for the cessation of Mr Auguste’s employment. However, that is a long way from justifying any conclusion that Ascham’s Board had before it “grounds of business efficiency” which it determined either to ignore or to re-characterise as personal characteristics of Mr Auguste. I do not accept that there is any evidence that Ascham’s Board failed properly to consider what were the reasons for Mr Auguste’s departure; nor do I accept that the Board, as it were, improperly shut its mind to a possibility that it recognised that its reasons constituted grounds of business efficiency.[85]Ascham never shirked from acknowledging that the driver was to secure continued funding from the Council and that a major, probably overriding, part of its rationale was the financial position of Ascham; but equally, it did so on the understanding that the Council was simply using its financial position because it had lost confidence in Mr Auguste, not to secure or reflect any financial, organisational or structural changes.[86]The question still remains, therefore, whether Ascham’s Board could reasonably have concluded that their decision was not being made on “grounds of business efficiency”. In my view that was a reasonable conclusion; indeed in my judgment, it was a correct characterisation of the factual basis of their decision.[87]In short, I do not consider that the Deputy Ombudsman had any real basis for upsetting the determination of Ascham’s Board on the basis that it did not ask itself the correct questions, or reached a conclusion without proper consideration of whether the facts on which it was relying justified it.[88]In light of that conclusion, and since I have already addressed many of the points they specifically raise in reaching it, I propose to deal more shortly with the remaining grounds of the appeal.

Ground 5: no basis for Deputy Ombudsman’s conclusions in paragraph 31 of the Final Determination

[89]Ground 5 of the appeal is that the Deputy Ombudsman’s conclusion in paragraph 31 of her Final Determination that “The Board had not raised performance issues. This was not an employee being sacked for poor performance” was against the weight of the evidence and wrong in law.[90]Put shortly, and as already will be apparent, I consider this ground to be substantiated. Even if not initially unanimous, it is clear that the Board understood the Council’s insistence that Mr Auguste should be required to leave, and its threat to stop funding if he did not, was principally, if not entirely, related to his personal performance or the performance of Ascham under his leadership as its Chief Executive. Further, the clear evidence of two of the Directors was (to quote a letter from one of them, Ms Wendy Wilson) that following the discussion at the Board meeting on 3 November 2009 “the Board had no choice but to recognise that Mr Auguste had been presiding over an absolute mess and had withheld information from the Board about the true state of affairs”. There was no basis for not accepting that evidence: there was never any oral hearing.[91]I appreciate that the Deputy Ombudsman appears to have concluded that the Board terminated Mr Auguste’s employment because the Council required it and Ascham could not survive without Council funding (see paragraph 27 of the Final Determination). However, her leap from that conclusion to the determination that therefore his termination was on the grounds of business efficiency was, in my judgment, unwarranted: it ignores, or at least depends upon separating and taking no account of, the underlying reasons for the Council’s insistence, and it (to my mind, again incorrectly) assumes that steps taken to ensure continuity of funding constitute “business efficiency”. As to the latter, the fact that a precondition of continued funding to enable a business to continue is satisfied does not mean that the efficiency of the business has been improved. The Deputy Ombudsman’s reasoning that since the termination of Mr Auguste’s employment was likely to lead to Ascham’s business operating more efficiently “it follows that the provisions of Regulation 19 were satisfied” is not, in my judgment, sustainable.

Ground 6

[92]In Ground 6 of the appeal Ascham contend that the Deputy Ombudsman erred in law in that she applied the incorrect test for perversity to the Appellant at paragraph 29 of the Final Determination. This was elaborated as follows:
“The learned Deputy correctly recognised the Appellant’s duty to act in good faith “the Imperial duty” (by reference to Imperial Group Pension Trust Ltd v Imperial Tobacco Ltd [1991] 1 WLR 589) at paragraph 21 of the determination. However, in paragraph 29 the learned Deputy erred and applied the test for perversity set out in Harris v Lord Shuttleworth [1994] ICR 991 which is applicable to trustees when forming a judgment. The correct test was whether the Appellant’s decision was irrational or perverse to the extent that no reasonable employer could have acted in the manner that the Appellant did: IBM United Kingdom Holdings Ltd v Dalgleish [2014] PLR 335. Had the Deputy Ombudsman applied the correct test she could not have properly made the finding that at paragraph 32 that the Appellant’s decision was “so wholly against the weight of evidence that it was perverse”
. Alternatively, in the event that the appropriate test was that set out in Harris v Lord Shuttleworth the learned Deputy Ombudsman nonetheless erred in law because the unchallenged evidence of the Appellant concerning the meeting of 20 May 2013 points inexorably to the finding that the Board considered the question as to the Respondent’s entitlement under Regulation 19 correctly.”[93]The essence of the Deputy Ombudsman’s approach was her view that it was perverse of the Board to characterise the termination of Mr Auguste’s employment as being for reasons other than “business efficiency”. She accepted that “in the absence of a definition in the…Regulations, it fell to Ascham to decide what constituted business efficiency” (see paragraph 28 of the Final Determination); but she held that in this case it reached a wrong decision because it was so blinded by its concern about the costs of providing an unreduced pension and of ensuring continued funding from the Council that it “did not ask itself what the cause of Mr Auguste’s departure really was, so far as the…Regulations were concerned” (see paragraph 30 of the Final Determination).[94]I do not think that the Deputy Ombudsman had in mind the wrong test of perversity. I consider that Regulation 19 did require the Board to consider what the cause of Mr Auguste’s departure really was. I do not think that this appeal can turn on the applicable test of perversity. However, for reasons already apparent, I am not persuaded that the Board did not ask itself the right question: I consider that in determining that Mr Auguste would have to leave because he had lost the confidence and trust of the Council, to which his performance was unacceptable, and that this did not constitute termination on the ground of business efficiency, it was acting fully in accordance with the approach required of it, and not perversely.

Ground 7

[95]Ground 7 of the Appeal was that the Deputy Ombudsman erred in lawin concluding that the Appellant had come to a perverse decision in reaching the view that the Respondent was not dismissed for reasons of business efficiency. Ascham contends that what she actually did, in reaching this conclusion, was substitute her own view for that of Ascham, which was something she was not entitled to do even if she disagreed with the decision. The Deputy Ombudsman ought to have concluded that Ascham had considered the matter in good faith and that there was sufficient evidence upon which Ascham could form the view that Mr Auguste did not qualify for unreduced pension on the basis of Regulation 19.[96]My views in relation to Ground 6 sufficiently address this ground of appeal also.

Ground 8

[97]The last ground of appeal, Ground 8, is that the Deputy Ombudsman erred in law in concluding at paragraph 25 of the Final Determination that the terms of the Compromise Agreement between Ascham and Mr Auguste was not an impediment to Mr Auguste’s entitlement to claim early payment of an unreduced pension.[98]The relevant term is clause 14.4 (quoted in paragraph 11 above), which saved claims for accrued pension rights on the understanding of a warranty by Mr Auguste “that he is not aware of any circumstances that might give rise to any such claims”. The Deputy Ombudsman acknowledged (in paragraph 25 of her Final Determination) that Ascham’s Chairman (Mr Paul Lowenberg, who was responsible for negotiating the Agreement) thought that early retirement was included in the negotiations but relied on Ascham’s statement that “there was no suggestion that he wished to retire on immediate pension”.[99]Whether or not Mr Auguste or his advisers did raise the issue or were aware of a possible claim under Regulation 19 is a question of fact which cannot safely be answered without oral evidence. In any event, in the circumstances, I do not think it necessary to deal further with Ground 8.

Summary and conclusion

[100]For the reasons I have given, I propose to allow this appeal.[101]Mr Auguste has sought to make a virtue of the fact that his employment ceased because the Council considered his performance or that of Ascham under his leadership so unsatisfactory that it would refuse to fund Ascham unless his employment was terminated, and the Board of Ascham felt it had to comply with the Council’s demand both as a legal reality and in order to preserve its source of funding and improve its relationship with its sole shareholder.[102]He has portrayed the Board of Ascham’s acceptance of this state of affairs and its decision in response to the Council’s demand that his employment should cease as a decision on the ground of “business efficiency”. He has contended that this should entitle him to enhanced pension arrangements.[103]However, there has never been any suggestion that the cessation of Mr Auguste’s employment was made necessary or expedient by reason of some change in the way Ascham conducted its business. As recorded in the Final Determination (at paragraph 27), Ascham achieved no cash or other saving, actual or prospective: indeed it had to pay Mr Auguste substantial compensation for loss of office.[104]Standing back from the detail, it would be surprising, to my mind, if the Regulations provided for him to be specially favoured in such circumstances. A full analysis of the law and its application to the facts demonstrates, in my judgment, that they do not.[105]I have reached the conclusion that Ascham’s decision not to permit Mr Auguste to take early retirement on an unreduced pension should not have been upset, and must be restored.

Postscript

[106]I should record that after circulation to the parties of a draft of this Judgment, Mr Auguste provided detailed comments on it in support of his contention that it contained “fundamental errors of fact” and “omissions of settled evidence”, and “did not obey the reasoning” set out in it.[107]Mr Auguste has sought to emphasise particularly his contentions that(1) the evidence of Ms Wilson recited in paragraph 8 of the Final Determination was untrue or “at best, inaccurate”, and that in truth the Board of Ascham did not consider, and did not suggest to Mr Auguste, that there were issues with his personal performance;(2) the Council wanted structural changes in the way Ascham operated and, having identified Mr Auguste as the reason why they were not being actioned, required his removal to facilitate them;(3) after his removal, the Council pushed through the structural changes it wanted;(4) in referring to “performance issues” in his letter of 7 October 2011, Mr Auguste was referring only to the Council’s own particular concerns as to Ascham’s performance and its wish to remove him to drive forward their own agenda, and not to any criticism by Ascham of his own performance; and that(5) the Deputy Ombudsman’s conclusions, based on more evidence than is recited in her Final Determination, should not be upset, especially given her experience as “an habitual decider” in such matters.[108]I have considered these points with care. In the light of them, I have revised the expression, but not the substance, of certain paragraphs of this finalised Judgment, and especially paragraphs 24, and 63 to 66, primarily to take into account(a) Mr Auguste’s explanation of what he meant by “performance issues” in his letter of 7 October 2011, and(b) his contention that the Council had an agenda for change.[109]I have also once more weighed the consideration that the Final Determination may not recite evidence that influenced the Deputy Ombudsman but of which I have a lesser grasp; and that I should be reluctant to conclude that she had no sufficient basis for the conclusions she expressed.[110]However, ultimately, the question is whether the real reasons for Mr Auguste having to leave, which the Deputy Ombudsman recited in paragraph 26 of her Final Determination as being agreed (that is, that “Mr Auguste had to go because the Council had no confidence in him, and was unlikely to continue Ascham’s funding if Ascham continued to employ him”), constituted “grounds of business efficiency” within the meaning of, and such as to trigger an entitlement under, Regulation 19. I remain of the view, for the reasons I have expressed, that Ascham’s Board was entitled to proceed on the basis that they did not. Accordingly, my conclusions are unchanged.