BAILII Citation Number: [1999] EWHC 848 (Ch) Case No. CH 1997 L. No. 6434, CH 1997 L. No. 6433

IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION

Royal Courts of Justice

15th October 1999

B e f o r e :

MR JUSTICE RIMER IN THE MATTER OF THE LANSING LINDE PENSION SCHEME

And IN THE MATTER OF THE LANSING LINDE EXECUTIVE PENSION SCHEME

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LANSING LINDE LIMITED Claimant - and - ALFRED MICHAEL ALBER AND OTHERS Defendants AND BETWEEN: LANSING LINDE LIMITED Claimant - and - ALFRED MICHAEL ALBER AND OTHERS Defendants

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Mr Terence Etherton Q.C. and Mr Michael Furness (instructed by Taylor Joynson Garrett) appeared for the claimant in both actions

Mr Richard Hitchcock (instructed by Messrs Biddle) appeared for the trustees in both actions (the first eight defendants in action 6434 and the first four defendants in action 6433)

Mr Brian Green Q.C. and Mr Michael Tennet (instructed by Rowe & Maw) appeared for the beneficiary defendants in both actions (the ninth and tenth defendants in action 6434 and the fifth and sixth

defendants in action 6433) ____________________

HTML VERSION OF JUDGMENT ____________________

Crown Copyright ©

Introduction

Two actions have been tried before me. The claimant in both is Lansing Linde Limited ("Lansing"), which appears by Mr Terence Etherton Q.C. and Mr Michael Furness. Lansing manufactures, distributes and sells material handling equipment, particularly fork-lift trucks. The actions are concerned with the affairs of occupational pension schemes in respect of which it is the principal employer. One action concerns the Lansing Linde Pension Scheme, a staff scheme ("the main scheme"); the other concerns the Lansing Linde Executive Scheme ("the executive scheme"). There was formerly also an hourly paid scheme, but it was amalgamated with the main scheme following certain resolutions passed on 22 August 1990 in relation to all three schemes. These resolutions are at the heart of the issues in the actions.

The definitive deeds and rules originally governing the main and executive schemes were executed in 1977 and 1979 respectively but in 1992 and 1994 respectively they were amended and replaced by new deeds and rules. Lansing claims that the new deeds and rules were intended to give effect to the resolutions of 22 August 1990 but that, by mistake, they do not give correct effect to the true intentions of itself and of the schemes' trustees. It asks the court to rectify them so that they will conform with what is said to be those intentions; but it also asks for additional relief which would require the deeds to be administered in a way involving a departure from such intentions.

Put shortly, the effect of the new rules was to defer the normal retirement date ("NRD") of women members from age 60 to 65, the latter having always been the NRD of the men members. However, the new rules also gave both men and women the right to retire between 60 and 65 on an immediate pension unreduced by reason of the fact that it was being taken early. Lansing's case is that in this latter respect the new rules are in error. It claims that no member was ever intended to have any such right and that everyone's intention was always that a member (whether a man or a woman) could only retire between 60 and 65 on an immediate unreduced pension if Lansing and the trustees first consented to his doing so. The main object of the rectification sought in each action is to introduce the need for consent into the early retirement provisions in the new rules.

The respective trustees of the main and executive schemes have been joined as defendants in the particular action which affects them. They are represented by Mr Richard Hitchcock, who adopted a neutral role at the trial. Mr Brian Green Q.C. and Mr Michael Tennet represented those defendants in both actions who were joined as representative members of the two schemes. They argued against the relief claimed by Lansing. The issues raised by the two actions are similar, but not identical. I will deal with the main scheme action first and then with the executive scheme action. Most of the evidence is relevant to both actions.

A. The main scheme action

There are ten defendants. The first eight are the current trustees of the main scheme. The remaining two, Nigel Murgatroyd and Maureen Laundy, are members of the scheme who have been joined for the purpose of representing all its past and present members and those claiming through them.

The constitution of the main scheme as at 1990

The main scheme commenced on 31 July 1974. It was originally known as the Lansing Bagnall (1974) Pension Scheme and, later, as the Lansing Linde (1974) Staff Pension Scheme. It was constituted by an interim deed dated 24 July 1974 executed by Lansing, four associated companies and three trustees. Its purpose was to provide retirement pensions and other benefits for employees and directors of the companies. In due course it became governed by a definitive deed and annexed rules dated 6 July 1977 and made between Lansing and five trustees, as amended by various subsequent (and, for present purposes, immaterial) deeds made between March 1978 and June 1990. I will refer to the 1977 deed and rules as so amended collectively as "the 1977 deed".

The scheme is a contracted-out, contributory, balance of cost, final salary scheme. The 1997 deed provided for women to have an NRD on their 60th birthday and for men to have an NRD on their 65th birthday, at which respective ages they would become entitled to a pension for life based on 1/60th of final pensionable salary for each year of service. "Final pensionable salary" was the highest average pensionable salary in any period of three consecutive years in the previous ten. "Pensionable salary" was the annual salary in the preceding year, including an average of the previous three years' commission or bonus but, importantly, less an amount approximately equivalent to the basic state pension in force at the time.

The right to receive a pension for life at NRD was dealt with by rules 6(A) and (B). Rule 7 dealt with retirement after NRD: it provided that those active members of the scheme (i.e., those in service, whom I will call "actives") who remained in service after NRD would become entitled to a pension calculated in accordance with rule 6 as though they had retired at NRD, save that it would be payable as from the date of actual retirement and would be actuarially increased to take account of the period of deferment. Rule 8 dealt with the opportunities for actives to retire and take an immediate pension before NRD. It is central to the action and its material provisions are as follows:

"8. RETIREMENT BEFORE NORMAL RETIRING DATE

(A) A Member may with the consent of the Trustees and the Employer retire before Normal Retiring Date at any time on account of ill-health (being physical or mental deterioration which prevents the Member following his normal employment or which seriously impairs his earning capacity) or otherwise within ten years of his Normal Retiring Date. Upon retirement as aforesaid the Member shall be entitled to receive an immediate pension payable in accordance with the provisions of Rule 6(A) commencing on his date of retirement unless he shall have elected that such retirement shall be classed as leaving Service in accordance with Rule 15 when the provisions of that Rule shall apply instead.

(B) A pension payable on retirement other than through ill-health as aforesaid shall be calculated in accordance with Rule 6(B) based on his Final Pensionable Salary at and his Pensionable Service to the date of retirement but shall be actuarially reduced by virtue of its early payment."

The provisions in rule 8 relating to early retirement on grounds of ill-health are not material. The material provisions are those providing for early retirement otherwise than on ill-health grounds. They permitted such retirement up to ten years before NRD, but only with the consent of the trustees and Lansing. Any such retirement would be on an immediate pension, but one which was reduced to reflect the fact that the benefits were being paid in advance of NRD.

Also relevant are the provisions in the 1977 deed relating to the rights of those who had left service prior to NRD and had qualified for entitlement to a deferred pension payable from NRD ("deferreds"). Their rights were dealt with in rule 15. They too had the right, but only with the trustees' consent (Lansing's consent was not also required), to take an immediate pension before NRD, although one which was similarly actuarially reduced. The relevant provisions are in rule 15(D) and read:

"(D) Where the Member is entitled to a deferred pension under the foregoing provisions of this Rule:-

. . .

(ii) The Member shall have the option exercisable by notice in writing to the Trustees on his cessation of Service or at any subsequent time before Normal Retiring Date of selecting in lieu of a pension payable from Normal Retiring Date:-

. . .

(b) subject to the consent of the Trustees a pension payable on retirement before Normal Retiring Date in the circumstances described in Rule 8. Such pension shall be equal to the deferred pension payable from Normal Retiring Date calculated in accordance with the foregoing provisions of this Rule reduced in the circumstances and in the manner described in Rule 8 and shall be payable in the same manner as a pension commencing at Normal Retiring Date."

Clause 20 of the 1977 deed included an amendment power. It provided, so far as material, as follows:

"20. THE Company may at any time and from time to time with the consent of the Trustees by Deed amend or extend all or any of the trusts powers or provisions of the Trust Deed or by Deed or Board Resolution amend or extend all or any of the trusts powers or provisions of the Rules and any such amendment or extension shall have the effect from such time as may be specified in such Deed or Board Resolution whereby the same is effected and so that the time so specified may be the date of such Deed or Board Resolution or any reasonable time previous or subsequent thereto so as to give the amendment or extension retrospective or future effect

PROVIDED THAT

No amendment or extension as aforesaid shall

(A) Reduce the benefit accrued to or in respect of any Member under the Scheme at the date of such amendment or extension without the consent in writing of such Member

. . . "

As is common practice, the scheme members were provided with booklets explaining the essence of the scheme in more user-friendly language than that of the deeds and rules. An early version explained the position as at 6 April 1980. A later booklet explained it as at 1 July 1988. It was prepared by Antony Gibbs Benefit Consultants Limited ("Gibbs") who (by itself or via an associate company) provided administrative, documentation, advisory and actuarial services to the scheme. It summarised the pension rights of actives in part as follows:

"RETIREMENT DATE

Your normal retirement date is your 65th birthday (for men) and 60th birthday (for women).

Alternatively, you can retire at any time after your 55th birthday (for men) or 50th birthday (for women) (or even earlier if in serious ill health) but you would then be able to take an immediate pension only if the Company and the Trustees agree. In this case, your pension would be less than if calculated on the formula described overleaf. More information on this can be supplied by the pensions officer.

If you remain in the Company's employment after your normal retirement date, then you can choose to take your pension then or defer it until a later date, by which time it would have increased."

1. Background to the proposal to amend the 1977 deed

Mr S.L.Wasserman of Gibbs was the actuary to the scheme. On 12 December 1989 he wrote to the trustees reporting on a valuation which had been carried out as at 1 May 1989. He reported that the total required company contribution rate was 11.2% of pensionable salaries per annum. He explained that the permitted limit of the funds which could be held within a pension scheme was the value of the liabilities built up by service completed before the valuation date plus a margin of 5%. He said that, applying the conservative assumptions required by the legislation, the scheme's assets exceeded liabilities by 21%, such excess therefore being more than was permitted. He annexed a valuation balance sheet for the scheme as at 1 May 1989. That showed that the scheme liabilities at that date for pensioners were £4.742m, for deferreds were £2.883m and for the past and future service benefits of actives were £20.682m and £39.741m respectively, such liabilities totalling £68.048m; and that members' contributions were valued at £5.656m and the fund assets at £35.481m, leaving a residual company liability of £26.911m. Those figures showed an excess of fund assets over past service liabilities of £7.174m, or 20.2%. Mr Wasserman annexed a membership analysis for 1988/89 recording that there were 1705 actives, 488 deferreds and 343 pensioners. There were also 12 employees who were not members of the scheme.

The receipt of that valuation led to a trustees' meeting on 15 December 1989. Eight trustees attended, with Mr W.J.Allenby (Lansing's deputy chairman) in the chair. Messrs Wasserman, Haines and Thornton of Gibbs were also present. Mr Thornton was a Gibbs employee who provided services on-site in connection with the scheme, and at the meeting he also carried out his usual role as secretary to the trustees. He was destined to play an important part in the subsequent story, since it was he who gave instructions to the solicitors who drafted the 1992 amending deed of which rectification is sought.

The meeting considered the valuation and Mr Wasserman reported that he was obliged to inform the Inland Revenue of a five year plan necessary to reduce the past service surplus to an acceptable level so as to avoid a charge to tax on the assets. Under "any other business" there was a reference to the reorganisation then current in Lansing, involving a reduction in the workforce and the making of redundancies. It recorded that:

" . . . the Trustees would consider sympathetically the pension of those individuals due to retire in 1990 and 1991 whose jobs were subject to major changes due to the re-organisation. Messrs

Colson and Steele [two of the trustees] would identify such employees who would be offered improved terms for early retirement on an individual basis."

The background to that entry was that Linde AG ("Linde") had acquired Lansing in February 1989. Lansing's manufacturing facility was, by 1989, perceived as being out of date and overstaffed. By the end of the year it had major plans for re-organisation; and between 1991 and the end of 1993 its old factory was demolished and replaced with a new one which had three times the capacity but required a fraction of the labour force. A material thinning out of the labour force was already in contemplation at the end of 1989. This is of some relevance.

Mr Peter Steele was particularly familiar with these plans. He has been Lansing's personnel director since 1984. He became a trustee of the main scheme in May 1988 and of the executive scheme in 1989 and is still a trustee of both schemes. He was an important witness for Lansing since he played the most significant role in formulating the proposed changes to the 1977 deed and in connection with the instructions for the preparation of the amending deed.

In relation to Lansing's reorganisation plans, Mr Steele said that it had become Lansing's policy to encourage older people to go and younger people to stay. There were certain key employee areas – for example, service engineers and welders – which Lansing needed to protect for the purposes of its long term plans. By contrast, its assembly section was going to close down. Overall, it needed fewer people, but it needed to be selective with regard to those whom it encouraged to leave. At the meeting of 15 December 1989 approval was given to the participation of the main and hourly paid schemes in a voluntary redundancy package; and at about that time Mr Steele prepared a list of about 50 people who were due to retire within the next two years. Lansing then identified those on it whom it could lose immediately (i.e. by the end of January 1990), those whom it could release later and those whom it wanted to retain until their NRD. Those whom it wanted to go would be encouraged to do so under Lansing's "selective early retirement programme" under which they would be offered a financial severance package which included a pension of the amount they would have earned at NRD had they stayed on plus a lump sum to compensate them for the loss of earnings resulting from their early retirement. The offered package went a considerable way towards compensating the employee for the financial disadvantages he or she would have suffered if the early retirement had simply been on the basis of an immediate pension (even if it was unreduced because it was being taken early). The package was sufficiently attractive that only two people to whom it was offered declined to accept it.

Mr Steele referred in his evidence to the need for consent to early retirement in rule 8 in the 1977 deed (and the like provision in the executive scheme) and said that, apart from redundancies and the operation of the selective retirement programme, there was no culture of early retirement at Lansing. The pension schemes applied a state scheme deduction to the pay used for calculating pension (a deduction of one and a half times the state pension); and this, coupled with the fact that the state pension would not be available until retirement age, made early retirement an unattractive proposition. He said that the scheme was a "top-up" scheme, which assumed that people would have an old age pension. In addition, the early retiree would lose the benefit of pension accrual between the date of his early retirement and his NRD. Moreover, the scheme members were not, in the main, very high earning people, including, as they did, unskilled factory workers and junior clerical people at the lower end and middle management at the upper end. Early retirement, even on an immediate pension, was not an attractive proposition.

Mr Steele reported to Terry Colson, who, in 1989, became a joint managing director of Lansing. He also then became a trustee of its three pension schemes, although he said he never read the deeds in full and does not remember having been given copies: his evidence was that he would have researched a particular passage only if a problem arose, but he said he would have read the scheme booklets. He relied on Mr Steele and Lansing's advisers for "technical pensions details". He was involved with the design of Lansing's new factory and with the redundancy programme following the Linde takeover. He said that between 1989 and 1993 Lansing's workforce was reduced from about 1500 to around 550, after which output quadrupled. He co-ordinated the redundancy programme, which was based on what was called "retention of skills" and he said it was vital to this and to the success of Lansing's new operation that certain key skills (for example, welders) were retained, many of such people being over 60, and that Lansing should have control over which employees left and over early retirements. This feature of Lansing's reorganisation programme was central to its case in this action, the evidence of several of the witnesses being that no-one ever thought, or could

have thought, that it was ever intended that the consent requirement in the 1977 deed to early retirements was not also to be included in the 1992 amending deed in relation to early retirements between 60 and 65. As will appear, the extent to which Mr Thornton was also sensitive to this consideration is of some interest. Mr Colson said he found it hard to believe that Mr Thornton was not fully aware of its importance, although he also said he could not remember the subject being discussed in Mr Thornton's presence.

A further trustees' meeting took place on 10 May 1990. There was some discussion about the Social Security Bill 1990, a Bill proposing (inter alia) that, after 1991, any surplus in a company pension fund would have to be used to escalate all pensions for service prior to 1992 at 5% per annum (or the RPI increase, if less). This meeting was Mr Bruno Kulick's first meeting as a trustee of the scheme (he also became a trustee of the executive scheme at about the same time). He was a main board director of Linde and had, before 1990, been working for Lansing at the German end of its operations. He had come to the UK on a permanent basis in April 1990 and then became, with Mr Colson, a joint managing director of Lansing, his primary function being the responsibility for the service engineers based over the country. Lansing's plans included substantial reductions in the marketing and service departments for which he was responsible. As for Mr Kulick's pensions expertise, according to Mr Colson he did not know much about English pension schemes, and Mr Kulick accepted that he "was not involved in any UK pension matters before May 1990." He was not a member of any of the Lansing schemes - he had his pension arrangements with Linde in Germany, where he said the law and practice on pensions is very different. His evidence, however, was that he knew that the consent of Lansing and the trustees to early retirement was required under the scheme rules. He kept no file of his own on pensions matters and would return all papers to Mr Steele after each trustee meeting, of which there were only about two a year.

On 14 May 1990 Mr Haines of Gibbs wrote to Mr Steele and pointed out that the consequences of the 1990 Bill on the scheme were potentially very serious in view of its large surpluses and its heavy pre-1992 liabilities. He suggested that he and Mr Wasserman should have a meeting with the management trustees (i.e. the four trustees who were company representatives - Messrs Allenby, Colson, Kulick and Steele - as opposed to the four trustees who could be regarded as representing employee interests - whom I will call "employee trustees"). He suggested that one obvious response was to get rid of the surplus before the end of 1991. On 16 May 1990 Mr Steele circulated an internal memorandum reflecting Mr Haines's thoughts to his three management co-trustees. A meeting then took place on 23 May 1990, although there is no note in evidence of what occurred at it.

The next relevant event was on 17 May 1990. That was the day on which the ECJ gave its decision in Barber v. Guardian Royal Exchange Assurance Group [1991] 1 Q.B. 334. The court held that benefits under contracted-out occupational pension schemes such as the main scheme were "pay" for the purposes of Article 119 of the EU Treaty and the Equal Pay Directive and so (like other aspects of remuneration) were required by European law to be equal in relation to men and women for like work. It held that early retirement pensions which distinguished between men and women so as to confer on women a right to take an immediate pension at an earlier age than men were contrary to European law. It was already established that Article 119 was of direct effect so as to enable individuals to invoke it in the enforcement of their rights, but the ECJ limited the potential width of its decision by stating, at p.405B, that:

"5. The direct effect of article 119 of the Treaty may not be relied upon in order to claim entitlement to a pension, with effect from a date prior to that of this judgment, except in the case of workers or those claiming under them who have before that date initiated legal proceedings or raised an equivalent claim under the applicable national law."

That formulation gave rise to some uncertainty at the time as to the effect of Barber on pensions payable and benefits accrued before and after 17 May 1990. Clarification of its true effect was not provided until 28 September 1994, when the ECJ delivered its judgment in Coloroll Pension Trustees Ltd v. Russell and Others [1995] I.C.R. 179. It was to the effect that the consequence of Barber was that scheme rules had to be amended so as to eliminate any inequality of treatment between men and women (either by a levelling up of the disadvantaged sex or a levelling down of the advantaged one) and that until that was done - but only in respect of the period since 17 May 1990 - there had to be a levelling up of the benefits of the disadvantaged class (usually men) so that they matched those of the advantaged class (usually women). Applying that to this scheme, the consequence was that, from 17 May 1990 until such time as an equalisation of benefits was put in place, the men accrued

benefits on the basis of the same NRD as women, i.e. at age 60. This action concerns amendments which were proposed to be, and were, made to the scheme in and following 1990 but before the precise consequences of the Barber decision were known.

In June 1990 Gibbs issued a briefing on Barber to its various clients, including the trustees of the Lansing schemes. They advised that the result of the case was that "European (and thus UK) law says that retirement ages for males and females must be equalised; currently, most UK plans do not have equal retirement ages." They advised that it was now apparently unlawful to operate a pension plan which had a different NRD for men and women or which treated men and women differently in respect of the availability and amount of pension benefits at early, late or normal retirement; that it followed that a standard NRD for men and women had to be introduced and that schemes must ensure that early and late retirement benefit calculations were identical for men and women; and that the options were to: (i) increase women's NRD to that of men; (ii) reduce men's NRD to that of women; or (iii) equalise the NRD somewhere between the current different ones.

Gibbs advised that option (i) would be unpopular with women, because it would involve a reduction in their benefits: if, for example, under the new rules a woman wanted to retire at 60, she would suffer an actuarial early retirement factor and so get less pension than she would under the current rules. They also advised that there might be employment law problems in imposing a later NRD on women. They advised about option (i) that:

"Management may therefore wish to allow the women to retire at 60 as before with no actuarial reduction; however, if this is done then men must also be able to go at 60 on the same basis. This could prove to be expensive (depending on the number of employees who choose to go early), and may in practice end up being similar to equalising retirement ages at 60."

Mr Steele's evidence was that he interpreted this passage as implying that women's retirement at 60 should be a matter of right, not something which was dependent on anyone else's prior consent, an interpretation with which I agree.

Gibbs then considered option (ii) and expressed the view that it would be expensive; and that since men would anyway not obtain any state retirement pension until 65, they may also face personal financial problems. They advised that option (iii) was a compromise solution, involving the same, but smaller, problems as the other two. They advised careful consideration of Barber in the context of the client's personnel culture and management requirements.

On 5 June 1990 Mr Haines wrote again to Mr Steele. Mr Colson said he also received this letter (although it is not apparent it was copied to him), but that he did not specifically remember it. Mr Haines wrote that at the meeting of 23 May it had been agreed that the hourly paid scheme should be merged with the main scheme so as to achieve a common surplus. He referred to the schemes' past service surplus being £9.526 million. He said this with regard to Barber:

"In the light of the Barber Case, it will be necessary to alter the retirement ages. Essentially, the options are:

[1] To reduce male retirement age to 60.

[2] To increase female retirement age to 65.

[3] To equalise retirement ages somewhere between 60 and 65.

If you adopt either [1] or [2] above, there could still be considerable flexibility over retirement ages. For example, if [1] is adopted, employees could remain in service after age 60 (at their option? at management option only?) and earn extra pension. If you adopt [2], then males and females could be permitted to retire at ages of 60 and above with no actuarial reduction.

There is still much work to be done on this, but it does seem that you should not make a decision on the 5% post-retirement increases without having a pretty firm view on your policy on retirement ages. To give you an indication of costs, reducing male retirement age to 60 would use up £7,500,000 of

the £9,526,000 past service surplus and add 1.7% to the future contribution rate; this assumes, of course, that all males and females would actually retire at 60, and to the extent that any remain in service after age 60, this would reduce costs."

By a memorandum dated 18 June 1990 Mr Steele relayed the substance of that advice, with his own recommendations, to Messrs Allenby, Colson and Kulick. His evidence was that he probably discussed it with Mr Thornton and that he probably also sent a copy to him and to Mr Haines.

As regards Barber, Mr Steele's memorandum spelt out the three options. He pointed out that to reduce the men's NRD to age 60 would be very expensive (involving using £7.5m of the £9.5m surplus) and would be unpopular because men retiring at 60 would have no state pension until 65. Mr Colson said in evidence that the possibility of adopting a common NRD at 60 was never considered as a serious option, since it would have upset Lansing's skills retention plans. Mr Steele then described Mr Haines's suggested second option in these terms:

"Fix the retirement age of males and females at 65 years, but to have no actuarial reduction for retirement within 5 years of normal retirement age.

Thus, the position of females will remain unchanged, except that they would continue to contribute and accrue benefits after 60, but early retirement for males will be more attractive for those who seek it - the current actuarial reductions are 6% p.a. It is not possible to estimate the costs as they will depend upon the number of males who choose to retire early. If all 178 current male employees aged over 60 did so, then the cost would be £7.5M, but due to lack of state pension it is extremely unlikely that many would do so. In general, the scheme benefits if females stay until 65 as the pension costs, and any transfer costs for early leavers are less."

Mr Steele did not there spell out whether or not Lansing's and the trustees' consent to an early retirement between 60 and 65 on an unreduced pension would be required. However, the inference from his observation that "Thus, the position of females will remain unchanged" is that he did not have the need for any consent in mind - since, if the women could only so retire with consent, their position would be changed; and if he had in mind that the women could so retire without consent, then it followed from Barber that men must be given the like right to retire between 60 and 65 without the need for consent, also with no actuarial reduction. There is, moreover, an inference from Mr Steele's chosen language that he did have in mind that men would be entitled to retire as a matter of right as from age 60 - note his reference to "the number of males who choose to retire early" and his contemplation that all 178 men over 60 might so choose. If, as Mr Steele now claims, he had then intended that Lansing could always veto any proposed early retirement, it was inaccurate for him to talk in terms of the members having any real choice in the matter, and his suggestion that all 178 might go was unreal. However, according to Mr Steele, he never intended either the women or the men to have any such choice. He says he only meant that they could ask to retire early - but the choice as to whether they could actually do so would be exclusively that of Lansing and the trustees.

Mr Steele's evidence in chief about Mr Haines's second option differed from the inferences which might be drawn from that memorandum. He said that:

"Increasing the retirement age to 65 but allowing members an absolute right to leave at 60 on an unreduced basis (which is what was written into the [main and executive schemes] when they were amended) was not an option that was ever specifically considered. It would not have made any sense. We may as well have reduced the retirement age to 60 which was something that we were clear we did not want to do."

He said that his statement in his memorandum to the effect that "the position of females will remain unchanged" was inaccurate, although it appears to me that the alleged inaccuracy went to the heart of what he claims he meant. Whilst confessing to such inaccuracy, he also sought to avoid it by saying that in practice the women's position would be not fundamentally changed - because consent would "almost certainly have been given to a woman wanting to retire early". This was because they were generally in either clerical or administrative occupations or in electrical assembly work, being sections which, by 1990, were due to be downsized. As I have indicated, he disagreed with the suggestion that his memorandum indicated that he had in mind that men would have a right to go at 60 on an immediate unreduced pension.

Later in his memorandum Mr Steele set out his recommendations. He proposed that the hourly paid scheme should be merged with the main scheme. He then recommended that:

"2. Change the retirement age of females to 65 and remove actuarial reductions to employees who retire early (for any reason within 5 years of their normal retirement date. This may cause an immediate temporary increase in the number of retirees (which would be helpful in our manpower requirements) and put us in a good position for any future changes in legislation."

Again, this makes no mention of the need for consent to early retirements - and, again, the statement that the proposed change could "cause" an immediate increase in the number of retirees is more consistent with there being no such requirement: because, if the consent requirement was to be retained with regard to retirements between 60 and 65, the number of retirees would be exclusively within Lansing's control and the change could not "cause" anything except the making of requests which Lansing could refuse. Mr Steele also recommended that if they were to change the actuarial reductions for the hourly paid and main schemes, they should also do so for the executive scheme.

Mr Allenby is now dead, but a statement obtained from him was put in evidence under the Civil Evidence Act 1995. He said he did not read Mr Steele's note and recommendations as meaning that all control over early retirements would be lost. He said that the question of whether consent to early retirement should be preserved was never raised with him and that he would not have agreed to what amounted to a common right to retire at 60. On the contrary, he said that the object of the exercise was (or became) to achieve a common retirement age at 65.

Mr Colson's evidence in chief about this memorandum was that he was "sure that [it] would have had the underlying assumption that consent [to early retirement] would still be required, as we could not have contemplated it otherwise." He did not also say that is how he read it at the time. In cross-examination he agreed that Mr Steele's reference to employees having a choice of retiring was "not the most fortunate" use of language, but the said "we knew . . . what it meant". To the question whether he agreed that Mr Steele's language in recommendation 2 above was consistent with the retention of a right of consent he replied:

"I don't see why not because it was in his mind. I mean the author is Peter Steele and he knew the consent requirement was paramount."

Mr Colson felt able to say this even though he accepted that the question of the retention of consent was never discussed. This was one example of the almost telepathic sensibilities which the evidence suggests was enjoyed by and between certain of the trustees at about this time: they claim to have known what others intended and meant by what they wrote with regard to the proposed amendments to the scheme, even though what was written might more naturally be read as being inconsistent with the suggested intention and meaning. I shall come to further examples of this.

On 2 July 1990 there was a meeting of the management trustees (Messrs Allenby, Kulick, Colson and Steele) with Messrs Haines and Wasserman of Gibbs. The minutes, prepared by Mr Haines, recorded that Lansing's trading results were not good and that there were to be continuing reductions in employee numbers - possibly from 2,500 then to about 1,750 within five years. They also recorded that about 250 redundancies were to be made during that year and that it was hoped to effect these by the early retirement programme. Mr Steele noted against this item on his copy "Not correct" and put a "No" against a note to the effect that redundancy was to be offered to all those who were within five years of NRD: he said in evidence that Lansing still needed to control key people. The early retirement programme referred to was expanded in item 2 of the minutes, which suggested that its "likely elements" were (i) redundancy to be offered to all those within five years of NRD, (ii) an offer of the member's expected pension at NRD based on current final pensionable salary, and (iii) a cash sum. The minutes showed that no final decision on Barber had been made: they recorded that the trustees would "wait & see what other companies do and any redrafting of the 1990 Social Security Bill."

Towards the end of July 1990 Gibbs sent a briefing to the trustees of the Lansing schemes that the Social Security Act 1990 had received the Royal Assent on 20 July. Mr Steele followed that up with a memorandum dated 30 July to Messrs Allenby, Colson and Kulick, of which he also provided a copy

to Mr Thornton. He discussed the question of the pension scheme surpluses and various ways of reducing it, including paying enhanced pensions to fund the redundancy programme. As for Barber, he wrote:

"We still have differing treatment of males/females which is inconsistent with that case, although one could, in general, claim that that case only applied to compulsory redundancy. The Cray Precision v. Clarke case is due shortly, which should finally resolve the matter. We should, therefore, immediately change the rules to introduce a common normal retirement age of 65 with no actuarial reduction for retirement within five years."

Mr Colson said that, when he read this, it "never entered my head that we would not have a choice over who took early retirements and who did not." He said that if the issue of removing consent had been raised it would have been promptly dismissed. But he said that he realised "it would be prejudicial if we required females to remain until 65" and that their position was discussed by some of the management trustees (probably Mr Allenby, Mr Steele and himself). He said they were not regarded as a problem since there were very few women and those who wanted to retire early were likely to have been given consent.

That memorandum was followed by a meeting on 3 August 1990 and, on 13 August 1990, by a further memorandum from Mr Steele to Messrs Allenby, Kulick and Colson. Part of it recorded the actuarial estimate of the cost (£1.2m) of "Equalising retirement age at 65 and waiving actuarial reduction for first 5 years", with a note explaining that the estimate was based on an assumption that "everybody retires one year early - a probable over-estimate." Mr Steele recommended that "with immediate effect (or as soon as possible consistent with other matters) we . . .

iv) Equalise retirement age for males and females at 65 and waive actuarial reduction for first five years before normal retirement age."

Mr Steele said that his recommendations were approved by the management trustees and, on 20 August 1990, he sent Mr Allenby a note headed "Pension Scheme Proposals". Its purpose was to brief Mr Allenby for the trustees' meetings which were to be convened for the purpose of considering and resolving on the proposals in relation to all three schemes, meetings which Mr Allenby would be chairing. At other points in his evidence Mr Steele said that he sent this note to all the trustees, and Mr Colson, for one, thought he had received it, although Mr Kulick could not remember doing so. Mr Albert Rampton (an employee trustee of the hourly paid scheme) said he saw this note, although he could not recall whether he first saw it during or before the trustees' meeting.

Mr Steele said in the note that Barber showed that occupational pension schemes should treat women and men equally. He gave an imprecise six line summary of the effect on surpluses of the Social Security Act 1990. He then outlined some "Proposed Changes", including the merger of the hourly paid scheme into the main scheme. As to Barber, his proposal was that:

"d. All employees will have a normal retirement age of 65. However, there will be no actuarial reduction for early retirement up to five years before normal retirement date.

This will be a substantial improvement for male employees, it will leave current female employees who retire at the age of 60 in the same circumstances as currently, but any female employee who remains with the company after the age of 60 will remain a member of the pension scheme, thus accumulating benefits and retaining life insurance."

Again, Mr Steele did not spell out what he says he meant, namely that both men and women would only be able to retire before the new NRD of 65 if both Lansing and the trustees consented. He said in chief that he still had the underlying assumption that Lansing would retain the ability to control early retirements. He said that his words that "it will leave current female employees . . . in the same circumstances as currently" were inaccurate because women would require consent to retire on an unreduced pension after 60 (although, given the inclusion of the words "who retire", I am not convinced that, on his case, these words were in fact inaccurate); but, as I have sad, his evidence was also that in substance their position would be unchanged, because Lansing envisaged that, in general, women wanting to retire at 60 would get the necessary consent. He said that, in practice "we couldn't envisage a situation where we wouldn't want to give consent to a woman to retire early."

Mr Colson gave evidence to much the same effect. Mr Steele's note proposed a trustees' meeting for 22 August, two days later.

Mr Allenby prepared a briefing note for his own use at the trustees' meetings. It noted that there was no longer any justification for having a separate hourly paid scheme and that it was proposed to merge it with the main scheme; that Barber required pensions for male and female employees to be placed on the same footing; that the purpose of the meeting was to give effect to these objectives and that it was also the trustees' duty to see that they were achieved at minimum cost to Lansing, which was not making profits and was unlikely to in the immediate future. The note then set out the proposals, of which (b) was:

"Equalising retirement age at 65 and waiving actuarial reduction for the first 5 years (in case of early retirement).

Benefit: As stated

Cost: £1.2M, assuming everyone retires 1 year early."

It added that any decision by the trustees had to be subject to final approval by Linde. Mr Rampton said he also saw a copy of this note, but again could not remember whether he first saw it at or before the trustees' meeting which he attended.

The trustees' meeting

The meting of the main scheme trustees took place on 22 August 1990. It commenced at 11.35am and lasted at most 30 minutes. The meeting of the trustees of the hourly paid scheme followed at 12.05 pm, and that of the executive scheme trustees at 1.00 pm.

Seven trustees attended the main scheme meeting: Mr Allenby (chairman), Mr Colson, Mr Kulick and Mr Steele (the management trustees); and Mr Abell, Mrs Ferguson and Mr Hunt (the employee trustees). Mr Thornton also attended and acted as secretary. He prepared the minutes, which I will quote in full:

"1. Mr W.J.Allenby outlined the legislative requirements of Barber v. GRE and the 1990 Social Security Act and also confirmed the company's wish to harmonise employee benefits as far as possible.

2. Mr W.J.Allenby proposed the following package of changes in view of 1 above and having regard to the surplus disclosed in the last actuarial valuation.

a) The transfer of all current Hourly-Paid employees to the [main scheme].

b) The equal treatment, between Staff and Hourly Paid members, of pension benefits for service accrued prior to 1st April 1974.

c) The equalisation of normal retirement age at 65, with the option for any member to retire up to five years early with no loss of accrued pension.

d) The suspension of company contributions until 31st December 1991.

e) A commitment to use any surplus arising after the implementation date in the 1990 Social Security Act (expected to be 1st January 1992) to improve increases to all pensions in payment from 3% pa to 5% pa or the movement in RPI whichever is the smaller.

The views and agreement of fellow Trustees was requested.

Mr P.W.Steele observed that the company's decision to suspend contributions was not an item for discussion within the parameters of the meeting.

Mr R.E.Abell and Mr B.F.Hunt requested more time to consider the proposals and to consult with their union officials.

After discussion the proposals were agreed in principle, subject to further comments from Messrs Abell and Hunt and from Linde AG. (Subsequent to the meeting agreement was confirmed by all parties and the proposals implemented).

There being no further business, the chairman closed the meeting."

Paragraph 2(c) is the important one. I regard its meaning as clear. NRD was to be at age 65 for both men and women, but either was to have the option - or right - to retire between 60 and 65 on an immediate pension which was to be subject to no reduction reflecting the fact that it was being taken early. It says nothing about the need to obtain the consent of Lansing or the trustees before any such early retirement could be enjoyed. Its use of the word "option" to describe the early retirement opportunity which was intended to be made available to the members under the new regime is, moreover, inconsistent with the requirement of such consent. The legal concept of an option is that it is a right which is exercisable unilaterally and which, when exercised, gives rise to enforceable rights against another. A so-called "option" to do something, but only with the consent of another, is not an option at all. The more everyday meaning of the word option conveys essentially the same sense as the legal meaning. Invite any of the seven trustees to dinner and tell him that the main course options were meat or fish, and he would be surprised if, on choosing fish, he was told he had to have meat. The sense of paragraph 2(c) is, in my view, consistent with that of Mr Steele's memorandum of 18 June 1990.

Mr Steele approved the minutes as so drawn and they were then issued to the other trustees. They were then formally approved at a subsequent trustees' meeting held on 20 June 1991, a meeting chaired by Messrs Allenby and attended by Messrs Abell, Hunt, Kulick, Simmonds (who became a trustee in September 1990), Steele and Taylor (who was a trustee of the hourly paid scheme as at 22 August 1990 and was by 1991 a trustee of the main scheme), plus Messrs Thornton and Wasserman.

Evidence about the meetings of 22 August 1990

Although I regard the language and meaning of paragraph 2(c) as clear, Mr Steele's evidence was that he did not read it as meaning that the consent requirement for early retirement between 60 and 65 was being removed. He said that was not part of the discussion at the meeting: it was not a proposal which was up for discussion and was not intended. He said in cross-examination that he did not have the provisions of clause 20 of the 1977 deed (in particular its proviso (A)) in mind at the time of the meeting or at any material time. His understanding at the meeting was that to introduce a common NRD at page 65 for men and women would meet the Barber requirements; that the change was intended to apply to all the then actives; that, as regards women, the new NRD at 65 would apply in relation to all past and future service so that all benefits already accrued by women on the basis of an NRD at 60 would go; and that, as regards men, the NRD at 65 would similarly apply in relation to all past and future service (an intention which ignored the fact, of which Mr Steele was unaware, that the effect of Barber was that men had been accruing benefits on the basis of an NRD at age 60 since 17 May 1990). In short, there was no intention that either men or women should be entitled to an NRD at 60 in relation to any part of their service. Mr Steele's evidence in this respect was inconsistent with Lansing's case as presented at the trial, namely that its intention at 22 August 1990 was only to increase the NRD for women actives to 65 in relation to periods of service after 27 August 1990 (the date of the announcement of the proposed changes, to which I shall come). His evidence was that the changes were intended to take effect as and when announced.

Likewise, in relation to actives between 60 and 65 for whom consent to early retirement was given, Mr Steele's evidence was that it was the intention that nil early retirement factors should apply to the entirety of their pension, not just to a part earned by merely part of their service. There was no intention that either men or women in service on 22 August 1990 could (without consent) take early retirement at 60 on nil early retirement factors in relation to any period of service. There was no discussion at the meeting of, and no consideration given to, late retirement factors. There was no discussion about the then deferreds or about those actives who might become deferreds thereafter. Mr Steele was unaware on 22 August 1990 or at any material time of the requirements of the

preservation legislation (deriving from the Social Security Act 1973) prohibiting schemes from containing provisions which can result in a deferred's pension benefit being less favourable than the benefit to which he would have been entitled had he remained in service. He said they intended to change the position for actives, but not for deferreds, and so intended to treat the two classes differently.

As to whether consent to early retirement between 60 and 65 would be given, Mr Steele's evidence was that it would be "extremely unlikely" that any woman would be refused consent, as most worked in sections which were being downsized. As for men, Lansing "would have tried to give consent" to anyone who asked for it, but I find that the substance of his evidence was that a man would be unlikely to receive consent as easily as a woman - it would largely depend on the importance of the man's occupation (for example, machinists were more likely to get consent than welders).

Mr Steele's evidence about everyone's intentions and understanding at the main scheme meeting applied equally to the executive scheme meeting on the same day. He said that, had they been aware that what was being resolved upon on 22 August 1990 might be said to infringe European law, fell foul of clause 20(A) of the 1977 deed or infringed the preservation legislation, they would all have stopped and looked at the proposals again.

Mr Allenby's recollection of the meeting as set out in his statement was that the continuation of the consent requirements for early retirement was not specifically mentioned. His view was that it went without saying that it should continue. As for paragraph 2(c) of the minutes, he said it was unlikely he had used the word "option": if he did, it was intended to convey "possibility, subject to established practice", not "unfettered choice". He would, therefore, have used the word in a sense different from its usual one, but without explaining what it was.

Mr Colson confirmed that the question of consent was not discussed at the meeting – he said he did not consider it to be an issue. There was no need for the consent requirement to be mentioned in paragraph 2(c) "because it was understood by everyone that it was still there" – an understanding which, apparently, was never the subject of discussion or mention by anyone and which was, apparently, so set in stone that the trustees could safely approve a minute which implied the reverse. He said that although he "was superficially aware of the equalisation problems caused by Barber", he was not sufficiently informed about the details to have made a sensible decision on his own "about the right options." His evidence as to what the trustees did and did not understand and intend at the meetings he attended was in line with Mr Steele's. He agreed that, apart from those who retired from Lansing under its selective retirement or redundancy programme, there was no culture of early retirement at Lansing – there was no incentive to early retirement since, absent the benefit of Lansing's special financial packages, the financial disadvantages were so acute.

Mr Kulick said he saw nothing inconsistent between paragraph 2(c) and the retention of the need for consent to early retirement. That view does not appear to give a natural meaning to paragraph 2(c). He said that the consent requirement – or the need to retain it – was "very much" in his mind on 22 August 1990, but that there was no discussion about it. His evidence as to what the trustees did and did not intend or appreciate on 22 August 1990 was also essentially in line with Mr Steele's.

A written statement from Ronald Abell was put in under the Civil Evidence Act 1995. He became a trustee of the scheme at the end of 1989 and was an employee trustee. He had no previous experience of being a trustee and said that at first he did not understand a great deal of what was happening. He was, however, aware of the need for the trustees to consent to early retirements. The meeting of 22 August 1990 was only his third trustee meeting. He said he recalled "first being told about the prospective changes to the pension scheme at a trustees' meeting in Basingstoke" but that "I cannot be sure whether that was the August 1990 meeting or an earlier meeting". In relation to that, I find there was no earlier trustees' meeting at which the proposed changes were discussed. He said it was clear to him that the proposal to allow retirement between 60 and 65 without a reduction in pension was on the basis that consent was required – although he could not recall that the question of consent was specifically discussed. He understood this would apply to actives – he could not recall whether, at the time, he understood it would also apply to deferreds. He was not given any papers to look at before the meeting in relation to the proposals – he believed they were simply read out by Mr Allenby. He said he would have discussed them with his union membership before agreeing to them.

Mr Hunt, also an employee trustee, said that he did not recall discussing the proposed changes with his co-trustees or with any Lansing representatives in advance of the meeting. He said Mr Allenby would have led the meeting and done most of the talking. He could remember if the trustees were given any papers in advance of it, but he said it was unusual for the trustees to be provided with papers in advance.

Mr Hunt said in his witness statement that, in agreeing to the proposed changes, he understood that actives would need the consent of Lansing and the trustees in order to retire early on an unreduced pension, and that there was no discussion at the meeting about removing the consent requirement. In cross-examination, however, he departed from this. He still agreed with other witnesses that the question of consent was not discussed at the meeting and that he was not even thinking about it. But he also said that it was no part of his intention on 22 August 1990 that women should have to obtain consent if they wanted to retire at 60; and he understood the effect of the resolution to be that they would not need such consent. He also said that it "wasn't my impression at all" that the decision of 22 August 1990 was to the effect that men would require consent if they wanted to retire at 60. He said that at the time of the meeting he was unaware of the restrictions on amendments imposed by clause 20(A) of the 1977 deed.

Mrs Ferguson, another employee trustee, had been a trustee of the main scheme since January 1988. She had no involvement prior to 22 August 1990 in discussions about prospective changes to the scheme. In her witness statement she said she could not recall whether she had received any papers before the meeting, and in cross-examination she said she did not think she had. She said the meeting was led by Mr Allenby for whom she had great respect. She has since been shown a copy of his briefing notes for the meeting and said that, so far as she could remember, he had spoken along the lines of those notes. She said in her witness statement that she was "sure that the position of women was discussed although I cannot remember whether that would have been at the August 1990 meeting." She also said in it that "I realised from what was said at the meeting . . . that I, as a woman (then aged 57), would not after the changes be able to retire until 65. My impression was that if I wanted to go before that (before or after 60) I could ask but that I would not necessarily get consent. I did not think I personally would get consent if I did ask." She could not remember whether the deferreds were discussed at the meeting "although I am sure John Allenby would have mentioned this."

In her supplemental oral evidence in chief, Mrs Ferguson said she believed Mr Allenby said at the meeting that consent to early retirement was still necessary, a recollection which was unique to her. In cross-examination she even said that Mr Allenby made this point with some force, although later she said she was not in fact 100% sure he had mentioned it at all although she retained a feeling that he probably did. She agreed that paragraph 2(c) did not accurately state the position, because it did not state that Lansing's and the trustees' consent was necessary. Her evidence as to what the trustees did and did not intend or appreciate on 22 August 1990 was broadly in line with Mr Steele's.

The meeting of the trustees of the hourly paid scheme was attended by Messrs Allenby, Colson, Kulick, Rampton, Steele and Taylor, with Mr Thornton also in attendance. They resolved to merge that scheme into the main scheme and also in favour of:

"The equalisation of normal retirement age at 65, with the option for any member to retire up to five years early with no loss of accrued pension."

Mr Rampton said in chief that he ceased to be a trustee of the hourly paid scheme at the end of 1990, although it appears he was still a trustee in June 1991. He could not remember discussing the question of consent at the meeting and said the trustees were not thinking about it. He said the practice with regard to trustee meetings was that the trustees would receive an agenda a few days before, although it would not usually provide its reader with a comprehensive grasp of the issues to be discussed. He said Mr Allenby, or someone else from management, would usually go through the agenda and the other trustees would generally agree with what was proposed. He did not believe there was any intention to dispense with the needs for consent for early retirements between 60 and 65. He said, with some confidence, that none of his members (nearly all men) would want to take early retirement at 60 because they would not get a state pension until 65 and so "they couldn't afford it, simple as that" (he was referring to early retirement on a standard pension, not on Lansing's special severance packages). He broadly agreed with Mr Steele as to the matters which the trustees

did and did not intend or appreciate at 22 August 1990, although he differed slightly with regard to the deferreds. They were not discussed at the meeting, but he said "we" naturally assumed that (in substance) they would be entitled to the like benefits as the actives. He also differed from all the other witnesses in that, to the question whether, had he been told on 22 August 1990 that what was being proposed might involve a breach of European law, he would still have gone ahead, he answered, somewhat unexpectedly: "Probably, yeah, a hundred per cent sure, yeah."

Mr Taylor also gave evidence about the meeting of the trustees of the hourly paid scheme. He said in chief that he was "adamant" that the question of consent was never discussed. Had there been any talk of removing its requirement to early retirement, he would have been surprised and would have challenged it. He said he and Mr Allenby were of the same view, that Lansing should retain control over when skilled workers left. "You cannot suddenly find the paint shop, for instance, losing key people all at once. It was vital to have consent." He too broadly agreed with Mr Steele as to the matters which the trustees did and did not intend or appreciate on 22 August 1990.

The meeting of the trustees of the executive scheme was attended by Messrs Allenby, Colson, Kulick and Steele, also with Mr Thornton in attendance. That meeting also passed a resolution equalising the NRD, with the like option to retire up to five years early with no loss of accrued pension.

As the minutes of the main scheme indicated, the consent of Linde in Wiesbaden had to be obtained to the proposed changes. So on the same day, 22 August 1990, Mr Allenby sent a fax to Mr Nolte of Linde. He said that agreement had been reached between the trustees about various changes, but that it was all subject to Linde's approval. He then summarised the proposals, saying this about the proposed equalisation of the NRD:

"2(a) To take account of the Barber judgment at the European Court, the normal retirement age for women will be raised to 65. (In practice this makes little difference to female employees – the majority will want to retire at 60, when their State Pension starts. Pension rights at 60 will remain unchanged).

(b) To place men on the same footing as women we have to remove the actuarial reduction of 6% per year of early retirement. (Relatively few men will want to leave early because their State Pension only starts at 65. On the other hand, improved terms for early retirement will make it easier for us to thin out the upper age end of the workforce)."

Mr Allenby added in paragraph 4 that:

"4. We would like to announce the benefit improvements before publishing our redundancy plans, in the hope that some of those affected will make use of 2(b) and thus reduce the cost of the planned headcount reduction."

There is no evidence that Linde had any knowledge of the terms of the 1977 deed as regards retirement before NRD or the need for the consent of the trustees or Lansing. As with everything else which the trustees generated in relation to the proposal to equalise NRD at 65, Mr Allenby's fax said nothing to the express effect that early retirement at 60 on an unreduced pension could be enjoyed only if Lansing and the trustees first consented. On the contrary, it said that most women would want to enjoy such early retirement and, in my view, it can fairly be read as implying that they would have a right to do so; and it followed that if, in Mr Allenby's words, men were to be placed on the "same footing" as women then they were being given a like right. Mr Steele agreed in evidence that the tenor of what Mr Allenby wrote referred to what the members wanted to do, not to what Lansing was willing to allow them to do. Again, the sense of Mr Allenby's fax was consistent with that of Mr Steele's memorandum of 18 June 1990 and with paragraph 2(c) of the minutes. As an explanation of what Lansing now claims its intention in fact was, it was thoroughly inadequate. Mr Allenby's witness statement does not offer any explanation of his choice of language.

However, whatever inferences may be drawn from the language in which Lansing and the trustees expressed themselves in the documentation leading up to that of 22 August 1990, Lansing's case is that everyone involved in the relevant events was of one mind – namely, that although NRD was to be raised to 65 for men and women, the so-called option for either men or women to retire with an

unreduced pension between 60 and 65 was not an option at all but was at most to be regarded as a hope which could only be realised if Lansing and the trustees agreed. The members were not being given an option to retire with an unreduced pension between 60 and 65: they were only being given the option to ask if they could so retire, with Lansing and the trustees having an absolute right to refuse. Lansing's case is that rule 8(A) of the definitive deed provided that retirement before NRD required the consent of both Lansing and the trustees, and that at no stage did it or the trustees intend to alter that. Its pleaded case is that it had no intention to make unreduced retirement benefits available to all members – but only to those whom it wished to encourage to retire early for redundancy or other commercial reasons. It also says that nor did it or the trustees ever have any intention of changing the rights of the deferreds – to which there was no express reference in the minutes of the meeting of 22 August.

Pausing there, by 22 August 1990 there was in place a resolution of the scheme trustees to amend the 1977 deed in the manner recorded in the minutes. By clause 20 of the 1977 deed the power to amend the deed and rules was conferred on "[Lansing] . . . with the consent of the Trustees . . ."; and it could amend the deed by deed and the rules either by deed or board resolution. It is not suggested by either side that Lansing's board ever passed a resolution proposing or effecting any amendments, although no separate point is taken on that by Mr Green for the beneficiary defendants; and I understand him to accept that Lansing was sufficiently represented at the trustees' meeting to justify a conclusion that it can be taken to have proposed and approved the amendments to the scheme which were then resolved upon. The board resolution amendment route, which was not adopted, would have enabled the amendments to have been effected very quickly. The amendment route which was instead adopted was by way of a deed, which in the event was not executed until 20 July 1992. It follows that neither the resolution passed on 22 August 1990, nor its announcement on 27 August 1990 had the effect of making any immediate changes to the scheme rules, which remained governed by the 1977 deed. All the resolution did was to propose some changes which would take effect only when and if an amending deed was executed. Clause 20 did, however, provide for such deed to have a limited retrospective effect, although its potential for that was limited by proviso (A), something to which, as they accepted and I find, none of the trustees had any regard when passing the resolutions of 22 August 1990.

The announcement of the proposed amendments

On 27 August 1990 there was produced a bulletin headed "Important announcement for all members of Company pension schemes". It was prepared by Mr Thornton. He showed it to Mr Steele, who read it before it was issued. It was then published on Lansing's notice boards in the UK and Mr Steele thought it was also sent to the deferreds. It summarised the changes intended to be in place as from 27 August 1990. It read as follows:

"1. The normal retirement age for women is raised to 65th birthday

At present women retire at age 60 but have the option of working beyond this date. They do not accrue additional pension although benefits are increased for being deferred after the age of 60.

The change means that women will now accrue benefits, and continue to contribute, up to their 65th birthday. They will also be covered for the lump sum death benefit. This puts women in the same position as men.

2. The scope for early retirement is extended

At present early retirement is permitted up to 10 years prior to normal retirement date.

With effect from 27th August 1990 men and women will be able to retire at any time after their 50th birthday, i.e. up to 15 years early.

3. The penalties for early retirement are reduced

At present members wishing to retire earlier than their normal retirement age receive a pension based on their accrued service. This is then reduced by 6% for each year of early retirement.

With effect from 27th August 1990 the 6% reduction is waived, for both men and women, for the first five years of early retirement. For periods beyond five years the 6% reduction will still apply.

The change means that:

a/ Women will continue to be able to retire at 60, should they so wish, on the same terms as previously offered.

b/ Men will be able to retire at any age after 60, should they so wish, without loss of accrued benefits.

Employees wishing to learn more about these changes should contact TONY THORNTON in the PENSIONS OFFICE . . ."

That was a poor piece of drafting. Paragraph 2 purported to summarise the current position, but made no clear reference to the need for consent for early retirement. Any member familiar with rule 8 might have regarded that summary as confusing. He might then have wondered what the precise nature of the new regime was: because paragraph 3 used language which, like the paragraph 2(c) of the minutes, conveyed that, despite the new NRD at age 65 for both men and women, both could retire at 60 without loss of accrued benefits "should they so wish". Again, I regard those words as suggesting, consistently with paragraph 2(c), that they had a right to retire at 60, not merely a right to ask for permission to do so which Lansing and the trustees could refuse.

Mr Steele's evidence is that, at the time, he did not read the announcement as meaning that the consent requirement for early retirement between 60 and 65 was being removed, which he says had not been discussed or intended. His witness statement, however, contained the following passage:

"It is clear from the announcement that 65 was the normal retirement age for males and females. I agree now that the announcement does not make it clear that females would require consent to retire from age 60. I do not know why that is. It is possible that I decided deliberately not to mention consent for fear that this would create a backlash and because, in practice, most females would get consent anyway."

Mr Steele agreed in evidence that nor did the announcement make clear that men would require consent to retire from age 60. He also agreed that the natural meaning of the language of the announcement was that consent would not be required. In cross-examination, he said that the last sentence of the quoted passage was not based on recollection, it was merely speculation on what could have been in his mind at the time – of which he denied any actual memory – but he confirmed that the speculation reflected what might have been his then thinking. Another piece of Mr Steele's evidence about the announcement also related to something he could not recall. He said that Peter Simmonds, Lansing's company secretary (not a scheme trustee at the time, although he became one on 14 September 1990), had since reminded him that, after seeing the announcement, he told Mr Steele that he read it as suggesting that the consent requirement to early retirement had been dispensed with. Mr Steele said that, if this happened, it did not occur to him to correct the announcement, because he did not do so. He said that no-one else, so far as he knew, had ever asserted that he had a right to retire at 60 without consent.

Mr Simmonds gave evidence confirming he had raised the matter of consent with Mr Steele following the production of the announcement. He acted as the accountant to the Lansing pension schemes and occasionally attended trustee meetings for the purpose of presenting the accounts. He was aware of the Barber decision at the time and knew from discussions with Mr Steele and with Gibbs that the benefits of the women and men members were going to be harmonised, although he was not "involved directly" in any discussions about the change in retirement age (he does not explain what, if any, indirect involvement he may have had). Mr Simmonds said he saw the announcement on 5 September 1990 and promptly asked Mr Steele if it meant that members could take an unreduced pension at 60. He said Mr Steele replied that they could not, but that the consent of Lansing and the trustees was required if a member wanted to retire earlier than 65. Mr Simmonds does not appear to have picked up the like point about language of paragraph 2(c) of the minutes of the meeting of 22 August 1990 – he too was at the June 1991 trustees' meeting which approved them as correct.

Mr Colson said in his witness statement that he assumed that he would have received a copy of the announcement, but said he did not recollect reading it. In cross-examination he said, inconsistently with his statement, that he saw it "at the point of issue and I had no quibble with it." He said that it did not cross his mind that the announcement should refer to the need for consent to early retirement between 60 and 65.

Mr Kulick said in chief that he did not consider the form of the announcement before it went to members, but that he did not believe it could be taken to mean that employees could leave without consent – he would never had so read it. He said his understanding was that the announcement only showed those elements of the scheme which had been changed. His evidence was that in his department he would not have had any difficulty if employees had an unfettered right to go at 60, but that he understood that things were different on the production side and that Mr Allenby and Mr Colson would never have dispensed with the need for management control over who left early and who did not. He did not think it possible that Mr Thornton could have left any of the meetings thinking that the consent requirement was to be given away. He said nobody read the announcement as suggesting that the need for consent had gone. He was wrong about that: the evidence shows that at least Mr Simmonds did.

Mrs Ferguson saw the announcement after it was issued, and said that she did not think that the consent requirement had gone. She said "that would have been a major change and it never came up as an issue." In cross-examination, she agreed that the reference to women and men being able to retire at 60 "should they so wish" did not accurately state the position, since it suggested they could so retire without consent and draw their pension.

Mr Rampton said he believed he saw the announcement before it was issued. He said it might have been better for it to make a reference to the need for consent, but it did not. He said "As far as we were concerned the situation was as it has always been, the previous ten, fifteen years. Which meant consent".

Mr Taylor said he would have been given a copy of the announcement before it was issued. He said there was no mention of removal of the consent requirement and he would have noticed if there had been.

Instructions to solicitors

The next event was that instructions were given to Slaughter and May ("Slaughters"), the City solicitors, to prepare a deed amending the 1977 deed. The solicitor instructed at Slaughters was Mr Humphrey Morrison.

It is, I hope, a not unfair summary of Lansing's and the trustees' case as to their contribution to the preparation of that deed that they played no part in it at all. They simply delegated to Mr Thornton the task of instructing Slaughters and then left the matter exclusively to him. Mr Steele described Mr Thornton as a "bright and helpful individual" and Mr Allenby described him as "an efficient administrator, possibly a little bureaucratic, and probably not an original thinker (which was not his job)". Mr Steele said that Gibbs and Slaughters had the trustees' authority to get on with the drafting and to incorporate into it any changes which the law required (although there is no evidence that the trustees ever expressly addressed themselves to the latter point). The trustees' evidence is that they neither read nor even saw any of Slaughters' drafts. When eventually it came to the execution of the deed of amendment in July 1992, not a single signatory (apart only from Mr Taylor) claims he first looked at so much as a line of the deed he was so solemnly executing. Mr Taylor said he checked certain bits of it and skimmed the rest but he admitted he could not say he "effectively read it all before I signed it", and I find his reading of it was at best thoroughly cursory and was insufficient to satisfy himself as to its proper effect. Mr Taylor apart, all the trustees signed it without making the slightest effort to understand it, to have it explained to them or to be satisfied that it was carrying out their alleged intentions. If my task in this litigation were to award prizes for the signatories' individual and collective irresponsibility in connection with the execution of the deed, Lansing and the trustees would win major ones, with the gold medal going to Mr Steele, who was the link between the trustees and Gibbs and had primary responsibility for the matter. In so far as Lansing now complains that the deed it so blindly executed does not say what it claims it should have said, it has only itself to blame. No suggestion has been made that Slaughters were at fault. Whether Lansing levels any

criticism at Mr Thornton is unclear. Neither side called him as a witness, although I understand he was available to be called. For my part I would have been greatly assisted to hear from him as to how it was that his understanding of what was resolved on at the meeting of 22 August 1990 apparently differed so fundamentally from what Lansing and the trustees (Mr Hunt apart) assert was theirs – particularly bearing in mind that Mr Colson said of Mr Thornton that "the whole world" – our world of Lansing Linde was going on around him" and that he would have been as aware of the need to retain the consent requirement as everyone else. I do not accept that assertion as to Mr Thornton's understanding, since his written words and his acts appear to suggest the contrary; and the court has not had the benefit of hearing from Mr Thornton himself.

The course of events leading up to the execution of the amending deed was as follows. On 3 December 1990 Mr Thornton sent Mr Morrison a copy of the announcement dated 27 August 1990. Slaughters' instructions were to prepare a deed consolidating and updating the scheme documentation. On 28 February 1991 Mr Thornton sent Mr Morrison a polite chaser. On 18 April 1991 Mr Morrison produced his first draft to Mr Thornton, saying in his covering letter:

"As you know, the definitive deed has not been amended significantly since 1983. Since then there have been a great many legal changes, and there have also been substantial changes in benefits, reflected briefly in the 1988 booklet. The new draft reflects these changes, the most recent announcements and the further details you have given me over the telephone."

Mr Morrison then explained that he had raised various questions and comments in the body of the draft itself, and in addition he also set out in his letter some eight aspects of the draft to which he considered it appropriate to draw separate attention. One of them referred to a problem in relation to clause 20(A) of the 1977 deed (the amendment provision), arising out of the uncertainty of the meaning of "Member", a matter which he said he needed to discuss. He proposed a meeting to discuss the draft. His letter shows that a copy of it (unaccompanied by a copy of the draft) was sent to Mr Steele. Mr Steele's evidence was that the letter would not have meant very much to him without the draft. He did not, however, think to ask for a copy of it – he said he really regarded the letter as in the nature of a progress report "that things are proceeding", although it was obviously very much more than that. He did not think that the various points raised by the letter (and, as appeared from it, also by the draft) were matters in which he or any of the trustees needed to get involved. This was his evidence despite the fact that, in addition to the many queries which Mr Morrison had raised on matters he needed to discuss, Mr Steele also understood that the drafting exercise involved "a mammoth redrafting of the thing . . . re-writing it in a completely different style, a completely different format." He said it was for Gibbs to follow it through and refer any questions back to him.

Rule C3 of the draft dealt with the deferreds and rule C3(B) gave those aged 60 or over whose pensionable service ended on or after 27 August 1990 a right to take an immediate unreduced pension. Mr Morrison's note to that, expressly flagging a point now in issue, read:

"[To discuss: no change to need for consent? But see August 1990 announcement. See also booklet: reference to Company's consent.]

Rule D2 of the draft dealt with an active's right to retire early, and rule D2(B)(i) provided that actives retiring at 60 or over on or after 27 August 1990 were to be entitled to an immediate unreduced pension. Mr Morrison's note to it read:

"[To discuss: see Rule C3(B): consent needed if aged 60 or over?]

He was, therefore, again flagging for discussion and instructions another of the points at the heart of this action.

It might be thought that Mr Thornton would want to refer those and other matters to Mr Steele for discussion. However, Mr Steele's evidence was that he had "no recollection of any serious discussion on the drafting" of the deed with anyone at Gibbs or Slaughters; and the substance of his evidence was that he at no stage had any such discussion, whether serious or otherwise. He said he had no copies of any of Slaughters' drafts on his file.

On 4 April 1991 Mr Wasserman wrote to Mr Steele in connection with the valuations of the Lansing schemes as at 1 January 1991. Under the heading "Barber v. GRE", he wrote:

"Although the impact of this case on pension schemes is still subject to a degree of doubt it is becoming clearer that at least some retrospection will apply.

The decision was taken to equalise retirement age at 65 for men and women but then to allow retirement within five years of this age without actuarial reduction. In the valuation I have made allowance for the band of retirement as indicated in Appendix E. However, it should be noted that there could be considerable variation to this assumption."

Again, that description of the new regime appears to indicate that early retirement between 60 and 65 was a matter of right not a privilege. Mr Steele agreed with that, but implied that is not how he read it in 1991. Mr Steele's manuscript note on this letter (adorned with two exclamation marks) shows that he had for some unexplained reason agreed with Mr Allenby to keep it from the eyes of everyone else, including his co-trustees. In the valuation itself, Gibbs described the main provisions of the scheme as including an NRD at 65 for all members, adding that "Members can retire five years early without incurring any actuarial penalties." This did not send any warning light to Mr Steele either; nor to Mr Colson, who said he too would have read the valuation.

On 29 August 1991 Mr Morrison made a note that he had spoken to Mr Thornton, who had begun to go through the draft and was liaising with Mr Lawrie Myers, a senior employee in Gibbs' documentation department. Mr Morrison noted that:

"[Mr Thornton] would come back to us soon, probably simply to ask for a final draft to put to Trustees".

On 3 September 1991 Mr Morrison wrote direct to Mr Steele and sent him Slaughters' account for its work on the Lansing schemes. He explained that the major part (about £29,000, plus VAT) related to the main scheme, on which the work was close to completion. Mr Steele replied on 10 September 1991, asking for clarification of the account. His letter noted that Slaughters had apparently had two meetings with Gibbs. Mr Morrison replied on 16 September 1991, explaining (inter alia) that the two meetings with Gibbs had occupied about 12 hours:

". . . in which we worked through the first draft provision by provision, considering all the questions and comments I had inserted, those in the covering letter and others raised by [Mr Thornton] or [Mr Myers]."

By 17 September 1991 Mr Thornton had reviewed Slaughters' second draft of the amendment deed. On that date he wrote to Mr Morrison with a number of detailed comments on it. Rule C3 still provided for deferreds to take an immediate unreduced pension at age 60, without the need for consent. Rule D2 still provided for actives to retire on an immediate unreduced pension at age 60, without the need for consent. Mr Thornton opened his letter with these words:

"I have now had the opportunity of reviewing your letter of 7th August and the second draft of the consolidating Deed and of discussing various aspects with both Lawrie Myers and Peter Steele.

Our collective comments and responses are, using your numbering, as follows:-"

and he then set out two pages of points. Point (i) referred to a proposed amendment to rule C3(B)(i), being the precursor of the provision giving deferreds the right which Lansing seeks to rectify by its claim in these proceedings; and point (j) related to rule D2(C) (iii), which was on the same page as rule D2(B) (i), the precursor of the early retirement provision affecting actives which Lansing also seeks to rectify. Mr Thornton's letter suggests that Mr Steele played a material role in considering Slaughters' drafts, including those parts of them directly material to this action. As I have said Mr Steele's evidence was that he had no recollection of any such discussion with Mr Thornton: and the sense of it was that he had none. If Mr Steele's evidence on this is correct then Mr Thornton must have been suffering from a major short term memory lapse in suggesting that he had been through the draft with Mr Steele.

In the meantime, Gibbs were busy producing an updated version of the scheme booklet. This was said to be the work of Mrs Jennifer Hodgkins, who had taken over Mr Thornton's role as an on-site administrator following his promotion - although Mr Steele said he thought Mr Thornton was its author. On 13 November 1991 Mrs Hodgkins wrote a letter addressed to eight trustees of the main scheme (Messrs Allenby, Abell, Colson, Ferguson, Hunt, Simmonds, Steele and Taylor) enclosing a copy of the draft booklet and asked for any comments by 31 December 1991. She does not appear to have sent a copy to Mr Kulick. The draft was described as "updated as at 1st January 1992", and the introduction described it as outlining the benefits "as they apply from 1st January 1992". One section, headed "Your Pension on Early Retirement" read in part:

"You may if you wish, with the Company's and Trustees' consent, retire at any time after your 50th birthday (or earlier if you are in serious ill health).

If you are retiring more than five years before your Normal Retirement Date, the pension will be reduced to allow for the fact that it will be paid over a longer period. Currently, the reduction is 6% for each year in excess of 5 years (with a proportion for additional months) . . ."

That is essentially consistent with what Lansing and the trustees say they always intended with regard to the actives. There is, however, no evidence as to the process of reasoning or research which led Mrs Hodgkins (if she was the author) to understand that this was the intended regime. There is no evidence that the trustees ever so instructed her. The author's understanding appears to have differed from Mr Thornton's - and also, as will appear, from Mr Wasserman's. Moreover, since the trustees' evidence is that they intended the new regime to apply as from 27 August 1990, what was the supposed magic of 1 January 1992? There is no evidence that Slaughters ever say the draft. If, as Mr Steele suggested (but which I regard as improbable), Mr Thornton was the author, what he wrote in the booklet differed from the instructions he was apparently giving Slaughters.

On 24 January 1992 Mr Morrison produced a third draft of the consolidating deed. So far as concerns the rights of actives and deferreds to take an unreduced pension between 60 and 65, without the need for consent, it followed the form of the previous draft. On 21 February 1992 Mr Morrison sent Gibbs an engrossment of the final form of the deed for execution by Lansing and the trustees.

Before the deed had been executed, Gibbs produced the final version of the amended scheme booklet, which was now expressed as being "Updated as at 1st May 1992" and described itself as outlining the benefits "as they apply from 1st May 1992", a statement as enigmatic as its, slightly different, predecessor in the draft. Page 12 followed the form of the draft, which I have quoted. Page 19, also following the form of the draft, dealt with the right to a deferred pension for actives who left service early, but did not deal expressly with the right (if any) of a deferred to take an immediate unreduced pension at 60. It did, however, say that the "options" (using the word in its usual sense) open to the deferreds included the right to:

". . . leave your benefits in the Scheme. You would then be entitled to a pension calculated in exactly the same way as the pension described on page 12 but based on your period of pensionable employment to the date of leaving."

On one view, although I accept there is scope for a different one, that was impliedly saying that the deferreds would have the like right as the actives to an unreduced pension on retirement between 60 and 65, whereas the weight of the trustees' evidence is that they did not intend this. Page 22 explained that, in the case of a difference between the 1977 deed and the booklet, the former prevailed. As at 1 May 1992 the amending deed had still not been executed, the scheme was still governed by the 1977 deed and so, to the extent that the booklet anticipated any of the proposed amendments, it was premature and wrong. It was distributed to all Lansing's supervisors who were asked to distribute them to the appropriate actives in their sections.

Evidence about the new booklet

The amended booklet and its significance played some part in the argument. The evidence about it was as follows.

Mr Allenby made no mention of it in his statement. There is no evidence that he ever saw or read it, either in draft or final form.

Mr Steele's evidence (from a part of a transcript which was gone slightly awry) was that no-one from Gibbs ever said that the booklet was mistaken and that:

". . . we then circulate it had they sent it to the trustees in draft, minor modifications nothing of substance and then we issued it to all the members on the basis that it was right."

He said no active ever approached him and suggested there was a discrepancy between the booklet and the August 1990 announcement.

Mr Simmonds said he recalled receiving the draft booklet in 1991, which he went through and made some markings on - all from an accounting point of view. He did not remember discussing it at a trustees' meeting. I find that it was not.

Mr Colson said in his witness statement that he could not remember seeing the booklet, and in cross-examination he said he could not remember seeing the draft either. His oral evidence showed that he had at least read the booklet by the time of the trial. There is no evidence satisfying me that he read it before signing the amending deed of July 1992. He said he was sure he was never shown any revised booklet for the executive scheme.

Mr Kulick said he read the booklet carefully. He said he would not have commented on its since it did not contain anything he did not expect.

Mr Abell said in his witness statement that he did not recall discussing the booklet in advance of its issue. He said he was simply sent a copy once it had been produced. He does not say he read it and I feel unable to find that he did.

Mr Hunt said in his witness statement (which he swore to be true) that he recalled seeing the draft before it was finalised. He said he would have discussed it with his union, but could not remember whether he made any comment on it. By contrast, in his supplemental oral evidence in chief he said he did not think that he had received a draft of the booklet. He said he had, however, received the booklet itself which he "probably" read when he received it. To the question whether its contents were an accurate reflection of the scheme, he replied "So far as I was concerned, yeah, because the only thing I was looking for actually was the differences in the ages for retirement for women", an answer suggesting he did not read it thoroughly.

Mrs Ferguson received the draft booklet in November 1991. She looked at it but had no specific comment on it. She said "it contained the requirement for consent to early retirement on early pension, like the previous one. I would have been surprised if it had not." Her copy of the draft shows some manuscript remarks she made. Against the statement that NRD is 65, she noted "change for women"; and in the section headed "Your Pension on Early Retirement" (earlier quoted) she underlined "Company's and Trustees' consent" and wrote "Better Benefit" against the second paragraph. She could not remember when she made these comments.

Mr Taylor said he received the draft booklet in late 1991 and went through it in detail. He thought he did so with Mr Hunt (not something which Mr Hunt appeared to recall) and probably with Mr Thornton as well.

Mr Rampton said he received a copy of the booklet, but that "we never read it".

Mr Wasserman's letter of 9 April 1992

On 9 April 1992 Mr Wasserman of Gibbs wrote to Mr Steele about the transfer value factors to be used in relation to the scheme. The seventh paragraph of his letter said this:

"There is one partially counterbalancing element to take into account. Now that retirement is allowed without actuarial reduction from age 60 it is important to make some allowance in the actuarial

assumptions for this. About the most favourable assumption from Lansing's perspective is to make an assumption that men and women will in practice retire at age 64. This demonstrates that the trustees have taken account of the right of the members to retire `early' without penalty but recognises only the minimum cost."

The amending deed was not yet in place, but I read that paragraph as reflecting an understanding by Mr Wasserman understanding (like Mr Thornton) that members were to have a right to retire between 60 and 65: he actually uses that word. Mr Steele said the letter still did not cause him to think that the consent requirement was no longer there.

The execution of the amending deed on 20 July 1992

The amending consolidating deed, incorporating a wide variety of amendments, was executed on 20 July 1992 by Lansing and nine trustees (Messrs Allenby, Steele, Hunt, Colson, Abell, Kulick, Simmonds and Taylor and Mrs Ferguson).

Mr Allenby said that no detailed description of the changes effected by the deed were given to him. He only expected that some fairly simple amendments to the existing deed would be required and said that, when the deed was presented for signature, he was surprised by its length (a composite of it, as amended by a deed of 6 October 1992, runs to over 160 pages). He says he signed it in reliance on Gibbs and Slaughters having carried through the agreed changes.

Mr Colson said in his witness statement that, before signing this deed and those affecting the other schemes, he "did not read them thoroughly", but he came clean in cross-examination and said he did not read this deed at all. He said it was a very thick document, which had been prepared by professionals and he simply signed it accepting that it was "a proper document". He said the same about the 1994 deed amending the executive scheme. He said he asked Mr Steele if he was happy with the form of the deed and that, as apparently he was, he too signed it. Mr Steele could not remember this exchange but said that he would have replied to Mr Colson with words to the effect that he had not read it but assumed it was all right. Mr Colson said that, when he signed the deed, he thought it was saying the same thing as the booklet, which was a brave thought for someone who did not read the former and could not remember having read - or, apparently, even seeing - the latter. He was wholly unaware of the nature of the changes which had been made as compared with the 1977 deed (or, in relation to the deed amending the executive scheme, the definitive deed of that scheme). He had left it to Mr Steele to deal with the drafting points on behalf of Lansing and the trustees.

Mr Simmonds could not recall the circumstances in which he signed the deed or whether he discussed it with anyone else. He said he assumed it simply confirmed the booklet and the announcement. He was not aware of clause 20(A) of the 1977 deed when he signed. He assumed it complied with the requirements of Barber. He said he would not have signed the deed if he had been aware that it might be said that it infringed European law.

Mr Kulick said he received no advice about the deed before being presented with it for signature. He just signed it. He said that "If we had been told that consent was removed everyone would have jumped up." He said he was under the impression that the deed (and also the 1994 deed in relation to the executive scheme) "were exactly in accordance with the booklet, and with our calculations which we got from the advisers beforehand". He agreed in cross-examination that he would expect the booklet to reflect the deed and rules of the scheme, that the latter took precedence over the booklet and that he would have expected the 1992 and 1994 deeds to reflect the terms of the earlier trust deeds and rules as amended by any subsequent trustee resolutions.

Mr Abell said that he did not discuss or see the deed before signing it. He said he assumed it "simply implemented what had been decided at our August 1990 trustees' meeting" - and, taking that literally, it appears he assumed the lawyers needed some 160 pages to say what the trustees had said in less than one.

Mr Hunt could not remember discussing the deed with anyone before signing, nor could he remember reading it (and I find he did not read it). He said no explanation about it was given by Gibbs or Slaughters. He thought it was simply implementing the changes resolved upon on 22

August 1990. He said in his supplemental oral evidence in chief that he thought the deed would have reflected the booklet.

Mrs Ferguson did not read the deed. She could not remember its details being discussed at any trustee meeting. She said she "would have assumed it reflected the booklet". She said she did not recall getting any advice from Gibbs or Slaughters about it.

Mr Taylor said he checked certain bits and skimmed the rest. He says that he cannot say that he effectively read it all before he signed it. He assumed it reflected the booklet.

The material provisions of the deed of 20 July 1992

The deed recited clause 20 of the 1977 deed, that Lansing wished to amend and consolidate the prior deeds and rules and that the trustees were joining in to signify their consent to the amendments and consolidation. It contained a great number of amendments and changes which were not discussed at the meeting on 22 August 1990, which were never resolved upon by Lansing or the trustees and of which Lansing and the trustees were ignorant when they executed it. Despite this, and despite its pleaded case that Gibbs had no authority to introduce any substantive changes to the 1977 deed which had not been approved by Lansing and the trustees, Lansing does not seek any relief in respect of those amendments. Its claim is confined to those provisions in the deed relating to the rights of actives and deferreds to take early retirement between 60 and 65 on an immediate, unreduced pension.

Rule C3 deals with the early retirement rights of the deferreds. Its provisions fall within the same class as that occupied by those many provisions in respect of which Lansing seeks no relief: that is, Lansing and the trustees never resolved to amend the provisions of the 1977 deed relating to deferreds at all. Rule C3 provides:

"C3(A) Application of Rule C3

This Rule C3 shall apply where a Deferred Member has ceased to be an employee and -

(i) in the case of a man whose Pensionable Service ended before 27th August 1990, he is aged 55 or more,

(ii) in any other case, the Deferred Member is aged 50 or more, or

(iii) the Deferred Member satisfies the Trustees, who may in this respect rely upon medical advice, that he is under an Incapacity.

C3(B) Deferred Member's election

(i) The Deferred Member may, with the consent of the Trustees and the Employer, elect to receive his pension before his Normal Retirement Date. If the Deferred Member's Pensionable Service ended on or after 27th August 1990 and he is aged 60 or over, the consent of the Trustees and the Employer shall not be required.

(ii) If, in the opinion of the Trustees, the Deferred Member is unable, by reason of Incapacity, to make an election, the Trustees may, with the consent of the Employer pay the Deferred Member a pension before his Normal Retirement Date.

C3(C) Amount of pension

(i) If the Trustees and the Employer consent to the Deferred Member's election or the Trustees act under Rule C3(B) (ii), his pension shall be equal to the aggregate of -

(a) his Formula Pension, and

(b) the amount by which the Trustees estimate that the deferred pension would be increased under Rules G1 (Increases to Deferred Pensions) and J1 (Social Security Pensions Act 1975),

reduced by such amount as the Trustees, with the consent of the Company and subject to Rules C3(C) (ii) and (iii), shall decide.

(ii) A reduction under Rule C3(C) (i) shall not exceed the amount which the Actuary shall advise as reasonable having regard to the period between the date on which the pension starts to be paid and the Deferred Member's Normal Retirement Date.

(iii) No reduction under rule C3(C) (i) shall be made in respect of such period of early retirement of the Member's pension as will occur between his sixtieth birthday and the Normal Retirement Date."

The early retirement of actives is dealt with in Rule D2. Rule D2(B) provides that:

"(i) The Member may, with the consent of the Trustees and the Employer, elect to receive an immediate pension starting on the day on which he ceases to be an Employee. If the Member's Pensionable Service ended on or after 27th August 1990 and he is aged 60 or over, the consent of the Trustees and the Employer shall not be required."

The effect of rule D2(C) (amount of pension) is that the pension payable to such an early retiree will be actuarially reduced, save that:

"(iii) In the case of a Member who leaves Pensionable Services on or after 27th August, 1990, no reduction under Rule D2(C) (i) shall be made in respect of such period of early payment of the Member's pension as will occur between his sixtieth birthday and the Normal Retirement Date."

The problem which has arisen

Whilst the 1992 deed introduces a common NRD at age 65, its substantive effect has been to equalise retirement ages at 60. That is because, there being no need for consent to retirement between 60 and 65 on an unreduced pension, the effect of the deed is to confer a right on all scheme members to take their benefits at age 60. This has not resulted in a flood of early retirements by men at 60 - as I understand it, not a single man has exercised the option to retire early (although many have retired early under Lansing's selective retirement programme). Nor, for reasons earlier explained, was such a flood ever either expected or likely since men would be unlikely to be able to afford it. But the existence of such a right of early retirement has necessarily increased the cost of the provision of benefits under the scheme, with the extra cost falling on Lansing. In particular, it means that members who leave the scheme without retiring and ask for a transfer payment of the value of their benefits to their new employer's scheme (or to a personal pension scheme) are entitled to have their benefits valued by reference to a right to retire without actuarial reduction at age 60. This produces a higher value for their benefits (and a higher payment out of the scheme funds) than if their claim to retire at 60 without an actuarial reduction is subject to consent.

The cost problem which this has presented Lansing is considerable, or potentially considerable. It will be mitigated if the rectification sought is granted, although the degree of mitigation will depend on the date on which any rectification takes effect. Lansing's case is that it should have effect from 27 August 1990: and the earlier the date, the shorter the period during which women (and men as a result of Barber) will have been accruing benefits by reference to a right to retire at 60. The beneficiary defendants claim that any rectification should only take effect from the date of the execution of the 1992 deed.

The problem came to light in 1996, following the arrival on the scheme of a new scheme actuary, Simon Corbett, who took over at the end of 1995. He spotted that transfer values were being calculated and paid by effectively valuing a pension revalued to 64 as payable from that age, whereas the 1992 deed provided that if a member's pensionable service ended on or after 27 August 1990 and he was 60 or over, he could retire without consent on an unreduced pension. On 11 April 1997 he wrote about the matter to the Occupational Pensions Regulatory Authority and said this:

"I raised this matter at a meting with our normal contact, Peter Steele (who is a Trustee as well as a director of the company) at a meeting on 19 December 1996 after having raised it in writing. Since that meeting Mr Steele has advised us that he believes the Rules may have been incorrectly drafted and that it may not have been the intention in 1990 of the Trustees that consent should not have been required for retirement at 60."

I note the two "mays" in the second sentence: Mr Corbett does not suggest that Mr Steele's reaction to the emergence of the problem was one of immediate amazement that the deed had been (as he now claims) fundamentally misdrafted. Unless Mr Corbett was misreporting Mr Steele's reaction, the inference from his letter is that Mr Steele was initially uncertain whether there had been a mistake and that it was only later that he had advised Mr Corbett of the two "mays".

Mr Steele disagreed with this inference. He said he told Mr Corbett at the December 1996 meeting that "the deed is wrong and if that's what the deed really says then we need to change it." He said he also told him that he needed to obtain a legal opinion to confirm that the deed was wrong (a need I find surprising - the deed is perfectly clear). He thought the advice was obtained from Taylor Joynson Garrett, although he could not remember if he went to see them to obtain it. He said he and Mr Geuecke (a Lansing director and a current scheme trustee) decided to seek clarification about the matter before raising the matter with the other trustees.

On 18 April 1997 there was a meeting of the scheme trustees, which Mr Corbett attended. It was convened to discuss the problem. According to the minutes it was called at short notice, suggesting that the problem had become an emergency. It was then that the other trustees were first informed of it. They were not given any written explanation of its nature prior to the meeting - nor were they provided with copies of papers which might be thought to be relevant to it, for example the minutes of the meetings of 22 August 1990 or the announcement of 27 August 1990. Paragraph 4 of the minutes recorded Mr Steele as saying that since 1990 between 30 and 40 women had retired at 60, but no men had. Paragraph 4.1 reads:

"Mr Allenby said that the sole purpose of offering the option to retire before normal retirement age without actuarial reduction had been to encourage voluntary retirement when compulsory redundancy was the alternative. In all cases the consent of the company was required, and this was clearly understood by all concerned. At no time did either the company or the trustees intend that this conditional privilege should become an entitlement.

All the other trustees expressed their agreement with this account.

Mr Allenby also expressed the view that, while amendments to the employee booklets in line with Mr Corbett's interpretation would probably have little effect on the behaviour of active members, deferreds would have a clear incentive to take advantage. This would create unfairness between different classes of members."

Certain of the trustees present who so agreed were not trustees of any of the schemes in August 1990. The minutes of the meeting were prepared by Mr Steele.

The potential effect of the problem has in part since been mitigated by the execution of a deed of amendment dated 27 August 1997, which amends rules C3 and D2 of the 1992 deed as regards future service. The action is only concerned with the past service entitlement. The difference between success and failure in it is the difference between a past service surplus and a past service deficit in the scheme's assets. Not surprisingly, the problem has been regarded as a serious one by the trustees, and Mr Steele's evidence was that since 1996 it has been the subject of many hours discussion by the present and former trustees.

The issues

Lansing's case as presented at the trial is that the extent of its and the trustees' intentions when executing the 1992 deed was that the NRD for women actives should be raised to age 65 in respect of periods of service after 27 August 1990 (a case which, in its last respect, was contrary to Lansing's evidence); that both male and female actives retiring after that date were to be entitled to

receive an unreduced pension on retirement between 60 and 65 if consent was first given by Lansing and the trustees; and that it and the trustees had no intention of changing the early retirement rights of the deferreds as provided by the 1977 deed. It claims that it is entitled to have the 1992 deed rectified by (a) providing that after 27 August 1990 male and female actives may retire between age 60 and 65 on an unreduced pension, but only with the prior consent of Lansing and the trustees; and (b) providing that deferreds may retire before age 60 (in the case of women) or 65 (in the case of men) only with the consent of the trustees and only with a reduced pension. The rectification sought in (b) is directed to restoring the position to what it was under the 1977 deed. The pleaded form of rectification sought is: (a) the deletion of second sentence of rule C3(B) (i); (b) the deletion of rule C3(C) (iii); and (c) the deletion of the second sentence of rule D2(B) (i).

If that rectification is granted, Lansing also seeks certain consequential relief in one or other of two alternative forms, its primary claim being for relief in an unheralded form produced at the beginning of the trial. The amended statement of claim at one point describes this relief as further rectification, but Mr Etherton accepts that is inaccurate. The point is that, as Lansing accepts, the proposals voted for on 22 August 1990 ignored the restrictions imposed by clause 20(A) of the 1977 deed and purported to deprive women actives and deferreds of accrued rights to retire at 60 on a full pension and to deprive the men of the like rights which Barber gave them in respect of service since 17 May 1990. Lansing accepts that it cannot hope for the deeds simply to be rectified, and then administered, in a manner which will deprive actives and deferreds of such rights. So it invites the court to grant the requested rectification, but then so to re-write the rectified trusts as to pay full respect to the effects of clause 20(A) and Barber. I do not understand it to be suggested that the deed of 20 July 1992 does not already fully respect clause 20(A) and Barber, but the purpose behind the alternative relief is to introduce a different regime which will be less costly to Lansing, although it is not suggested that it is one which anyone had in mind until Lansing's legal team got to work on its case.

To this rather complicated end, paragraph (2) of the prayer sets out in five sub-paragraphs what are (in effect) further consequential amendments to the rectified 1992 deed. It is striking, for example, that although Lansing's rectification case is that they had no intention of changing the position of the deferreds, paragraph (2) invites the court to do precisely that; and that although its case is that the changes were all to happen with effect from 27 August 1990, paragraph (2) invites the court to decide whether it should be that date or 20 July 1992. The alternative form of relief claimed by the late amendment is simpler. It seeks a declaration that:

"(a) The scheme shall be administered on the footing that in calculating the amount of benefits payable to a Member at the date of his retirement account shall be taken of the fact that benefits earned during the periods set out in (b) below were accrued by reference to an NRD of 60:

(b) The periods in question are:

(i) For women all periods of service prior to the Effective Date.

(ii) For men all service between 17 May 1990 and the Effective Date."

If the court refuses to rectify rule C3(C) (iii) by deleting it then it is asked to answer a question of construction said to arise under it. If that question is answered adversely to Lansing, there is a further claim to rectify rule C3(C) (iii), being a claim which is inconsistent with Lansing's primary claim.

I turn now to the issues.

The claim for rectification

Rectification is a discretionary equitable remedy which is available to correct the manner in which a transaction is recorded in a written instrument. It is not a remedy which is available to change the transaction itself. The need for the remedy is because it is a fact of life that sometimes mistakes arise in the drafting of documents which the signatories do not spot before they sign. The result is that they lend their names to a document which they believe and intend achieves effect X, whereas

by mistake it in fact purports to achieve a different, and unintended, effect Y. Provided the requisite conditions are satisfied, the court has a discretion to correct the executed document so that it reflects the intention to achieve effect X.

There is, however, a strong presumption that a signatory of a document intends to sign it in its executed form, since the purpose of signing it is to make the document do the legal job it purports to do; and of course the signatory has every opportunity to satisfy himself before he signs it that it is in a form which meets his needs, an opportunity which responsible signatories will usually take. The jurisdiction to rectify documents is, therefore, one which is "cautiously watched and jealously exercised" (Whiteside v. Whiteside and Others [1950] 1 Ch. 65, at 71, per Sir Raymond Evershed M.R.); and, although the question of whether or not there is a mistake in the document as executed is one which falls to be tested by reference to the civil standard of balance of probability,:

". . . convincing proof is required in order to counteract the cogent evidence of the parties' intention displayed by the instrument itself. It is not, I think, the standard of proof which is high, so differing from the normal civil standard, but the evidential requirement needed to counteract the inherent probability that the written instrument truly represents the parties' intention because it is a document signed by the parties".

(See Thomas Bates and Son Ltd. v. Wyndham's (Lingerie) Ltd. [1981] 1 W.L.R. 505, at 521, per Brightman L.J.).

It is agreed between Mr Etherton and Mr Green that if Lansing is to arrive at the point at which the court can consider whether to exercise its discretion to rectify the 1992 deed in the claimed respects Lansing has to prove according to the requisite standard that: (i) on 22 August 1990 Lansing and the trustees intended and resolved to make certain specific amendments to the 1977 deed; (ii) that they continued to have the same intention down to the execution of the 1992 deed; and (iii) that, by mistake, the deed included provisions which departed from, or failed to give effect to, that intention.

Lansing's case is that all that it and the trustees intended and resolved upon was to increase the NRD for women actives to age 65 and to allow those men and women actives who retired between 60 and 65 with the consent of Lansing and the trustees to enjoy an immediate, unreduced pension; and that they had no intention and made no resolution to change the position of the deferreds. It claims that it and the trustees never departed from these intentions and resolutions and that, insofar as the 1992 deed did not include the consent requirement and did change the deferreds' position, it mistakenly failed to give effect to the continuing intentions of its signatories. Therefore, it is said, there is a jurisdiction to grant the rectification sought.

Mr Green challenges the claim at every point. First, he disputes that Lansing proves the formation and continuation of the intentions which it asserts and he submits that the claim fails at the initial factual hurdle. Secondly, if the court were to conclude that Lansing and the trustees did form and retain the intentions which are asserted, then he says that there is no "outward expression" of them whereas the authorities show that this is a pre-requisite to the rectification jurisdiction. Thirdly, he submits that there are several further reasons why the court should exercise its discretion against rectification.

(a) Lansing's and the trustees' intentions at the material times

Taking first the question of what was or was not intended on 22 August 1990, I approach the assessment of the evidence with a reminder that at least the management trustees who gave evidence cannot be regarded as entirely disinterested and objective. I have referred to the irresponsible way in which the trustees as a whole, and Mr Steele in particular, handled the matter of the preparation and execution of the 1992 deed. What Lansing and the trustees now claim was an awful mistake is something which, if it really was a mistake, ought to have been spotted by them before the deed was executed, since it was at that stage that they ought to have taken the trouble to satisfy themselves that the deed did exactly what they wanted and no more. Their irresponsible handling of the matter has led to a problem which has become, as Mr Steele said, something of a high profile one - and also a potentially expensive one for Lansing. I have little doubt that the three management trustees who gave oral evidence have suffered considerable embarrassment by reason of what they claim was a mistake and that they all have a considerable interest in achieving

its correction. I make clear that I do not by this mean to suggest that I regard any of them, or any of the witnesses, as having been tempted to mislead the court in the evidence they have put before it. But, as Mr Steele confirmed, it is clear that, once the problem was identified - and as might be expected - the trustees devoted much time to looking back on what happened and on what they believe they intended to happen. In that exercise they were casting their minds back to the happenings of several years before and the net result of that was inevitably something of a reconstruction of events, thoughts and intentions. I do not doubt that the reconstruction they have arrived it is one they believe to be accurate. But I do take the view that I need to assess its reliability with care. Everyone's evidence (Mr Hunt's apart) about the question of consent and its importance, and the presumption that it was being retained, came out so positively and clearly (rather like name, rank and number, as Mr Green suggested) that a bystander might have been forgiven for thinking that the witnesses had thought of little else in and since 1990. There is, in short, a danger that they may have convinced themselves that they had intentions at the time which they did not; and in the light of the fact that the intentions they now assert are inconsistent with some of the contemporaneous documentation, I approach Lansing's evidence with caution.

So cautioning myself, the first question is this: what intentions did the seven trustees have at the meeting of 22 August 1990 when they passed the resolutions which led to the execution of the 1992 deed?

The main weight of the evidence which I have read and heard is that no-one had any intention at that meeting of removing the need for consent with regard to retirements of actives between 60 and the new NRD at age 65. However, there are two dissenting voices. First, Mr Hunt, an employee trustee, who said in cross-examination that his understanding was that consent was not to be required. Secondly, whilst he was not called as a witness, I find on the basis of the material which is in evidence that Mr Thornton's understanding of the outcome of that meeting was also that consent was not to be required. I regard that as a clear inference from paragraph 2(c) of the minutes, which he drafted; from the announcement of 27 August 1990, which he also drafted; and from the instructions which I infer he gave Slaughters, whose Mr Morrison had raised the very question for discussion with him

In that state of evidential play, what conclusions should I draw as to the trustees' intentions on 22 August 1990 with regard to the question of consent? I find first that there was no discussion about the question of consent at that meeting. Nor, as I also find, (and Mr Hunt apart) was it even in the minds of the trustees. Mrs Ferguson claimed to recall otherwise and said that Mr Allenby had raised the point, but even she was not 100% sure and her voice on this was a lone one which I do not accept as reliable. Nor, save only for an imprecise suggestion from Mr Colson that there was at some stage a discussion about consent in the context of women taking early retirement, does it appear that the consent question had been discussed by the trustees earlier. The evidence of the management trustees is that the point was not discussed in the context of the proposed amendments - their stance being that the need for consent, and with it control by Lansing over when or whether a key worker might leave, was so fundamental to Lansing's operational policy that the need to retain it went without saying.

For my part, I consider that this aspect of Lansing's case was over-emphasised in the evidence. There was of course, by 1990, a programme on foot for the reduction of the labour force, with those leaving under it being offered financial packages which went a long way towards compensating them for the financial disadvantages of early retirement they would otherwise suffer. But it was clear from the evidence that, apart from retirement under these special terms, the financial disadvantages of early retirement merely with an immediate pension were too acute to be likely to result in a mass departure of 60 year only males simply because of the proposed relaxation of the actuarial reduction provisions under the scheme. The evidence was that, apart from those who left with the benefit of the special packages, there was no culture of early retirement at Lansing; and there was no evidence of any men wishing to take such early retirement - as Mr Rampton said, they simply could not afford it. Mr Taylor's vision of the paint-shop emptying overnight if the consent retirement went was, I find, an unreal one of what was likely to happen in practice. Mr Kulick, for example, did not foresee any early retirement problem within his area of responsibility. Overall, I view with reservation the claim that the retention by Lansing of the consent requirement was as fundamental to its personnel policy as the witnesses asserted. I regard this as an area where the reconstruction of events has been exaggerated and is, in consequence, unreliable. In particular, although Mr Thornton

was said to be close to the hub of Lansing's world, I do not accept that he understood that the consent requirement was fundamental.

As for the employee trustees, they were not brought into any of the discussions leading up to the meetings of 22 August 1990. They were simply given a day or so's notice of those meetings, but no accompanying papers for consideration. On the morning of 22 August 1990 they were pitched into several heads of business, including those in point in this action, which were then rattled through in half an hour. The scope for consideration by them of precisely what was being proposed was limited. Save only that Mr Hunt appears to have emerged from the meeting with the understanding to which I have referred, questions of consent with regard to the early retirement of actives were, I find, simply not in their minds or considered by them.

As for the deferreds, Mr Rampton's evidence as to the meeting of the hourly paid scheme trustees was that "we" assumed they would get like benefits as the actives; but the weight of the evidence was, I find, that their position was not discussed or considered at the main scheme meeting of 22 August 1990.

I find, therefore, that there was no discussion at the meeting of the question of consent with regard to the retirement of actives between 60 and 65 and that (Mr Hunt and Mr Thornton apart) nor did anyone even consider the point. Nor was there any discussion or consideration of the position of the deferreds.

Mr Etherton submits that the fact that the question of consent or the position of the deferreds was not discussed or considered is not inconsistent with Lansing's case. He says that, even accepting Mr Hunt's unhelpful evidence, a majority of the trustees were all of one mind; and he says that all that the meeting was resolving to do was to make certain changes to the 1977 deed (he emphasised the phrase "package of changes" in paragraph 2 of the minutes). As regards retirement, the change was to raise women's NRD to age 65 and to exclude the actuarial reduction in pensions taken by those retiring between 60 and 65. It follows, he says, that unless something express was said that consent would not be a condition to retirement between those ages, the consent requirements of rule 8(A) of the 1977 deed must be taken to have been intended to apply to such retirements.

I would have found that a convincing argument if the 1977 deed had been presented to the meeting and the resolutions which were put to it had been expressly identified as involving merely a change of NRD and a modification to rule 8(B). If this had been the basis on which the trustees had voted on the proposals then, even if there had been no express reference to the retention of the consent requirement referred to in rule 8(A), it would have been easy to infer that its retention was intended. However, I do not regard that approach as a safe one. There is no evidence that the 1977 deed, or rule 8, was referred to by anyone at the meeting, or that anyone at it even had a copy of the 1977 deed, so that no-one had the particular terms of rule 8 in mind. In those circumstances, although all the trustees claimed to be familiar with the consent requirements in the 1977 deed, I feel unable to treat their resolution as having been intended to achieve no more than a modification of rule 8(B). I prefer the view that what they actually intended to achieve by their resolution must depend on the precise nature of the proposal which was being put to them and, therefore, on precisely how Mr Allenby described it. There is, however, no satisfactory evidence of that. In these circumstances I consider that the best place to identify what the trustees resolved upon is in the minutes of their meeting - the whole purpose of which was to provide a reliable record of precisely that.

The minutes were drafted by Mr Thornton and were based, as I infer and find, on his understanding of what the meeting had resolved in the light of the proposals explained to it by Mr Allenby. They were then approved by Mr Steele and issued to the other trustees. They were then formally approved by the trustees' meeting which took place on 20 June 1991 and was chaired by Mr Allenby and attended by Messrs Thornton and Wasserman.

Clause 12(A) of the 1977 deed provides for minutes of trustee meetings to be kept and that any such minute "if purporting to be signed by the chairman of the meeting at which the proceedings took place or the chairman of the next following meeting shall be sufficient evidence of the matters to which it relates." The copy minute in evidence does not appear to have been signed by Mr Allenby but no point has been taken on that. I did not understand Mr Etherton to suggest it is not a true

record of what was resolved upon at the meeting. No claim is made to rectify it on the basis that it was mistakenly drawn and does not correctly record the sense of what was then resolved upon.

All that being so, I regard the minute as the best evidence as to what the meeting of 22 August 1990 resolved to do. I do not regard it as conclusive evidence, and if there were convincing oral evidence that the trustees had decided upon something different, I would have regard to such evidence. There is, however, no such evidence.

Paragraph 2(c) of the minutes is the relevant one, providing for:

"c) The equalisation of normal retirement age at 65, with the option for any member to retire up to five years early with no loss of accrued pension."

I have already expressed my view that the ordinary meaning of that was that members were to have a right (without the need for consent) to retire at 60. That is the natural meaning of the word "option" in the context. Words are the primary vehicles of thought and communication, and their users must ordinarily be taken to intend and expect them to be understood in accordance with their usual meaning. This is particularly important in the case of formal documents like minutes. The whole point of Mr Steele going through the exercise of approving them before they were issued was to see that they were accurate; and the reason for that was because their purpose was to provide an accurate, and permanent, record of the trustees' resolutions for future reference and use (for example, at this trial). He, Mr Allenby and all the other trustees had a further opportunity at the meeting of 20 June 1991 to consider the minutes, and to correct paragraph 2(c) if they considered it did not accurately reflect what the trustees had earlier resolved to do. But no-one suggested any change. In my view, paragraph 2(c), read according to its natural meaning, is the best evidence of what the trustees resolved to do at the meeting of 22 August 1990.

Quite apart from the significance I attach to the minutes, I am anyway unconvinced by the evidence that the trustees did not intend that which paragraph 2(c) appears to show they did intend. Paragraph 2(c) does not stand in isolation. Not a single piece of paper generated by the management trustees in relation to Barber refers expressly to the need to retain consent for retirements between 60 and 65; and, more significantly, two of the documents produced by them at the material time suggest that they did not regard consent as a pre-requisite to such retirements, namely, Mr Steele's memorandum of 18 June 1990 and Mr Allenby's fax to Line of 22 August 1990. It is not just a question of these documents not referring to the need for consent - it is that they are written in language which suggests that it would not be required and that the choice about early retirement was exclusively a matter for the employees.

Accordingly, the written thoughts of Mr Steele and Mr Allenby appear to me to be in line with the minutes. So also was the announcement of 27 August 1990, produced by Mr Thornton. Again, whilst it is badly drafted, a natural reading of its last part is that men and women would be entitled to take early retirement at 60. Nothing else the trustees produced prior to this time was inconsistent with this. Lansing has not convinced me that, as at 22 August 1990, its and the trustees' intentions were that consent was to be a pre-requisite to early retirement between 60 and 65 on an unreduced pension. I prefer the view that their intentions were that it was not.

Mr Etherton places reliance on the revised May 1992 booklet as to Lansing's and the trustees' intentions in this regard. It is correct that page 12 describes the actives' early retirement prospects in a manner consistent with Lansing's case. It is, however, in my view an unsatisfactory document to invoke as evidence of a continuing common intention of the signatories to the amending deed of 20 July 1992. First, it purports to describe the benefits "as they apply from 1st May 1992". Lansing's evidence was that everyone intended the changes to have effect from 27 August 1990: so why did no-one who claims to have read the booklet pick up that unexplained oddity? Secondly, there is no evidence as to the source of the author's understanding of what he/she wrote on its page 12: there is, in particular, no evidence that it derives from Lansing or the trustees. Thirdly, as I have suggested earlier, page 19 is arguably inconsistent with Lansing's case as to the deferreds, namely that there was to be no change. Fourthly, although Mr Etherton emphasised that the draft booklet had been sent to all the trustees, the evidence about the effect it had on them was unimpressive. There is no evidence that Mr Allenby saw or read it. There is no evidence that Mr Abell ever read it. There is no evidence that Mr Colson read it before he executed the July 1992 deed. It is unclear that Mr Hunt

read it comprehensively. It appears that the other trustees did read it, but they obviously did not read it very critically or else they might have wondered about the supposed magic of 1 May 1992 and perhaps also have picked up the point about the deferreds. What is clear is that there was no trustees' meeting to discuss the booklet. Had there been it is conceivable (although I regard it as improbable) that it might have occurred to them that the booklet was premature and that the correct order of events was first to get the deed signed and then think about updating the booklet. Fifthly, there is no evidence that the booklet was sent to Slaughters. Sixthly, reliance is placed on the booklet because it appears to point to a different intention from that which can be derived from the 1990 documentation; but, in the various circumstances I have just mentioned, I can see no good reason for regarding the booklet as constituting better evidence of Lansing's and the trustees' intentions than that documentation. I do not regard it as justifying a conclusion that at any stage Lansing and the trustees collectively had intentions which differ from those which other evidence has led me to conclude they had as at 22 August 1990.

It is urged by Mr Etherton that a conclusion that there was an intention to allow early retirement between 60 and 65 is improbable, since that would in substance amount to reducing NRD to a common age of 60, which the evidence shows (and I accept) was an option which Lansing rejected. I recognise that may be the substance of the matter, but I am unconvinced that Lansing and the trustees appreciated it. A flood of early male retirements was unforeseen and has not happened. It was foreseen that some women would go at 60, which would represent no practical change. Looking at it from a practical point of view, I find that Lansing and the trustees did not understand that the substance of what they were doing was creating a common NRD at age 60. On the contrary, they had resolved on a common NRD at age 65 and I find that they assumed that this meant what it appeared to say.

In conclusion, I am not satisfied that the absence in the July 1992 deed of the need for consent for the early retirement of actives between 60 and 65 on an unreduced pension is a feature which departed from, or failed to give effect to, the intentions of Lansing and the trustees. I find that it is not. The claim to rectify rule D2(B) (i) fails.

As regards the deferreds, the position is different. Although paragraph 2(c) of the minute of 22 August 1990 might be read as applying also to the deferreds, Mr Green did not suggest that it should be; and his case is, and I accept that the evidence proves it, that the position of the deferreds was not considered, discussed or resolved upon at the meeting of 22 August 1990. The May 1992 booklet can perhaps be read as reflecting some change to the position of the deferreds, but for the reasons I have given I do not regard it as providing a reliable guide as to the intentions of Lansing and the trustees at any time. I find, therefore, that Lansing and the trustees never positively resolved, and never positively intended, to change the position of the deferreds.

This would suggest that Lansing is in a better position as regards its claim to rectify rules C3(B) (i) and C3(C) (iii) of the 1992 deed. Even there, however, I consider that it is in difficulties. The main one is that if the 1992 deed is compared with the limited amendments which Lansing and the trustees resolved upon in August 1990, it is obvious that it went very substantially beyond them. It is a document running to some 160 pages, involving a consolidation and substantial re-drafting of the prior deeds and incorporating many amendments and changes upon which Lansing and the trustees never resolved and about which they never had any specific intentions. In fact, Lansing and the trustees were wholly ignorant of what the 1992 deed was purporting to do, because none of them read it or had it explained to them or even sought an explanation about it (Mr Taylor was perhaps very slightly more diligent in this respect, but only cursorily so). Some of them thought, or assumed, it was giving effect to the booklet (their number included Mr Colson, who had not read the booklet), although this was not something which they ever resolved or agreed upon. Others appear to have assumed, remarkably, it was merely giving effect to their August 1990 resolutions. These included Mr Allenby, who was surprised at the length of the document, who must therefore have realised (and, I find, did realise) that it went substantially beyond merely implementing the August 1990 amendments, but who happily signed it in the belief that whatever Gibbs and Slaughters had produced must have been all right.

In these circumstances, I regard as unattractive Lansing's selective claim to rectify those provisions of the 1992 deed which change the position of the deferreds. The evidence shows that, when they executed the deed, they had no clear common understanding of what it provided, and no clear common intention as to what it should provide. The only common thread of intention which appears

to link the signatories was an intention to sign, wholly blindly, the document which was put before them on the basis that, as it was prepared by Gibbs and Slaughters, it must be one they could safely sign. In short, their intention was no more complicated than to sign a deed in the form produced to them, whatever it in fact provided, and knowing that in material respects it had gone beyond the limits of what had been resolved in August 1990. In those unusual circumstances, I am unpersuaded that the deed as signed was not in the form that Lansing and the trustees intended, even as regards its provisions in relation to the deferreds.

This would, in my view, be sufficient to defeat the rectification claims also as regards the deferreds. There is also a further reason why I regard this claim as deserving to fail. I have referred to Mr Steele's evidence that he considered that Gibbs and Slaughters had an implied authority from the trustees to incorporate into the 1992 deed any changes which the law required. I have also observed that it is not clear whence that authority derived, although it does receive some de facto support from the way in which Lansing and the trustees all signed the deed, knowing that it contained a multitude of material of whose effect they were ignorant. Given, however, as I have found, that the deed's provisions for the early retirement - without consent - of actives at 60 on an immediate unreduced pension was in line with Lansing and the trustees' intentions, I consider that it followed that a like provision had to be included in the deed as regards the deferreds in order to satisfy the preservation legislation then in force and now to be found in the Pensions Schemes Act 1993, Chapter IV, Part 1. The effect of the inclusion of the right of actives to retire at age 60 with an unreduced pension was that that was their "normal pension age" for the purposes of s.180 of the 1993 Act; and I consider it follows that s.72(1) required provisions essentially along the lines of rule C3(B) (i) and C3(C) (iii) to be included also for the deferreds. I regard it as having been within Gibbs' and Slaughters' admitted implied authority to include these provisions - even if, as may be the case, they were drafted more widely than was necessary.

In these circumstances, I do not accept that the court has any jurisdiction to rectify the deed in relation to the deferreds. I also reject this part of the rectification claim.

(b) Is there any "outward expression of accord"?

This conclusion makes it strictly unnecessary to consider Mr Green's submission that the rectification claims are anyway doomed by reason of the absence of any "outward expression of accord" as to Lansing's and the trustees' alleged intentions with regard to the early retirement of actives and deferreds on an unreduced pension. I will, however, express my views on it.

The submission derives from the well-known contract case of Frederick E. Rose (London) Ld. v. William H. Pim Jnr & Co. Ld. [1953] 2 Q.B. 450. I need only cite from Denning L.J.'s judgment at p. 461, where he said:

"Rectification is concerned with contracts and documents, not with intentions. In order to get rectification it is necessary to show that the parties were in complete agreement on the terms of their contract, but by an error wrote them down wrongly; and in this regard, in order to ascertain the terms of their contract, you do not look into the inner minds of the parties - into their intentions - any more than you do in the formation of any other contract. You look at their outward acts that is, at which they said or wrote to one another in coming to their agreement, and then compare it with the document which they have signed. If you can predicate with certainty what their contract was, and that it is, by a common mistake, wrongly expressed in the document, then you rectify the document; but nothing less with suffice. It is not necessary that all the formalities of the contract should have been executed so as to make it enforceable (see Shipley Urban District Council v. Bradford Corporation [1936] Ch. 375); but formalities apart, there must have been a concluded contract. There is a passage in Crane v. Hegeman-Harris Co. Inc. [1939] 1 All E.R. 662,664, which suggests that a continuing common intention alone will suffice; but I am clearly of opinion that a continuing common intention is not sufficient unless it has found expression in outward agreement. There could be no certainty at all in business transactions if a party who had entered into a firm contract could afterwards turn round and claim to have it rectified on the ground that the parties intended something different. He is allowed to prove, if he can, that they agreed something different; see Lovell & Christmas v. Wall 104 L.T. 85,88,83, per Lord Cozens-Hardy M.R., and per Buckley L.J., but not that they intended something different."

That statement of principle is accepted by Mr Etherton as a correct statement of the law in relation to claims to rectify a contract; he referred me to the judgment of the Court of Appeal in Joscelyne v. Nissen and Another [1970] 2 Q.B. 86, which included a comprehensive review of the law relating to the rectification of contracts and re-affirmed the need for an "outward expression of accord" (see p.98); and see also Etablissements Georges et Paul Levy v. Adderley Navigation Co. Panama S.A. (The "Olympic Pride") [1980] 2 Ll.L.R. 67, at 72, per Mustill J. Mr Etherton submits, however, that the principles expressed by Denning L.J. are directed only to claims to rectify a contract. He submits that the logic of the need for an outward expression of accord in such claims is that the determination of whether or not a contract has been made, or what its terms are, is a matter which is itself required to be determined by reference to objective evidence; and so it is consistent that there should be the like requirement of an outward expression of accord in a claim to rectify a contract. But he submits that, since Lansing is not here claiming to rectify a contract, there is no need for any outward expression of accord. He says that the present case is closer to a claim by a settlor to rectify a settlement so as to correct a mistake in it in giving effect to his intentions. In cases such as that there will often be no question of any "accord", since it is only the settlor's intentions which are relevant; and he says it follows that there can be no need, or indeed any scope, for any purported outward expression of accord. He referred me to In re Butlin's Settlement Trusts, Butlin v. Butlin and Others [1976] 1 Ch. 251, a case concerning the rectification of a settlement. He submitted that to apply the Rose v. Pim principle to a case such as the present would require a development of the law.

I agree with Mr Etherton that the present claim is not one to rectify a contract; and since no authority has been cited to me which expressly identifies the rectification requirements in a claim such as the present, I agree also that it maybe said that to apply the Rose v. Pim requirement of an outward expression of accord to the present case does involve a development of the principles. If so, however, I take the view that such development requires only the smallest of steps.

This case is all about an amendment of the 1977 deed pursuant to clause 20(A). That provides that "[Lasing] may . . . with the consent of the Trustees by Deed amend the . . . [1977] Deed or by Deed or Board Resolution amend . . . the rules". Any amendment has, therefore, to be proposed, or made, by Lansing with the accord of the trustees. What is required is a bilateral, consensual transaction whose substance is equivalent, or at least very close, to that of a contract save only for the absence of consideration. I cannot see how an amendment pursuant to clause 20 could ever be validly effected except in circumstances in which there is objective evidence of the accord between Lansing and the trustees: if there is not, how can it be shown that the trustees have consented to what Lansing has proposed? Moreover, since any such amendments are potentially of great importance to the scheme members generally (to whom Lansing owes a duty of good faith - see Imperial Group Pension Trust Ltd and Others v. Imperial Tobacco Ltd and Others [1991] 1 W.L.R. 589, at 597 - and for whom the trustees act as such) it is in my view essential that there should be objective evidence showing that the amendment proposed by Lansing has been consented to by the trustees; and I cannot see that the need for such evidence is any less compelling than it is in the case of a contract. The fact that an amendment pursuant to clause 20 does not involve the moving of consideration between the parties appears to me to be irrelevant. The relevant feature of a clause 20 amendment is that, just like a contract, it is a bilateral transaction, involving the need for an accord. It follows in my view that the principles which Denning L.J. expressed in Rose v. Pim are equally applicable to a case such as the present. I accept Mr Green's submission that, if Lansing is to succeed in its claim, it must be able to point to an outward expression of what it says were its and the trustees' true intentions.

As to that, even if I am wrong in my earlier findings as to such intentions with regard to the actives, I can still identify no outward expression of Lansing's and the trustees' claimed intention that the consent requirement should apply to the early retirement of actives between age 60 and 65. Apart from the 1992 booklet, all the documents are either neutral (in the sense that they do not indicate one way or the other what the consent intentions were) or else can be interpreted as pointing to an intention that consent was not be required. Further, since consent was not discussed at the meeting of 22 August 1990, Lansing cannot point to any oral evidence which might be said to be an outward expression of the alleged accord. That, therefore, simply leaves the 1992 booklet. I have already made some critical observations about the extent to which I regard that as providing evidence of the intentions of the deed's signatories. For reasons given, I do not regard it as providing any sufficient evidence of accord to satisfy the Rose v. Pim requirements.

I find, therefore, that there is and was anyway no outward expression of accord with regard to Lansing's and the trustees' alleged agreement as to the changes with regard to the actives. For this reason too I would refuse the rectification sought with regard to the actives.

As regards the deferreds the position is again slightly different. An outward expression of accord with regard to something which was not agreed or intended might, at first sight, be thought to be something which would be difficult to produce. In practice, however, it should not be. If A and B orally agree five contractual terms and, by mistake, an unspoken sixth appears in their contract as signed, it will not in principle be difficult for one of them to prove that the sixth was not agreed or intended. He will adduce evidence of all they did agree and, if it is accepted, the court may be prepared to regard it as a sufficient outward expression of accord showing that the sixth term was never agreed or intended.

So also here. Lansing has sought to prove, and I have accepted, that the deferreds were not discussed or considered at the meeting of 22 August 1990; nor is it suggested that paragraph 2(c) of the minutes should be read as extending to the deferreds. That being so I consider that Lansing is entitled to say that the proven outward expression of accord as at 22 August 1990 did not include any intended change to the position of the deferreds, any more than it included an intention that the amendment deed should contain all the other amendments and changes which it eventually did. However, even accepting that, I have given my reasons why, on the unusual facts of this case, I consider that the claim to rectify in respect of the deferreds must anyway fail.

It follows that the claim in prayer (1) of the amended statement of claim fails. I also heard elaborate further arguments from Mr Green as to why the claimed rectification, and the relief consequential upon it, should anyway not be granted. These involved arguments to the effect that the rectification involved amendments which so infringed proviso (A) to clause 20 as to amount to an excessive and unseverable execution of the amendment power, as infringing the Barber principles and the preservation legislation and as involving an infringement of the so-called "rule in Hastings-Bass" (as to which see In re Hastings-Bass decd., Hastings-Bass and Other v. Inland Revenue Commissioners [1975] 1 Ch. 25; Mettoy Pension Trustees Ltd v. Evans and Others [1990] 1 W.L.R. 1587; and Stannard v. Fisons Pension Trust Limited [1991] P.L.R. 225). To do justice to the arguments I heard on both sides, for which I express my gratitude, it would be necessary to extend this judgment very considerably. Since there is still quite a bit to come, I do not propose to do so, although I should record that, subject to what I have already found about the question of consent, I find that what the trustees did and did not intend or appreciate at the meeting of 22 August 1990 was in line with Mr Steele's evidence: as I have said, all the trustees were broadly in agreement with him. I add also that I find that, had Lansing and the trustees been comprehensively and properly advised prior to 22 August 1990 of the effects of clause 20(A) of the 1977 deed, of Barber and of the preservation legislation in relation to deferreds they would not have passed the resolutions in the form they did. I feel unable to make any finding as to what different forms of resolution they would instead have passed.

The claims in the subsequent prayers down to prayer (4) are consequential on the success of prayer (1), and do not arise. Prayer (5) raises a question of construction which does.

The construction question

This arises in respect of rule C3(C) (iii), a provision in the rules relating to the deferreds. I have earlier set out the relevant provisions of rule C3.

The issue is whether the rule C3(C) (iii) exclusion of a reduction in pension applies: (a) only to benefits payable in respect of deferreds who left pensionable service on or after 27 August 1990; or (b) to benefits payable in respect of all deferreds whenever they left pensionable service; or (c) to benefits payable to some other class of deferreds.

Mr Etherton argues for alternative (a). Mr Green submits that a purposive construction of rule C3 points to alternative (b) but that a literal construction points to the conclusion that rule C3(C) (iii) applies to all deferreds save those who left pensionable service after 27 August 1990 having attained 60.

Mr Etherton submits, and I am inclined to agree, that something has gone wrong with the drafting of rule C3. However, I have to interpret it as best I can by reference to what it says and there are limits to the extent to which the court can engage in any re-writing as part of the exercise of interpretation.

The argument in favour of Mr Green's literal construction is as follows. Rule C3(A) shows that the whole of rule C3 applies not only to those still in service on 27 August 1990 but also to those who had left before then. Rule C3(B) (i) provides for deferreds to take their pensions early with consent, but includes an exception in its second sentence as regards those deferreds whose pensionable service ended on or after 27 August 1990 and who are aged 60 or more - in their case no consent is required. Rule C3(C) deals with the amount of pension payable to a deferred taking early retirement. Leaving aside those retiring because of incapacity, rule C3(C) (i) is directed at quantifying the pensions only of those who retire early with consent. Any such pensions fall to be reduced by such amount as the trustees and Lansing may decide, an exercise which is subject to rules C3(C) (ii) and (iii). Rule C3(C) (ii) imposes a limit on the permitted reduction. Rule C3(C) (iii) then excludes any reduction "under Rule C3(C) (i)" in respect of the period of early payment of the pension as will occur between the deferred's 60th birthday and NRD. Since, however, that reduction only falls to be made "under Rule C3(C) (i)", being a rule which is only concerned with early retirements with consent, it cannot apply to those deferreds who, pursuant to the second sentence of rule C3(B) (i), retire on or after 27 August 1990 at or after age 60 without the need for consent. Thus, submits Mr Green, that class of deferreds is excluded from the benefit of rule C3(C) (iii); but, he says, the wide application of rule C3 proclaimed by rule C3(A) shows that all other deferreds who take early retirement with consent do enjoy its benefit. Thus he invites the court to find in favour of what he calls the literal construction.

Mr Etherton's argument in favour of alternative (a) above is one which does not fit easily with the language of rule C3. He sought assistance from clause 4 of the 1992 deed, headed "Effect of amendments". That reads:

"(A) Any amendment made by this deed affecting the calculation of, or entitlement to, benefits shall be of effect only in relation to benefits of, or arising in respect of, a person who is a Member after the date which first appears on page 1 of this deed, except:

(i) as expressly provided in any provision of the Definitive Deed or Rules as amended by this deed; or

(ii) as the Trustees may, with the consent of the Company, decide;

and in all other cases calculation of, and entitlement to, benefits shall be determined in accordance with the deeds listed in Appendix B."

Mr Etherton sought to deploy that provision as limiting the scope of rule C3(C) (iii) to that for which he argues, although I have difficulty in seeing how it applies at all. In my view, rule C3(A) is an express provision of the nature contemplated by clause 4(A) (i); and it shows that rule C3 as a whole (including rule C3(C) (iii)) applies to the wide range of deferred members which it defines.

I consider, therefore, that the answer to the construction question lies within the four corners of rule C3. With respect to Mr Etherton's argument, I regard the proposition that rule C3(C) (iii) applies only to benefits payable to deferreds who left pensionable service after 27 August 1990 as an impossible one. There is, in my view, at least as regards those members of that class who left the scheme after 27 August 1990 having attained 60, an argument that rule C3(C) (iii) does not apply at all.

I am, however, also unpersuaded by Mr Green's literal construction. The difficulty I have with it is that, whereas rule C(3) (C) purports to quantify the amount of the pension of the early leavers, it appears to ignore those who leave without consent pursuant to the second sentence of rule C3(B) (i). There is a long line of authority to the effect that pension provisions have to be construed purposively and practically. I adopt a purposive approach in this particular case with some caution, because it appears to me to have overtones of deciding what rule C3 ought to mean as a route towards deciding what it does mean. However, I find it impossible, construing rule C3(C) in a practical sense, to conclude other than it must impliedly have been intended also to embrace the rights of deferreds who retire without consent pursuant to the said second sentence. I will declare

that the answer to the question of construction is in sense (b) above, save only that it may be more accurate to define the relevant class by reference to rule C3(A), a matter on which I will hear counsel.

In the light of that conclusion, paragraph (6) of the prayer asks the court to rectify rule C3(C) (iii) by inserting a proviso restricting its operation to benefits payable to deferreds who leave or left pensionable service on or after 27 August 1990. It is not suggested that this would reflect anyone's intention at any time - save that of Lansing's lawyers. I am unaware of any jurisdiction which would justify the granting of such relief simply because the claimant's legal team consider it would be in its client's interests. I refuse that relief too.

(B) The executive scheme action

There are six defendants to this action. The first four are the current trustees of the executive scheme. The fifth and sixth are Hugh Norris and Lorraine England, who are members of the scheme and are sued in a similar representative capacity as the representative defendants in the main scheme action.

The execution scheme was constituted by an interim deed dated 3 November 1976 made between Lansing and three trustees and in due course it became governed by a definitive deed and annexed rules made on 8 August 1979 by Lansing and four trustees, such deed and rules being subsequently amended by various deeds made between 1980 and 1990. I shall refer to the definitive deed and rules as so amended as "the 1979 deed". It is a contracted out, contributory, balance of cost, final salary scheme. It also provided for an NRD for men on their 65th birthday and for women on their 60th. The pension is 2/3rds of final pensionable salary, subject to 20 years pensionable service with a reduced pension for shorter service. "Final pensionable salary" and "pensionable salary" mean essentially the same as in the main scheme.

Rule 8 provided for the retirement of actives before their NRD. Its language is not identical to that of rule 8 of the main scheme, but its substantive effect is the same and I need not quote it. Likewise, although not in identical language, Rule 15(D) (ii) (b) offered deferreds the like right (with the consent of the trustees) to retire early as was enjoyed by the deferreds under the main scheme, and there is also no need to quote it. Clause 20 of the definitive deed contains a power to amend the deed and rules in the same terms as clause 20 of the 1977 deed.

Gibbs also prepared an explanatory booklet of the executive scheme as at 1 May 1988. Part of its summary of the member's pension rights on retirement was as follows:

"RETIREMENT DATE

Your normal retirement date is your 65th birthday (for men) and 60th birthday (for women).

Alternatively, you can retire at any time after your 55th birthday (for men) or 50th birthday (for women) (or even earlier if in serious ill health) but you would then be able to take an immediate pension only if the Company agrees. In this case, your pension would be less than if calculated on the formula described below. More information on this can be supplied by the pensions officer.

If you remain in the Company's employment after your 65th birthday, then you can choose to take your pension at 65 or defer it until a later date, by which time it would have increased."

Background to the amendment to the scheme

On 12 December 1989 Mr Wasserman also wrote to the trustees of this scheme reporting on the valuation as at 1 May 1989. His letter was similar to that written to the trustees of the main scheme, and he pointed out that the scheme assets were 111% of past service liabilities, and so also exceeded the permitted 5% margin. The valuation balance sheet as at 1 May 1989 showed total liabilities of £18.275m, comprising liabilities to pensioners of £4.9m, to deferreds of £642,000, for actives' past service benefits of £6.188m and for actives' future service benefits of £6.995m. As to assets, members' contributions were valued at £1.696m and the fund assets at £13.116m, leaving a

residual company liability of £3.913m. On those figures the excess of fund assets over past service liabilities was 10.56%. As at 1 May 1989 there were 81 actives (all men), 23 deferreds (all men) and 30 pensioners (29 men and 1 woman).

The subsequent events leading up to the decision to amend the 1979 deed marched hand in hand with those concerning the main scheme, and I need not repeat the story. On 22 August 1990 there was a meeting of the trustees of the executive scheme. All four trustees were present: Messrs Allenby (in the chair), Colson, Kulick and Steele - the scheme had no employee representatives. Mr Thornton took the minutes. Paragraphs 1 and 2 were identical to the minutes of the main scheme meeting. The changes proposed as then recorded in the minutes were:

"a) The equalisation of normal retirement age with the option for any member to retire up to five years early with no loss of accrued pension.

b) The suspension of company contributions until 31st December 1991.

c) A commitment to use any surplus arising after the implementation date in the 1990 Social Security Act (expected to be 1st January 1992) to improve increases to all pensions in payment from 3% pa to 5% pa or the movement in the RPI whichever is the smaller.

The views and agreement of fellow Trustees was requested.

Mr P.W.Steele observed that the company's decision to suspend contributions was not an item for discussion within the parameters of the meeting.

After discussion the proposals were agreed in principle, subject to further comments from Linde AG. (Subsequent to the meeting agreement was confirmed and the proposals implemented).

There being no further business, the chairman closed the meeting."

Paragraph (a) did not identify the new NRD, although of course it was age 65. Mr Steele's evidence was that the minutes would have been approved at a subsequent meeting.

The amendments to the executive scheme were not effected until a deed was executed on 5 October 1994. I shall come to that in a moment, but it is relevant to note that, as I find, down to 1 May 1994 the scheme had no women actives or deferreds. However, on that date Mrs England became an active member of the scheme.

Mrs England gave evidence. She joined Lansing in 1989 as an assistant accountant and is now a business analyst in its IT department. She became a member of the main scheme. She could not recall seeing the announcement of 27 August 1990. The only pension booklet she remembers receiving is that relating to the main scheme, as amended by Gibbs as at 1 May 1992; but she said she did not look at it because "to be honest I've never taken any interest at all in my pension." She said she did not know what her retirement age under that scheme was.

Mrs England transferred to the executive scheme as from 1 May 1994. There is in evidence a copy letter to her dated 29 April 1994 from Mr Geuecke and Mr Steele confirming her changes in employment as from 1 May 1994. Paragraph 2 reads:

"You will be invited to become a member of the Executive Pension Scheme. If you decide to join, your benefits will be transferred from the main Pension Scheme. (I enclose the relevant booklets).

The relevant booklet was the one which had been prepared by Gibbs as at 1 May 1988 but it had in part been amended in manuscript by Mr Steele to delete the references to women retiring at 60. The section headed "Your Pension on Retirement" reads in part, as amended:

"RETIREMENT DATE

Your normal retirement date is your 65th birthday.

Alternatively, you can retire at any time after your 55th birthday (or even earlier if in serious ill health) but you would then be able to take an immediate pension only if the Company agrees. In this case, your pension would be less than if calculated on the formula described below. More information on this can be supplied by the pensions officer.

If you remain in the Company's employment after your 65th birthday, then you can choose to take your pension at 65 or defer it until a later date, by which time it would have increased."

I have earlier set out the unamended version.

Mrs England recalls receiving the letter of 29 April 1994, but has no recollection of receiving any accompanying booklets, although she does not assert she did not receive them - she just cannot remember. She accepted it was probable that the booklets were enclosed; and I find that she did receive the booklets, or at any rate the amended booklet referred to above. She said that when she joined the executive scheme she was just 30, she had never thought what her retirement age would be and did not consider the information relating to it which was provided to her. She said that no-one told her that her retirement date would be at age 65 and that until recently she had never even wondered when it was. She agreed with the proposition put to her in cross-examination that it would be fair to say that the offer which was being made to her by the letter of 29 April 1994, as she would have understood it, was that she would join the executive scheme on the terms set out in booklet. Since, however, p.16 of the booklet correctly pointed out that it was the terms of the 1979 deed which governed the scheme, not the booklet in so far as it differed from the deed and rules, I consider it would be fairer - because it would be correct - to say that the offer being made to her was to join the scheme on the terms of the 1979 deed.

Mrs England did transfer to the executive scheme: she said she was informed that it offered a better pension scheme than the main scheme. She thereafter received annual benefit statements which showed her date of birth as 15 December 1963 and her NRD as 15 December 2028, i.e. at age 65.

The amendments to the executive scheme were effected by a deed executed on 5 October 1994. This document was not produced by Slaughters, but by Gibbs. It is not suggested that any specific instructions were given to Gibbs with regard to its drafting, although Lansing's case is that Gibbs had no authority to introduce any substantive changes to the effect of the 1979 deed which had not been approved by Lansing and the trustees. It was executed by Lansing and the four then trustees of the scheme, Messrs Allenby, Steele, Colson and Kulick. They all executed it with the like irresponsibility as they had executed the 1992 deed in relation to the main scheme - that is, they took not the slightest bother to endeavour to read it, understand it, have it explained to them or otherwise to be satisfied that it did what they wanted it to do and no more.

The material provisions of 1994 deed

The definitions include the following:

"`Normal Pension Age' means a Member's 65th birthday.

Provided that:-

(A) the Normal Pension Age of a Member who has been so notified in writing shall be his 62nd birthday;

(B) prior to 27th August 1990 the Normal Pension Age of a female Member (had there been any) would have been her 60th birthday, but there were no female Members prior to that date."

Rule 5C, headed "Early Retirement (Not Incapacity)', includes the following provisions relating to the early retirement of actives:

"If a Member retires from Service (not for Incapacity) before Normal Pension Age then the following provisions will apply.

(1) If the Member leaves Service before 27th August 1990 and within the ten years preceding his Normal Pension Age, he may, with the consent of the Trustees and the Principal Employer, choose to receive an immediate pension, calculated as described in (4) below but reduced for early payment on a basis certified as reasonable by an Actuary.

(2) If the Member leaves Service on or after 27th August 1990, and on or after his 60th birthday (or on or after his 57th birthday if his Normal Pension Age is his 62nd birthday), he may, without the consent of the Trustees or the Principal Employer being required, choose to receive an immediate pension calculated as described in (4) below and with no reduction for early payment.

(3) If the Member leaves Service on or after 27th August 1990, and on or after his 50th birthday, but before his 60th birthday (or before his 57th birthday if his Normal Pension Age is his 62nd birthday), he may, with the consent of the Trustees and the Principal Employer, choose to receive an immediate pension, calculated as described in (4) below but reduced for early payment in respect of the period preceding his birthday which occurs five years before his Normal Pension Age on a basis certified as reasonable by an Actuary."

Rule 10 deals with the position of the deferreds, the drafting being in material respects by reference to rule 5C. Rule 10A, headed "Early Pension", reads:

"Subject to the conditions set out in Rules 5C and 5D, a Member entitled to a preserved pension may choose a pension starting earlier than Normal Pension Age (but unless he is suffering from Incapacity not earlier than age 55 if he left Pensionable Service before 27th August 1990 or age 50 if he left on or after that date). The Trustees must be reasonably satisfied that the early pension is at least equal in value (i.e. taking account of the longer period of payment) to the preserved pension (including future increases) that would otherwise have been provided under Rule 9B. However, a Member who has opted out of the Scheme under Rule 9A cannot choose an early pension under this Rule before actually leaving Service."

The problem which has arisen

This is of the same nature as with the main scheme. Again, by an amending deed dated 27 August 1997 rule 5C has been amended as for the future. The action is concerned with past service entitlement. Success in the action will result in a reduction in the scheme's past service deficit.

The issues

As regards rule 5C, Lansing claims that it failed to give effect to its and the trustees' intentions. Although there were no women actives in the scheme as at 22 August 1990, Lansing's case is that the extent of what was intended was to create a common NRD at 65, but with the opportunity for men or women who retired between 60 and 65 to take an unreduced pension on retirement if consent to such retirement was given by Lansing and the trustees. Lansing seeks the rectification of rule 5C(2) by the deletion of the words "without the consent of the Trustees or the Principal Employer being required" and the substitution therefor of the words "with the consent of the Trustees and the Principal Employer".

If that relief is granted, then Lansing claims a declaration to the effect that, upon the true construction of rule 10A (construed by reference to the rectified rule 5C), deferreds can only take a pension earlier than NRD with the consent of the trustees and Lansing and every such pension is actuarially reduced to reflect its early payment. If that declaration is not granted either at all or in its entirety, then Lansing seeks rectification of rule 10A so as to provide that the consent of the trustees is requisite to the early taking of a preserved pension and that such pension will be reduced for early payment on a basis certified as reasonable by an actuary. Additional questions also arise in relation to Mrs England.

(a) Rectification

I did not understand it to be suggested in argument that there was any material difference between this case and that relating to the main scheme so far as concerns the identification of the intentions of Lansing and the trustees. There are certain factual differences, in that there were and are no employee trustees on the executive scheme and Slaughters were not retained to draft the 1994 deed. Those factors do not, however, in my view require a different approach to the rectification claim in this case. The reasons which led me to reject the rectification claim in the main scheme action are equally applicable to this action. I am not satisfied that Lansing and the trustees intended to include a consent requirement with regard to the retirement between 60 and 65 of actives.

If I am wrong on that, I find that there is anyway no sufficient outward evidence of Lansing and the trustees' accord to a different effect. I add that even though the four trustees can in practice be regarded as representing Lansing, they also had a separate role as trustees; and I do not consider that this coincidental de facto identity of interest can have operated to dispense with the need for an outward expression of the alleged accord: the meeting of 22 August 1990 was a meeting of trustees, whose purpose (inter alia) was to consider and resolve upon Lansing's proposal; and I consider that in this case too there must be some objective evidence of what that was. I again find that there is no such evidence. For the like reasons as apply to the main scheme, I also find that the rectification claim in respect of the deferreds fails.

I dismiss the claims for rectification in paragraphs (1), (3) and (4) of the prayer. Paragraph (2) seeks a declaration which, following the dismissal of paragraph (1), des not arise.

(b) The position of Mrs England

When Mrs England joined the executive scheme on 1 May 1994, the scheme was governed by the terms of the 1979 deed, which gave her an NRD at age 60. Lansing and the trustees had of course earlier passed their resolutions on 22 August 1990 proposing a common NRD at age 65 for both men and women, and had announced them on 27 August 1990; but, for reasons earlier given, neither the resolutions nor their announcement effected any change in the rules - that would only be achieved if and when an amending deed was executed, which did not happen until 5 October 1994.

The admission in the meantime of the sole woman to the body of actives has added an extra dimension to the issues arising in connection with the executive scheme. The point is that if from 1 May 1994 Mrs England was accruing benefits on the basis of an NRD at age 60, then the men have solid Barber arguments for saying that their benefits in the scheme between 1 May and 5 October 1994 were also accruing on the basis of an NRD at age 60.

Lansing disputes that the men's argument can succeed, and relies on two arguments to defeat it. First, it submits that the 1994 deed was effective to back-date the change in NRD to 65 so as to apply to all service from 27 August 1990. If this is right it would have been the effect of treating Mrs England as if she had been accruing benefits as from 1 May 1994 on the basis of an NRD of age 65 and Barber would not be in point. Secondly, if this is wrong, Lansing contends that anyway Mrs England joined the executive scheme on the basis of an NRD at 65 and is estopped by convention from asserting that she joined on the basis of an NRD at 60. If Lansing fails on both arguments, it accepts that the position of the men on early retirement must be brought into line with that enjoyed by Mrs England between 1 May and 5 October 1994.

As to the first point, and assuming that Mrs England joined the executive scheme on the basis of an NRD of age 60, I take the view that, by 5 October 1994, she had been accruing benefits under the scheme by reference to such an NRD. If the deed is to be regarded as having had the retrospective effect for which Lansing contends, then it must have reduced those benefits. Mrs England did not consent to such reduction, whether in writing or at all. In my view, it follows that the effect of proviso (A) to clause 20 was to strike down any purported attempt by the deed so reduce Mrs England's benefits. I find against Lansing on the first point and refuse the declaration sought in paragraph (6) of the prayer.

As to the second point, Lansing says that Mrs England was, by 5 October 1994, estopped by convention from asserting that she had joined the executive scheme on the basis of an NRD of age 60. Lansing relies, first, on the announcement of 27 August 1990, which Mrs England said, as I accept, she did not see. Mrs England's evidence displayed in general a lack of interest and

comprehension of her pension rights which I regard, in no way critically, as by no means unusual amongst people of her age at the material time. I add that I have little doubt that she is a most able woman, and could, if she had to, absorb the essence of Lansing's pension schemes in a minimum of time. But the inference from her evidence was that her mind at the time had more pressing and interesting matters to dwell on, which I find unsurprising.

Lansing relies next on the fact that Mrs England was sent a booklet on 29 April 1994 telling her that her NRD was 65. Again, I find on the facts that that was not something which struck a chord of any significance with her - she did not absorb the information. But anyway, in telling her that her NRD was 65, the booklet was simply wrong. It was still 60, since the 1979 deed remained unamended; and even Lansing and the trustees might perhaps have been expected to realise that. If they did not, how did they think the amendments had been effected? And if they thought they had been effected, what did they think was the point of the amending deed? Moreover, the booklet did not just tell her that her NRD was 65. It told her that her rights were governed by the 1979 deed, which prevailed over the booklet, and (in effect) that she could not rely on the booklet.

Thirdly, Lansing relies on the production to Mrs England on 6 May 1994 of a benefit statement indicating that her NRD was age 65. In my view, that amounted to saying little more than what the booklet said. She at most received only one of these between May and October 1994.

Mr Etherton placed reliance on Icarus (Hertford) Ltd v. Driscoll [1990] PLR 2, a pensions case in which Aldous J found an estoppel by convention established. I do not regard that case, in which the circumstances were rather different, as providing any direct guidance to the resolution of this case. The law as to estoppel by convention received consideration by the Court of Appeal in Amalgamated Investment & Property Co. Ltd. v. Texas Commerce International Bank Ltd. [1982] Q.B.84 and was re-visited by the Court of Appeal in Hiscox v. Outhwaite [1992] 1 A.C. 562. At p.574 Lord Donaldson of Lymington M.R. cited from Lord Denning M.R.'s judgment in the earlier case and then said at p.575:

"In the same case Eveleigh L.J., at p.126, and Brandon L.J., at pp.130-131, approved the following passage from Spencer Bower and Turner, Estoppel by Representation, 3rd ed. (1977), at p.157:

`This form of estoppel [estoppel by convention] is founded, not on a representation of fact made by a representor and believed by a representee, but on an agreed statement of facts the truth of which has been assumed, by the convention of the parties, as the basis of a transaction into which they are about to enter. When the parties have acted in their transaction upon the agreed assumption that a given state of facts is to be accepted between them as true, then as regards that transaction each will be estopped against the other from questioning the truth from the statement of facts so assumed.'

In Norwegian Cruises A/S v. Paul Mundy Ltd. [1988] 2 Lloyd's Rep. 343, Bingham L.J., with the agreement of Taylor L.J., approved a passage in a judgment of Peter Gibson J. in Hamel-Smith v. Pycroft Jetsave Ltd. (unreported), 5th February 1987, from which he quoted at length: see pp.351-352. In so doing he was approving criticisms of this passage in Spencer Bower and Turner, Estoppel by Representation, 3rd ed., p.157. For present purposes all that need be said is that his judgment is authority for the proposition that estoppel by convention is not confined to an agreed assumption as to fact, but may be as to law (see p.351), that the court will give effect to the agreed assumption only if it would be unconscionable not to do so and that, once a common assumption is revealed to be erroneous, the estoppel will not apply to future dealings."

In my view there is no estoppel by convention in this case. First, I find that the transmission of the amended booklet to Mrs England had no impact on her as regards her NRD. I find that at no time until after October 1994 did she focus on what her NRD was. I find that the receipt of the booklet did not result in any understanding or belief by her that her NRD was at age 65 rather than at 60 or at any other age. Secondly, as follows, insofar as the booklet suggested that her NRD was age 65, I find that, during the period May to October 1994, she did not consciously act in the belief, or on the assumption, that her NRD was at age 65. Thirdly, if Lansing and/or the trustees believed as at May 1994 that Mrs England's NRD had been changed to 65, I do not understand how they could have done so. Fourthly, the booklet did not make an unequivocal representation that 65 was Mrs England's NRD. True, it said that this was her NRD. But it also said, correctly, that if in any respects

it differed from the deed and rules, then it was the latter which prevailed; and they told Mrs England that her NRD was at age 60. Fifthly, in the circumstances I do not understand why it would be unconscionable to prevent Mrs England from asserting that when she joined the scheme her NRD was 60, since that was the legal position. Sixthly, I do not understand why it would be unconscionable to hold Lansing to the legal position as at 1 May 1994 - if Lansing was in any way misled by the booklet, then it should not have been. Its booklet made clear that the 1979 deed governed the day, and it should have known that. If an estoppel arises in this case, then it appears to me that it would amount to allowing the booklet rather than the deed to govern the scheme, whereas the booklet itself proclaims that it does not. I reject Lansing's estoppel claim and refuse the relief claimed in paragraph (7) of the prayer. It follows that the declaration sought in paragraph (5) is also refused.

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