REPUBLIC OF TRINIDAD AND TOBAGO IN THE HIGH COURT OF JUSTICE Claim No. CV 2013-04899 IN THE MATTER OF THE TRUSTS OF THE PENSION FUND PLAN OF THE FORMER EMPLOYEES OF GUARDIAN LIFE OF THE CARIBBEAN LIMITED (GLOC) ESTABLISHED BY TRUST DEED AND RULES DATED MAY 5TH 1987 AND AMENDED BY SUPPLEMENTAL TRUST DEED AND RULES DATED OCTOBER 9TH 2000 Between CLEVELAND GEORGE

Claimant

And BRENT FORD SELBY WILSON FÉ LOPEZ COLLYMORE (As Trustees of a Pension Fund Plan made Supplemental to a Trust Deed dated May 5, 1987)

First Defendants

And GUARDIAN LIFE OF THE CARIBBEAN LIMITED

Second Defendant

BEFORE THE HONOURABLE MADAM JUSTICE ELEANOR J. DONALDSON-HONEYWELL

Appearances: Claimant appearing in person and unrepresented. Mr. Russel Martineau, SC and Mr. Ravindra Nanga instructed by Ms. Marcelle Ferdinand for the First Defendant. Mr. Jonathan Walker instructed by Ms. C. Gopie for the Second Defendant.

Delivered on: January 7, 2016 JUDGMENT Page 1 of 23

Introduction: 1. Until May 18, 2001 the Claimant, Mr. Cleveland George, was an Insurance Salesman employed with the Second Defendant, Guardian Life of the Caribbean Ltd [“GLOC” or “the Company”]. He had worked with GLOC for almost seven years. During that time he was a member of the Pension Plan Fund established by his employer GLOC [“the Pension Plan” or “the Plan”]. As a former employee the Claimant remained a member of the Pension Plan even after his employment ended. The Pension Plan was a deferred benefit, non-contributory plan established for the benefit of employees to which only the Second Defendant, as employer, made contributions. The Pension Plan was governed by Rules and a Trust Deed and the First Defendants were the Trustees of the Pension Plan. 2. The Pension Plan was wound-up on December 31, 2004 after the Second Defendant gave six months’ notice and invited members to transfer to a new pension plan. By letter dated April 15, 2004 and a booklet entitled “Pension Fund Plan, Questions and Answers” (“Q&A”), the Second Defendant had invited members of the Plan to transfer to the new Pension Plan. The vast majority of the members of the Plan elected to transfer to the new plan. 3. At the time of its termination the pension plan fund was in surplus and its Trustees, the First Defendants paid the surplus of Three Hundred and Thirty Million Dollars ($330,000,000.00) [“the surplus”] to the Second Defendant. The Claimant, as one of the few pension plan members who declined to accept the transfer to the new plan, contends that since he remained a member of the plan and a beneficiary of the trusts established under its Trust Deed and Rules he was entitled to the surplus. Special reliance is placed on Rules 23 and 24 of the Plan. It was the Claimant’s contention based on Rule 23 that on termination of the Plan only Rule 24 governed how the fund should be utilised. At paragraph 5 of his Amended Statement of Case the Claimant contends these rules should be interpreted as providing that on dissolution of the Pension Plan “all the assets of the Fund were to be applied in the purchase of additional benefits for the members of the Plan, so that the entire beneficial interest in the trust was to be exhausted.” 4. Accordingly, he seeks to have the Court declare that the First Defendants acted in breach of trust by paying the surplus to the Second Defendant. He further claims an order that

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the Second Defendant account for and pay the surplus to him and other remaining Pension Plan members if any. 5. In Defence to the Claim, the Claimant’s interpretation of the Rules of the Plan as the basis for his entitlement to the surplus is challenged as being contrary to settled law. The Defendants, by way of this challenge, underscored the need to read and construe the Trust Deed and the Rules of the Plan as one. In so doing, account had to be taken of the fact that the Trustees obligation to make payments to members from the fund was limited by the provisions of Rule 7. Based on that Rule there was a ceiling beyond which payments could not be made. 6. Accordingly, they contend that on the highest authority of the Privy Council’s decision by Lord Millett in No 27 of 1998 Air Jamaica Limited et al v Joy Charlton et al, the surplus of the Pension Plan Fund that remained after all obligations to the members had been fulfilled by the First Defendants as Trustees, was correctly paid to the Second Defendant. This payment was made by virtue of a resulting trust since the Second Defendant was the sole contributor to the Pension Plan fund. 7. The Defendants further contention is that the Claimant failed to present any evidence that he had given early notice of his objection to the termination of the Pension Plan and his intention to make a claim for the surplus. The Defendants allege that in the absence of such evidence the Claimant is guilty of inordinate and inexcusable delay. The Second Defendant contends that having heard of no objection to GLOC’s receipt of the surplus from the Pension Plan there has been extensive re-investment of assets, fluctuation of investment values and comingling of funds over the years. 8. Accordingly, having been led to believe that there would be no objection to the termination of the Plan, the Second Defendant was prejudiced by the Claimant’s delayed claim. Any payment of the surplus to the Claimant after so many years would require difficult unravelling and/or reversal of GLOC’s investment decisions over the years. The Second Defendant submits the Claimant is therefore barred by laches from maintaining his claim which was filed some nine years after the Claimant was informed about the planned termination of the Pension Plan. 9. The Claimant did not file a Reply so as to address the issue of laches raised in the Second Defendant’s Defence. Page 3 of 23

Issues: 10. The issues in the present case are as follows: a. Whether the Claimant should be barred from being granted the relief sought in this action due to unconscionable delay; and b. Whether the surplus of the pension plan should be given to the remaining members, including the Claimant, or whether on the basis of a resulting trust the surplus was correctly paid by the First Defendants to the Second Defendant. Provisions of the Rules and Trust Deed: 11. The May 5th, 1987 Trust Deed governing the Pension Plan sets out the purpose of the Second Defendant GLOC in establishing the Pension Plan. The purpose is “securing pensions and other benefits for such of their present and future employees as under the rules hereto annexed and marked “A” shall be eligible and shall elect to participate in the same such persons being hereinafter referred to as the members.” 12. The Trust Deed further provides that: “1. The object of the Plan is to provide benefits for the Members by way of pension on retirement from service with the Company and ancillary benefits in accordance with the Rules. 2. The plan is established under irrevocable trusts to end in accordance with the Trust Deed and the Rules” 13. Clause 4 of the Trust Deed contemplates the possibility that contributions to the Pension Plan could be made by both GLOC and the members and provides that GLOC will pay to the Trustees in each year a sum of money equal to the total of the aggregate contributions of all Members and the aggregate contributions of GLOC as provided for by the Rules. 14. Although the prospect that Members could make contributions to the Pension Plan is provided for in the Trust, such an eventuality is subject to being provided for in the Rules. It is clear under Rule 6 of the Rules that only GLOC is required to make contributions. Rule 6 states that “The Company shall contribute all monies necessary to secure the benefits of the Members in the Plan.”

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15. Rule 7 of the Pension Plan delimits as follows the amount of pension each member is entitled to receive at normal retirement date. “7.1 The Plan provides for each member who has a minimum of 5 years’ service an annual pension on retirement equal to 1/60th of his Final Pensionable Salary multiplied by the number of his completed years of service.” Pensionable Salary for a person in the Claimant’s former positions as a Salesman is defined in the Rules at 1.4(b) as “two-thirds of the average remuneration……such average to be taken over the five consecutive years which will provide the highest aggregate.” 16. Further limitations on pension entitlements that can be received are provided at Rule 7 as follows: “7.3 No Member shall be entitled to receive a pension which exceeds two-thirds of the highest Pensionable Salary except where such excess is approved by the Board of Inland Revenue. 7.4 The Company at its sole discretion may increase the annual pension of any or all Members (including Members in Receipt of a Pension) at any time provided that such increased pension does not exceed the maximum permitted by Rule 7.3.” 17. Termination of the Plan and dissolution of the Fund are governed by Rules 23 and 24 which provide: “23.1 Whilst the Company has every hope of maintaining its contributions to the Plan the right is nevertheless reserved to the Company: (a) To terminate the Plan by giving 6 months’ notice in writing to the Trustees and in such event the Fund shall be dissolved and the provisions of Rule 24 shall apply.” [The fund is defined at Rule 1.5 as “the fund which comprises all contributions, all dividends and interest arising from investments of such contributions …….from which the pensions and other benefits of the Plan are to be provided.”] “24.1

Upon the Plan being wound up and dissolved in pursuance of the

provisions contained in Rule 23 hereof, the fund shall be realized and the net Page 5 of 23

proceeds of such realization shall….be applied so far as the monies available permit in the manner following, that is to say: (a) First, in the purchase from an Insurance Company or Companies carrying on insurance business in Trinidad and Tobago of non-commutable and nonassignable annuities for the remainder of their lives for those persons who are then in receipt of pensions out of the Fund such annuities to be of amounts equal to the amounts of the pension allowances which such persons are then receiving and payable under the same conditions. (b) Second, in the purchase from the said Insurance Company or Companies of immediate deferred annuities as the Trustees acting on the advice of the actuary shall decide for persons entitled in anticipation to pensions out of the Fund the amount of such annuities having regard to the respective interests of such persons at the date of dissolution. …… (c) Third, any balance of the said proceeds shall be applied in the purchase by the Trustees of additional annuities for the benefit of incumbent and contingent pensioners in such amounts as the Trustees acting on the advice of the Actuary shall decide.” 18. The Transfer of a Member’s entitlement in the Plan to money or policies of insurance is provided for by Clause 13 of the Trust Deed. When a member becomes a member of another plan approved by the Board of Inland Revenue [“BIR”] the Trustees are authorised to transfer their entitlements to the new plan provided the Member consents in writing to the transfer and the transfer is based on actuarial advice. 19. There is guidance on how the Rules must be construed at Rule 29 of the Pension Plan which states that “The Plan is constituted by the Trust Deed and the Rules.

The Rules

are to be read and construed as one with the provisions of the Trust Deed.” 20. The Trust Deed provides in its final clause 22 that the Company is permitted to make amendments or additions to the Trust Deed: “provided that no such amendment or addition shall: (a)…………………………………………….. (b)………………………………………………….. Page 6 of 23

(c) result in the payment of any part of the Fund or any benefits of the Plan to the Company” Evidence and Submissions: 21. The Evidence before the Court comprised the filed witness statements of the Claimant, one of the Trustees, Ms Fé Lopez Collymore for the First Defendant and former President and Director of GLOC, Mr. Douglas Camacho for the Second Defendant. All witnesses were cross-examined. Much of the evidence in the Claimant’s witness statement had been struck out prior to the Trial. As a self-represented litigant he sought to rely in full on his amended Statement of Case and the documents annexed thereto. There was no objection as in any event most of those documents had been admitted into evidence through the testimony of the Defendant’s witnesses. Additionally, there was little in dispute as it relates to the factual background to the Claim. 22. The Evidence of the First Defendant was that the Trustees had obtained legal advice after receiving the proposal from the Second Defendant GLOC to terminate the Plan and create a new Plan so as to address the issue of a growing surplus in the fund. It was based on the legal advice of Senior Counsel that the Trustees decided that the Pension Plan would be wound-up in accordance with Rules 23 and 24 of the Pension Plan Rules. 23. Following the legal advice obtained from Senior Counsel, they obtained the advice of actuaries in order to deal with the funds in the Pension Plan in accordance with their obligations under the Trust Deed and the Pension Plan Rules. Thereafter, given the extent of the surplus, the Trustees wrote to the BIR enquiring whether they would be willing to approve the increase in pension benefits in excess of the two thirds limit prescribed by Rule 7 of the Pension Plan Rules. The BIR responded allowing only for a maximum enhancement of 3.5% per year compounded. 24. The First Defendant’s evidence was that after termination the Claimant was entitled to an annual pension on retirement equal to 1/60th of his final pensionable salary multiplied by his completed years of service. In addition in accordance with Rules 24.1(a), (b) and (c), the BIRs approved enhancement and the actuarial advice received, the Trustees purchased enhanced annuities for members of the Plan who did not transfer to the new Plan. The Claimant was one of those members who received such enhanced benefits and Page 7 of 23

the amount provided, which was Forty-Six Thousand and Ninety-One Dollars and Thirteen Cents ($46,091.13) per year, reached the maximum allowed by the BIR. 25. Thereafter, upon purchasing enhanced benefits to the extent allowed by the Rules and the BIR a surplus of funds in the sum of Three Million, Five Hundred and Sixty-Three Thousand, Seven Hundred and Ten Dollars and Fifty Cents ($300,563,710.50) remained. The Trustees did not purchase additional annuities exceeding the value calculated by the Actuary using the BIR approved formula. Instead based on the legal advice received, they paid over the surplus to the Second Defendant GLOC. 26. The evidence of Mr. Camacho for the Second Defendant corroborated all that was said by the First Defendant. He also underscored that prior to terminating the Plan and inviting members to transfer to the new Plan GLOC had disclosed to Members in the April 15, 2004 letter that any surplus that remained in the Plan after the transfer to the new plan and maximum allowable purchase of annuities would be paid over to the company. Speaking for GLOC, he was able further to provide evidence on the number of members that elected not to transfer to the new plan. According to his information there were only three such persons, including the Claimant. The other two persons did not file lawsuits to claim the surplus. 27. With regard to the Claimant’s claim, Mr. Camacho’s evidence was that it came nine years after the termination of the Plan. He said the termination was not preceded by any objection by the Claimant and the first he heard that the Claimant planned to seek payment to himself of the surplus was in 2009 when his then Attorney sent a pre-action protocol letter. He said that he searched the records of GLOC and had not found any prior objection by the Claimant to the stated intention of GLOC to receive the surplus of the Pension Plan. 28. Mr. Camacho further testified that following on the transfer of a mix of assets including equities, debt investments, properties and cash from the Pension Plan surplus to GLOC they were co-mingled with GLOC’s other assets and no separate accounting was maintained in respect of them. There was also fluctuation over the years in the market value of these assets and some of the assets had been utilised for GLOC projects. 29. Oral submissions on law were made by Counsel for the Defendants at the end of the hearing. The Claimant made his closing submission, in writing, in compliance with the Page 8 of 23

court’s directions and thereafter a written submission in reply was filed by the First Defendant. 30. Counsel for the Second Defendant commenced his closing submissions by referring to the most recent Privy Council decision of Vivian Scully v Gerald Coley and Others [2009] UK PC 29 at para 30. In that case the Court was deciding on whether the respondents were entitled to an allocation from a Pension Fund Surplus by virtue of one of the Rules governing the Pension Fund. Lord Collins explained: “The question ……………is solely a question of construction of that Rule in the light of the Rules as a whole and the Trust Deed. It has been said more than once that there are no special rules for the construction of pension scheme documents. The provisions of a pension scheme should be construed to give reasonable and practical effect to the scheme, bearing in mind the practical consequences and the fact that it has to be operated against a changing commercial background. See, e.g. Re Courage Group’s Pension Schemes [1987] 1 WLR 495, 505, per Millett J; Mettoy Pension Trustees Ltd v Evans [1990] 1 WLR 1587, 1610, per Warner J; National Grid Co plc v Mayes [2001] UKHL 20, [2001] 1 WLR 864, at [53], per Lord Hoffmann; Stevens v Bell [2002] EWCA Civ 672, [2002] PLR 247, at [26]-[32], per Arden LJ.” 31. Applying this reasoning Counsel for the Second Defendants submitted that in the instant case as well, the Court is required to read the Trust Deed and Rules as one so as to give reasonable and practical effect to the scheme of the Pension Plan. He contended that the Claimant’s construction of the Rules to mean that on termination only Rule 24 should be applied could not be upheld by the Court because it would be a construction that failed to take the Rules as a whole into account. This also would not give practical effect to the intended purpose of the Pension Plan. 32. In particular he noted that if the Rules were construed as the Claimant contended so that only Rule 24 remained in effect after termination of the plan there would be no provisions remaining in force to govern the obligations of the Trustees. The proper construction would therefore be that Rule 24 must be applied in the context of all the

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Rules including Rule 7.3 which put a cap on the benefits to which all members could be entitled even after termination of the Plan. 33. Counsel for the Second Defendant’s further contention was that on applying Rule 24 and Rule 7.3 the Defendants had acted reasonably, based on advice and in compliance with the BIR’s approved benefit limits when after communicating with the members they terminated the Plan and paid all benefits that were due under Rule 7.3. Thereafter, a decision had to be made as to what should be done with the remaining surplus in the Fund. Counsel for the Second Defendant relied on the Privy Council decision in Air Jamaica and Others v Charlton and others as authority on this issue. 34. The similarities in the factual background of the Air Jamaica Case were summarised by Counsel. He observed that Air Jamaica was a state entity with a pension plan prescribed by statute. The company had seen some hard times and was being privatized. All staff members except the Trustees were made redundant. Following that there was a decision to dissolve the pension plan. Despite the fortunes of the company the plan was in surplus and an application was made by the members claiming entitlement to the surplus. The Attorney General joined in the matter to claim that the surplus should go to the State as bona vacantia. The company, Air Jamaica, was saying it should receive the surplus for various reasons. 35. Though there were significant similarities in the factual background and the claims made there were facts that were slightly different. Importantly, in the Air Jamaica case unlike in the instant matter, there was clear evidence of contributions being made both by the company and by the individual members. Also the language of the Rules of the Air Jamaica Plan was more stringent or narrow in terms of how the funds could be applied. There was for example, an express provision saying that the Pension Plan Fund must have been used for the exclusive benefit of the members and restricting the company from benefiting in it. Counsel opined that the provisions in the instant case are more roundabout in that there is only the provision at Clause 22 of the Trust Deed which says the Rules cannot be amended to allow the company to benefit. 36. The provision in the Air Jamaica Pension Plan governing what was to happen in the event of termination of the Plan were however very similar to Rule 24 which governs the GLOC Pension Plan in the instant case. In construing the said Rule in the Air Page 10 of 23

Jamaica case, the Privy Council addressed the appropriate destination of the surplus funds by saying at paragraph 43 that: “Prima facie the surplus is held on a resulting trust for those who provided it. This sometimes creates a problem of some perplexity. In the present case, however, it does not. Contributions were payable by the Members with matching contributions by the Company. In the absence of any evidence that this is not what happened in practice, the surplus must be treated as provided as to one half by the Company and as to one half by the Members.” [Emphasis added] 37. Counsel in highlighting the binding statement of the law in the AirJamaica case to be applied by the Court underscored that in the instant case 100 percent of the contributions to the fund that ended up in surplus after all obligations to the members were fulfilled, were made by GLOC. Accordingly, on termination of the plan, the surplus was held on a resulting trust for GLOC, the sole contributor to the fund. 38. Another point highlighted by Counsel for the Second Defendant as having been settled in the Air Jamaica case was whether a clause providing that the Company was not entitled to benefit precluded any claim to the surplus by the company based on a resulting trust after termination of the Plan. On this point the Privy Council explained at paragraph 45 that: “Like a constructive trust, a resulting trust arises by operation of law, though unlike a constructive trust it gives effect to intention. But it arises whether or not the transferor intended to retain a beneficial interest - he almost always does not since it responds to the absence of any intention on his part to pass a beneficial interest to the recipient. It may arise even where the transferor positively wished to part with the beneficial interest, as in Vandervell v. Inland Revenue Commissioners [1967] 2 A.C. 291. In that case the retention of a beneficial interest by the transferor destroyed the effectiveness of a tax avoidance scheme which the transferor was seeking to implement. The House of Lords affirmed the principle that a resulting trust is not defeated by evidence that the transferor intended to part with the beneficial interest if he has not in fact succeeded in doing so. As Plowman, J. had said in the same case at first instance ([1966] Ch. 261 at p. 275):Page 11 of 23

"As I see it, a man does not cease to own property simply by saying ‘I don’t want it.’ If he tries to give it away the question must always be, has he succeeded in doing so or not?’ 46. Lord Upjohn expressly approved this at p. 314. 47. Consequently their Lordships think that clauses of this kind in a pension scheme should generally be construed as forbidding the repayment of contributions under the terms of the scheme, and not as a pre-emptive but misguided attempt to rebut a resulting trust which would arise dehors the scheme. The purpose of such clauses is to preclude any amendment that would allow repayment to the Company. Their Lordships thus construe clause 4 of the Trust Deed as invalidating the 1994 amendments, but not as preventing the Company from retaining a beneficial interest by way of a resulting trust in so much of the surplus as is attributable to its contributions.” 39. Applying the learning from the Air Jamaica case Counsel for the Second Defendant submitted that the Court should find that since the Defendants had fulfilled the obligation to pay the maximum benefits allowable to members, the purpose of the Pension Plan was completed and the remaining surplus reverted on a resulting trust to the sole contributor, GLOC. 40. Finally, Counsel for the Second Defendant reiterated the contention in the pleadings that the Claimant had not objected to the termination of the Plan and the receipt by GLOC of the surplus, in a timely manner. The delay was prejudicial to the Second Defendant and accordingly the Claim should be dismissed based on laches. 41. These submissions were adopted by Counsel for the First Defendants who also highlighted additional points for the Court’s attention. He pointed out that at paragraph 5 of the Statement of Case the Claimant’s contention with regard to what Rule 24 of the Plan provides is incorrect. He underscored that it is not correct as contended by the Claimant that “the terms of the trust governing the plan included a provision by which upon the dissolution of the plan all the assets in the funds were to be applied in the purchase of additional benefits”. There was in fact no requirement that all assets be utilised in this way. Page 12 of 23

42. As such the question that had to be answered at the time of termination was what to do with the surplus. The Court was asked by Counsel to find in answer to this question that: “It makes good sense to say you don’t give it to the people who didn’t contribute. Even if we didn’t know about the law of resulting trust it will be quite odd from a common sense point of view (and these days we are hearing a lot about common sense), it will be quite odd from a common sense point of view to be saying well there is surplus here, these members never contributed, the company contributed but let us give the surplus to the members who never contributed. It just doesn’t make sense but quite apart from that fortunately the law is clear. Even apart from Air Jamaica we know going back to Barclays Bank Ltd v Quisclose Investment Ltd and all those things. That is the classic resulting trust situation. I give you money, I pay money for a particular purpose, the purpose has either not been fulfilled or hasn’t materialised or if it has been you know you are completely satisfied and so on. Then the balance results to me, that is what is a resulting trust is. So it results to the people who paid the money in and this is what Lord Millet, who is really an expert in this area of trust law came up with in the Chancery Division. This is what he is saying here. That is what Air Jamaica is all about and it’s on principle bang on with this case. To whom does the excess belong? It must be to the person who paid it there and that is really the beginning and end of this case.” 43. Counsel contended that the First Defendants having done precisely what the Rules required of them as Trustees by providing enhanced benefits to the maximum allowable amount on termination of the plan, acted correctly in following the approach in the Air Jamaica case. They did with the surplus what Lord Millet said should be done, that is they gave it “to the people who made the contributions.” 44. The Claimant though unrepresented by Counsel prepared a 40 page written submission exhaustively setting out the legislation, case law and analysis based upon which he supported his Claim. In his submission he addressed a number of issues a minority of which were not germane to the determination to be made herein. There was relevance in the parts of his submissions that presented counter-arguments to the Defendants

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contentions on laches, destination of the surplus, the operation of a resulting trust and whether GLOC was in fact the sole contributor to the Pension Plan Fund. 45. In addressing the laches defence raised by the Second Defendant the Claimant raised for the Court’s consideration a failure on the part of the Defendants to fully disclose all the relevant facts and documents. He explained that the Defendants were fully aware of his timely objections to the winding up of the Plan and receipt of the surplus by the Second Defendant. This information, including documents to which the Defendants were privy, was ventilated in pre-trial hearings in this matter, when there were several interlocutory applications.

According to the Claimant, the Court’s record included affidavit

information on: 

His voicing of concerns about the winding up of the Plan in dialogue with officers of the Second Defendant as early as 2004;



His complaints to the Central Bank and the resulting investigation in 2005 as well as;



His letter to the then Prime Minister in 2007 seeking intervention with regard to his concerns.

Accordingly, he argued, the Defendant’s claim of laches was a case of litigants coming to the Court of Equity with unclean hands. The Defendants he contended ought not to seek to present a picture to the Court that he was a litigant who had sat on his claim for nine years. 46. The Claimant asked the Court not to determine whether there had been any undue delay on his part by merely looking at the filing date of this Claim. He cited the Canadian Case of Canada Trust Company v. Lloyd et al.[1968]S.C.R. 300 as authority that: “The length of the delay in itself is not determinative in deciding whether a laches claim exists. One must examine 1. The nature of the acts done in the interval. 2. Degree of change which has occurred. 3. How far they have affected the parties. 4. Where lies the balance of justice/injustice.” Accordingly, he contended that all his actions from 2004 to the filing of his claim were such that he could not be found to have engaged in an inordinate delay.

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47. The Claimant also sought to shed doubt on the merit of the Second Defendants claim that the delay was prejudicial because of the changes that had occurred in the fund over the years. The Claimant argued that there could have been no prejudice because the surplus received by the Second Defendant were “not utilised for purposes other than the business of the Defendant whose business entails investments and the provision of insurance and other financial products.” He underscored that in the normal course of business the Second Defendant was required to account for such funds and the return of the surplus would therefore cause no prejudice. 48. In a written Reply to the Claimant, Counsel for the First Defendant submitted on the point of laches that the Claimant’s submission on the law was correct. Counsel noted however that the Canadian case cited by the Claimant was not subsequently followed by the British Columbia Supreme Court in Martin v Donaldson Securities Ltd. 61 D.L.R. (3d)518. There it was stated at paragraph 29 that “a mere lapse of time – in that case 43 years – does not determine whether equitable relief should or should not be granted. But in the case before me the defendants do not rely on the mere lapse of time: they rely upon the conduct of the plaintiff in failing, at the critical time or times, to make any demand and in continuing, after he had knowledge of the breach, to act in association with the defendants in circumstances which could only imply that he acquiesced in what had been done.” 49. It was the submission of Counsel for the First Defendant that although the Claimant’s submission on what should be taken into account was correct in law, on the facts of the instant case the Claimant’s submission ignored the effect of the delay on the Defendants. Furthermore, the Claimant having omitted to file a Reply and there being no information on his earlier objections admitted into evidence, Counsel for the First Defendants submitted there was no basis for the Court to decide against the Defendants on the laches point. 50. The Claimant, in his submission on destination of the surplus, placed reliance on the Judgment of Archie, J, as he then was, in Lopez and Ors. v TSTT & RBTT Trust H.C.A. No. 3572 of 1999. In so doing he focussed not on the ratio decidendi of the case but on obiter dicta. The issue to be determined in Lopez was whether the Plan had been terminated. Accordingly, the court recognised that if it found that the plan was ongoing Page 15 of 23

there was no need to determine the destination of a surplus. The ratio decidendi was the finding by Archie, J. that the Plan was not terminated. He therefore did not need to determine the destination of a surplus. 51. The Claimant highlighted, however, a statement on page 25 of the Judgment by Archie, J on what could have been the destination of the surplus if the Plan had been terminated. The statement was that if the Textel Plan had been terminated “in accordance with Rule 34.2, then [the Company] would be obliged to apply the surplus for the benefit of the remaining members pursuant to that Rule.” Rule 34.2 was the provision governing destination of surplus funds on termination of the Textel Plan. It provided that in those circumstances the Trustees were required to “provide for an equitable allocation of the funds solely to the members remaining in the Plan at the date of termination.” 52. The Claimant in relying on the Judgment in Lopez failed, however, to take into account the critical difference between his own position as a non-contributing member of the GLOC Plan and the status of the remaining members in the Textel Pension Plan who were contributors to the fund. 53. Similarly, the Claimant put forward the decision in Vivian Scully v Gerald Coley and Others [2009] UK PC 29 as providing precedent for a decision by the Court to pay the entire surplus to remaining members of the Plan after its termination.

The factual

background in that case was that in 1994 Gillette Caribbean Ltd was being restructured and only two persons remained on staff.

The departing staff members accepted

repayment of their pension plan contributions and the Pension Plan remained in operation until termination some six years later. 54. The Claimant in his submissions pointed out that in Scully just the two remaining members were permitted to receive the entire surplus. Again, however, the Claimant did not identify the distinguishing factor which allowed for such a result in Scully. The remaining members unlike the Claimant in this case were contributors to the Plan. As members they were required to “make contributions by payroll deductions of 5% of earnings, and may make additional optional contributions up to an aggregate of 10% of annual earnings”. 55. Though not adverting to the status of the remaining members in the cases of Lopez and Scully as contributing Pension Plan members, the Claimant was clearly aware of the Page 16 of 23

necessity for members to be contributors in order to benefit from the surplus. He sought to address this by re-introducing an argument put forward in Scully that formed part of the basis of the Jamaican Court of Appeal’s decision that not only the two remaining members but also those that had taken the cash return of their actual contributions in 1994 should share in the surplus. This argument, which was rejected by the Privy Council in overturning that part of the Court of Appeal’s decision in Scully, was as follows: “In deciding what was fair and equitable in all the circumstances the trustees would have had to act impartially and be expected to give weight to the claims of those whose contributions were, or would be, the effective source of the surplus; (3) in considering whether [..in relation to..] former employees who had exercised option (b) the employer’s contributions to the pension fund, as well as employee’s contributions, ought properly to be regarded as part of the employee’s total earnings or remuneration: Parry v Cleaver [1970] AC 1 and The Halcyon Skies [1977] QB 14; (4) accordingly an employee who had taken a cash return of his contribution nevertheless remained a Member of the Plan by virtue of the retention of the employer’s contribution: (5) “the then Members” in Rule 12(c) included past employees who had taken benefits under Rule 6(b); (6) accordingly, the funds should be distributed among all of the Members who had contributed to the Fund and “justice would be better served if all Members who served the company during its operation as a business were allowed to share in this surplus”. 56. In the case of Parry v Cleaver referred to by the Jamaican Court of Appeal and again relied on by the Claimant in the instant case, Lord Reid said at page 36 that “What the employer pays actually or notionally to a pensions fund is part of the total cost which he is prepared to pay in respect of the employee’s service. Only as a last resort should one try to differentiate between contributory and non-contributory pensions as a dividing line between that which should and that which should not be brought into account”. 57. Importantly and as submitted by Counsel for the First Defendants “what was being considered in Parry was whether a certain pension payment ought to be deducted when compensating the Claimant in that case in respect of a claim in negligence. Parry was Page 17 of 23

considering what sums ought to be properly deducted in awarding damages in a claim in negligence.” 58. The Privy Council’s over-ruling of the Court of Appeal in Scully on their decision based on Parry that the employees who had been repaid their contributions could still share in the surplus based on the Employer’s contributions, is found at paras 41 and 42 of the Judgment where Lord Collins said: “Members who have left Gillette’s employment and have withdrawn their contributions and credited interest are no longer Members. It is also consistent with the allocation in Rule 12(c)(i) to Members, not only of their contributions, but also to “Credited Interest thereon to the beginning of the month in which the Plan is terminated.” That could not apply to employees who had left years before termination of the Plan. The rights of existing Members under Rule 12(c)(i) are therefore parallel to those of employees who exercised option (b). 42.

No assistance in resolving this question can be obtained from Parry v

Cleaver [1970] AC 1 and The Halcyon Skies [1977] QB 14 relied on by K Harrison, JA. The fact that an employer’s failure to make contributions may be a breach of contract is irrelevant to the question on this appeal. In the present case Gillette’s duty to make contributions was very limited, and there is no suggestion of any breach. The issue is solely one of the interpretation of the Rules.” 59. As it relates to the operation of a resulting trust the Claimant made a submission based on the Australian/Commonwealth case of Simes & Martin PTY Ltd v. Dupree (1990) 55 SASR 278. He relied on the case to bolster his contention that the Second Defendant GLOC should not have received the surplus in this case. In that case Legoe, J expounded on circumstances in which the terms of a Pension Plan could expressly or by implication exclude the operation of a resulting trust. As pointed out by Counsel for the First Defendant, however, at paragraph 14 of his written submission in response, this was one of a number of case references in relation to which the basis of the Claimant’s reliance was unclear. Counsel contended further that “Suffice it to say that all these cases referred to are distinguishable from the instant case and there has been no attempt by the Claimant to apply these decisions to the facts of this case.” Page 18 of 23

Analysis of the Law: Delay: 60. It is the Defendants’ contention that the Claimant’s claim should be barred due to unconscionable delay in bringing the action. As stated in Halsbury’s Laws of England1: “A claimant in equity is bound to prosecute his claim without undue delay. This is in pursuance of the principle which has underlain the statutes of limitation 'equity aids the vigilant, not the indolent' or 'delay defeats equities'. A court of equity refuses its aid to stale demands, where the claimant has slept upon his right and acquiesced for a great length of time. He is then said to be barred by his unconscionable delay ('laches').” 61. Halsbury’s further establishes that the major considerations in determining whether there has been unconscionable delay are 1) Acquiescence on the part of the claimant; and 2) Change of position which have occurred on the defendant’s part. 62. As stated in the case of Lindsay Petroleum Co v Hurd2: “Two circumstances, always important in such cases, are, the length of the delay and the nature of the acts done during the interval, which might affect either party and cause a balance of justice or injustice in taking the one course or the other, so far as relates to the remedy.” 63. The Claimant states that he is not guilty of acquiescence as he made it clear to the Defendants that he would be disputing the distribution of the surplus. He claims that he made diligent inquiries, investigations and attempts to forward his case prior to initiating legal action. Further, he cites difficulties with his former Attorneys-at-law in the pursuit of the matter as reason for his delay. Many of the documents he references in support of these claims are unagreed and have not been properly put into evidence before the court. Finally, he contends that the Defendants have suffered no prejudice as a result of any delay. 64. The Defendants claim, however, that there is no evidence before the court which can support the Claimant’s propositions in his submissions that investigations had been made prior to initiation of the action. They also state that they have changed their position and

1 2

Equitable Jurisdiction (Vol. 47 (2014)) [254] (1874) LR 5 PC 221 at 239

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acted to their detriment by winding up the Plan and transferring the surplus while under the impression that the Claimant did not intend to make a claim. 65. The circumstances of any early investigation or inquiry made by the Claimant are not properly before the court for this substantive trial. It cannot, however, be maintained in good conscience that the Defendants were unaware of same. There is a record of these alleged pre-trial activities on the Court’s file herein and the said record has been disclosed to the Defendants during interlocutory proceedings. Further, it is apparent from the Court’s records that the Claimant, who was previously represented by two teams of Attorney’s led by Senior Counsel, had difficulties with his attorneys at the beginning of the matter. In the circumstances of the history of this matter and the Claimant’s current status as an unrepresented litigant, the delay is neither undue nor unconscionable. 66. Accordingly, although the Claimant delayed in bringing the action, given his reasons for delay, it was not sufficient to be a bar to his claim in the present proceedings.

The Surplus: 67. The Claimant’s case is that Rules 23 and 24 of the pension plan are sufficient to negate any presumption of a resulting trust in favour of the Defendant. He contends that the provisions by the words “any balance of the said proceeds shall be applied in the purchase by the Trustees of additional annuities for the benefit of incumbent and contingent pensioners in such amounts as the Trustees acting on the advice of the Actuary shall decide” indicate that any surplus is to be applied for the benefit of the members of the plan. 68. The Defendants have effectively rebutted this contention in their arguments herein above outlined. Primarily, they state that the law is clear that not even express provision negating intent to create a resulting trust can prevent the operation of the law to supply a resulting trust. They further argue that even if express provision can in fact prevent the occurrence of a resulting trust, the Trust Deed in this case, read as a whole, does not expressly do so. They make reference to both the object of the Plan as well as the provision under Rule 7.3 limiting the amount recoverable by any member to two thirds of his highest pensionable salary except where the excess is approved by the Board of Inland Revenue. Page 20 of 23

69. Prior to the Air Jamaica Case the position in law was that a resulting trust in favour of the provider of the funds was to be presumed where a Trust Deed is silent as to the destination of a surplus. However, this presumption could be rebutted by the inclusion of a provision to prevent a resulting trust from operating, but that 'it is only where it is made absolutely clear that in no circumstances is a resulting trust to arise that it will be excluded' – See Jones v Williams3. This position was supported by Re ABC Television Pension Scheme4 in which a statement in the trust deed that 'no monies which at any time have been contributed by the principal company shall in any circumstances be repayable' was held to be sufficient to prevent a resulting trust from occurring. 70. The position in law was altered, however, by the Air Jamaica decision. In that seminal decision, the Privy Council held that Foster J's judgment in Re ABC Television that a provision similar to that in the Air Jamaica Plan could negate the possibility of implying a resulting trust, was wrong in principle. According to Lord Millett, a resulting trust “arises by operation of law”, “whether or not the transferor intended to retain a beneficial interest”, and “may arise even where the transferor positively wished to part with the beneficial interest”. The Privy Council therefore determined that the provision of the Trust Deed which said that 'no moneys which at any time have been contributed by the Company under the terms hereof shall in any circumstances be repayable to the Company' precluded any amendment to permit a refund of surplus, but would not prevent the company from retaining a beneficial interest in the surplus by way of resulting trust. 71. The decision of the Privy Council in the Air Jamaica Case is highly persuasive to this Court. The decision in the instant case must therefore follow the precedent as expressed by Lord Millett that the resulting trust was not negated even by express provision within the Trust Deed. The provision cited by the Claimant as negating the implication of a resulting trust cannot therefore be so interpreted. A resulting trust must be implied in favour of the persons who have contributed to the fund. 72. The Claimant advances a further argument that the members of the fund, though expressed to be non-contributory members, were in fact to be considered contributors. He

3 4

[1989] PLR 17 (1973) unreported

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relies on certain statements made in the case of Parry v Cleaver5. However, the case is misapplied. In that case the issue was whether in making an order for compensation to an employee who had sustained personal injuries, his contributions to a pension fund should be taken into account. This does not provide assistance in the present case where the Claimant is seeking to attribute the contributions of the Defendant to that of the members of the plan in a non-contributory fund. The contribution of the Second Defendant to the fund could not properly be considered to be the contribution of the Claimant due to his employment. This is clear from the distinction made between members’ contributions and the companies’ contributions in pension fund cases like the Air Jamaica case. Therefore a resulting trust is created in favour of the Second Defendant as it was the sole contributor to the fund. 73. The case of Scully v Coley6, cited by the Appellant is equally inapplicable to the present circumstances. That case involved a pension scheme in which the members were the main contributors. The issue to be determined was whether the members who were former employees and had elected to receive a refund of their contributions were entitled to the benefit of further sums upon discontinuance of the Plan. Aside from the members being contributing members, the provisions of that Plan upon discontinuance are dissimilar to the present case.

They provide for allocations to the members to be

increased proportionately where there are sufficient funds to provide full allocations to all persons. It was considered by the Privy Council that there was no surplus in the Scully case in the sense discussed in Air Jamaica as the Trust Deed provided an exhaustive code for allocation of whatever funds were left in the plan after it was discontinued. There was therefore no question of a surplus to be distributed among all members who had contributed to the plan, nor was there any question of a surplus to be held on resulting trust. A further distinguishing factor is that the Claimants in Scully were contributors to the Fund. 74. The provision of the present case for the purchase on termination of the Plan of a capped amount of additional annuities is identical in all material respects to that in the Air

5 6

[1970] AC 1 [2009] UKPC 29

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Jamaica case. Therefore, the surplus of the Pension fund would devolve to the Second Defendant having been the sole contributor, by way of a resulting trust. Conclusion: 75. Although the Claimant’s claim is not barred due to unconscionable delay, the claim fails on the substantive issue. The law is clear that a provision such as the present one under Rule 24 is not sufficient to negate the presumption of a resulting trust. Therefore, any surplus must go to the Second Defendants as the sole contributors to the fund. 76. The submissions and authorities provided by Counsel for both defendants as well as the thorough and erudite arguments of the unrepresented Claimant were of great assistance in determining this matter. Disposition: 77. The Claimant’s claim against the First and Second Defendants is dismissed. 78. The Claimant is to pay the costs of the First and Second Defendants to be assessed by the Master.

………………………………………………….. Eleanor Joye Donaldson-Honeywell Judge Assisted by: Christie Borely Judicial Research Counsel

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