Burges Salmon helps Desmond and Sons Trustees to divert Judicial Review “injustice”

An application for Judicial Review against the Pensions Regulator by Desmond & Sons, formerly one of Northern Ireland’s largest employers, has been thrown out by the High Court in Northern Ireland.

14 June 2013

An application for Judicial Review against the Pensions Regulator has been thrown out by the High Court of Justice in Northern Ireland. Bringing the application, the director / shareholders of Desmond & Sons had sought to nullify a determination of the Determinations Panel (DP) of the Pensions Regulator to issue contribution notices against them.

Desmond & Sons was formerly one of Northern Ireland’s largest employers, operating as a clothing manufacturer to M&S. When this contract was discontinued in 2004, the company was put into Members’ Voluntary Liquidation (MVL) which resulted in the Desmond & Sons pension scheme[1] members receiving only 50% of their pension benefits. Garvin Trustees Ltd were appointed as independent trustees to the scheme in 2004, instructing a team of lawyers from Burges Salmon, led by pensions litigator Justin Briggs, assisted by Matthew Walker. 

In April 2010, the DP found that Desmond & Sons director / shareholders, Mr Desmond and Mr Gordon, had been party to an act or acts a main purpose of which was to prevent the recovery of a debt due to the pension scheme. The DP determined to issue contribution notices against Mr Desmond and Mr Gordon in the sum of £1million, but determined not to issue a contribution notice against Mr Desmond's wife, Annick. In May 2010, Burges Salmon made a reference to the Upper Tribunal in respect of the DP's determinations. Clifford Chance, acting for Mr Desmond, Mrs Desmond and Mr Gordon (the Targets) sought to strike out the reference.

In its decision, the Upper Tribunal rejected all but one element of the Targets' strike out application. The one element related to Mrs Desmond, with the tribunal finding that the Trustee's reference had no prospect of success due to provisions relating to time limits. Both Burges Salmon, on behalf of the Trustee, and the Pensions Regulator appealed this decision to the Court of Appeal in Northern Ireland. The appeal hearing took place in December 2012 and judgment is expected shortly.

In an added twist to the proceedings, shortly after the Court of Appeal hearing the Targets applied for leave to apply for Judicial Review against the Pensions Regulator. They argued that steps taken by the Pensions Regulator and the DP invalidated the contribution notices against Mr Desmond and Mr Gordon. If successful, the Targets would escape liability to the scheme for the £1million determined by the DP, or any other amount later determined. Due to its interest in the proceedings, the Trustee was joined to the application as a 'Notice Party'.

At a hearing on 19 April 2013, and in an ex tempore judgment, the High Court of Justice refused the Targets leave to apply for Judicial Review. The Court found that the Targets had delayed in bringing the application, had no grounds to extend limitation and had no arguable case. 

In his written judgment, handed down on 23 May, Mr Justice Treacy stated, 'upholding the applicants claim would deprive the members of the scheme of any relief against them' and that 'it is wrong to allow the determination of issues that affect the private interests of individuals ie the members of the instant scheme to be delayed by collateral public law attacks'.

Burges Salmon’s Justin Briggs said: “It’s quite clear that the Targets' application was brought to take advantage of what their team perceived to be a technical argument by which they could avoid all liability. It would have been an injustice for the scheme's members if the Targets had been successful.'

[1] Desmond & Sons 1975 Pensions & Assurance Scheme

Key contact

Justin Briggs

Justin Briggs Partner

  • Pensions Disputes
  • Trustees and Trust Companies
  • Professional Negligence

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