The Courage Group Pensions Scheme Case

The Case

This case has special significance since it involves an attempt to gain control of the surplus in three pension funds of the Courage Brewing Group in the United Kingdom by the same group of white-collar criminals who gained control of the occupational pension fund established on the 23 December 1913 in the State of South Australia that was once known as The Provident Fund and then latter as the Elders IXL Superannuation Fund.

Geraint Thomas in Thomas on Powers (1st Edition) {Sweet & Maxwell 1998} at [9-05] in reference to the doctrine of  a “Fraud on a Power” in relation to the exercise of a Power of Amendment:

“Similarly, the  doctrine applies to a power conferred on the committee of management of a pension scheme to amend the scheme’s trust deed, “which can only be exercised for the purpose of promoting the purpose of the scheme, namely to provide pensions for those employed in the undertaking, and not to bring about the unnecessary dissolution of the scheme“”

Re Courage Group’s Pension Schemes {1987} 1 W.L.R. 495

Geraint Thomas notes: Millet J’s judgement is clearly couched in the terms of a fraud on a power (of amendment). Duke of Portland v Topham (1864) 11 H.C.L. 32 was cited in argument, but neither it nor anyone case on fraud on a power was referred to in the judgement.

Millet J simply stated:

“It is trite law that a power can be exercised only for the purpose for which it is conferred, and not for any extraneous or ulterior purpose.”

In making reference to whether the management committee could join in executing the amending Deeds Millett J, stated at 1 WLR 495,  505 D,E:

“They may only do so if the proposed amendments are within the power to amend the trust deeds and rules, and can properly be made. They must not infringe the provisos to the rule-amending power, particularly the express prohibition to be found in all three schemes against altering the main purpose of the schemes, namely, the provisions of pensions on retirement at a specified age for members. This is a restriction which cannot be deleted by amendment, since it would be implicit anyway. It is trite law that a power can be exercised only for the purpose for which it is conferred, and not for any extraneous or ulterior purpose. The rule-amending power is given for the purpose of promoting the purposes of the scheme, not altering them.”

 

A transcript of the case is on the following link:

Courage Pensions Case [1997] 1 All ER 528
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This tab updated on 24 March 2015