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	England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Capital Cranfield Trustees Ltd v Walsh & Anor [2004] EWHC 2874 (Ch) (09 December 2004) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2004/2874.html Cite as: [2004] EWHC 2874 (Ch)

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IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
COMPANIES COURT
IN THE MATTER OF K & J HOLDINGS LIMITED
AND IN THE MATTER OF THE INSOLVENCY ACT 1986

		Royal Courts of Justice Strand, London, WC2A 2LL
		09/12/2004

Mr Justice Lindsay:

A. Introduction

1. This judgment concerns the same or similar questions of construction arising in two quite different proceedings.
2. The first proceedings ("the Proof of Debt proceedings") relate to a Proof of Debt submitted by Capital Cranfield Trustees Limited ("the Trustee") as sole trustee of the Kenrick & Jefferson Group Pension Plan ("the Scheme") in the Members' Voluntary winding up of K & J Holdings Limited ("the Company"), formerly Kenrick & Jefferson Limited. The Scheme, now in winding up, was a defined benefit "balance of cost" Occupational Pension Scheme to some of the terms of which I will need to refer at length. The Respondents, Messrs T.G. Walsh and R.V.Y. Setchim, both of PricewaterhouseCoopers LLP, appear by Mr Simmonds Q.C. and are Joint Liquidators of the Company ("the Liquidators"). The Trustee, on the footing that the Scheme had insufficient assets to meet all its liabilities, lodged a Proof in the Company's winding up. It was calculated by reference to the cost of purchasing from one or more insurance companies provision to the members of the Scheme of the benefits to which they had become entitled; that can be called the "buy-out" basis of calculation. However, the Liquidators rejected that Proof, which was then "estimated to be in the region of £12.2m" and the Trustee, which appears by Mr Inglis-Jones Q.C. leading Mr Collings, now appeals against that rejection. Mr Inglis-Jones tells me that the £12.2m has grown to some £18.23m.
3. The question of construction in the Proof of Debt proceedings is whether, under the provisions of the Scheme, the Trustee was entitled to demand a contribution from the Company on the buy-out basis after the Company had by notice purported to terminate the Scheme. That question arises as it was only after the Company had served a notice purporting to terminate the Scheme (and after, also, the notice had, according to its terms, taken effect) that any requirement for payment of such a lump-sum contribution was made.
4. The second proceedings ("the Negligence Action") are also brought by the Trustee but against Pinsent Curtis, Solicitors (and related firms, successors of Pinsent Curtis) who appear by Mr Steinfeld Q.C.. The Negligence Action alleges professional negligence on the part of the Solicitors ("Pinsents") as former advisers of the Trustee in their advice to, or failure to advise, the Trustee, in particular as to there being (as the Trustee asserts) at material times an ability in the trustee for the time being of the Scheme under its terms to demand any buy-out shortfall as a contribution from the Company. I must emphasise that there has been as yet no investigation into the facts in the Negligence Action, in which Pinsents deny negligence. I have not needed to go into questions such as whether Pinsents were instructed by the Trustee to advise, whether they did or did not advise and, if they did advise, whether their advice was negligent or not. However, in the Defence in the Negligence Action, Pinsents assert that the relevant provisions of the Scheme did not entitle the Trustee to demand a buy-out shortfall from the Company either before or after the Company purported by notice to terminate the Scheme. Accordingly, the Proof of Debt proceedings and the Negligence Action raise, as to the effect of the provisions of the Scheme after such notice, the very same principal question of construction. Moreover, some of Pinsents' arguments on construction seek to contrast and compare the effect of the Scheme after such a notice with that obtaining before. Hence there were plainly compelling reasons why the questions of construction that had arisen should be decided at one hearing fixed to deal with both proceedings. Accordingly on the 11^th October 2004 Master Price ordered that the questions of construction in the Negligence Action should come on with the Proof of Debt proceedings. In that way I have come to be required to deal with two quite different proceedings at one and the same time.

B. Scheme provisions

5. The Scheme, then regulated by different instruments, began life in 1959. It was re-structured as a Group Pension Plan in 1984. The terms of the Scheme, as it was immediately before the final form with which I am concerned, consisted of a Definitive Deed, as amended from time to time, which is now found in a so-called "working edition" of December 1985. All parties made reference to such earlier provisions ("the Earlier Provisions") as aids to the construction of the successor provisions as to which the questions of construction before me arise, namely the comprehensively re-drafted and still current form of the Definitive Trust Deed of the 16^th June 1997 ("the Current Provisions").
6. The Current Provisions begin with declarations, one of which states that the Earlier Provisions "… shall be replaced by the provisions set out in the Schedule to this Deed …". That Schedule and its appendices then set out the rest of the Current Provisions. I shall need to refer to only a few of the many defined terms; "the Actuary" is defined as "the Fellow of the Institute of Actuaries or of the Faculty of Actuaries appointed for the purpose of the Scheme by the Trustees" (A.1.1). The "Principal Employer" is defined (A.1.1) as the Company "or its replacement for the time being in accordance with the Trust Deed". The term "Employers" is defined (A.1.1) to include the Principal Employer and other employers admitted to participation in the Scheme but there never was, in fact, at any material time any Employer but the Principal Employer. "The Fund" (A.1.1) is defined as "All the cash and other assets from time to time held by or on behalf of the Trustees for the purposes of the Scheme". The singular was to include the plural (A.1.4). The discretions and powers conferred on the Trustees were described as "absolute and unfettered" (A.2); a power to amend was included (B.4.1). Clause B.6, headed "Perpetuities", after a reference to the Pension Schemes Act 1993 provided as follows:-

"If the relevant provisions of section 163 of the 1993 Act and the Personal and Occupational Pension Schemes (Perpetuities) Regulations 1990 cease to apply to the Scheme, the Scheme shall be wound up and the trusts dissolved on the later of the date which falls on the 20^th anniversary of the death of the last survivor of the descendants living on 3^rd April 1959 of His late Majesty King George V and the latest date which may then be permitted by law."

That period of twenty years has, of course, not yet even started.

7. Clause C of the Current Provisions, headed "Use of the Fund" began, at C.1.1, as follows:-

"The Trustees shall continue to pay out of the Fund held by them on irrevocable trusts the benefits for which the Scheme provides and the expenses properly incurred by the Trustees. Any such expenses and benefits may be paid in full as and when they become payable without regard to the sufficiency of the Fund to meet any other expenses or benefits whether payable presently, prospectively or contingently. The Trustees need not distinguish between capital and income of the Fund for any purpose."

8. Section E.6, headed "Actuarial Valuations", provided, so far as material, as follows:_

"E.6.1 The Trustees shall appoint an Actuary ….

E.6.2 The Trustees shall obtain actuarial valuations of the Scheme from time to time but in any event the effective date of each such valuation shall not be later than 3 years and 6 months after the date of the previous valuation. Each such valuation shall be obtained as soon as reasonably practicable after its effective date and shall comply with and be accompanied by an actuarial statement pursuant to the Disclosure Regulations."

9. That was a reference to the Occupational Pension Schemes (Disclosure of Information) Regulations 1996. The Current Provisions include the ability of the Scheme to receive transfers from other schemes and to make transfers to other schemes (Section H). At Section I, headed "Re-organisations of the Scheme" provision was made at I.2 for a new Principal Employer replacing the Company. At I.3, marked "Closure to new Members", the Scheme provided that:-

"The Principal Employer may close membership of the Scheme to new entrants and may direct that the Scheme be reopened, in either case by giving written notice to the Trustees."

10. At I.4 the Current Provisions include a provision which is of some importance because of the reference to it found in Clause L.1.3, one of the clauses, which I shall come onto, which are most central to the questions of construction before me. I.4, so far as relevant, provides as follows:-

"Cessation of participation

If an Employer other than the Principal Employer:

(a) gives notice in writing to the Trustees in accordance with clause L.1.3; or

(b) goes into liquidation or is dissolved or ceases to carry on business or has an administrator, receiver or an administrative receiver appointed to act in relation to it …. and the Trustees, in their absolute discretion, think fit; or

(c) ceases to be associated with the Principal Employer to an extent that its continued participation in the Scheme would prejudice Approval, then,

if paragraph (c), applies the Trustees may permit the Employer to keep participating in the Scheme for such period consistent with Approval as the Trustees shall determine. If any of the events in paragraphs (a), (b) or (c) occurs and the Trustees do not permit the Employer to keep participating (or if the period of permitted participation ends) then the Trustees may apply clause J.4.1 at any time after the event specified (but without prejudice to the power of the Trustees indefinitely to defer taking such a decision) to the part of the Fund which the Trustees after consulting the Actuary consider in all the circumstances to be equal to the value of the benefits and contingent benefits in respect of persons who cease to be Pensionable Members of the Scheme …. as a result of that event. In determining the appropriate part of the Fund, the Trustees shall make no allowance for projected increases in salary after the date of cessation of participation."

11. Then comes one of the two major clauses with which I have been most concerned. Clause J is headed "Termination of the Scheme". J.1 is headed "Events leading to termination of the Scheme". J.1 and the provisions of J.1.2 and J.2 continue as follows:-

"J.1 Events leading to termination of the Scheme

J.1.1 If:-

(a) all the Employers give to the Trustees notice in writing that they wish the Scheme to terminate or under clause L.1.3; or

(b) the Scheme is required to be wound up by clause B.6

then the Scheme shall terminate and the Trustees shall hold the Fund on trust to apply it in accordance with the provisions of clause J.1.2.

J.1.2 If the Scheme is terminated under J.1.1 above, the Trustees shall at their discretion determine whether to apply the Fund:

(a) in accordance with clause J.2 (Closed Scheme) (except where J.1.1 (b) applies); or

(b) in accordance with clause J.3 (Transfer to another arrangement); or

(c) in accordance with clause J.4 (Winding-Up),

or in such combination of these methods as the Trustees decide and until all liabilities of the Trustees under the Scheme have ceased all the powers, duties and discretions (including the power of amendment and the power to appoint new trustees) previously vested in the Principal Employer and the Employers shall, subject to the remaining provisions of this clause J.1.2, become vested in the Trustees. No power, duty or discretion vested in the Trustees by virtue of this clause J.1.2 shall be exercised in such a way as to affect prejudicially the interests of the Principal Employer or any company which is or has been an Employer without the prior written consent of such person. Where exercise would not have such a direct effect on the interests of the Principal Employer, or other present and former Employers, the Trustees shall have regard to the best interests of those persons together with the best interests of all the other beneficiaries of the Scheme and shall have all the other duties it would have to them were they beneficiaries of the Scheme and of the powers vested in the Trustees by this clause.

J.2 Closed scheme

For the purposes of clause J.1.2 (a), the Trustees may administer the Scheme as a closed scheme until such date as they may decide to wind up the Scheme in accordance with clause J.4 or until the Fund is exhausted (whichever shall first occur). While the Scheme is a closed scheme no new members may be admitted and the contributions of the Employers will cease. Benefits of Members shall be restricted to those accrued to the date of termination of Employer contributions and the Members' contributions shall cease."

12. J.3 amplified the reference in J.1.2 (b) to transfers to another arrangement and J.4, headed "Winding-Up", began as follows:-

"J.4.1 If the Trustees decide under clauses J.1.2 (c) or J.2 to apply the Fund in accordance with this clause J.4, the Fund (or relevant part of the Fund as appropriate) shall be applied by the Trustees in paying or providing for any costs, charges and expenses incurred or to be incurred by the Trustees and the balance remaining as follows:"

13. There then is provided a comprehensive sequence of headings in which the balance remaining is to be applied chiefly in making provision for the benefits of members. The eighth of the headings, heading "(h)", includes that:-

"If the balance is insufficient to meet in full all such benefits, all such benefits shall be abated rateably so that no person who has left Pensionable Service prior to the date of commencement of the winding up shall be treated less favourably than Members in Pensionable Service.

The sequence contains the words:-

"Every such benefit or the provision to be made for the benefit shall be of such amount as the Trustees shall decide having regard to such matters as they shall think fit including the rights and prospective rights of the person to or in respect of whom the benefit is payable."

14. The last of the provisions under the J.4 winding up heading are as follows:-

"J.4.2 The benefits to be provided under clause J.4.1 above shall be secured in either or both [sic] of the following ways:

(a) by the purchase of an annuity, assurance contract or policy from any Insurance Company or by the assignment of an annuity or assurance policy to the Member;

(b) by paying the benefits (other than pensions where the Scheme is being completely wound up) out of the Fund;

(c) by paying state scheme premiums.

15. There were conventional provisions in section K – "Membership" – but then one comes on in the Current Provisions to section L, headed "Contributions". Particular attention will need to be given to L.1.1 and L.1.3 but all the provisions of L.1 – "Employers' contributions" – play their part in giving rise to, and, it is argued, supplying answers to, the principal questions of construction which are before me. Thus:-

"L.1 Employers' contributions

L.1.1 Each Employer shall, subject to the following provisions of this clause L.1, pay such contributions to the Scheme as are determined by the Trustees, having taken advice from the Actuary, to be appropriate but in any event not less than those set out in the schedule of contributions in force from time to time in accordance with section 58 of the 1995 Act.

L.1.2 An Employer may, give written notice to the Trustees that it wishes to reduce, suspend or vary its liability to make contributions to the Scheme. On receipt of such a notice the Trustees shall at their absolute discretion decide whether or not to change the Employer's contributions and, if they do change the Employer's contributions, the Trustees may, if they consider it appropriate after consulting the Actuary, reduce or restrict the benefits of all or any of the Members who are or have been employed by that Employer and may reduce, suspend or vary the liability of Members who are employed by that Employer to contribute to the Scheme. All Members who are affected by such action shall be notified by the Trustees.

L.1.3 An Employer may, by giving written notice to the Trustees, terminate its liability to make contributions to the Scheme for benefits accruing after the effective date of the notice in respect of any or all of the Members who are or were its employees, in which case clause I.4 shall apply.

L.1.4 If an Employer gives notice under clause L.1.3 its liability to meet costs, charges and expenses (other than investment expenses) incurred thereafter shall cease and in the case of clause L.1.3 those Members who are in its employ shall also have their contribution liability terminated.

L.1.5 If an Employer gives notice under clause L.1.2 the Trustees may, and if it gives notice under clause L.1.3 the Trustees shall revise the schedule of contributions before the expiry of the notice to reflect, in the case of a notice under clause L.1.2, any reduction in benefits and, in the case of a notice under clause L.1.3, the cessation of benefit accrued [sic]for those Members who are in its employ.

16. Whilst there were other passages from the Current Provisions to which I was taken, the above citation suffices for an understanding of the principal questions of construction arising in the Proof of Debt Proceedings and the Negligence Action.

C. Chronology

17. I now turn to the few and uncontentious facts necessary to be borne in mind. On the 22^nd October 1997 the Company served on the Trustee a notice in the following form:-

"The Kenrick & Jefferson Pension Scheme – notice under clauses L.1.3 and J.1.1

Following a decision of the Board of Kenrick & Jefferson ("the Company") at their meeting on 20^th October 1997, I am writing:

a) to give you notice under clause L.1.3 of the above Scheme's Trust Deed of the Company's intention to cease contributing to the Scheme with effect from 31^st March 1998; and

b) to give you notice under clause J.1.1 of the Trust Deed of the Company's wish as sole Employer that the Scheme be terminated with effect from 31^st March 1998.

I would be grateful if you would let me have written acknowledgement of receipt of this notice."

It will have been noted that the Notice was under both clauses L.1.3 and J.1.1. Although I have not been taken to any particular resolution on the point, it is common ground that the Trustees duly determined that after the specified termination date of the 31^st March 1998 the Scheme should, in accordance with clause J.1.2 (a) and J.2, be administered as a closed scheme. It is the Trustees' case in the Negligence Action that the buy-out deficit (the amount by which the Fund was insufficient to purchase accrued benefits from an insurance company) was then of the order of £1.246m-£2.3663m.

18. On the 2^nd November 2001 the Trustee was appointed Trustee of the Scheme.
19. On the 11^th April 2003 the Trustee resolved to wind up the Scheme – see clause J.1.2 (c) and J.2 of the Current Provisions cited above. By then the buy-out deficit (so stated the Trustee in the Proof of Debt Proceedings) had grown, as I have mentioned, to some £12.2m.
20. On the 15^th April 2003, the Company, which had for some time been engaged in an asset realisation programme and an associated distribution of substantial amounts to shareholders, went into Members' Voluntary Liquidation. The Liquidators were appointed liquidators in that winding-up. The Company had by then sold its businesses and property. The Directors' Declaration of Solvency contemplated a surplus after paying debts in full of £4,421,879 but without the Declaration identifying any liability to the Trustee. That, no doubt, was because on the 21^st March 2003 the Chairman of the Company had reported to all shareholders that:-

"The liquidation of K & J Holdings Limited will protect shareholders from any future deterioration in the funding level of the Company's Pension Plan, because the date for assessing any statutory debt on the Company cannot be later than the date of liquidation, in this case 15^th April 2003. As at 31^st December 2002 the Plan's Actuary has estimated that the pension fund was in surplus on the basis of the Minimum Funding Requirement under the Pensions Act 1995, and therefore that there was no statutory liability for the Company to contribute further amounts to it. The position is not expected to be materially different today."

I shall later briefly refer to the statutory Minimum Funding Requirement ("MFR") but it is plain that the Chairman had not anticipated any demand coming from the Trustee in respect of a buy-out deficit; he saw the Company's only liability, if any, to be in respect of the statutory MFR. Mr Simmonds tells me that until the Scheme began to be administered as a closed scheme there never was an MFR deficit.

21. On the 30^th January 2004 the Trustee lodged its Proof of Debt. The Proof recited that the Trustee understood from the Scheme Actuary that the Scheme had insufficient assets to meet all its liabilities upon the winding-up of the Scheme. As already cited, it indicated that the deficit was then estimated to be in the region of £12.2m. It asked for notice of when the Proof of Debt would be adjudicated so that the Trustee might have the opportunity of putting in the best estimate as at that date. It added that the final buy-out deficit would not be known until all the benefits had been secured in the market, namely not only when the Proof of Debt had been adjudicated but also when it had been paid. The Proof of Debt went on to make an alternative claim as follows:-

"Alternatively and only insofar as we are incorrect as to the liability for the buy-out basis, we claim the statutory debt pursuant to section 75 Pensions Act 1995 which, as of 11^th April 2003 was £1.9m."

The proof indicated, as the basis of the Trustee's claim, that the Company was obliged under the terms of clause L.1.1 of the Current Provisions to "…. pay such contributions to the Scheme as are determined by the Trustees, having taken advice from the Actuary, to be appropriate ……". The Trustee continued that the Scheme had ceased to be a closed scheme following the triggering of the winding-up of the Scheme on the 11^th April 2003 and consequently, so the Trustee claimed, the Company had become liable to pay contributions, as determined by the Trustee to be appropriate, in accordance with clause L.1.1. The Scheme Actuary, said the Proof, had estimated the approximate deficit as at the 11^th April 2003 at £12.2m; the value of the assets (excluding Advance Voluntary Contributions) was £22.2m but the total liabilities (on a buy-out basis) amounted to £34.4m.

22. On the 8^th March 2004 the Liquidators by letter rejected the Proof on the buy-out basis but indicated a willingness to consider, if Further and Better Particulars were provided, an alternative debt under section 75 of the Pensions Act 1995.
23. On the 26^th March 2004 the Trustees launched their Proof of Debt proceedings and on the 10^th June 2004 completed their Particulars of Claim in the Negligence Action. On the 30^th July 2004 Pinsents served their Defence in the Negligence Action. On the 20^th September 2004 the Trustee replied in the Negligence Action and, as already noted, on the 11^th October 2004 Master Price made the Order by which the two proceedings have been heard together. It raised the issues before me as Preliminary Issues in the Negligence Action and directed them to come on with the Proof of Debt Proceedings.
24. It had seemed that I was to be asked to rule not only on construction but also on some other minor issues as to quantum but in the event the parties were content that I should deal only with construction.
25. The Trustee does not argue that an L.1.1 demand for appropriate contributions could have been made whilst the Scheme was a closed scheme, namely between 1^st April 1998 and the 11^th April 2003; it recognises, presumably, the force of the words "While the Scheme is a closed scheme …. the contributions of the Employers will cease" in clause J.2 supra. But the Trustee argues that down to the 31^st March 1998 and after the 11^th April 2003 it was able to demand appropriate contributions under clause L.1.1. The Liquidators are only immediately concerned with the latter period, which includes both the dates on which the Trustee first required a lump-sum contribution from the Company on a buy-out basis and when the Proof of Debt was lodged. Pinsents are potentially concerned with both periods although, as yet, as I have mentioned, questions as to whether and when they were instructed and, if they were, what were their responses to any instructions have not yet been determined.

D. Applicable Principles of Construction

26. There has been a wide citation of authorities on construction generally and on construction, in particular, of Pension Schemes. Cases to which I was referred included Antaios Compania Naviera –v- Salen Rederierna [1985] AC 191 at 201 a-e per Lord Diplock, Investors' Compensation Scheme –v- West Bromwich Building Society [1998] 1 WLR 896 p. 913 e per Lord Hoffmann, British Airways Pension Trustees Limited –v- British Airways plc [2002] PLR 247 at paragraph 28, Prenn –v- Simmonds [1971] 1 WLR 1381 at p. 1384 b-1385 h, National Grid plc –v- Laws [1997] PLR 157 paragraphs 69-73, Spooner –v- BT [2000] PLR 65 paragraphs 75-77, Stevens –v- Bell [2002] EWCA Civ 672 at paragraphs 26-32, UEB Industries –v- Brabant [1992] 1 NZLR 294 at 298, LRT Pension Trustees –v- Hatt [1993] PLR 227 at 267, National Grid Co. Plc –v- Mays [2001] UKHL 20 paragraph 53 and paragraphs 57-63, Harwood-Smart –v- Caws [2000] PLR 101 at paragraph 5 and Mettoy Pension Trustees –v- Evans [1990] 1 WLR 1587 per Warner J. at p 1610 where the Learned Judge, in a passage frequently cited since, indicated that the Court's approach to the construction of Pension Scheme Trust Deeds should be:-

"Practical and purposive, rather than detached and literal."

Whilst the different parties before me referred at different stages to give different emphases to various passages from the authorities, I detected no real differences of principle between Counsel on the approach which it was proper for me to take.

E. Appropriate Contributions on and after the 11^th April 2003

27. I shall deal first with the arguments as to the Company's liability to make appropriate contributions to the Scheme on and after the 11^th April 2003, i.e. after the Scheme had moved into winding-up. The Trustee's argument is this. The Trustee, after taking advice from the Actuary was entitled by clause L.1.1 to determine that a particular contribution from the Company was "appropriate" and the Company was thereupon obliged to pay the same. "Appropriate", says Mr Inglis-Jones, has a meaning competent to include sufficient to fund the benefits conferred by the Scheme in the particular circumstances from time to time applicable. In the ordinary way, so long as the Fund was not in actuarial deficit and the relevant Employers or Employer could be seen to be able and willing by recurring payments to keep it so, a trustee would not wish, even if the Actuary agreed, to endanger the proverbial creature to which all referred, the goose that laid the golden eggs. Large lump sum payments would thus, even though conceptually possible, be rarely, if ever, called up whilst the Scheme was run on a foreseeably enduring ongoing basis. But where a winding-up of the Scheme became a real prospect, as it did, at the latest, once the Company had served a Notice of Termination of the Scheme of 22^nd October 1997 to take effect from the 31^st March 1998, then, subject to taking the advice of the Actuary, it was within the discretion of the Trustees to require a contribution not, as hitherto, on an on-going basis, but on a full buy-out basis. There was nothing express or to be implied in L.1.1 that precluded either lump sums or their computation on a buy-out basis. It was to be noted, he said, that under clause J.4.2 the benefits were to be secured and one of the ways securing them – J.4.2 (a) – was by purchase from an insurance company. The Company was at the relevant time solvent and in the course of liquidating its assets and it would have been almost perverse, says Mr Inglis-Jones, for the Actuary and Trustee not to have sought a buy-out contribution when finding the fund to be insufficient to secure the accrued benefits. Such a construction, he urges, is practical and purposive for any scheme, such as the Scheme, conducted on a "balance of costs" basis.
28. Mr Inglis-Jones, as I have said, argues that there is nothing in the language of clause L.1.1 that precludes payment by way of a lump sum. I agree. Although it refers to contributions (plural) that is explicable by reference to L.1.1 covering "Each Employer" in a scheme which contemplated that there might be more than one. In any event the draftsman of L.1.1 could have contemplated contributions (plural) by reference to more than one lump being paid at different times over a number of years; where the scheme is a continuing one it does not follow that provision by an employer of a lump sum, even one calculated on a full buy-out basis in year 1, does not prove insufficient to cover a full buy-out basis in, say, year 5, by which time the membership of the scheme could have changed and by which time the benefits of the scheme could have been added to by amendment. Mr Inglis-Jones accepted that contributions would in general be periodic but added, as I accept, that in a scheme intended to run for years and years there was nothing that precluded occasional lump sums, still less that precluded a single lump sum.
29. In support Mr Inglis-Jones relies on McClelland, below, a New Zealand authority to which I shall return and to some terms found in the Earlier Provisions. Those included that the Trustee could require contributions from the Company such as were "required to enable the benefits of [the then Scheme] to be maintained". That, he argues, would plainly have entitled the trustees of the Scheme to require contributions on a full buy-out basis, at all events when a winding-up of the Scheme was likely or already in course, and that it would have been so commercially improbable a decision by fiduciaries such as the trustees of the Scheme to give up such a valuable entitlement upon the introduction of the Current Provisions that that improbability itself pointed strongly against that entitlement having been given up but pointed, instead, in favour of an uncircumscribed reading of clause L.1.1, that, in turn permitting a demand on a buy-out basis. Plainly the Current Provisions were not speaking merely of statutory contributions, he added, as the words "but in any event not less than those set out in the schedule of contributions in force from time to time in accordance with section 58 of the 1995 Act" made that clear.
30. Against that supposed improbability there is another. I shall not set out the lengthy terms of the Earlier Provisions on the issue but Mr Steinfeld draws attention to clauses 17, 18 and 19 of them to argue that under the Earlier Provisions the Employers were in a position to terminate the then-scheme on a basis such that if there was a buy-out deficit it would be the benefits that abated rather than that any lump sum could be demanded from them. I am far from convinced that Mr Steinfeld's construction of those clauses is wrong and he is entitled to argue, on the balance of improbabilities, that it is just as unlikely that the Employers would have given up that position as that the trustees would have been unlikely to have given up their ability to call for such contributions as enabled benefits to be maintained. In all I do not see the Earlier Provisions as throwing any useful light on the construction of the crucial clauses J and L of the Current Provisions; whilst in many cases a reference to clear prior provisions and the history of drafting amendments can prove helpful in construing the current ones, here there is little more than the risk of converting what begins as if a construction summons as to one lengthy instrument to being as if of two.
31. Mr Inglis-Jones made reference to some passages in correspondence passing when the Current Provisions were being negotiated but I am unable to regard them as properly to be referred to in the construction of the Current Provisions. True it is, asserts Mr Inglis-Jones, that liability to contribute in respect of a buy-out deficit is suspended while the Scheme is a closed scheme, as clause J.2 provides, but, he says, at the beginning of the winding-up of the Scheme on the 11^th April 2003 it ceased to be a closed scheme within J.2. It then moved to being within a clause J.4 winding-up and what he said was the suspensory provision of J.2 ceased to have effect and there was nothing thereafter to preclude the Trustees making demand for "appropriate" contributions within clause L.1.1.
32. The argument against the entitlement of the Trustee to make a demand on a buy-out basis on or after the 11^th April 2003 came chiefly from Mr Simmonds whose argument in that respect Mr Steinfeld adopted and added to. Mr Simmonds' argument was partly as to the uncommerciality and hence improbability of any such entitlement having been intended but also by reference to the particular language of the Current Provisions.
33. As for that language, Mr Simmonds refers to clause J dealing with termination of the Scheme by notice in writing from "all the Employers". That was satisfied by the notice that was given by the Principal Employer, the only employer. Once that was given ordinary operation of the Scheme came to an end. Clause J.1.2, he continues, gave the Trustee a discretion as to how to administer the Scheme after such a termination but nothing amongst its provisions could have the effect of undoing or qualifying the effect of the Employers' notice of termination. Referring back to the words in clause J.2, namely "While the Scheme is a closed scheme … the contributions of the Employer will cease", he argues that such cesser is plain and express and that the words are not merely suspensory nor merely dealing with the period when there was a closed scheme but were clarifying that although, even after a J.1.1 termination notice, the Scheme in a sense still subsisted, it subsisted without any further involuntary contributions from the Employer under the Scheme, as opposed to possible further contribution under statute. Nowhere, urges Mr Simmonds, is there any provision that suggests that contributions are to begin again once the closed scheme moves into liquidation. Such a provision, if intended, would have been so important to have been made clear that one could expect that it should have been dealt with expressly, but nothing such is to be found.
34. As the notice of 22^nd October 1997 was not expressed to take immediate effect and as it has not been said that the notice period it gave was unreasonable it may be that I have no need to come to any decision as to whether some notice period had to be specified in order that a notice under J.1.1 should be valid. However, there was argument on the point and, were I required to decide, I would hold that, no notice period being expressed to be required in J.1 and with there being no compelling need to imply one, none, in my view, is required. It is notable that where a notice period is required, the Scheme language makes that clear – see clause L.1.3 and L.1.5.
35. There was a difference between Counsel as to the effect of the words "While the Scheme is a closed scheme" in clause J.2; did the words qualify the last sentence of J.2 or only the penultimate sentence of J.2? On Mr Inglis-Jones' construction the penultimate sentence, which begins with the words in question, contemplated merely a suspension, while the Scheme was administered as a closed scheme, of the admission of new members and of the contributions of the employers. However, by reason of the words "While the Scheme is a closed scheme" not, on his argument, qualifying the last sentence of clause J.2, Mr Inglis-Jones accepted, indeed asserted, that benefits of members were irrevocably and forever restricted to those accrued to the date of termination of employer contributions and that members' contributions were forever brought to an end because of the words "… the Members' contributions shall cease". Hence on his argument the words "Will cease" in the penultimate sentence had a different meaning to the words "Shall cease" in the last sentence, the former referring to a suspension, the latter to a cesser. That, itself, seems a little improbable and the improbability is added to if one contemplates the possibility of a surplus in a winding-up. On Mr Inglis-Jones' construction the benefits of members, having irrevocably and forever been restricted as then provided upon the Scheme going into administration as a closed scheme, would not be able to include benefits accruing after the date of the last employer contributions even though, only having been (on his construction) suspended, Employers' contributions might restart. It is difficult to see, should there be a surplus in a winding-up, why that should be so. It would have been easy enough to say "suspend" if that had been intended as to Employers' contributions but the word "cease" was used. I prefer to read the expression "While the Scheme is a closed scheme" as not merely a suspensory provision dealing with admission of new members and contributions of employers but as qualifying also the last sentence in such a way that the two sentences together are intended to define some aspects of the intended characteristics of administration of the Scheme as a closed scheme. There is no definition in the Current Provisions of what administration as a closed scheme involves and whilst the notion of a closed scheme is familiar enough in outline the details of a closed scheme can vary greatly from one scheme to another. It was thus, in my view, at least desirable, if not necessary, to give an indication of what administration of the Scheme as a closed was, in this Scheme, intended to bring about and that is what the last two sentences of J.2 do. I thus do not read the word "while" as merely suspensory.
36. As for commercial improbability, in order to counter or trump Mr Inglis-Jones' argument that it was so improbable that any trustees should ever have given up their entitlement to demand full provision on a buy-out basis (supposing that to be open to the trustees of the Scheme under the Earlier Provisions) Mr Simmonds asserted the improbability of the Principal Employer or any employer agreeing a system under which, during a closed scheme, a buy-out deficiency could be permitted to escalate considerably, as this one did, yet without any power in the Principal Employer during the whole of the closed scheme administration to bring the period to an end and hence to crystallise its liability. On the facts of this case the Employer would have been powerless as it watched the amount of its debt (if Mr Inglis-Jones is right) ballooning from a manageable £1.25m-£2.3663m to a completely unaffordable £18.23m (the more recent suggested figure than that in the Proof of Debt) or even more. No-one would have been able to predict how long the Trustee would continue with a closed scheme administration before moving to its winding-up; here the interval was over 5 years from 1^st April 1998 to the 11^th April 2003 but it could have even been extended to the end of the Perpetuity Period and all along, says Mr Simmonds, without the Company being able to procure a winding-up of the Scheme as the trustees alone have that power under J.2. Mr Inglis-Jones' argument, he adds, exposes the Company to a liability unlimited in amount and unknowable as to the time of its occurrence. No reason could be given, says Mr Simmonds, why the liability to contribute should arise in an administration in a winding-up but should have been denied throughout the period of administration as a closed scheme. The Scheme was one of checks and balances as between Employer and Trustees; the consent of the Employer or of the Trustee was carefully required at many stages in the administration of the Scheme but once the Scheme passed into administration as a closed scheme all powers were in the Trustee - J.1.2 (c) - and (if Mr Inglis-Jones was right) the Employer was nonetheless liable for contributions whilst having no say as to the aggregate needed or the time of payment.
37. In a related argument that goes more to a question as to the quantum of any lump sum that could be demanded under clause L.1.1 than to whether such a sum could be demanded, Mr Steinfeld argues that it could never be "appropriate" under L.1.1 to demand enough to fund a full buy-out of benefits once, as he put it, a winding-up threatened, because in a winding-up, if there was not a sufficient Fund to provide all the relevant benefits, then the benefits abated to fit the Fund. The Actuary, when a winding-up threatened, would thus invariably have to advise that a further contribution of zero was the "appropriate" contribution. I do not accept this argument; it founders on the great uncertainty of the notion of a winding-up "threatening". The Trustee may not have any advance notice of the intention of all the Employers or of the Principal Employer to give notice to terminate under clause J.1.1. The Trustee may thus not know that a termination threatened. Even if the Trustee did have such notice, it would not be able, ahead of the termination notice taking effect, to exercise its discretion under J.1.2 and thus to elect between a closed scheme, a transfer or a winding-up. That discretion only arises when the Scheme is terminated – clause J.1.2. Nor would the Employers know, ahead of that exercise, whether there was to be a winding-up or whether, for example, administration as a closed scheme was to be selected. If, in the face of those prospective uncertainties affecting both the Trustee and Employers on so important an issue, the Scheme had contemplated that, at any time when a winding-up "threatened", the demand under L.1.1 could not be higher than zero, it would, in my judgment, have needed expressly to say so. It would have needed to spell out the situations in which, for this purpose, it could be said that a winding-up threatened. It does not do so and I thus reject this argument.
38. Mr Steinfeld also draws attention to the terms under which distributions are to be made in a winding-up under clause J.4 and, in particular, to J.4.1 (h) in which it is provided that:-

"…. if the balance is insufficient to meet in full all such benefits, all such benefits shall be abated rateably …."

However, I cannot see that that provision necessarily precludes there being a demand in a J.4 winding-up made upon an employer as to a buy-out deficit. The provision could equally be intended to meet the situation where there had been a demand for a buy-out deficit but that the employer had proved to be insolvent. It is not, therefore, a provision that suggests that on a winding up it is the benefits that necessarily abate rather than that some adequate sum can be demanded. However, it can fairly be said that J.4 makes no provision as to any incoming post-termination contributions from the Employer, nor any coming in after the Scheme had, under J.1.2, been administered as a closed scheme, both of those being provisions one could have reasonably expected to see had such contributions been intended.

39. Mr Steinfeld, accepting, of course, that there was to be no liability to make non-statutory Employer contributions during administration as a closed scheme (J.2), says, as did Mr Simmonds, that it would be strange for such liability to "pop up", as Mr Steinfeld put it, on a J.4 winding-up. I agree: it would have been so plainly unwise for the trustees to rely only upon voluntary contributions from the Employers during that possibly very lengthy period that one could expect that, if post-termination "appropriate" contributions had been intended at all, they would have been made compellable. Otherwise, and especially where the Employer was ungenerous, unscrupulous, imprudent or unsuccessful in financial terms, the trustees would be torn between their wish to continue with a closed scheme and their anxiety that, if they delayed, then, come the winding-up, the cupboard would be found to be bare. It is reasonable to suppose that if there was to be any Scheme (as opposed to statutory) liability on the Employer after termination, it would have been expressly provided for both during and after a closed scheme administration. There is no such provision and, the former being expressly negatived, it is not unreasonable to negative the latter.
40. As for the Earlier Provisions, Mr Simmonds argued by reference to clause 17 of the 1985 Working Edition that under those provisions the employers' contributions could be terminated at any time by notice in writing to the trustees without any conceivable ability in the trustees thereafter to insist on any contributions other than under statutory provision. It would have been sensible, he argued, whether under the Earlier Provisions or the Current Provisions, to provide that if, once a notice of termination had been served and a period of administration as a closed scheme had begun, that did not automatically and irrevocably put an end to any obligation on the Employer further to contribute other than under Statute, that one should find a power in the Employer to require a move from administration as a closed scheme to administration of that scheme in winding-up. The very fact that there was no express provision in the Current Provisions giving any employer such a power of itself suggests, says Mr Simmonds, that liability to contribute on the Employer's part came irrevocably to an end on the notice of termination taking effect.
41. Mr Inglis-Jones seeks to meet that last argument by relying on clause L.1.3. The employer, during a period during which the Scheme is administered as a closed scheme, worried about a potential liability should the Scheme move into winding-up, is free, he says, to terminate any liability to make contributions by giving notice under L.1.3. I cannot accept Mr Inglis-Jones' argument as to L.1.3. L.1.3, as it seems to me, was contemplating a situation in which, although the Scheme continues, an employer other than the Principal Employer withdraws from it but in such a way that it would be unfair to expect the other company or companies remaining in the Scheme to contribute towards benefits of members who were then or had been employees of the outgoing employer. The concluding words of L.1.3, "…. in which case clause I.4 shall apply" show, when one refers back to I.4, that L.1.3 is not to apply to a notice given by the Principal Employer. I thus cannot read L.1.3 as entitling the Company, the Principal Employer, to give notice to terminate its liability and, in turn, Mr Simmonds' argument as to the improbability of the Principal Employer being left unable to crystallise his liability upon a winding-up (supposing Mr Inglis-Jones was right) is undiminished. The notice given on 22^nd October was inept insofar as it purported to be under clause L.1.3.
42. Mr Inglis-Jones, by reference to the clause that indicates that the singular may include the plural, attempts to enlarge the opening words of L.1.3 "An Employer may ……" to covering the case where all employers give notice. But, first of all, that construction would require more than merely an extension of "an Employer" into "Employers"; it involves more than transmuting a singular into a plural, a change which, of itself, would not cover the notion of "All" employers. Further, Mr Inglis-Jones' argument seeks to give the concluding words in L.1.3 (making I.4 applicable) an effect which contradicts I.4 itself, as I.4 is expressed not to apply to the Principal Employer.
43. There was an argument that once there had been a termination under J.1.1 then there could be no duty on any Employer further to contribute to the Scheme as, by J.1.2, duties hitherto vested in the Employers became vested in the Trustee and hence, by way of a merger, ceased to exist. I do not accept that reasoning: J.1.2 appears not to include the liabilities of the Employers as amongst their duties as, by its reference to "liabilities", the very line preceding the reference in J.1.2 to "powers, duties and discretions" suggests a distinction being drawn between liabilities and what was to pass to the Trustee.
44. Mr Simmonds, relying on a passage cited from Municipal Mutual Insurance Limited -v- Harrop[1998] PLR 149 at paragraph 54, sought to argue that upon the termination of a pension scheme members were entitled to have the funds dealt with strictly in accordance with the winding up provisions of the scheme and that accordingly, he argued, the fund then being complete, nothing more by way of contribution could be expected once the winding-up had commenced. However the passage in paragraph 54 in Municipal Mutual began:-

"On the termination of a pension scheme the members' rights crystallise and they are entitled to have the funds dealt with strictly in accordance with the winding-up provisions of the scheme."

In that case Rimer J. was concerned with members' rights crystallising; nothing in the passage suggests that in no case can one expect contribution from an employer once a scheme winding-up has commenced. The rights (subject, perhaps, to express provisions to the contrary) might crystallise but there is nothing in the passage or elsewhere to suggest that at the commencement of winding-up a scheme fund, too, is equally incapable of increase. In any event, the term "the Fund" in the current provisions was defined widely enough to cover assets which were rights and hence to contemplate change and addition as such rights were or were not converted into liquid assets.

45. Drawing these various conclusions together, but before I turn to the New Zealand authority to which I have referred, I shall attempt to arrive at an answer to the question as to the Company's liability to make a contribution on or after the 1^st April 1998, when the termination notice served by the Employers took effect. At this stage I will attempt to answer without regard to the New Zealand authority. On that basis and having in mind the various issues as to construction already dealt with, I would hold provisionally as follows:

(i) there is nothing in clause L.1.1 or otherwise that precludes a demand for a lump sum, or for one or more contributions, by reference to a buy-out basis, but

(ii) once, in combination, a termination notice in writing under clause J.1.1 has taken effect and the Trustee elects under J.1.2 to administer the Scheme as a closed scheme, the ability of the Trustee to demand contributions under L.1.1 is forthwith brought to an end and does not revive upon the Scheme passing into winding-up under J.4.

(iii) It would not be right to regard clause L.1.3 as a means by which the Company could escape any post-termination liability under clause L.1.1 (and thus to conclude, no L.1.3 notice having been served, that the Company was left potentially liable to what had been an avoidable post-termination demand) as L.1.3 was dealing with a quite different situation and in any event did not apply to the Company as Principal Employer.

46. As to (i) above I rely on the wide terms of clause L.1.1 itself which I have found no reason to limit.
47. As to (ii), as to the Employers' contributions ceasing upon the Scheme being administered as a closed scheme, I rely upon the words "and the contributions of the Employers will cease" in J.2.
48. As for the liability to contribute not then reviving on a winding-up under clause J.4 I rely upon two routes. Firstly, I do not see a winding-up under J.4 as precluding the Scheme being administered as a closed scheme. The characteristics of what is a closed scheme for the purposes of the Scheme are discernible from clause J.2 and three of the four are, expressly, that no new members may be admitted, that benefits are restricted to those accrued to the date of the termination of Employers' contribution and that members' contributions shall cease. I see no reason why those three should not be carried on into a winding-up under J.4 and if those three are so carried on it is not possible to see why the fourth characteristic expressed in J.2 – namely that the contributions of the Employers will cease – should not also be carried on into the winding-up. Mr Inglis-Jones thus has to and does argue that one cannot have a closed scheme (having the characteristics specified for a closed scheme by the Current Provisions) once there is a clause J.4 winding-up. But I cannot accept that; there is nothing in J.4 that, so to speak, opens the Scheme. The Scheme, albeit in winding-up, remains a closed scheme for the purposes of J.2 and hence, in my judgment, the words as to the cesser of employer contributions continue to bite even in a winding-up.
49. Lest that be wrong I would take a different route. Terminate means terminate. It was open to all the Employers or, as occurred on the facts, the Company as the Principal Employer and only Employer, to give notice of a wish to terminate the Scheme under clause J.1.1. Whilst it was no doubt prudent in an excess of caution expressly to provide where, in a sense, the Scheme, although terminated, nonetheless continues (as administered as a closed scheme under J.2) that the Employers' contributions should in that event cease, such a cesser could in any event be expected to be the natural result of a termination which was wholly at the suit of the Principal Employer and there is nothing in the Scheme that provides to the contrary. One could reasonably expect, if the Scheme had intended to provide for the highly unusual consequence that, after however many years (short only of the expiry of the Perpetuity Period) as a closed scheme, a move into a winding-up would revive the long-dead liability of the Employer to contribute and to do so on a buy-out basis, that it would have expressly so provided. Yet nothing of the kind is found.
50. With that construction in mind as arrived at without the benefit of McClelland & Ors –v- Unisys New Zealand Ltd [2002] OPLR 39 I now turn to that case. In it the scheme in question, like the one before me, was a defined-benefits scheme and it, too, had a clause such that the trustees, much as under clause L.1.1, could, after considering the advice of an Actuary, require a contribution from the employer. The difference there was that in McClelland the advice of the principal employer also had to be taken. Mr Inglis-Jones is thus right to say that to that extent clause L.1.1 gives more power to the trustee than did the one considered in McClelland. There Ellis J held that the trustees did have power to require the substantial payments which had been calculated on the basis of the value of accrued benefits. Thus far the decision re-inforces rather than undermines my provisional construction at paragraph 45 (i). But, I apprehend, Mr Inglis-Jones seeks to get more than that out of McClelland; he seeks to have it regarded as an illustration that a termination notice by an employer does not necessarily bring liability to make contributions to an end under a clause L.1.1 type of provision. That, though, cannot, in my view, be extracted from McClelland. Leaving aside the differences between the scheme language before me, with its express provisions, in particular, as to administration as a closed scheme, and such of the language in McClelland as is accessible from the report, there the employer's notice (see McClelland at paragraph 5) did not purport to terminate the scheme but only the employers' contributions and, furthermore, it was not a notice capable of taking immediate effect but had to prescribe one month's notice and there was an express additional provision by way of an exception that the employer was to remain liable to contribute:-

"….. in respect of payment due on or before the date of expiration of the period of one month."

In McClelland it was thus not possible to argue that the issue of a termination notice could reasonably and naturally be taken to bring employer contributions to an end as plainly it did not; the trustees always had the month after the date of the notice in which to cause a liability to contribute to arise.

51. On the facts in McClelland the employer's first notice of cessation of contributions was withdrawn but in any event it was issued after a shortfall of $1.942m had been identified. Even if that first notice had remained effective, it is thus hard to see why the $1.942m there referred to would not have been due from the employer under the exception I have quoted. After the employer withdrew its first notice it then issued and then withdrew a series of "rolling" monthly notices – McClelland paragraph 6 – but the $1.942m would have remained due because of the initial exception. Equally the employer there could not escape a later liability computed by the Actuary at $1.030m as at the 10^th August 2000, if only because the first cessation notice had been withdrawn and thus could not work to effect the total cesser of contributions after a month which, had it not been withdrawn, would presumably have been its result. As each later monthly notice was also withdrawn there would have been no reason why, in the course of some month, the $1.030m liability would not have fallen within the exception I have mentioned. The question for the Judge in McClelland, as he himself expressed it (McClelland paragraph 7), was whether the trustees there had power to require further contributions under clause 3.3, the clause broadly corresponding with L.1.1, after the company issued its first notice of termination. Given that the company there had withdrawn its first notice the answer seems inevitable. I see nothing in McClelland to turn me away from the provisional construction to which I had arrived without its benefit.
52. Finding nothing in McClelland or other authority to incline me away from my provisional construction, I thus hold (by way of answer to the "Preliminary Issue" framed at paragraph 1 (iii) of Master Price's Order of the 11^th October 2004) that the Trustee did not have power on or after the 11^th April 2003 to require the Company to pay a contribution in an amount equal to any shortfall in the Scheme's funds needed to enable the Trustees to secure members' benefits by the purchase from an insurance company of policies in accordance with Rule J.4.2 (a) of the Scheme.

F. Appropriate Contributions before 31st March 1998

53. I turn, therefore, to Preliminary Issue 1 (i); did the Trustee have any such power before the effective date of the termination notice, the 31^st March 1998?
54. On this part of the argument Pinsents are the only interested Defendant. I have already dealt with many of Mr Steinfeld's arguments and, as I see it, only two relate specifically and only to the period before the Company's termination took effect on the 31^st March 1998. They are these. Firstly, it is said that before a termination notice takes effect one cannot fix the quantum of liability of an employer to contribute on a buy-out basis as being "appropriate" within clause L.1.1 as the members' rights will not, until then, have crystallised; one will not then know what the size of the existing fund will be nor can it then be known what the insurance company rates available to provide the buy-out basis will be. Until the termination takes effect nor can it be known whether the Trustee will continue the Scheme as a closed scheme or make a transfer or go into winding-up. However, this argument supposes that a contribution can be described as "appropriate" under clause L.1.1 only if all relevant factors used in its computation can be established to the last pence. I see no reason to read that into the clause; I see no reason why an actuary should not be able to say that, whilst the precise figure for a buy-out deficit is not ascertainable, nonetheless not less than such and such would be "appropriate". Indeed McClelland supra illustrates in a practical way that an actuary need have no difficulty in computing what the buy-out deficit from time to time might reasonably be.
55. Secondly, Mr Steinfeld says that it would be bizarre if, there being no possible liability of an Employer to make a lump-sum payment on a buy-out basis after the Scheme had been terminated by way of notice under J.1.1, there should nonetheless be such a possible liability before such a termination. That argument, though, would lead to there never being a liability of such a kind, however "appropriate" it might be, and that is a conclusion I am unable to support as I see no reason to limit the wide terms of L.1.1 in any such way.
56. In all, I have been unable to see any good reason why, before the 31^st March 1998, clause L.1.1 should not have been given full literal effect, that literal effect including that contribution could be required by reference to what, having taken advice from the Actuary, the Trustee determined to be appropriate as a lump sum sufficient to make good a buy-out deficit. Thus in answer to Preliminary Issue 1 (i) of Master Price's Order I hold that before the effective date of the termination notice the Trustee did have the power, having taken the advice of the Actuary, to demand a contribution to make good any buy-out deficit then obtaining.

G. Statutory Requirements

57. At various stages in the argument I was referred to section 56 of the Pensions Act 1995 as to MFRs, to the valuation provisions of section 57, to the details of the statutory "Schedule of Contributions" required under section 58, to section 59 and to the provisions headed "Deficiencies in the assets" under section 75. I have already mentioned that, in the course of their rejecting the proof lodged by the Trustee, the Liquidators indicated a willingness to consider that there might be an alternative debt under section 75 of the 1995 Act, a liability, as yet unagreed, but which, according to the Trustee, is said to be of the order of £1.9m. I have not found the statutory provisions to be of any real assistance in construing the Current Provisions; for example, I have not felt able to hold that if the Company's liability to contribute under section 75 ended upon its going into members' voluntary liquidation that that suggested that liablity to contribute under the Scheme must also then have ended. The two systems may at points overlap but they are essentially different. Thus nothing I here decide is intended to relate to any possible liability of the Company under section 75.

Conclusion

58. I have not attempted to deal with every shade of meaning which Counsel sought to extract from the Current or Earlier Provisions but I believe I have covered at least the chief arguments as to the former's construction. On that basis and for the reasons I have given, the Preliminary Issue described at 1 (i) in Master Price's Order of the 11^th October 2004 (see paragraph 56 above) is, in my judgment answered yes and that in (iii) (see paragraph 52) is answered no.