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In re Tara Mines Pension Plan; Boliden Tara Mines v Cosgrave and Others
on 30 August 2011
Right to rectify provision in deed of amendment altering the definition of “pensionable salary” for the purposes of a company pension plan
The Irish Supreme Court handed down judgment in the case of In re Tara Mines Pension Plan; Boliden Tara Mines v Cosgrave and Others [2010] IESC 62 on 21st December 2010. This case involved an attempt by the appellant to exclude a number of disabled employees from the benefits under a company pension plan by amending the meaning of the term “pensionable salary”.
Former employees were included under the terms of the Income Continuance Plan, by which an ex-employee was deemed to continue being an active member of the Plan until, at the appropriate age, he could draw a pension. Accordingly, a disabled employee’s years spent in receipt of benefits under the Plan were considered as years of service for the purposes of that Plan.
The question for the court was whether members in receipt of Income Continuance Benefit as of 20th February 1998 could be excluded from the entitlement to exclude a deduction in respect of the Social Welfare Pension, known as “integration” under a deed of amendment in 1999. The High Court had previously ruled that disabled workers would, like existing employees, not be subject to proposed deductions from their pensions, but the appellant argued that the 1999 amendment did not properly reflect the intentions of the parties to exclude disabled ex-employees and thus the contract should be rectified by the court.
Hardiman J, delivering the judgment of the Court, noted that evidence of witnesses advanced by the appellant in support of its appeal was to an “unusual degree of cogency and unanimity”, while the appellant in their dealings with the respondents had at all times behaved on the basis that the true position was as they had intended it to be.
The Court held that the High Court had demanded an “unusually exacting” standard of evidence to support its claim for rectification. There was “ample evidence”, unchallenged by the respondent, as to the intention of the appellant and the Deed did not express that intention. The appeal was therefore allowed, and rectification in the terms claimed was granted.
