Barbara Gayle, Staff Reporter
Mark McKenize, managing director of Red Stripe. - File
On Friday, the Supreme Court threw out a claim by members of the Desnoes and Geddes Pensioners' Association that the pension plan should be wound up and the $1.1 billion surplus in the fund be distributed to them.
In the class action brought by four members of the association for the court to terminate the pension plan, the claimants had asked the court to rule that the four amendments made to the Trust Deed between 1979 and 1995 were invalid.
Pleased at outcome
"The company is pleased with the outcome of the proceedings because all along it felt that the challenge to its pension plan was unwarranted and unjustified, and that any termination of the current plan would have been detrimental to the present and future pensioners of Desnoes and Geddes Ltd.," managing director of Red Stripe, Mark McKenzie, said after the decision was handed down.
Attorney-at-law Leonard Green who appeared with attorney Vincent Chen for the claimants, said they were going to take steps to appeal the ruling.
Miss Justice Ingrid Mangatal, in ruling in favour of Desnoes and Geddes Ltd., D&G Wines Ltd. (in voluntary liquidation) and the trustees of the pension plan who were the defendants, said that the claimants were estopped from challenging the validity of the amendments to the D&G pension plan.
The judge said none of the amendments had adversely affected the benefits of the members.
JusticeMangatal further said that some of the amendments, in particular those relating to the widening of the investment powers and the inclusion of worker-nominated trustees, had been beneficial to the members and employees.
The claimants sought several declarations and contended that the companies did not have the power to amend the trust deed of the pension plan.
Attorneys-at-law Sandra Minott- Phillips and Emile Leiba, instructed by attorneys-at-law Peter Goldson and Monica Ladd, of Myers, Fletcher and Gordon, argued that the defendants and the trustees did not commit any beaches.
The judge found that "there was no allegation and no evidence that the amendments made to the pension plan over the last 27 years and in respect of which complaint was made for the first time in the year 2003, had an adverse effect on any member of the plan at anytime or to the benefits to which they were entitled under the plan."
In outlining her findings, the judge said there was an express power to amend the 1971 trust deed by virtue of the rule which empowered D&G to change the plan.
She said the plan encompassed the documents that constituted it and that was the principal trust deed and the rules.
Capable of ammendment
The fact that the power was located in the rules did not affect the question since the rules were a schedule to the principal trust deed.
"Even if there was no express power with a clear and plain meaning allowing such amendment, or if several constructions of the language are possible, the court ought to construe the pension documents in a purposive and practical manner and not in a detached and literal manner. The court has to take into account the fact that pension schemes are long-term institutions which have to cope with various commercial, social economic and legislative changes.,"the judge said.
According to the judge, the "Court has to construe the documents in accordance with the meaning they have to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation they were at the time of the contract. A reasonable person would have understood the documents to mean that both the 1971 trust deed and the rules were capable of amendment."
The judge found that in addition to the power to amend, the pension documents in their original form also gave D&G the power to decide all maters relating to the administration, operation and interpretation of the plan and also allowed D&G to waive eligibility requirements."
The judge also ruled that the employers did not breach their implied obligation to their employees to act in good faith.
The claimants had sought a declaration in relation to the funds from the Guinness pension plan but the judge ruled that there was no proper basis for a declaration that the funds brought into the D&G Pension Scheme from the Guinness Pension Scheme should be held on a resulting trust or on a constructive trust for the members of that plan.
