HC 1999 No 00517
 Neutral Citation Number: [1999] EWHC 272 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
IN THE MATTER OF AN APPEAL UNDER
SECTION 151(4) OF THE PENSION 
SCHEMES ACT 1993 AGAINST A
DETERMINATION OF THE PENSIONS
OMBUDSMAN DATED 6 JANUARY 1999
Date: 20th December 1999

BEFORE:
THE HONOURABLE MR JUSTICE LIGHTMAN
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BETWEEN:

	WESTMINSTER CITY COUNCIL	Appellant	
	-and-		
			
	(1) JEFFREY JAMES HAYWOOD 
(2) THE PENSIONS OMBUDSMAN (No. 2)	Respondents	
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Miss Elizabeth Slade QC & Mr Timothy Pitt-Payne instructed by
City Solicitor and Secretary Westminster City Council for the Appellant
Miss Elisabeth Laing instructed by Mr John Yolland Solicitor
for the Pensions Ombudsman
The First Respondent did not appear and was not represented

Hearing: 3rd December 1999
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Judgment

INTRODUCTION

1.	This appeal by Westminster City Council (“the Council”) arises from a Determination by the Second Respondent the Pensions Ombudsman (“the PO”) of a complaint dated the 15th June 1998 (“the 1998 Complaint”) of maladministration in 1991 by the Council made by the First Respondent Mr Jeffrey Haywood (“Mr Haywood”) on the ground that the PO ought not to have entertained the 1998 Complaint.  The PO held that there had been maladministration by the Council; that the maladministration had caused Mr Haywood no pecuniary injustice; and that it had caused him non-pecuniary injustice in the form of distress and inconvenience, which had already been fully compensated for.  The PO accordingly refused to make any direction for payment of compensation.  Mr Haywood has not appealed against this refusal but the Council now seeks to appeal against the finding of maladministration.  The first question raised on this appeal by the PO is whether the Council has a statutory right to appeal against that finding.  If the answer to the first question is in the affirmative, the second question arises whether the PO had jurisdiction to investigate the 1998 Complaint of maladministration by the Council in 1991 and, if he did have jurisdiction, whether nevertheless he should have refused to entertain it on the grounds of res judicata or that it was time barred.

FACTS

2.	Mr Haywood was employed in local government for many years.  By 1991 he was working for the Council as a senior structural engineer in the Property Group of the Managing Director’s Department.  In late 1991 he was approaching his 50th birthday and was one of a number of employees whom the Council was considering making redundant.  He was given estimates of payments to which he would become entitled under the options available to him under two separate and distinct schemes, namely the Council’s Superannuation Scheme (“the Superannuation Scheme”) and the Council’s Severance and Compensation Scheme (“the Severance Scheme”).  The estimates differed depending on whether he left on redundancy under the age of 50 or whether he left at or after the age of 50.  In each case he would receive a lump sum and periodic payments under both schemes either immediately or on reaching pensionable age.  He would also receive a statutory redundancy payment.  He asked for his redundancy to take effect on his 50th birthday.  In January 1992 Mr Haywood was informed that he was to be made redundant.  He ceased employment on the 12th April 1992 (his 50th birthday).  Thereafter he received (as well as lump sum payments under both schemes and a statutory redundancy payment) an annual pension of £7,376.46 under the Superannuation Scheme and (for 10 months) an annuity of £3,949.97 under the Severance Scheme.

3.	On the 8th February the Council wrote to Mr Haywood and informed him that it had been advised that the Severance Scheme was unlawful in a number of respects, and in consequence his gross pension under the Severance Scheme would be reduced by approximately £158 per month with effect from February 1993.  Mr Haywood’s monthly payments were thereafter reduced by £158 per month as indicated in the letter.  This reduction was the subject of his first complaint to the PO made on the 1st March 1993 (“the 1993 Complaint”).  He complained of maladministration of the Severance Scheme, saying that he would have opted for the under 50 severance arrangement at the time of leaving the Council’s employment if the Council had told him (as it should have done) that it would or might be unlawful for the Council to make the proposed payments under the Severance Scheme.  Under the Pensions Act 1993 (“the 1993 Act”) Mr Haywood was qualified to make a complaint to the PO if, and only if, the Severance Scheme was an occupational pension scheme and he was entitled to long service benefits under that scheme.  Whilst it has at all times been agreed that these conditions were satisfied in respect of the Superannuation Scheme (as to which there was no complaint), issue was joined whether the conditions were satisfied in respect of the Severance Scheme.  Mr Haywood maintained that both these conditions were satisfied; the Council submitted that neither was satisfied.  The jurisdiction of the PO to entertain the 1993 Complaint depended on who was right.  I shall refer to the proceedings in respect of the 1993 Complaint as “Haywood No.1”.

4.	New regulations made in 1994, namely the Local Government (Compensation for Redundancy) Regulations 1994 partially alleviated the disappointment of Mr Haywood’s expectations under the Severance Scheme: Mr Haywood was paid £19,977.70 under these regulations, but it was not possible lawfully to restore his benefits to their original level.  He accordingly continued to maintain his complaint.

5.	On the 25th July 1995 the PO made his Determination of the 1993 Complaint (“the 1995 Determination”).  He determined that Mr Haywood was qualified to make the complaint and that accordingly he (the PO) had jurisdiction to determine it; that there had been maladministration; and that such maladministration had caused both pecuniary and non-pecuniary injustice.  He directed that:

(a)	the Council should reinstate Mr Haywood’s monthly payment to its previous level;

(b)	the Council should repay Mr Haywood with interest the reduction made since February 1993 (though the Council could set off against this sum the lump sum compensation paid to Mr Haywood under the 1994 Regulations); and

(c)	the Council should pay Mr Haywood £1,000 as compensation for distress and inconvenience.

6.	The Council appealed.  Robert Walker J. (in a judgment reported at [1998] Ch 377) upheld the appeal in part.  He held that:

(a)	the Superannuation and Severance Schemes could be regarded as forming a single scheme under which Mr Haywood was entitled to long service benefits, and that accordingly the PO had jurisdiction to determine the 1993 Complaint;

(b)	it was not maladministration for the Council (as it was legally obliged to do) to reduce the payments to Mr Haywood in February 1993;

(c)	the PO was entitled to find that the Council’s failure to warn Mr Haywood that there was a doubt as to the legality of the Severance Scheme amounted to maladministration;

(d)	the Ombudsman could not properly direct the Council to restore Mr Haywood’s payments to their pre-February 1993 level because the reduction in payments was not caused by the maladministration established, namely the failure to warn;

(e)	the right remedy was to put Mr Haywood in the same position as if the Council had provided him with correct information, not to put him in the same position as if the Severance Scheme was lawful;

(f)	there was no evidence that Mr Haywood would have been better off if properly advised, and so he was entitled to no compensation for financial loss; but

(g)	the PO had been entitled to direct the Council to pay Mr Haywood £1,000 as compensation for distress and inconvenience.

7.	The Council appealed against the decision of Robert Walker J.  The PO cross-appealed.  The Court of Appeal (in a decision also reported at [1998] Ch 377) allowed the appeal and dismissed the cross-appeal.  The Court of Appeal held that:

(a)	the two schemes could not be regarded as forming a single scheme;

(b)	the Severance Scheme was an occupational pension scheme;

but (c) Mr Haywood was not entitled to long service benefits under it and that accordingly the PO did not have jurisdiction to determine the 1993 Complaint.  The Court of Appeal also held (necessarily obiter) that the PO’s direction that the Council pay Mr Haywood £1,000 ought in any event to have been set aside because the non-financial injustice was fully compensation for in the overpayment to him of £1,580 over the 10 months before the payments to him under the Severance Scheme had been reduced, an overpayment which he had not been asked to repay.

8.	The gap in the jurisdiction of the PO exposed by the decision of the Court of Appeal was filled by the Personal and Occupational Pension Schemes (Miscellaneous Amendments) (No. 2) Regulations 1997 (“the 1997 Regulations”) and in particular Regulation 9 of the 1997 Regulations (“Regulation 9”).  The 1997 Regulations were made on the 18th December 1997, laid before Parliament on the 22nd December 1997, and came into force on the 12th January 1998. Regulation 9 (which I set out later in this judgment) dispensed with the need for a complainant to be entitled to long service benefits.

9.	Relying upon Regulation 9 as having retrospective effect, on the 15th June 1998 Mr Haywood presented a second complaint (“the 1998 Complaint”).  The 1998 Complaint was practically identical to the 1993 Complaint.  The Council made a number of detailed written representations to the PO in response to the 1998 Complaint.  As well as responding to the complaint on its merits, the Council argued that the PO should not entertain the 1998 Complaint on four grounds; namely that

(a)	the Severance Scheme was not an occupational pension scheme;

(b)	Regulation 9 did not have retrospective effect and accordingly the PO could not investigate alleged acts of maladministration which took place in 1991 as required by the 1998 Complaint;

(c)	the decision of the Court of Appeal in Haywood No. 1 gave rise to a res judicata precluding a further complaint identical to the 1993 Complaint;

(d)	that the 1998 Complaint was time-barred.  The Council made it clear to the PO and to me that the first of these grounds (involving as it does a challenge to the decision of the Court of Appeal in Haywood No. 1) must be reserved for a higher court and I say nothing about it.

10.	On the 6th January 1999 the PO made his Determination of the 1998 Complaint (“the 1999 Determination”).  He determined that:

(a)	Regulation 9 did have retrospective effect and accordingly he did have jurisdiction to consider the 1998 Complaint;

(b)	the Council was guilty of maladministration in offering Mr Haywood benefits under the Severance Scheme at a time when it was aware of concerns about the legality of such payments;

(c)	Mr Haywood had not suffered injustice consisting of financial loss as a result of that maladministration;

(d)	(as I read the 1999 Determination) Mr Haywood had however suffered injustice consisting of distress and inconvenience;

(e)	but nevertheless no direction for payment of compensation was appropriate in respect of the distress and inconvenience on account of his receipt of the overpayment of £1,580.

11.	On the 29th January 1999 the Council appealed against the part of the 1999 Determination finding maladministration on the grounds that the PO ought not to have entertained the 1998 Complaint for the four reasons I have previously stated.  The PO in turn submits that I should not entertain this appeal.

LEGISLATIVE SCHEME

12.	It is, I think, helpful before I address in turn each of the four issues raised that I set out the distinctive features of the relevant legislation relating to the PO:

(a)	the office was constituted on the 1st October 1990 under the provisions of the Social Security Act 1990, (“the 1990 Act”) now consolidated in the Pension Scheme Act 1993 (“the 1993 Act”).  It is common ground that for all relevant purposes the provisions of the 1990 Act and the unamended 1993 Act are identical;

(b)	the PO is the creation of statute brought into existence to fulfil specified statutory functions laid down in the legislation, and for the proper performance of these functions he is vested with specified statutory powers and discretions and subjected to specified statutory obligations.  He is subject to principles of public law which the Court will enforce in the exercise of its appellate and supervisory jurisdictions;

(c)	the functions of the PO are set out in Section 146 of the 1993 Act.  The relevant provision is to the effect that he “may” investigate and determine complaints made by actual or potential beneficiaries of an occupational or personal pension scheme who allege that they have sustained injustice in consequence of maladministration in connection with any act or omission of a person responsible for the management of the scheme and may direct remedial action: see Section 146(1) of the 1993 Act (as amended).  The word “may” connotes that the PO has a discretion (which is to be judicially exercised) whether or not to investigate and determine any particular complaint duly made to him.  It is to be expected that he will exercise his discretion in favour of investigating and determining complaints duly made unless there is a sufficient reason to the contrary and it will be incumbent on the PO to spell out that reason;

(d)	the 1993 Act does not confer on members of a scheme any private law right nor does it impose on the managers of schemes any private law obligations.  What the 1993 Act does is confer on members a public law right to complain to the PO and a legitimate expectation that the PO will therefore perform his public law duties which may lead him to make a direction righting wrongs dome to them;

(e)	(leaving aside for a moment the question on whose complaints he may do so) the PO has at all times been expressly authorised to investigate complaints notwithstanding the fact that they arose, or related to a matter which arose, before the 1st October 1990.  (The provision to this effect in the 1990 Act is now re-enacted in Section 146(5) of the 1993 Act);

(f)	neither the 1990 Act nor the 1993 Act contain any limitation period in respect of complaints that can be entertained by the PO, but both contain provisions authorising the Secretary of State by statutory instrument to regulate procedure.  In exercise of this power contained in the 1990 Act the Secretary of State on the 1st April 1991 by the Personal and Occupational Pension Schemes (Pensions Ombudsman) Regulations 1991 laid down time limits.  The current regulation made pursuant to the 1993 Act laying down time limits are Regulation 5 of the Personal and Occupational Pensions Schemes (Pensions Ombudsman) Regulations 1996 (“the 1996 Regulations”);

(g)	(i)	Section 146(1) of the 1993 Act (as originally enacted) authorised the PO to investigate and determine complaints made by an “authorised complainant”.  Section 146(7) defines “authorised complainant” as a member of the scheme or a widow or widower or dependant of a deceased member.  Section 146(8) defines “member” in relation to a pension scheme as including a person who is or has been in pensionable service under the scheme.  Section 181(1) provides that “pensionable service” has the meaning given in Section 70(2).  Section 70(2) provides that “pensionable service” means service in employment which qualifies the member (on the assumption that it continues for the appropriate period) for long service benefit under the scheme; and Section 70(1) provides that “long service benefit” means the benefits that will be payable under the scheme on the assumption that he remains in relevant employment and continues to render service which qualifies him for benefit until he attains normal pension age.  Section 181(4) of the 1993 Act empowered the Secretary of State by statutory instrument to make provision as to the persons who are to be regarded as members;

(ii)	the Pensions Act 1995 in Section 157(1) substitutes for the words “authorised complainant” the words “actual or potential beneficiary of an occupational or personal pension scheme” and in Section 157(7) gives the same definition of “actual and potential beneficiary” as had previously been given for “authorised complainant”.  Accordingly this amendment is linguistic only and has no material effect;

(iii)	(as I have already said) the Court of Appeal in Haywood No. 1 held that the Severance Scheme was an occupational pension scheme, but that for the purposes of that scheme Mr Haywood was not in pensionable service because he was not entitled to long service benefit and that accordingly the PO had no jurisdiction to entertain a complaint made by him in respect of the management of the Severance Scheme;

(iv)	in order to supply the lacuna in those protected by the 1993 Act as revealed by the decision of the Court of Appeal in exercise of the power conferred by section 181(4) of the 1993 Act, the Secretary of State included in the 1997 Regulations Regulation 9 which provides as follows:

“9.	Persons entitled to benefits to be regarded as members for the purposes of section 146(7) of the Act.

1A.	For the purposes of section 146(7) (persons who are actual or potential beneficiaries) a person shall be regarded as a member of a scheme if he is, or has been, entitled to benefits under it.”

Accordingly Mr Haywood thenceforth became a member and was qualified to make a complaint, and therefore to make the 1998 Complaint of maladministration in 1991 (and accordingly prior to the 1997 Regulations) if Section 146(5) applied in case of a complaint made by him.

THE COUNCIL’S RIGHT OF APPEAL

13.	Statutory Construction

	Section 151 of the Act provides as follows:

“(1)	Where the Pension Ombudsman has conducted an investigation under this Part he shall send a written statement of his determination of the complaint or dispute in question to [the parties] ...
and such statement shall contain the reasons for his determination.

(2)	Where the Pensions Ombudsman makes a determination under this Part ... he may direct any person responsible for the management of the scheme to which the complaint relates to take, or refrain from taking, such steps as he may specify in the statement referred to in subsection (1) or otherwise in writing.

(3)	Subject to subsection (4), the determination by the PO of a complaint or dispute and any direction given by him under subsection (2), shall be final and binding on [the parties]...

(4)	An appeal on a point of law shall lie to the High Court ... from a determination or direction of the Pensions Ombudsman ...

(5)	Any determination or direction of the Pensions Ombudsman shall be enforceable -
(a)	in England and Wales in a country court as if it were a judgment or order of the court ...”

14.	This issue raises questions as to the meaning of the words “appeal” and “determination”.  Implicit in the word “appeal” is the limitation that a party can only appeal against a determination or direction which is adverse to him, but it is not so implicit that the determination or direction should be wholly (rather than only partially adverse).  A determination must decide (implicitly if not explicitly) in turn a series of questions, the later only arising if the earlier is decided in the affirmative.  These questions are as follows: (a) whether the PO has jurisdiction to investigate and determine the complaint (the mirror image of the question whether the complainant is qualified to make the complaint); (b) whether the discretion to investigate and determine is to be exercised; (c) whether there has been maladministration; (d) whether the maladministration caused injustice to the complainant; and (e) whether any consequent direction ought to be made.  In my view the language of Section 151(4) is apposite to allow an appeal against an adverse determination of any of these questions.  (It may be noted that in Haywood No. 1 an appeal by the Council succeeded on the ground that the PO had no jurisdiction to determine it).  I am accordingly quite satisfied that a respondent to a complaint can appeal against a determination of maladministration notwithstanding that it is accompanied by a determination that it caused no injustice, or that it caused injustice but that no consequential direction should be made.  This is only just, for a finding of maladministration is a serious slur on the reputation of a person concerned in the management of a scheme and (in particular if he is a professional manager) may be highly damaging.  He has accordingly a substantial and legitimate interest in clearing his name.  I am reinforced in this view by the judgment to the same effect of Rimer J. In Law Debenture Trust Corp Inc v. Malley (7th May 1999).  The Court is well able to protect its process and the respondents to appeals from admissible but unmeritorious and insubstantial appeals.

15.	Accordingly even if (as the PO contends) the 1999 Determination merely decided that there was maladministration but that it did not occasion injustice, I hold that the Council was entitled to appeal.  But I also hold (as I have already said) that on a fair reading of the 1999 Determination the PO did find that there was maladministration causing non-pecuniary injustice for which no compensation should be directed.  I should add that the appeal in this case serves a useful purpose beyond deciding the issues raised on the appeal between the Council and Mr Haywood, for there are some seven other complainants to the PO against the Council in like position to that of Mr Haywood.  The authoritative determination of the issues raised on this appeal is calculated to save the time and money involved in ventilating the same issues in those proceedings.

RETROSPECTIVE EFFECT

16.	The issue raised is whether the effect of Regulation 9 is to entitle Mr Haywood to complain of maladministration which took place in 1991 prior to the date that the 1997 Regulations came into force.  The guiding principles of construction are authoritatively stated by Lord Reid in Sunshine Porcelain Potteries Pty Ltd v. Nash [1961] AC 927 at 938:

“Generally, there is a strong presumption that a legislature does not intend to impose a new liability in respect of something that has already happened, because generally it would not be reasonable for a legislature to do that....  But this presumption may be overcome not only by express words in the Act but also by circumstances sufficiently strong to displace it.”

17.	The principles have been further elaborated by Lord Mustill in L’Office Cherifien v. Yamashita Ltd [1994] AC 486 at 524:

“My Lords, it would be impossible now to doubt that the court is required to approach questions of statutory interpretation with a disposition, and in some cases a very strong disposition, to assume that a statute is not intended to have retrospective effect.  Nor indeed would I wish to cash any doubt on the validity of this approach for it ensures that the courts are constantly on the alert for the kind of unfairness which is found in, for example, the characterisation as criminal of past conduct which was lawful when it took place, or in alterations to the antecedent national, civil or familial status of individuals.  Nevertheless, I must own up to reservations about the reliability of generalised presumptions and maxims when engaged in the task of finding out what Parliament intended by a particular form of words, for they too readily confine the court to a perspective which treats all statutes, and all situations to which they apply, as if they were the same.  This is misleading, for the basis of the rule is no more than simple fairness, which ought to be the basis of every legal rule.  True it is that to change the legal character of a person’s acts or omissions after the event will very often be unfair; and since it is rightly taken for granted that Parliament will rarely wish to act in a way which seems unfair, it is sensible to look very hard at a statute which appears to have this effect, to make sure that this is what Parliament really intended.  This is, however, no more than common sense, the application of which may be impeded rather than helped by recourse to formulae which do not adapt themselves to individual circumstances, and which tend themselves to become the subject of minute analysis, whereas what ought to be analysed is the statute itself.”

The question of retrospectivity requires an examination of two inter-related matters, namely the statutory scheme and language and the fairness and reasonableness in the legislature in the particular case giving a statutory provision retrospective effect.  Both these considerations lead me in no doubt that Regulation 9 does have retrospective effect in the sense that a complaint by a person added to the class of members is entitled to complain of maladministration occurring prior to the date the regulation came into force.

18.	My reasons are as follows:

(1)	The 1993 Act is social legislation designed to improve the legal protection available to members of schemes in two ways: (a) it affords a cheap summary and informal alternative to proceedings in the ordinary courts; and (b) it affords recourse whenever injustice has been caused by maladministration whether or not the maladministration constitutes a civil wrong and accordingly whether or not there is an available remedy in private law;

(2)	the 1993 Act does something less than create new private rights or duties, render unlawful what was previously lawful, create new criminal penalties or override accrued limitation defences, which are classic situations for the strict application of the presumption against a statute having retrospective effect: see e.g. In re Barretto [1994] QB 392 and Marsai v. Apong [1998] 1 WLR 674.  What it does is provide a form of redress to members of schemes through the medium of the PO against maladministration, a concept which embraces reprehensible conduct on the part of managers of schemes of two distinct characters, namely that which does and that which does not involve an interference with a private law right or a breach of a private law duty;

(3)	the provision of the PO as an alternative medium to the ordinary courts for redress of maladministration involving an interference with pre-existing private law rights or breaches of pre-existing private law duties could occasion no concern on grounds of retrospectivity.  Any such concern must be limited to the provision of the PO as a medium for the redress of complaints of maladministration involving no such interference.  Such concern may be considered to carry limited weight, since standards have always been expected of those who manage schemes, and the legislation is merely designed to maintain those standards and afford to the victim the possibility of recourse to the PO when the conduct of the managers has fallen below those standards;

(4)	Section 146(5) of the 1993 Act expressly provides that the PO may investigate and determine any complaint by actual or potential beneficiaries notwithstanding that it arose or relates to a matter which arose before the 1st October 1990, the date on which his office was constituted.  This provision makes plain that Parliament saw no objection in principle to the legislation having this retrospective effect and placing under scrutiny the management of schemes during periods pre-dating the legislation in respects when no such scrutiny had been possible; further by Section 181(4) the Secretary of State was given power by regulation to fill gaps in the definition and he did so by Regulation 9.

(5)	nothing in the scheme or language of the Act and Regulation 9 justifies any discrimination between the jurisdiction exercisable by the PO in case of complaints by members as originally defined in the 1990 and 1993 Acts and in cases of complaints by members as defined by regulation made under those Acts.  Section 146(5) is equally applicable to both.  The natural inference (giving full weight to the language of the 1993 Act) is that the legislature intended (in the absence of a contra-indication in the regulation) the same jurisdiction to investigate and determine complaints of maladministration to apply in the case of both categories of complainant.  There would be no rational basis for differentiating between the complaints of these different members.  The legislation enabled a redefinition to be made by regulation the very day the legislation came into force: it would be extraordinary if the complaints of members added by regulation should be restricted to subsequent acts of maladministration.  It is not as though the redefinition and inclusion of additional members was the product of some separate legislation; it is the product of regulations made under the 1993 Act itself: contrast L’Office Cherifien v. Yamashita Ltd [1994] 1 AC 486 at 523F.  There is no contra-indication in Regulation 9: indeed, since its statutory purpose is to fill a gap in the protection afforded, the more natural inference is that all members of the class should likewise be entitled to complain of past maladministration.

19.	In short, any presumption against retrospectivity in case of legislation such as the present can be of limited weight.  To find in social legislation of this character a form of retrospective protection against maladministration causing injustice is scarcely something which on grounds of fairness or reasonableness could not to be expected of the legislature.  The legislature has expressly provided for such retrospectivity in case of “members” as originally defined, the scheme and language of the 1993 Act and Regulation 9 require like treatment of “members” included within the definition by Regulation 9, and there is no sufficient reason to adopt any other construction.  I should add that I find limited assistance in the Explanatory Note attached to the 1997 Regulations which is relied on by the PO as indicative of retrospectivity.  The note is admissible to identify the mischief which the regulation was attempting to remedy: see Lord Oliver in Pickstone v. Freeman [1989] AC 66 at 127A.  The note states that the provisions of Regulation 9 “clarify the extent of the jurisdiction of the Pensions Ombudsman”.  This is an indication that Regulation 9 was regarded as declaratory and the presumption against retrospectivity does not apply to declaratory legislation.  The difficulty is that Regulation 9 was not declaratory: it was intended to change the law as established by the Court of Appeal in Haywood No.1 and it is effective to do so.  The Council argued that a serious and substantial reason for holding that Regulation 9 had no retrospective effect lay in the lack of Parliamentary attention given to the 1997 Regulations to be inferred from retrospectivity (as argued on behalf of the Council), the particular Parliamentary procedure pursuant to which the 1997 Regulations were made, and the fact that the Regulations were placed before Parliament shortly before Christmas.  I regard this argument as neither serious nor having any substance whatsoever.

RES JUDICATA

20.	The Council have submitted that, even if Regulation 9 has retrospective effect (as I have held), nonetheless the PO was precluded from investigating the 1998 Complaint by reason of the doctrine of “res judicata”, which was brought into play by the judgment of the Court of Appeal in Haywood No. 1.  This submission raises a number of distinct questions.

(a)	The first such question is whether a complainant before the PO can be bound by the doctrine of res judicata arising from a previous determination of the PO and judgments on appeal from that determination.  A distinctive feature of proceedings before the PO is the inquisitorial character of the proceedings and in Thoday v. Thoday [1964] P 181 at 197 Diplock LJ left open whether the doctrine of res judicata developed by the common law under the adversary system of procedure should be extended to courts which exercised an inquisitorial function.  In my view the form of procedure is not today determinative of application of the doctrine.  A modern and authoritative statement of the doctrine of res judicata is to be found in the speech  of Lord Bridge in Thrasyvoulou v. Environment Secretary [1990] 2 AC 273 at 289:

“The doctrine of res judicata rests on the twin principles which cannot be better expressed than in the terms of the two Latin maxims ‘interest respublicae ut sit finis litium’ and ‘nemo debet bis vexari pro una et eadem causa’.  These principles are of such fundamental importance that they cannot be confined in their application to litigation in the private law field.  They certainly have their place in criminal law.  In principle they must apply equally to adjudications in the field of public law.  In relation to adjudications subject to a comprehensive self-contained statutory code, the presumption in my opinion, must be that where the statute has created a specific jurisdiction for the determination of any issue which establishes the existence of a legal right, the principle of res judicata applies to give finality to that determination unless an intention to exclude that principle can properly be inferred as a matter of construction of the relevant statutory provisions.”

The 1993 Act, as it seems to me, creates a comprehensive statutory code for the investigation and determination of complaints made by qualified complainants of maladministration causing injustice.  Subject only to any appeal, the determination (together with any consequent direction) is made by Section 151 of the 1993 Act final and binding on the parties and enforceable as if it were a judgment of the court.  As a matter of principle and common sense, the doctrine of res judicata should apply equally to determinations and directions of the PO (and judgments on appeal from him) as to other judgments and determinations, and res judicata should as much be a bar to a complaint before the PO as it is a bar to the commencement of legal proceedings to which (in cases where the acts of maladministration complained of consist of interference with private law rights or breaches of private law duties) it is an alternative.  I should add that, if contrary to my view for any technical reason the doctrine of res judicata were held to have no application, it would be a proper exercise of his discretion by the PO in the interests of finality not to allow an issue already determined to be reopened before him: consider R. v. Secretary of State for the Environment ex p Hackney LBC [1984] 1 WLR 592 at 602 A-B.

(b)	The second question is whether the doctrine of res judicata applied in this case so as to bar investigation and determination by the PO of the 1998 Complaint.  The Council maintains that the bar is created by the decision of the Court of Appeal in Haywood No. 1.  There is a body of authority on the availability of a plea of res judicata where a claim has been made which failed by reason of the current state of the law, and where later, after the state of the law has been retrospectively changed, a new claim is made which for all practical purposes is identical to the old.  In each case it is of course essential to consider the precise terms of the retrospective legislation which may direct varying degrees of retrospective operation, but subject to any such clear statutory provision to the contrary the principles (as it appears to me) are as follows:

(i)	where the first claim is rejected on the ground that the court - a term intended to include any other equivalent body with adjudicative (as opposed to administrative functions) had no jurisdiction to entertain the claim, this rejection may operate as res judicata in respect of the issue whether the court at the time of the claim had jurisdiction to entertain the claim, but it does not operate as res judicata in respect of the merits of the claim.  The claimant is accordingly free to renew his claim before another court which does have jurisdiction or (if the jurisdiction of the first court is expanded) before that same court: see e.g. Hines v. Birkbeck College [1992] Ch 33;

(ii)	where the court has jurisdiction to entertain the first claim and decides it on the merits adversely to the claimant by reason of a shortcoming in the general law as it stands, res judicata precludes the claimant making the same claim on the same facts again later even after a retrospective change in the law remedying that shortcoming: see Lemm v. Mitchell [1912] AC 400 and Port of Melbourne Authority v. Anshun Pty Ltd [1980-1] 147 CLR 589 at 611:

(iii)	the dismissal of a claim on the merits occasioned by a shortcoming in the general law will not operate as res judicata precluding the claimant at a later date making a claim to the same relief where he has become entitled to that relief on different facts under retrospective legislation: see Hewitt v. Lewis [1986] 1 WLR 444 at 447H-448B.

21.	I turn now to apply these principles to the facts of this case.  The decision of the Court of Appeal in Haywood No. 1 operated by way of res judicata to bar any later claim by Mr Haywood that under the provisions of the 1993 Act as enacted he was qualified to make a complaint in respect of the Severance Scheme.  But Regulation 9 changed the law and qualified him to make a complaint to the PO in respect of the Severance Scheme.  Since the decision of the Court of Appeal in Haywood No. 1 rejected the 1993 Complaint on the ground that the PO had no jurisdiction to entertain it (and did not determine the complaint on the merits), it does not operate as res judicata barring Mr Haywood in the complaint which he is now qualified to make from covering exactly the same ground as was covered by the 1993 Complaint.

TIME BAR

22.	The 1996 Regulations contain in Regulation 5 the current time limits for making complaints to the PO.  The relevant provisions are as follows:

“5(1)	Subject to paragraphs (2) and (3) below, the Pensions Ombudsman shall not investigate a complaint or dispute if the act or omission which is the subject thereof occurred more than 3 years before the date on which the complaint or dispute was received by him in writing.
...
(3)	Where, in the opinion of the Pensions Ombudsman, it was reasonable for a complaint not to be made or a dispute not to be referred before the end of the period allowed under paragraphs (1) and (2) above, the Pensions Ombudsman may investigate and determine that complaint or dispute if it is received by him in writing within such further period as he considers reasonable.”

23.	The Council submitted that the 1998 Complaint was time barred because the acts complained of occurred more than 3 years before the date on which the complaint was received and accordingly triggered Regulation 5(1); and that Regulation 5(3) was inapplicable because, though Mr Haywood was not qualified to make the complaint until after the 1997 Regulations came into force, he cannot say that it was reasonable to have made no complaint before the end of this three year period commencing in 1991, because he had in fact made a complaint within that period, namely the 1993 Complaint.  This is an extraordinary submission, for it amounts to this, that a complainant cannot invoke Regulation 5(3) if he could previously have made, or has previously made, a complaint which he was not qualified to make and which accordingly would have been or was invalid; and that a complaint can become time-barred even before it can lawfully be made.  Plainly Regulation 5(3) is concerned with the position where a complainant qualified to make a complaint has deferred doing so and whether he has done so for a good and sufficient reason.  The PO’s decision that Regulation 5(3) was applicable and on this basis to investigate and determine the 1998 Complaint was clearly correct: indeed it was the only conclusion which he could rationally have reached.  I accordingly reject this objection to the assumption of jurisdiction by the PO.

CONCLUSION

24.	I accordingly hold that the Council is entitled to appeal against the 1998 Determination, but I also hold that the Council’s challenge to the 1998 Determination fails and I accordingly dismiss the appeal.

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