McConnell v Boyd 2

United Kingdom
27/01/1997
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Reference: (1997) OPLR 53

The employer set up a standing order to pay contributions of GBP 5,000 per month into the trustees' bank account. However, with the employer in financial difficulty, two of the four trustees (who were also directors) withdrew those contributions from the bank account and repaid them to the employer. This happened ten times.

The Ombudsman found that these two trustees were guilty of maladministration and in breach of trust. He directed that they should be personally liable to account for the sums removed from the bank account and ordered them each to pay to the pension scheme GBP 25,000 with interest.

On appeal, the two trustees conceded that there had been a breach of trust and maladministration. However, they argued that there was no loss to the pension scheme as, had they not taken this action, the employer would simply have cancelled the standing order. Alternatively, they argued that the loss was in fact only GBP 5,000 as the various payments and repayments were simply the same GBP 5,000 rotating between the company and the pension scheme. Sir John Vinelott rejected these arguments and confirmed the Ombudsman's determination.

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