Case law update

An insolvency case law update prepared by Alexandra Withers, Associate Director at Manolete Partners PLC.

Accessing directors’ pensions

Manolete Partners Plc v White [2023] EWHC 567 (Ch)

In this judgment of His Honour Judge Hodge KC sitting as a High Court Judge handed down on 16 March 2023, Manolete obtained an order against a director, who had failed to pay a judgment debt, compelling him to draw down his pension benefits to satisfy the judgment debt.  This case is good news for those who are judgment creditors (i.e., have brought a successful claim with a sum of monies ordered in their favour) facing judgment debtors who refuse to pay.


Mr White was a director of Lloyds British Testing Limited, which entered creditors’ voluntary liquidation on 28 November 2017.  In the 20 months preceding liquidation, Mr White had caused the company to make various payments, both directly to him and also to third parties in respect of luxury cars and holidays, home improvements at Mr White’s home, his son’s rent, and a helicopter.  None of these payments were in the interest of the company.

Manolete took an assignment of the claims against Mr White, and issued a claim in April 2021.  At trial in August 2022, it was held that the payments were made in breach of fiduciary duty, and Mr White was ordered to repay what became in excess of £1m with costs.

Mr White did not pay, yet he had a pension fund which contained a property in Swansea which was valued at £800,000 back in 2018, and which is presently occupied under a licence paying £60,000 per year.

The application

Manolete applied for an injunction order pursuant to s 37 Senior Courts Act 1981, giving its representative the right to instruct a sale of the pension fund property, to draw down sums for the proceeds of sale to satisfy the judgment debt, and for the draw down to be paid direct to Manolete.

Mr White’s defence to the application was based primarily on s 91 Pensions Act 1995, which deals with the inalienability of pensions.  In short, it prohibits the assignment, commutation or surrender of a pension scheme to another, and prohibits any order the effect of which would be that the person entitled to the pension would be restrained from receiving that pension.

A reminder of the law around pension draw down

The starting point is the decision in Blight v Brewster [2012] 1 WLR 2841, where the court held it has the power to order a judgment debtor to draw down their pension and to order a debtor to delegate pension powers.  The court held that such an order is in effect an injunction, which it has the power to make under s 37 Senior Courts Act 1981.

Then in 2022, we had Bacci v Green [2022] EWHC 486 (Ch) at first instance, where it was held, albeit only obiter, that s 91 Pensions Act 1995 does not prevent the court from granting an injunction in such cases.  This was because any injunction would not have the effect of restraining receipt of the pension (which is what s 91 prohibits), but rather the opposite – it orders payment out of the pension.

Whilst that point was not challenged on appeal, the Court of Appeal in Bacci v Green [2022] EWCA Civ 1393 did go on to note that a judgment debt founded on fraud would weigh heavily in favour of granting an injunction under s 37 (of course, the judgment against Mr White was based on his breach of fiduciary duties owed to a company of which he was a director).

The decision in Manolete v White

His Honour Judge Hodge KC firstly concluded that he was satisfied that “the court clearly has the necessary jurisdiction [under s 37] to grant an injunction requiring the respondent to exercise such rights as he may have under the Scheme Rules to draw down his pension pot to enable him to satisfy his judgment debt to the applicant”, thus confirming the accepted dicta of Blight v Brewster.

In considering whether s 91 was a bar to the exercise of that jurisdiction, His Honour Judge Hodge KC considered that “provided I direct that payment of the respondent’s pension pot is to be made to a nominated UK bank account in the name of the respondent, I do not consider that there will be any contravention of the statutory prohibition in s. 91 of the Pensions Act because, as explained by the Deputy Judge in that case, the order will not have the effect of restraining the respondent from receiving that pension pot but rather the opposite: it will ensure that the payment of that pension pot is made to the respondent, rather than remaining within the Scheme wrapper.”

Having determined that (1) he had the jurisdiction under s 37, and (2) s 91 was not a bar, His Honour Judge Hodge KC went on to consider the exercise of his discretion and determined that it was just, equitable and convenient to order the draw down.  Whilst all cases will turn on their own facts, a key part of the decision to exercise his discretion was the fact that the property asset within the pension fund was derived entirely from funds provided by the company.


The key takeaway here is that there is a distinction between restraining receipt of pension funds, and being compelled to receive the pension funds to apply these in a particular way (in this case, to pay debts).

This case will therefore be useful to judgment creditors dealing with debtors who refuse to make payment but have sums in their pension pots.

Content courtesy of IPA corporate partner Manolete Partners PLC.

Please note that guest content does not necessarily represent the views of the IPA.