Millions of euro in damages claimed by Tara Mines against pension trustees

Tara Mines is claiming some €2.3 million damages against the trustees of its pension scheme arising from an amendment positively affecting the entitlements of 80 disabled former miners.

The amendment, made in 1999, meant better entitlements for the disabled group but Boliden Tara Mines Ltd took legal proceedings for a rectification order, arguing the amendment did not accurately reflect the intentions of either Boliden or the trustees, the Irish Pension Trust (IPT), to exclude the disabled group from certain pension entitlements available to existing employees.

Boliden also initiated proceedings in 2006 against the IPT over the insertion of the amendment but had parked those pending the outcome of its bid for rectification.

The High Court refused rectification but the Supreme Court in late 2010 overturned that refusal and granted rectification.

In November 2012, Boliden served notice intended to pursue the proceedings against the IPT and delivered a statement of claim in November 2013, three months after expiry of a deadline for service of that.

In February 2014, the Master of the High Court refused Boliden the necessary extension of time to deliver the statement of claim and dismissed the company’s proceedings.

Boliden appealed that dismissal to the High Court and Ms Justice Marie Baker has allowed the appeal with the effect Boliden can pursue the IPT.

While finding Boliden’s delay serving its statement of claim was inordinate and, after December 2010, inexcusable, there was no evidence the delay had prejudiced the IPT’s right to a fair trial, the judge said.

The key factor in her decision to allow the case proceed was a December 2012 letter from a solicitor for the IPT which impliedly accepted he did not consider there was actual prejudice and which appeared focussed on getting the matter to trial, she said.

Boliden can now pursue its claims of negligence, breach of duty and breach of contract against the IPT over alleged failure to draft an amendment to the pension trust deed in accordance with instructions of Boliden.

The €2.3m damages sought includes the €1.65m legal costs of the rectificaiton action and of allied proceedings seeking directions concerning payments to some employees, plus about €650,000 paid out to those employees.

The Tara pension plan was from 1996 governed by a deed of amendment between the company and the IPT which defined pensionable salary as a member’s annual rate of basic salary less an amount to be decided by the employer not exceeding one and a half times the annual State Old Age Pension. The OAP deduction provided for in the 1996 deed was known as “integration”.

A further deed of amendment in 1999 removed integration, representing a significant benefit for members, especially lower paid workers. The High Court later ruled a proviso in the 1999 amendment applied to disabled workers receiving Income Continunance Payments.

In granting Boliden’s appeal against that High Court decision, the Supreme Court ruled the evidence from both parties involved in the 1999 amendment was to the same effect — the deed did not reflect the intention of either Tara Mines or the IPT to exclude members in receipt of ICP benefit from the entitlement to be excluded from “integration”.