In Century Property (Leeds) Ltd v Eville & Jones (Group) Ltd the High Court has made an order against a SIPP member requiring a member to take a lump sum from his SIPP on reaching his 55th birthday to enable enforcement of a judgment debt against the member’s pension fund. The order was also made against the professional trustee of the SIPP, which had not taken part in the proceedings.  In concluding that it was “just and convenient” to make the order sought, the judge took into account:

• that the member’s pension fund was sufficient to satisfy the judgment debt (which was approximately £450,000 as at the date of a recent hearing);
• there was no suggestion that the tax liability incurred by the member in taking the lump sum would be so great that there would be no benefit to the member’s creditor in making the order;
• there was no evidence that the member had any creditors other than the claimant;
• there was no evidence of any other asset against which the judgment debt might be enforced; and
• that making the order was necessary in order for the claimant to take effective steps to satisfy the judgment debt, and that the member’s past conduct indicated a clear intention to delay efforts to enforce the debt.

The court also made an order giving the claimant’s solicitors authority to sign the documentation required for the member to withdraw his funds from the pension scheme.  The judge considered there was clear evidence from the member’s past conduct that, in the absence of such an order, the member was likely to seek to delay the enforcement process by not completing the required documents.

Our thoughts

As regards a creditor’s ability to enforce a judgment debt against a pension fund, whether the scheme is a SSAS or a SIPP makes a key difference to the legal position.  As a SSAS is an occupational pension scheme, section 91 of the Pensions Act 1995 will generally prevent enforcement of a judgment debt against a member’s pension fund.  However, section 91 does not apply to personal pension schemes, and there have now been a number of reported cases in which the courts have been willing to make orders to allow a creditor to enforce a judgment debt against a member’s pension fund held in a personal pension scheme.