Court grants injunction to enforce judgment debt against member’s personal pension

The High Court has granted a mandatory injunction allowing a creditor to enforce a judgment debt against a debtor's SIPP.

The case concerned the enforcement of a judgment debt of £402,500 arising from a Tomlin order. (A Tomlin order is a consent order, agreed between the parties and approved by the court. The order stays further proceedings, so long as the debtor adheres to its specific terms of settlement).

The debtor agreed to pay £450,000 in two instalments as set out in the order: one of £150,000 and the balance from his self-invested pension fund (SIPP) upon reaching age 55. Failure to pay under the terms of the order would mean the whole sum became immediately payable.

The court considered the principles established in the 2012 decision in Blight v Brewster and subsequent cases and found it just and convenient to grant the orders sought.

The court also concluded it was appropriate to include a default provision authorising the creditor's solicitors to sign relevant documentation on the debtor's behalf if he failed to comply.

Comment

In contrast to cases where claimants have sought orders against debtors' rights under occupational pensions schemes, the claimant here was successful.

The most recent case involving a debtor with an occupational scheme pension fund was Manolete Partners plc v White [2024]. The Court of Appeal held that section 91 of the Pensions Act 1995 prevented an injunction from being granted, as the effect of the order was to restrain the member from receiving their pension. The Court held that "subject to specific exceptions", a member's entitlement to rights or future benefits under an occupational pension scheme should "be immune from attachment to pay the claims of creditors".

Section 91 does not apply to personal pension schemes. As a result, following Manolete it appears that individuals who are members of occupational pension schemes enjoy greater protection against the enforcement of judgment debts against their pension than members of personal pension schemes.