Background
Mr Roy Thomas (the “Appellant“) applied for a cohabiting partner’s pension and a lump-sum death grant from the Southwark Pension Fund (the “Respondent“) following the death of his partner, Ms. Claudette Coke, on 11 March 2021.
The Appellant and Ms Coke had a business together (Yeh Mon Juice & Food Ltd), but it did not appear to have actively traded in the last two years before Ms Coke’s death.
The Respondent administered the Local Government Pension Scheme (“LGPS“) and initially denied the Appellant’s claims based on his divorce from Ms. Coke in January 2012 and a lack of evidence supporting their cohabitation or financial interdependence.
In June 2021 the Respondent, in exercise of its discretion, awarded a lump sum death grant in the sum of £157,707 to Ms. Coke’s two eldest children from previous relationships.
By email on 24 June 2021 the Respondent informed the Appellant that it had decided that he did not qualify for a spouse’s pension from the LGPS because he had been divorced from Ms Coke in 2012 and they had not been “legally married” at the time of her death. It said that it would be happy to investigate further if he could provide evidence of cohabiting partnership status.
Subsequent correspondence indicated that the Appellant had not adequately demonstrated financial interdependence or cohabitation, leading to the Respondent’s final decision not to award the spouse’s pension.
Pensions Ombudsman
The Appellant’s complaint was escalated to the Pensions Ombudsman. It was after he had done so that he had learned from the Respondent that Ms Coke had named him on the LGPS death benefit expression of wish form in 2017. With that knowledge, he applied to extend his complaint to the decision not to award him the lump-sum death benefit.
The Appellant claimed that he and Ms Coke had reconciled in 2013, that they had been living together at the address shown on the expression of wish form, that they had been intending to remarry once Ms Coke’s health had improved, and that he had been caring for her during her final illness.
The Appellant submitted various evidence to demonstrate his financial dependency or interdependency with Ms Coke, including:
- a joint Costco account opened in January 2020;
- a tenancy agreement showing them as joint landlords of the Appellant’s flat; and
- bank statements showing payments between the Appellant and Ms Coke in the two years before her death.
The Respondent contended that the evidence related primarily to their business relationship and did not establish personal financial dependency or interdependency.
The Pension Ombudsman determination dated 24 February 2024 concluded that the Appellant had suffered no financial loss as a consequence of the Respondent’s dealing with his application. However, the Ombudsman did determine that he should be paid a modest monetary award (£500) in recognition of the distress and inconvenience he had suffered by reason of the Respondent’s failure to tell him that Ms Coke had nominated him for the lump sum death benefit in the expression of wish form or that the Respondent had decided not to award him that benefit.
High Court Appeal
A determination of the Pensions Ombudsman is final and binding on all parties subject to a successful appeal on a point of law to the High Court.
In this instance the Appellant’s grounds of appeal focused on mainly two things: (1) the Respondent’s decision not to award him the lump sum death benefit; and (2) the Appellant’s efforts to establish that he and Ms Coke had been living together as a married couple. Permission to appeal was not given on the former point.
The court found that the Pensions Ombudsman erred in accepting the Respondent’s reasoning and conclusion that the Appellant did not qualify as a cohabiting partner under the LGPS. The key issues were:
- the condition for being a “cohabiting partner” under the LGPS requires showing either that the Appellant was financially dependent on Ms. Coke or that they were financially interdependent. It does not require showing that Ms. Coke was financially dependent on the Appellant. The Respondent erroneously believed that it was also necessary to show that Ms Coke was dependent on the Appellant;
- the Respondent’s decision was based in part on a finding that the Appellant and Ms Coke did not live together as husband and wife, which the Pension Ombudsman rightfully rejected. The Appellant was living with Ms Coke at her home. She was therefore providing him with accommodation, which freed up his own flat to produce rental income. On the face of it, this appears to support a contention that he was financially dependent on her. As the flat owned by him was being let out to a third party under a tenancy that named both the Appellant and Ms Coke as the landlords was surely significant evidence supporting his contention that he and Ms Coke were cohabiting; and
- the Respondent may have improperly discounted evidence of financial dependency or interdependency on the basis that it related to business activities, without properly considering whether those transactions amounted to a personal financial relationship. For instance, even though the Respondent attributed some transactions (for example, on the Costco account) to business-related matters, it is doubtful whether the company ever traded and it certainly did not do so for a two year period ending with Ms Coke’s death. The court considered that the evidence suggested some level of financial interdependence, including shared business interests and correspondence indicating cohabitation.
Decision
There was clear maladministration by the Respondent and the Pension Ombudsman’s contrary conclusion was wrong in law.
The appeal was allowed. The Appellant’s application for the cohabiting partner’s pension was remitted to the Respondent for reconsideration and a fresh decision.
WB Comment This case highlights the importance of recognising the nuances of cohabitation and financial interdependence in pension entitlement, especially where marriage does not reflect the status of the relationship.