JUDGMENT:

Lady Justice Arden:

[1] This is an appeal by Singapore Airlines Ltd ("SA") from the order of Peter Smith J dated 20 January 2011. It raises important points about the meaning of "Earnings" for the purposes of The Singapore Airlines Pension and Life Assurance Scheme ("the Scheme") established by SA for its employees. The expression "Earnings" plays a key role in determining the amount of an employee's pensionable earnings and the amount of his or her contribution to the Scheme. The judge's order was made on a preliminary issue in a claim brought by SA in proceedings against the respondent, Buck Consultants Ltd ("BC") for negligence in the drafting of a revised version of the rules of the Scheme in 2000. We are not concerned with those allegations in those proceedings save to note that the preliminary issue had to be resolved for the purposes of SA's action against BC. However, and this is relevant to an issue as to costs considered below (Issue 4), BC had also been appointed by order of the court to represent the members of the Scheme on the preliminary issue.

[2] The Scheme was established by an interim trust deed made on 28 June 1974. SA is, and at all material times has been, the sole and principal employer for the purposes of the Scheme. The second claimant in the action, Capital Cranfield Pension Trustees Limited, is the Scheme's current trustee ("the Trustee"). From 1997, BC was retained by SA as an actuary pensions administrator and pension benefits consultant. It gave advice on, and drafted documents in relation to the Scheme.

[3] The first rules of the Scheme ("the 1976 rules") were attached to the Definitive Trust Deed ("the Trust Deed") of 1 April 1976. The 1976 rules were expressed to take effect from 1 July 1974. In 1981 amended rules for the Scheme were adopted ("the 1981 rules"). The 1981 rules were expressed to take effect from 6 April 1975, subject to an immaterial exception.

[4] The 1976 rules included the following definition:

"'Salary' means for each Member the annual rate of his basic remuneration from the Employers and London Weighting Allowance (if applicable) excluding any other emoluments."

[5] The 1981 rules used the defined term "Earnings", as opposed to the term "Salary", but continued to employ the phrase "basic remuneration". Much of the argument on this appeal has focused on this important term. For simplicity, I propose to divide the definition of "Earnings" into its three component parts, which I shall call "Limbs". The definition of "Earnings" is as follows:

"[Limb 1] 'Earnings' means for each Member the annual rate of his basic remuneration from the Employers.

[Limb 2] For the purposes of calculating Earnings of an employee who is in receipt of fluctuating emoluments, the annual rate of any such emoluments to be included in his Earnings shall be taken as the average annual amount received over the last three years, or over such shorter period as he has been in receipt of such emoluments.

[Limb 3] For the purposes of calculating Earnings of an employee paid on an hourly basis, remuneration in respect of any hours of work in excess of the Employer's standard working week for the time being in operation which is appropriate to the nature of such employee's employment will be ignored and the annual rate of his remuneration will be 52 times the weekly rate."

Neither the 1976 nor the 1981 rules define "basic remuneration" or "fluctuating emoluments".

[6] I shall also refer below to cl 2(b) of the Trust Deed. This provides that:

"(b) the Trustees shall have full power to determine all questions and matters of doubt arising in connection with the Scheme whether relating to the construction thereof or the benefits thereunder or otherwise ..."

[7] Rule 17 of the 1981 rules deals with limitations on benefits. Reference is made on this appeal to sub-rule (k), which provides in material part:

"In this rule, 'Final Remuneration' means in relation to a Member at Normal Retiring Date, or the date of termination of