Mr Justice Knox's ruling backs a similar finding by the Pensions Ombudsman last year, which Hillsdown had tried to challenge in court.
Legal experts said last night that the legal decision gave greater weight to the Ombudsman, Dr Julian Farrand, in future decisions over pension schemes, which control billions of pounds of employers' and employees' funds.
The ruling strengthens the rights of employees and pensioners, for whom the only avenue of protest against decisions taken by company pension schemes is through the Ombudsman.
The case follows Hillsdown's takeover in 1983 of Fatstock Marketing Corporation (FMC), a small food company, whose pension scheme had a large surplus.
Although the rules of the fund included restrictions preventing trustees paying any surplus to FMC, Hillsdown devised a series of transactions in an attempt to overcome them.
Hillsdown persuaded the trustees to transfer the members and assets to its own pension plan, the HF scheme.
Just pounds 1.3m of the surplus of more than pounds 20m was used to improve benefits for FMC pensioners, after which the HF scheme rules were amended to allow the pounds 18.4m surplus to be paid to Hillsdown, minus 40 per cent tax.
Hillsdown, which in the process enhanced the benefits to the FMC scheme members, honestly believed itself to be entitled to what it did. But Mr Justice Knox said the company was still "unjustly enriched".
The judge said members of the pension scheme were never told exactly what would happen to their money. Pension fund members were told of the merger but not about the payments to Hillsdown. When they eventually found out many years later, two individual pensioners appealed to the Pensions Ombudsman. Dr Farrand ruled in October 1995 that the FMC trustees acted in breach of trust and Hillsdown had breached their duty of good faith.
During the High Court hearing, David Oliver QC, for Hillsdown, challenged the Ombudsman's decision in the High Court and claimed the company had acted honestly.
But Mr Justice Knox said yesterday: "In my view one only has to compare the position of Hillsdown, who successfully wielded a big but misguided stick, with that of the members of the FMC scheme, who were never told anything ... to see which way the scales of justice fall."
Dates must still be set for more hearings to determine how pensioners are to be compensated.
David Parkin, a partner at Paisner & Co, solicitors to the Pensions Ombudsman, said after the hearing: "The Hillsdown appeal shows that an individual pension scheme member, or a small group of members, can effectively bring a test case to the Pensions Ombudsman on behalf of all the members."
A Hillsdown spokesman said: "The key thing is that [the judge] said that any remedy should be proportionate to the injustice suffered."Reuse content