Murray v. McDougall, 2015 NSSC 215

Ms. Murray and Mr. McDougall had a common law relationship from 2000 to 2008. The parties had separated for a brief period, but resumed cohabitation after their child was born in 2005 until their separation in 2008. Mr. McDougall was employed full time as a teacher and Ms. Murray attended school and worked at a coffee shop. Following their separation, Ms. Murray, among other things, claimed division of Mr. McDougall’s pension on the basis of unjust enrichment. As the parties were not married, Ms. Murray had, pursuant to matrimonial property law, no statutory entitlement to a share of her spouse’s pension.

The Nova Scotia Supreme Court (Court) considered the circumstances of the parties’ relationship and held that Mr. McDougall had been enriched by both Ms. Murray’s financial contribution and by the housework and childcare obligations she undertook during their relationship. The Court held that caring for their child and working in the home had deprived Ms. Murray of the opportunity to work, improve her income and advance her career while Mr. McDougall’s career benefited. The Court held that there was no juristic reason for this enrichment. The Court held that the parties contributed equally to a joint family venture during the period after the child was born, from May 2005 to May 2008, and that an appropriate remedy for the unjust enrichment was for Ms. Murray to receive an equal share of Mr. McDougall’s pension entitlement earned during that period, divided in accordance with minimum pension standards legislation.

Nova Scotia Supreme Court Decision

MacEachen v. Minnikin, 2015 NSCA 81

Ms. MacEachen was married to Mr. Minnikin at the time of his death and was his third wife. Mr. Minnikin was retired and in receipt of pension benefits at the time of his death. Following their separation, Mr. Minnikin and his second wife, Ms. Minnikin, entered into a separation agreement (Separation Agreement) which addressed Mr. Minnikin’s pension. The Separation Agreement provided that Ms. Minnikin would continue to be the beneficiary under Mr. Minnikin’s pension, but that Ms. Minnikin would execute the necessary documentation to release herself as the beneficiary in the event Mr. Minnikin remarried. Mr. Minnikin subsequently retired, but at the time his pension benefits commenced Ms. Minnikin remained his spouse for federal Pension Benefits Standards Act1985 (PBSA) purposes, though he had already begun cohabiting with Ms. MacEachen. After he remarried, Mr. Minnikin did not take any steps prior to his death to change the beneficiary designation from Ms. Minnikin to Ms. MacEachen. In contrast, Mr. Minnikin did take active steps to change the beneficiary designation on life insurance policies and other benefits to which he was entitled. Under the pension plan and the PBSA, Ms. Minnikin was the spouse entitled to the pension death benefit as at the date of Mr. Minnikin’s retirement and began receiving pension benefits after his death.

Ms. MacEachen filed a Notice of Application seeking entitlement to Mr. Minnikin’s pension benefits on the basis of the Separation Agreement and under the principles of unjust enrichment.

As discussed in the March 2014 Pensions Newsletter, the application judge dismissed Ms. MacEachen’s claim. The application judge held that the Separation Agreement provided that Ms. Minnikin would be designated as the pension beneficiary and that Mr. Minnikin took no steps following his remarriage to change his designated beneficiary or to seek a waiver from Ms. Minnikin. The application judge held that Mr. Minnikin made conscious choices about what to change following his remarriage and that he did not intend to “leave everything” to Ms. MacEachen as she claimed. The application judge also dismissed the claim of unjust enrichment holding that nothing Ms. MacEachen did enriched Ms. Minnikin nor was there a corresponding deprivation brought by the actions or inactions of Ms. Minnikin. In addition, the Separation Agreement and the beneficiary designation amounted to juristic reasons for Ms. Minnikin to retain the pension benefits. Ms. MacEachen appealed.

The Nova Scotia Court of Appeal substantially agreed with the application judge’s reasons and dismissed the appeal.

Nova Scotia Court of Appeal Decision

Hewlett v. Ontario (Superintendent Financial Services), 2015 ONFST 31

At the time of his death, a pension plan member (Member) was legally married to his former spouse and had been living in a conjugal relationship with his new spouse (Spouse) for over three years. Both the Spouse and the Member’s designated beneficiaries claimed entitlement to the Member’s pre-retirement death benefit. The plan administrator was unable to determine the appropriate beneficiary and did not distribute the death benefit. The Ontario Superintendent of Financial Services (Superintendent) issued a notice of intended decision proposing to order the plan administrator to determine and pay the eligible recipient(s). In response, the Spouse requested a hearing on the issue of entitlement.

The facts of this case are similar to the facts in Carrigan v. Carrigan Estate, 2012 ONCA 736 (Carrigan), discussed in the March 2013 Pensions Newsletter. In Carrigan, the Ontario Court of Appeal (Court of Appeal) denied payment of a pre-retirement death benefit to the common law spouse of the plan member on the basis that the member was still legally married to another person at the date of death.

Prior to Carrigan, where more than one person qualified as a member’s spouse within the meaning of subsection 1(1) of the Ontario Pension Benefits Act (PBA), section 48 of the PBA was interpreted as providing entitlement to the pension benefit to the spouse who was living with the member in a conjugal relationship on the date of the member’s death. In Carrigan, the Court of Appeal held that the use of the word “spouse” in subsection 48(3) of the PBA only applied to a married spouse as a common law spouse could not be living separate and apart from the member while remaining the member’s spouse as defined in subsection 1(1). InCarrigan, because the member was living separate and apart from his married spouse, the Court of Appeal held that subsection 48(1) of the PBA did not apply to either spouse and was rendered inoperable. As a result, the designated beneficiaries were entitled to the pension death benefit. Following Carrigan, the Ontario legislature amended section 48 of the PBA to restore the previous interpretation that the spouse living with the member at the time of death was entitled to the pre-retirement death benefit. However, this amendment does not apply retroactively and only applies to members who die on or after July 24, 2014.

The Financial Services Tribunal (FST) held that the facts of this case are identical to the facts in Carrigan. Because the Member died on September 12, 2012, the rule in Carrigan that there is no spousal priority where the member and the married spouse are living separate and apart applies and the Member’s designated beneficiaries are entitled to the Member’s pre-retirement death benefit. The FST further reminded plan administrators of their responsibility to make administrative decisions where the law is clear, in view of limited Superintendent and FST resources and the fact that plan members and beneficiaries should not be put to unreasonable expense and delay.

Financial Services Tribunal Decision