Clark v. TD Waterhouse Canada Inc., 2013 ABCA 123
This is an appeal of a 2012 decision of the Alberta Court of Queen’s Bench in which the court dismissed the plaintiff’s claim that TD Waterhouse Canada Inc. (“TD”) breached its fiduciary duty in the management of his Alberta-registered locked-in retirement account (“LIRA”).
The facts were as follows. In 2004, Mr. Clark retired and transferred his pension funds to a self-directed LIRA with TD. He then moved to Scotland and obtained non-resident status. Some of TD’s documents erroneously indicated that the Alberta-registered pension plan was federally regulated. This became significant as Alberta legislation permitted early release of funds to a non-resident, while, at the time, federal legislation did not. On two occasions in 2005, Mr. Clark requested early release of funds from his LIRA and TD complied. Several months later, he again requested the release of funds, but TD denied his request on the grounds that his account was subject to federal legislation. Eleven months later TD confirmed that the account was subject to Alberta legislation and that the funds could be released to Mr. Clark. In 2006, Mr. Clark commenced an action against TD alleging that, as a result of TD’s error, he suffered damages including loss of business opportunities.
The lower court found that the error by TD was honest and inadvertent, not intentional, and that there was no evidence that TD had misappropriated funds from the LIRA or benefitted from the error. It further held that there had been a temporary administrative error which was fully corrected, rather than a breach of fiduciary duty. Finally, the lower court held that Mr. Clark had not proven that he had suffered any damages as a result of the delay in payment.
In April 2013, the Alberta Court of Appeal found that there was no reason to interfere with the lower court’s decision and dismissed Mr. Clark’s appeal.
Love v. Love, 2013 SKCA 31
In this case, the Saskatchewan Court of Appeal considered whether the doctrine of rectification should be applied to correct a beneficiary designation change form under a group life insurance plan.
When Mr. and Mrs. Love divorced, Mr. Love emailed his employer and advised that he wanted to change the beneficiary of “my pension, etc. (from my former wife to my son).” He was given a beneficiary change form, which he improperly completed and did not sign, but did return to his employer. When Mr. Love died intestate, his son (Thomas) and former wife both claimed the life insurance proceeds. Among Thomas’ many arguments in support of his claim that he was entitled to the life insurance proceeds was that the beneficiary designation form should be changed so as to give effect to his father’s obvious intention to designate him as his beneficiary. The Saskatchewan Court of Queen’s Bench dismissed Thomas’ argument but, on appeal, the Saskatchewan Court of Appeal held that the doctrine of rectification should be applied to correct his father’s mistake in completing the beneficiary designation form.
According to the Court of Appeal, although the doctrine of rectification is generally applied when a contract mistakenly fails to give effect to the true agreement of the parties, it can also be applied when a unilateral mistake has been made on behalf of the sole party to a document. The court found that this was an appropriate case in which to apply the doctrine of rectification to a unilateral mistake as Mr. Love’s mistake was “self-evident and beyond reasonable dispute.” Mr. Love had taken all of the steps which, from his perspective, were necessary to give the beneficiary change form full legal effect. The court found that the lack of signature was not determinative because all parties agreed that the notations on the form had been made by Mr. Love and the employer and the insurer had been prepared to act on the form notwithstanding that it was not signed.
The court ordered that the beneficiary change form be amended to indicate that the beneficiary of Mr. Love’s life insurance coverage was Thomas Love and that the life insurance proceeds be payable to Thomas.
Insurance Corporation of British Columbia v. Canadian Office and Professional Employees Union, Local 378, 2013 BCSC 523
The parties in this case disagreed over the extent of their respective contribution obligations to the pension plan. The plan at issue was a defined benefit pension plan into which both the employer (“ICBC”) and employees contributed. Employee contributions were calculated as a percentage of earnings. Governance of the plan was the responsibility of trustees jointly appointed by ICBC and the applicable union.
An actuarial valuation as at December 31, 2011 indicated that increased contributions were required to properly fund the plan. The employees argued that under the Income Tax Act (Canada) (“ITA”) their contributions were not to exceed 9% of their earnings. That limit can be waived by the federal Minister of National Revenue (the “Minister”). ICBC argued that contributions must be equal between it and the employees and that the trustees, as plan administrator, had a duty to apply to the Minister for a waiver of the ITA limit. The trustees were divided as to whether or not to apply to the Minister for such a waiver.
The British Columbia Supreme Court rejected ICBC’s argument on the grounds that the plan text made clear that employees should not contribute a greater percentage of earnings than that permitted under the ITA. Specifically, the plan provided that “the contribution by a Member shall not exceed the maximum contribution allowed under Applicable Legislation” and if member contributions, but for the foregoing restriction, would exceed the maximum limit, the “Corporation contributions in respect of the Member will be increased by the shortfall in Member contributions” caused by the restriction. In addition, the court found that there was nothing in the legislation which imposed a duty on the trustees to apply for a waiver. According to the court, unless applicable legislation or the language of the trust agreement and plan text imposed such a duty, to apply for a waiver would be inconsistent with the duty of the trustees to pursue only the interests of the employees and other beneficiaries.
Ellsworth v. Boilermakers Lodge 359 Health and Welfare Plan (Trustees of), [2013] B.C.J. No. 689 (Prov. Crt.)
Mr. Ellsworth was a long-time member of the Boilermakers Lodge 359 in British Columbia and a member of its pension plan. When Mr. Ellsworth retired, he received pension benefits under the BC plan and ceased his membership in the union. He then went to work in Alberta and, pursuant to a collective bargaining agreement, his employer made contributions on his behalf to a national pension plan under which he accrued benefits.
Prior to his retirement in BC, the trustees of the BC and national plans had entered into reciprocity agreements under which, for example, a former BC employee who was temporarily working in Alberta could elect to accrue benefits under his home plan, the BC plan. At the time Mr. Ellsworth went to work in Alberta, reciprocity between the BC and national plans was voluntary and Mr. Ellsworth did not elect to transfer his benefits earned while in Alberta to the BC plan. Amendments were subsequently made to the reciprocity agreements which made the transfer of benefits mandatory. Because Mr. Ellsworth had already begun to receive pension benefits under the BC plan, this meant that he could no longer accrue benefits under such plan.
Mr. Ellsworth objected to the forced reciprocity for a number of reasons including that the reciprocity agreements did not apply to retired or former members. While the British Columbia Provincial Court agreed that the agreements could have been better drafted, it found that, based on the intent of the parties as shown by their conduct and statements, the agreements did apply to retired or former members.
Mr. Ellsworth next argued that the trustees had breached their fiduciary duty in making reciprocity mandatory. The court also rejected this argument. The evidence before the court showed that for several years prior to the change, many members of the BC plan had taken unreduced early retirement and then continued to work in Alberta which had the effect of increasing the costs to both plans. The court found that mandatory reciprocity was intended to stabilize and maintain the pension funds and that the trustees had acted honestly and prudently in amending the reciprocity agreements. It further held that the trustees had not failed to hold an even hand between beneficiaries because mandatory reciprocity applied to all members and former members.
The court dismissed Mr. Ellsworth’s claim and found that mandatory reciprocity applied to him.
Savoury v. Nova Scotia (Attorney General), 2013 NSCA 36
In this case, the Nova Scotia Court of Appeal considered whether to allow a plan member’s appeal of the lower court’s decision to dismiss his action for breach of contract and negligent misrepresentation.
The appellant, Mr. Savoury, had been employed by the government of Newfoundland and Labrador and a member of the Newfoundland Public Service Pension Plan (the “Newfoundland Plan”) for over 15 years. More than a year after resigning from his post, he accepted a new position with the Nova Scotia government. A reciprocal agreement between the two provinces allowed Mr. Savoury to transfer his earned pension credits under the Newfoundland Plan to the Nova Scotia Public Service Superannuation Fund (the “Nova Scotia Plan”). As a result of different contribution and interest rates between the two plans, the dollar amount transferred from the Newfoundland Plan was only able to buy approximately 7 years of service under the Nova Scotia Plan, leaving a deficiency of about 8 years. Mr. Savoury did not become aware of the deficiency until after the transaction was irreversibly completed in 1989, at which time he was advised that he could buy back his prior service.
Approximately 17 years after learning of the deficiency, in 2006, Mr. Savoury brought an action for breach of contract and negligent misrepresentation. He sought a declaration that he was entitled to credit for the full 15 years of service, special damages equivalent to the difference between the current value of his pension and what its value would have been had he received full credit in 1989, and damages for the lost opportunity of receiving 70% of a full pension from his earliest possible retirement date.
The Supreme Court of Nova Scotia dismissed the case. It held that Mr. Savoury had failed to meet the evidentiary burden of establishing either a breach of contract or negligent misrepresentation. The court found that there was nothing to support his contention that he had been induced to accept the position in Nova Scotia by a promise that he would receive full credit for his years of service.
The court further held that even if Mr. Savoury had met his burden, his claims were barred by the application of the Nova Scotia Limitations of Actions Act. It dismissed his argument that his claim was based on anticipatory breach of contract and that the limitation period clock should start to run only when Mr. Savoury’s entitlement to a pension crystallized at retirement. The court found that any breach of contract happened in 1989 when Mr. Savoury first became aware of the amount of his loss and, as a result, the limitation period clock started to run in 1989.
In March 2013, the Nova Scotia Court of Appeal held that the lower court’s dismissal of Mr. Savoury’s actions for breach of contract and negligent misrepresentation was fully supported by the evidence and dismissed his appeal. In light of its finding on the merits, it declined to deal with the limitation issue.
Rousselet c. Corporation de l’École polytechnique, 2013 QCCA 130
In a recent Quebec Court of Appeal decision, the Association des retraités de l’École Polytechnique (the “Association”) and Jean Rousselet appealed a judgment of the Quebec Superior Court which dismissed their motion for the bringing of a class action against the Corporation de l’École Polytechnique (“Polytechnique”) on behalf of all retirees of Polytechnique whose pension benefits were affected by amendments made to Polytechnique’s defined benefit pension plan. The Quebec Court of Appeal confirmed the decision of the Superior Court and refused to authorize the class action. In so doing, the court confirmed that, in Quebec, the pension committee of a registered pension plan is a distinct legal entity from the employer or plan sponsor and that the employer cannot automatically be held responsible for acts or omissions of the pension committee.
The plan in question was administered by a pension committee, as required by Section 147 of the Quebec Supplemental Pension Plans Act. Prior to 2004, Polytechnique had the discretion to grant certain pension increases in addition to those specifically provided for under the plan. The pension committee recommended that the plan be amended to provide that such additional increases would be granted on January 1 of each year, starting in 2004, if the plan was solvent on that date. The pension committee informed the participants of the proposed amendment and held a vote on the proposal; the participants voted in favour of the amendment.
A further amendment to the plan was introduced a few years later pursuant to which Polytechnique could take contribution holidays equal to its special solvency payments made to the plan, in return for which, retirees were to receive a retroactive pension increase. The pension committee again informed the participants of the proposed amendment and a vote was held in late 2005. However, Polytechnique amended the plan so that contributions holidays would take priority over the retroactive increases.
In 2007 and 2008, the plan had a solvency deficiency and, as a result, additional pension increases were not granted to the participants. The Association filed a motion for authorization to bring a class action against Polytechnique alleging that: (i) the requirement to have the actuary confirm the solvency of the plan prior to granting additional pension increases had not been approved by the participants as part of the vote on the initial plan modification; and (ii) participants similarly had not approved the priority of the contribution holidays over the retroactive pension increases when they voted on the second plan amendment in 2005.
The motion was dismissed by the Quebec Superior Court, which ruled that the Association had failed to establish a serious appearance of right such that the facts alleged in the motion did not seem to justify the conclusions sought, as required at the class action authorization stage under Section 1003(b) of the Quebec Civil Code of Procedure. The Court of Appeal dismissed the appeal for the following reasons:
  • As per a plain reading of the plan’s text, the plan amendments did not require the participants’ approval by secret vote, such that the participants’ votes could not be binding on Polytechnique.
  • Undisputed evidence submitted before the Superior Court indicated that the Association had been made aware of the proposed modifications by the pension committee and had informed the participants of the issues at stake related to such modifications, such that the appellants could not claim that they had never been informed or had been misrepresented.
  • No contractual fault on the part of Polytechnique had been established. The Court of Appeal confirmed that the pension committee is a distinct legal entity from the employer. As such, any issues related to the pension committee’s alleged failure to properly explain the solvency requirement and the priority of the contribution holidays to participants could not be deemed to be a fault committed by Polytechnique in the absence of specific facts supporting such argument.
  • The Appellants’ action was time-barred.
Withers v. Withers, 2013 ONSC 1665 (S.C.J.)
In this case, the Ontario Superior Court of Justice considered a number of questions relating to the equalization of net family property and spousal support upon marriage breakdown including, for the purposes of equalization, whether the spouse’s entitlement to survivor benefits under her husband’s pension should be excluded from the calculation of net family property.
Mr. and Mrs. Withers separated after 24 years of marriage. Mr. Withers was 72 years old and Mrs. Withers was 54. Mrs. Withers sought to waive her entitlement to spousal survivor benefits under her husband’s pension in order to exclude the amount of the benefits from the calculation of net family property. She argued that survivor benefits should not be considered property in existence at the date of separation because she may never actually receive the benefit and to consider it as property would cause her to suffer financial hardship.
The court rejected Mrs. Withers’ arguments and found that, based on prior case law, a pension, including a survivor pension, must be included in the equalization calculations and valued with the rest of the spouses’ net family property.
Colpitts v Ontario (Superintendent of Financial Services), 2013 ONFST 5
In this case, the question of the correct end date for payment of bridge benefits to the applicant was considered by the Financial Services Tribunal (“FST”). Craig Colpitts, the applicant, was entitled under the terms of his employer’s pension plan to the payment of a bridge benefit until the first of the month prior to his attainment of age 65 or his death. Mr. Colpitts retired on March 31, 2007, prior to his 65th birthday, and received his first pension payment, including a bridge benefit, as of April 1, 2007. Mr. Colpitts’ 65th birthday was on April 1, 2012 and, as a result, payment of his bridge benefit ceased with the March 1, 2012 payment. Both the Ontario Superintendent of Financial Services (“Superintendent”) and Tembec Enterprises Inc., the sponsor and administrator of the pension plan, argued that Mr. Colpitts’ bridge benefit had ceased to be paid in accordance with the terms of the plan.
Mr. Colpitts made two submissions in support of his position that payment of his bridge benefit should not have ceased as of March 1, 2012. He argued that: (i) pursuant to the definitions of “bridging benefit” in the Pension Benefits Act (Ontario) (“PBA”) and Section 8500(1) of the ITA Regulations there should be no gap between the cessation of his bridge benefit and the commencement of payments to him under the Canada Pension Plan and Old Age Security; and (ii) because he was born on the first day of the month, he did not receive the bridge benefits for the month in which he attained age 65, whereas a person born on any other day of the month would have.
On the first issue, the FST agreed with the submissions of the Superintendent and the employer that neither the provisions of the PBA nor Section 8500(1) of the ITA Regulations alter the conclusion that the applicant’s bridge benefit was paid in accordance with the terms of the plan. The FST found that both statutes merely define the term “bridging benefit” and do not prescribe the specifics of the timing or duration of such benefit.
On the second issue, the FST again sided with the Superintendent and the employer and found that although Mr. Colpitts was treated differently than someone who would have been born a day later, the terms of the plan clearly defined when payment of the bridge benefit was to cease and payment of Mr. Colpitts’ bridge benefit had ceased in accordance with the terms of the plan.
Gary Jackson Professional Corporation v Canada (National Revenue), 2013 FCA 142
In this case, the Federal Court of Appeal considered whether the appellant, Gary Jackson, had established a valid employees' profit sharing plan (“EPSP”) for the purposes of the ITA. Mr. Jackson submitted that the payments he made under an Employees Profit Sharing Plan Indenture were in accordance with the requirements of the ITA and, therefore, were deductible.
As the court noted, the definition of EPSP under the ITA requires, among other things, that: (a) an employer make payments to a trustee under the arrangement; and (b) such payments be computed by reference to profits or the employer elects to make payments out of profits.
Under the trust indenture entered into by Mr. Jackson, Gary Jackson Professional Corporation had absolute discretion with respect to the amount contributed to the EPSP, subject to a minimum contribution of 1% of profits per fiscal year. Because Mr. Jackson had not filed an election to contribute to the EPSP out of profits, the court found that all payments to the EPSP had to be payments that were required to be made to the EPSP and that were computed by reference to profits.
After reviewing the evidence, the court found that the payments actually made to the EPSP “bore no resemblance” to the minimum required payment of 1% of profits. Accordingly, the court held that the payments were not made under an arrangement that would qualify as an EPSP under the ITA.
Nash v. Canada (Attorney General), 2013 FC 683
Mr. Myers was a federal public servant and a contributor to the Public Service Pension Fund under the Public Service Superannuation Act (“PSSA”). He married Ms. Vallée in 1961 and, despite being separated for many years, the two remained legally married until his death on February 1, 2009. Ms. Nash married Mr. Myers in 2002, believing that Mr. Myers and Ms. Vallée had been divorced earlier that year.
On March 5, 2010, the Superior Court of Quebec declared the “divorce” between Mr. Myers and Ms. Vallée void and their marriage was only dissolved with Mr. Meyer’s death in 2009. As a result, the court also declared the marriage between Mr. Myers and Ms. Nash consequently null.
Ms. Nash filed a motion for the putative effects of the marriage under section 382 of the Civil Code of Quebec. On February 14, 2012, the Superior Court of Quebec found that Ms. Nash had married Mr. Myers in good faith and granted her motion for putative effects of the marriage, including liquidation of the family patrimony. The Quebec Court of Appeal upheld the decision.
Ms. Nash and Ms. Vallée had both applied to the Public Service Pension Centre for a survivor allowance under the PSSA. The Pension Centre advised that, pursuant to subsections 25(10) and (11) of the PSSA, the survivor allowance would be apportioned between the women based on the time each had lived with Mr. Myers. After reviewing evidence of the periods of cohabitation, the Pension Centre apportioned the survivor allowance 21:14 in favour of Ms. Vallée.
Ms. Nash applied for judicial review of the decision of the Pension Centre. The issues before the Federal Court were: (i) whether the Pension Centre erred in its apportionment of the survivor allowance; and (ii) whether the relevant provisions of the PSSA violate section 15 of the Canadian Charter of Rights and Freedoms (“Charter”) because they create a distinction between legally married and putative spouses (spouses in good faith).
Applying a standard of review of reasonableness, the court held that the Pension Centre had acted reasonably in apportioning the survivor allowance. According to the court, the judgment granting the putative effects of marriage to Ms. Nash did not change the legal status of Ms. Vallée’s marriage to Mr. Myers and the Pension Centre did not have the power or discretion to ignore a valid marriage. As both Ms. Vallée and Ms. Nash were considered survivors under subsection 3(1) of the PSSA, the Pension Centre correctly applied subsection 25(10) of the PSSA in dividing the survivor allowance based on their respective periods of cohabitation with Mr. Meyers.
The court further held that the impugned provisions of the PSSA did not violate section 15 of the Charter. For legislation to infringe section 15 of the Charter, a court must determine that the law imposes a distinct treatment based on an enumerated or analogous ground and that the distinct treatment perpetuates a disadvantage on the individual or group. The court held that as putative spousal status is a marital status it constitutes an analogous ground. However, the court found that as a putative spouse who was also a cohabitating spouse, the PSSA did not disadvantage Ms. Nash in any way, and she, therefore, lacked standing to bring the Charter challenge. The court went on to note that even if Ms. Nash had standing, her claim would not be successful as putative spouses do not comprise a historically disadvantaged group.

Vladescu v. CTVglobemedia Inc., 2013 ONCA 448
Ms. Vladescu was the first spouse of a member of a federally regulated defined benefit pension plan sponsored by CTV. In 2002, Ms. Vladescu and the plan member entered into a separation agreement which provided that Ms. Vladescu would receive “full survivor benefits” from the plan. The agreement also provided that should the member remarry or enter into a common law relationship, he would:
make all possible efforts to enter into a Cohabitation Agreement or Marriage Contract wherein the wife’s rights under this paragraph are recognized and his future wife or common-law wife releases all rights or claims of any kind or nature whatsoever to his pension.
In 2004, the member remarried and sent CTV a Plan Personal Information Change Form in which he stated that his second spouse was his spouse and primary beneficiary under the plan. In 2006, the member also provided CTV with a Declaration of Spousal Status form in which he named his second spouse as his spouse and declared that no interest in his pension entitlement had been assigned or granted by agreement or court order. When the member died in 2009, CTV took the position that the pre-retirement death benefit was payable to the second spouse. Ms. Vladescu disagreed and brought a motion for payment of the pre-retirement death benefits. The Ontario Superior Court dismissed Ms. Vladescu’s motion.
On appeal, the Ontario Court of Appeal considered whether: (i) pre-retirement death benefits could be transferred to a spouse or former spouse under section 25(4) of the Pension Benefits Standards Act, 1985 (“PBSA”), and (ii) if so, were they effectively assigned in this case.
Section 25(4) of the PBSA permits an assignment of “all or part” of a member’s “pension benefit, pension benefit credit or other benefit under the plan” to a spouse or former spouse on the breakdown of a spousal relationship. The Superior Court held that pre-retirement death benefits form part of a member’s pension benefit credit and, as such, can be assigned to a spouse or former spouse. However, the Superior Court found that the pre-retirement death benefits had not been effectively assigned in this case.
The Court of Appeal, in a decision authored by Justice Gillese, agreed with the lower court and held that the separation agreement did not amount to an assignment of the member’s pre-retirement death benefits. Justice Gillese found that the separation agreement included an express recognition that a subsequent spouse would be entitled to survivor benefits unless she executed a waiver, which she did not in this case, and that such recognition was inconsistent with the intent to irrevocably transfer a right to the benefits.
In addition, Justice Gillese noted that the agreement lacked the specificity and clarity required of an assignment. She noted that the language used in the agreement was “not the language of a transfer of interest” and that, while not determinative, the agreement did not use the word “assign”. She further noted that the term “survivor benefits” was vague, as it was not a defined term in the PBSA, the separation agreement or the plan, and could have referred to either or both of the plan’s pre-retirement death benefits and joint and survivor benefits.
Perhaps most importantly, the Court of Appeal declined to decide whether section 25(4) of the PBSA permits the assignment of pre-retirement death benefits. In declining to rule on the issue, Justice Gillese noted that it is a very difficult issue that is best left to be decided in a case in which the outcome depends on the issue and where the record before the court is more complete.
Independent Electricity System Operator v. Power Workers’ Union, 2013 ONSC 2131 (Ont. Div. Crt)
This is an application for judicial review of an arbitration decision related to a grievance filed by the Power Workers’ Union (“PWU”) that the Independent Electricity System Operator (“IESO”) had violated the collective agreement by ceasing to offer a mix and match pension option. The mix and match option permitted members of the IESO Pension Plan to choose one transfer option with respect to their pension benefits related to service prior to 1987 and another for benefits related to service after 1986.
Between 2004 and 2009, the Financial Services Commission of Ontario (“FSCO”) provided several different opinions to the IESO with respect to the permissibility of the mix and match option under the PBA. Upon receipt of a July 2004 ruling from FSCO that the option was not permissible, the IESO revised their member option forms and discontinued the mix and match option. The PWU grieved the IESO’s decision as did an intervener union, the Society of Energy Professionals (the “Society”).
Prior to the hearing of the grievance, a non-union member of the plan formally requested an order from FSCO that the IESO resume the mix and match option. On July 21, 2010, FSCO issued a Notice of Intended Decision stating that the IESO had not contravened the PBA as there was no requirement thereunder to provide such an option and there was no provision in the plan allowing for the option. The member did not request a hearing and the IESO and Society did, but withdrew their request after FSCO took the position that, subject to a ruling from the FST, the arbitrator’s decision was binding with respect to any plan member who was a member of the IESO or Society.
In his decision on the grievance, the arbitrator ruled that the mix and match option was permitted under the PBA and was provided for under the terms of the plan. He also held that the IESO had violated the collective agreement in discontinuing the mix and match option. Proceeding with a standard of review of reasonableness, the Ontario Divisional Court upheld the decision of the arbitrator.
With regard to the permissibility of the mix and match option under the PBA, the arbitrator adopted the opinion of the Deputy Superintendent of Pensions, David Gordon, set out in a letter of April 16, 2009 and held that section 42(1) of the PBA does not preclude the partial transfer of an amount if the plan provides for the option. The Divisional Court determined this to be a reasonable interpretation, noting that section 42(1) provides for a minimum entitlement and providing a member with the option to transfer less than the full commuted valued of an accrued pension is consistent both with the wording of the provision and with the general proposition that the PBA is minimum standards legislation.
With respect to the question as to whether or not the plan provided for the mix and match option, the court noted that it was undisputed that the brochure provided for such an option. The court further held that the arbitrator reasonably took into account the plan text, the brochure, the collective agreement and the parties’ longstanding practice when he concluded that the parties to the collective agreement understood that the plan provided for the mix and match option.
The court rejected the IESO’s argument that it had been unreasonable for the arbitrator not to defer to the Notice of Intended Decision of the Deputy Superintendent of FSCO that predated the hearing of the grievance. The court held that it was reasonable for the arbitrator to take the position that he did not have to defer to such decision because FSCO had not been asked to determine whether the collective agreement had been violated. It also noted that there had never been a hearing of the complaint at the FST and there was, therefore, no operational conflict between the two decisions.
Accordingly, the Divisional Court found that the arbitrator’s decision that the IESO had violated the collective agreement when it unilaterally removed the mix and match option was reasonable.
Chapman v. Benefit Plan Administrators, 2013 ONSC 3318
This is a decision on a motion to certify an action as a class proceeding. The plaintiff, Mr. Chapman, brought the motion on behalf of a class comprised of all members, former members and retirees of the Eastern Canada Car Carriers Pension Plan.
The plan is a federally registered multi-employer, negotiated contribution, defined benefit plan. It is administered by a board of trustees, jointly appointed by the union and participating employers. Under the terms of the plan, members with the requisite years of service are entitled to receive early retirement benefits (“ERBs”) upon attaining the age of 55 years, provided they obtain the consent of the plan trustees, which consent is given on the advice of the plan actuary.
According to Mr. Chapman, until December 31, 1999, the plan had a solvency ratio above 1 and its trustees regularly consented to the granting of ERBs. However, by December 31, 2005, the solvency ratio had dropped to 0.8, representing a solvency deficiency of approximately $43 million. Mr. Chapman alleges that the trustees continued to grant ERBs to all who applied until March 2006, when they announced the end of the practice. In August 2007, the trustees announced that due to underfunding, benefits and service credits under the plan would be reduced effective January 1, 2008.
Mr. Chapman alleges that the benefit and service credit reductions under the plan resulted (in part) from the negligence or breach of trust of the trustees, administrative agents and actuaries in consenting to payment of ERBs while the plan was underfunded.
In a June 2013 decision, the Ontario Superior Court certified the action as a class proceeding and approved six common issues to be determined at trial. A decision on the merits of the claims has yet to be issued.