The Supreme Court of Canada (Deschamps, Abella, Cromwell JJ.) has granted leave in a pension litigation case, in which the Court could potentially revisit the principles underlying democratic dialogue. This case may offer the Supreme Court the opportunity to provide an updated statement on the doctrines of retroactivity and res judicata, particularly on the differences between the authority of final judgments and the ”cogency” of final judgments. It may also explain the impact of an application for leave to appeal to the Supreme Court of Canada on the status of a case. This appeal may also deal with the extent to which courts may rely on parliamentary debates to support their conclusions. This appeal is likely to be heard in the spring of 2013.
In April 2008, the Quebec Court of Appeal reversed a decision of the Régie des rentes (the “Régie”), a governmental body responsible for administering the Québec pension plan and supervising supplemental pension plans. That decision had been rendered in May 2002. The Régie took the view that certain clauses of a multi-employer private pension plan (the Bakery and Confectionery Union and Industry Canadian Pension Fund) authorizing the contributing employer to reduce pensions after closing down were unlawful.
In April 2008, the Court of Appeal found that certain clauses of a private pension plan allowing the employer to limit its liability and reduce pensions after closing down were not inconsistent with the Québec Supplemental Pension Plans Act. The Court of Appeal remitted the matter to the Régie to be redetermined accordingly. On May 29, 2008, the Régie applied to the Supreme Court of Canada (the “SCC”) for leave to appeal.
The Court of Appeal decision also elicited disapproval from the Quebec legislature, which enacted a “declaratory statute” on June 18, 2008. During the parliamentary debates, the cabinet minister stated that the statute would have a retroactive effect on the April 2008 Court of Appeal judgment. During the question period, the Opposition argued that it could not have any effect on the April 2008 Court of Appeal decision. In the end, the enacted statute merely included the following statement: “Sections 14.1 and 228.1 are declaratory”. Shortly after, on October 18, 2008, the application for leave to appeal to the SCC was dismissed.
In August 2009, the Régie rendered its new decision (as ordered by the Court of Appeal), in which the Régie applied the declaratory statute, confirming the initial decision rendered by the Régie in 2002, and disregarding the guidelines provided in the April 2008 judgment of the Court of Appeal.
Some contributing employers challenged that decision on the ground that the case was no longer pending when the declaratory statute came into force. On April 20, 2010, the administrative tribunal upheld the decision made by the Régie, stating that even if the decision by the Court of Appeal was final, the case was still ongoing since an application for leave to appeal was filed. Therefore, according to the administrative tribunal, it is only on October 18, 2008 that the case passed into a state of res judicata. The decision was challenged on judicial review.
On December 10, 2010, the Superior Court quashed the Régie’s decision, stating that it had no standing to set aside the judgment of the Court of Appeal. In the Superior Court’s view, when the Court of Appeal remitted the matter to the Régie, it was solely for pragmatic and functional reasons. Moreover, the declaratory statute would have needed to be clearer if the legislative intent was to set aside the April 2008 judgment of the Court of Appeal.
On August 22, 2011, the Court of Appeal upheld the Superior Court judgment granting judicial review, and reiterated that a declaratory statute with a retroactive effect cannot reform a final judgment, unless the statute clearly provides otherwise.
The April 2008 Court of Appeal judgment was not irrevocable until the application for leave to appeal to the SCC was dismissed, in October 2008. Still, the Court of Appeal took the view that the Quebec legislature should have adopted an absolute formal and explicit statement to that effect if the real legislative intent was to set aside the April 2008 judgment of the Court of Appeal.
The Court of Appeal also quoted a few excerpts of the parliamentary debates, and stated that the cabinet minister misinterpreted the scope of the declaratory statute. In addition, the fact that some members of the legislature were doubtful of the scope of the declaratory act when it was adopted is supportive of that view. Therefore, in the Court of Appeal’s view, a simple declaration from a cabinet minister during the debates is not sufficient proof of the legislative intent to overrule a decided case.
Stricto sensu, the significance of this particular case is very limited since it addresses a very peculiar situation. Nevertheless, this case is interesting as it arises in the context of pension litigation and, at the same time, it may reiterate the principles underlying democratic dialogue. It may also provide additional guidance to the legislatures as to the level of clarity necessary to give full effect to a parliamentary reversal. It may reiterate the difference between the authority of final judgments and the “cogency” of final judgments. The Quebec Court of Appeal stated that only an absolute formal and explicit statement from the legislature could potentially reverse a final judgment. It will be interesting to read how the Supreme Court of Canada will perceive this issue.
Supreme Court Docket: 34505
Date of leave granted: March 29, 2012