Canada: Court’s Halloween Decision Spooks Pension Plan Administrators

Last Updated: November 8 2012
Article by Mark Newton

The Ontario Court of Appeal released its decision in Carrigan v. Carrigan Estate on Halloween, October 31, 2012: 2012 ONCA 736.  The decision is a surprise to pension plan administrators and overturns longstanding practice.

The facts of this case are straightforward.  Two spouses of a deceased pension plan member had competing claims for a pre-retirement death benefit from a defined benefit pension plan.  The plan member and the legal spouse were separated several years prior to the member's death.  The member had a common law spouse at the time of his death.  The question for the court was simply whether the legal spouse or the common law spouse was entitled to the death benefit.  Surprisingly, the court decided in favour of the legal spouse.

The scheme of the Ontario Pension Benefits Act  (the "PBA"), since it was overhauled as of January 1, 1988, is to provide minimum death benefits to surviving spouses of pension plan members.  Prior to that time, the PBA did not contain such protection.  The benefit is provided to a spouse who is living with the plan member as of the date of death or, using the wording in the PBA, is not living separate and apart from the member as of such date.

The benefit, in the case of a pre-retirement death as in the case at hand, is the full commuted value of the benefit the member had earned under the pension plan to date of death.  In the case of the death of a plan member after pension payments have started to be paid, the death benefit is a 60% survivor pension payable for the life of the surviving spouse.  This is provided on an "actuarially equivalent" basis (i.e., at no additional cost to the pension plan or plan sponsor).

There is some interesting legislative history concerning the definition of "spouse" in the PBA.  When the PBA was overhauled as of January 1, 1988, it did not recognize same-sex spouses.  The definition of "spouse" in the PBA referred to a "man and a woman" who were either legally married or cohabiting in a common law relationship.  The recognition in the PBA of same-sex spouses was made in a 1997 amendment with the addition of a definition of "same-sex partner".  The PBA was somewhat cumbersome as a result.  Later, in 2005, the definition of same-sex partner was dropped from the PBA in order to have a single definition of spouse.

When the definition of same-sex partner was removed from the legislation, the concepts of spouse and same-sex partner effectively merged into one, with the result that the words "man and woman" were deleted and replaced by "two persons".  Surprisingly, it is the reference to "two persons" that the court found to be determinative of the issue.  However, the court did not discuss the legislative history which led to the drafting of the definition of "spouse" or the inclusion of "two persons".

Specifically, the reference to "two persons" led the court to conclude that a legal spouse, living separate and apart from a plan member, disentitles a common law spouse who is cohabiting with the member, to pre-retirement death benefits under the PBA.  In the court's reasoning, if a plan member were to have two spouses, a legal spouse and a common law spouse, that would be "three persons" in total and not "two persons", therefore the definition of "spouse" cannot apply to all three persons.

The court also held that the provision in the PBA that denies a spouse from entitlement to a death benefit on account of living separate and apart, cannot even apply to common law spouses, because once they are apart they are not spouses!  The court stated:

"In the context of the PBA, it is not possible for a common law spouse to be living separate and apart from the member any more than a man can be pregnant."

However, if this is true, then the former wording of the PBA that referred to same-sex partners living separate and apart would not have been valid either.

As a result, according to the court's decision, where there is a legal spouse and that spouse is living separate and apart from the member, not only is the legal spouse disentitled to the protection under the PBA, but also the common law spouse.  The result in this case is that the plan member's designated beneficiary was entitled to the death benefit who, in this case just happened to be the legal spouse and daughters.

The scheme of the PBA, then, according to the court, is that if a plan member has a legal spouse, a common law spouse cannot qualify for the automatic death benefit protection under the PBA.  The common law spouse could, of course, qualify for a benefit as a designated beneficiary.  There could also be a domestic contract entered into between the plan member and the legal spouse which could disentitle the legal spouse.  In this case, there was no separation agreement. 

There could therefore, for example, be a legal marriage of short duration between a plan member and a spouse, followed by a separation and then a 40-year common law relationship with another spouse up to the point of the death of the plan member.  Under the court's reasoning, the common law spouse would not qualify for the minimum death benefit under the PBA.  That would seem to run directly contrary to the intent of the PBA.

Of course, the member could designate the common law spouse as a beneficiary, or the spouse could qualify for part or all of the death benefit through the member's estate.  However, the legislature's intent behind the minimum protection in the PBA is to qualify the spouse who is living with the member at the time of death to the prescribed death benefit.  The same applies to the 60% post-retirement death benefit. 

The entitlement of a spouse to a pre-retirement or post-retirement death benefit should not be subject to the whim of the plan member, otherwise the legislative scheme would be subverted.  Spouses of plan members would be left without protection as was the case prior to 1988.   This decision puts into question the spousal protections in the PBA and the administration of both pre-retirement and post-retirement death benefits.

Hopefully, leave to appeal to the Supreme Court of Canada will be sought in this case.  Otherwise, the issue can only be corrected through legislative action, which could take some time.

In the meantime, here are some reflections on statutory interpretation from the pre-eminent 20th century English jurist, Lord Denning:

"Whenever a statute comes up for consideration it must be remembered that it is not within human powers to foresee the manifold sets of facts which may arise, and, even if it were, it is not possible to provide them free from all ambiguity.  The English language is not an instrument of mathematical precision.  Our literature would be much poorer if it were. 

This is where the draftsmen of Acts of Parliament have often been unfairly criticized.  A judge, believing himself to be fettered by the supposed rule that he should look to the language and nothing else, laments that the draftsmen have not provided for this or that, or have been guilty of some or other ambiguity.  It would certainly save the judges trouble if Acts of Parliament were drafted with divine prescience and perfect clarity. 

In the absence of it, when a defect appears a judge cannot simply fold his hands and blame the draftsman.  He must set to work on the constructive task of finding the intention of parliament, and he must do this not only from the language of the statute, but also from consideration of the social conditions which gave rise to it, and of the mischief which it was passed to remedy, and then he must supplement the written word so as to give 'force and life' to the intention of the legislature... 

A judge should ask himself the question: 'If the makers of the Act had themselves come across this ruck in the texture of it, how would they have straightened it out?'  He must then do as they would have done.  A judge must not alter the material of which it is woven, but he can and should iron out the creases."

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.