Canada: Pensions Newsletter - October 2016

Welcome to the 15th issue of the Blakes Pensions Newsletter. This newsletter provides a summary of recent jurisprudential developments that affect pensions and benefits and is not intended to be legal advice.

FAMILY LAW

Kalawarny Estate v. Fife, 2016 MBQB 146

The estate of Brenda Kalawarny sought a division of Ms. Kalawarny's former partner's pension benefit credits accumulated during their common law relationship. The deceased Ms. Kalawarny and the surviving husband, Mr. Fife, had been in a common law marriage starting on February 1, 1999, until November 7, 2010, at which point they began to live separate and apart. Ms. Kalawarny passed away on March 28, 2014. At the time of Ms. Kalawarny's death, the family law proceedings, which Ms. Kalawarny had commenced, regarding the separation had not been resolved.

Mr. Fife's employer, Canadian National Railway Company (CN), had taken the position that it could not divide the pension pursuant to the breakdown of a common law relationship when the common law spouse was deceased, and the parties had not entered into an agreement to divide the pension prior to the death of the common law spouse. Ms. Kalawarny's estate obtained an interim order requiring Mr. Fife to obtain from CN a statement regarding the commuted value of the pension benefit that had accumulated during the period of cohabitation for the purpose of a division of the pension. CN took the position that it required a request letter from both parties to issue such a statement or a court order to similar effect. Mr. Fife refused to sign a request letter. As a result, the estate made this motion for a court order declaring the pension benefits a shareable family asset to be divided according to relevant pension legislation. Mr. Fife's position was that the pension credits should not be divided. Rather, the application for division should cease and the deceased's property, as it existed at the time of her death, should be distributed according to the deceased's will.

Mr. Fife's pension is governed by the federal Pension Benefits Standards Act (Canada), which states that provincial property laws govern pension divisions in the context of relationship breakdown. The relevant Manitoba statutory provision is section 28(2) of The Family Property Act (Manitoba), which provides that an application for division of family property can continue after one of the spouses or common law partners dies. For this reason, Ms. Kalawarny's application for division of family property, which was launched prior to her death, could be continued by her estate. Furthermore, Justice Hatch ordered the pension benefits accrued during cohabitation to be a shareable family asset to be divided equally between Mr. Fife and Ms. Kalawarny's estate.

Manitoba Court of Queen's Bench Decision

COSTS AWARDS

Dudumas v. Ontario (Superintendent of Financial Services), 2016 ONFST 15

In this dispute before the Financial Services Tribunal (Tribunal), Mr. Dudumas made numerous claims regarding entitlement to additional benefits under the CROWN Metal Packaging Canada LP Pension Plan for Hourly Employees (Plan) and that the benefits provided to him were calculated incorrectly. Mr. Dudumas was permanently laid off during a plant closure at 53 years of age with 26 years of credited service. The plant closure triggered a partial wind-up of the Plan in which Mr. Dudumas was included in the wind-up group. Mr. Dudumas received a basic pension (paid under a provision for an early, unreduced pension) and a bridge benefit.

Mr. Dudumas made various claims that the pension he had received was calculated incorrectly. He did not provide evidence to support this claim nor did he propose different calculation methods. Mr. Dudumas also claimed that even though he had received an unreduced early pension with a bridge benefit, he was entitled to an additional full normal pension starting at the retirement age. The Tribunal dismissed Mr. Dudumas's claims as being unsupported by fact and based on a very obvious misunderstanding of the Plan and the law.

The Plan sponsor, CROWN Metal Packaging Canada LP (Crown), requested costs for the proceeding. Costs can be ordered by the Tribunal pursuant to rule 41.01 of the Rules of Practice and Procedure for Proceedings before the Financial Services Tribunal (Rules), and section 24 of the Financial Services Commission of Ontario Act. Rule 41.01 states that costs can be ordered where a party's conduct has been unreasonable, frivolous or vexatious. Rule 42.01 further states that in determining whether a party's conduct falls within the language of rule 41.01, the Tribunal must consider all relevant circumstances, including (among other factors): failure to cooperate with other parties during the hearing or preliminary hearing, and advancing manifestly unfounded positions.

During the course of this litigation, Crown offered on numerous occasions to provide Mr. Dudumas with independent actuarial or legal advice at no cost to him. Such offers were refused. The Tribunal found that had the free advice been taken, the entire hearing would likely have been avoided. As a result, the Tribunal found that Mr. Dudumas's pursuit of a baseless and unstated legal claim and refusal of free professional advice constituted unreasonable conduct worthy of an adverse costs award. Crown requested costs of C$10,000, stating that its actual costs at the hearing well exceeded that amount, but also indicated that it would be satisfied with a nominal costs award. The Tribunal acknowledged that cost awards can be made against individual litigants but elected to award nominal costs of C$500. This represents the first time the Tribunal has issued a cost award in a pensions matter.

Financial Services Tribunal Decision

ACCESS TO INFORMATION

Trustees of the Bricklayers and Stonemasons Union Local 2 v. Information and Privacy Commissioner of Ontario; Canadian Bricklayers and Allied Craft Unions Members v. Information and Privacy Commissioner of Ontario, 2016 ONSC 3821

In preparation for a union "raid" (where one union tries to displace another union), Joseph Maloney of the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers (IBB) made an access-to-information request to the Ministry of Finance (MOF) and the Financial Services Commission of Ontario (FSCO) regarding certain documents related to two rival unions' multi-employer pension plans (Plans). Some of the requested documents contained sensitive financial information about the Plans (for example, the actuarial reports). MOF provided some of the requested documents but did not include any documents containing sensitive financial information. Maloney appealed to the Information and Privacy Commissioner (Commissioner) for disclosure of the remaining documents.

The Commissioner ordered the disclosure of certain of the financial documents, including the actuarial valuation reports of the Plans. The Commissioner's reasoning was based in large part on the conclusion that such disclosure would not cause Plan members any harm because such documents were already widely available to Plan members who could easily disseminate it among the trade union community. Furthermore, the Commissioner found that the harms that MOF argued would result from the disclosure were related to union raiding, namely that if a union were successfully raided, the raided union's loss in membership would negatively impact the raided union's pension plan. Since union raiding is statutorily permitted, harms stemming from it could not be the types of harms considered to constitute grounds for refusal of freedom of information requests.

The trustees of the Plans (Applicants) appealed the decision of the Commissioner to the Divisional Court of Ontario, with the support of MOF and FSCO as interested parties. Writing for the majority of the court, Justice Stewart found that, due to the statutory protection of pension documents filed with FSCO, the Commissioner's finding regarding the widespread availability of those documents was overstated and that such documents are accessible only to certain enumerated persons. Furthermore, the harms that could result to the pension plans targeted by the request and their beneficiaries, even those connected to a bargaining unit being successfully raided by a rival union, qualify as harms under the relevant privacy legislation as "undue loss." For these reasons, the potential harms identified by MOF were more than mere speculation when considered within the context of bitterly competitive union raids in the construction industry. The Divisional Court of Ontario referred the matter back to the Commissioner for reconsideration with these reasons in mind.

Ontario Divisional Court Decision

HEALTH AND WELFARE BENEFITS

Watt v. Health Sciences Association of British Columbia, 2016 BCCA 325

The Health Sciences Association of British Columbia (Union) established employee-funded trusts to fund long-term disability (LTD) benefits provided to its members. Some of the Union board members were named as personal trustees of the trust. Over time, the trusts became significantly underfunded. In March 2012, the underfunding of the trusts, as well as possible courses of action to remedy the situation, was discussed at the Union's annual general meeting. Afterwards, members were asked to adopt a resolution approving an increase in Union dues to maintain the solvency of the trusts and the LTD benefit coverage. The Union's board of directors opposed the resolution, and communicated this opposition to the members. The resolution failed by a large margin. Shortly after the failure of the resolution, the Union amended the LTD plans to reduce benefits.

Union members currently receiving LTD benefits (Plaintiffs) launched this proposed class action against the Union for breach of contract. The Plaintiffs also asserted that the Union, having control over the trustees, was itself a bare trustee or a trustee de son tort of the trust and that the Union had breached its duty of care and fiduciary duties as trustee. Additionally, the Plaintiffs claimed against the individual trustees of the LTD trusts for breaches of fiduciary duties and duties of care.

This class action was certified by the Supreme Court of British Columbia (B.C. Supreme Court) (2015 BCSC 1290). The Union appeals from that decision.

As a preliminary matter, the Court of Appeal for British Columbia (Appeal Court) decided to hear the issue of whether the B.C. Supreme Court had proper jurisdiction to hear the case at all. The Appeal Count found that the B.C. Supreme Court would not have jurisdiction if the claim were based on the Union's duty of fair representation codified under section 12 of the Labour Relations Code (British Columbia) (disputes of which are properly the jurisdiction of the Labour Relations Board). The Appeal Court found that the dispute, as pled by the Plaintiffs, could not be characterized as relating to the Union's role as bargaining agent of the employees because they do not engage the Union's duty of fair representation. Therefore, the B.C. Supreme Court had jurisdiction to hear the case.

In a class action certification motion, the proposed causes of action need only meet the standard of "not plain and obvious that the claim will fail." Regarding the claims against the Union based on a breach of contract, both the B.C. Supreme Court and the Appeal Court acknowledged the legal hurdles that the Plaintiffs would face in establishing that the Union contracted with its own membership to provide benefits. However, they found that it was not plain and obvious that this claim would fail.

Regarding the claims against the Union for breach of fiduciary duty, the B.C. Supreme Court found sufficient grounds to certify a claim based on the theory that the Union owed its disabled members a fiduciary duty because of its power over them, coupled with those members' inherent vulnerability. The Appeal Court overturned this decision. The Appeal Court found that this finding is inconsistent with the Union's duty (whether fiduciary or otherwise) to represent all of its members as their bargaining agent. The Appeal Court also overturned the B.C. Supreme Court's certification of the claim based on the Union as a trustee de son tort of the LTD trusts, on the basis that this claim had no legal authority.

Regarding the claims against the individual trustees, the Appeal Court overturned the B.C. Supreme Court's decision and dismissed this cause of action. The Plaintiffs claimed that the trustees breached their fiduciary duties to the disabled members by failing to ensure that the LTD trusts were fully funded. The Appeal Court ruled that the trustees did not have the power to order the Union to fund the trusts. The Appeal Court left open the alternative claim regarding the trustees' potential conflict of duty during the 2012 general meeting. The trustees were the same individuals who, as Union board members, advocated against funding the LTD trust shortfall with a Union due increase. The Appeal Court noted that causation would be difficult for the Plaintiffs to prove but acknowledged that the claim was not bound to fail.

Court of Appeal for British Columbia Decision

Rein v. Alberta (Human Rights Commission), 2016 ABQB 386

The applicant, Ms. Rein, alleged age discrimination due to the termination of her Group Health Benefits and Life Insurance Plan (Benefit Plan) coverage by reason of her reaching the age of 65. The Director of the Alberta Human Rights Commission (AHRC) (Director) dismissed her complaint. The applicant requested that the Director's decision to dismiss be reviewed. The Chief Commissioner of the AHRC (Chief Commissioner) upheld the dismissal. The applicant appealed that decision to the Alberta Court of Queen's Bench for judicial review.

While the Alberta Human Rights Act prohibits discrimination based on age, this prohibition does not affect "the operation of any bona fide retirement or pension plan or the terms or conditions of any bona fide group or employee insurance plan."

The Director has a gatekeeper role whereby he can dismiss cases where there is no reasonable basis in the evidence to proceed. Similarly, the Chief Commissioner's duty in reviewing these dismissals is to decide whether there is a reasonable basis in the evidence to proceed. In performing this duty, the Chief Commissioner can assess evidence. Both the Director's and the Chief Commissioner's decisions were based on the conclusion that the Benefit Plan was bona fide. The test for whether a benefit plan is bona fide is established in New Brunswick (Human Rights Commission) v. Potash Corporation of Saskatchewan Inc., 2008 SCC 45. In that case, the question of bona fides was applied to a pension plan. In this case, Justice Pentelechuk found that the same test applies to employee benefit plans as well due to the specific wording of the Alberta Human Rights Act.

The standard of review of the Chief Commissioner is that of reasonableness. The Chief Commissioner had the benefit of the relevant collective agreement and the Benefit Plan documents, which were sufficient to establish that the Benefit Plan was bona fide. Though the Chief Commissioner did not specifically state what elements of these documents she relied on to come to the conclusion that the benefit plan was bona fide, jurisprudence clearly states than gaps in an administrative decision-maker's reasons are not fatal to the decision. As a result, Justice Pentelechuk concluded that the Chief Commissioner's decision was reasonable and the applicant's complaint was dismissed.

Court of Queen's Bench of Alberta Decision

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 Mondaq.com.

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

Authors
Events from this Firm
12 Sep 2017, Seminar, Toronto, Canada

Please join us as we take an in-depth look at the legislation and the impact on the industry.

14 Sep 2017, Seminar, Toronto, Canada

Change, stress and uncertainty are ever]present factors in todayfs legal environment, and specific aspects about the practice of law make it difficult to thrive in the profession long term. Luckily, there are specific research]based strategies that have been shown to help lawyers thrive and lead to more effective ways to manage stress and pressure.

5 Oct 2017, Seminar, Toronto, Canada

Blakes is proud to host our New to In-House Series, designed to bring together junior and mid-level in-house counsel for a candid exchange of insights to highlight and address some of the challenges and opportunities facing in-house lawyers in their roles today.

 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (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 www.mondaq.com

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 Mondaq.com’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.

Disclaimer

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.

Registration

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 unsubscribe@mondaq.com 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.

Cookies

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.

Links

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.

Mail-A-Friend

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.

Security

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 webmaster@mondaq.com.

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 EditorialAdvisor@mondaq.com.

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 enquiries@mondaq.com.

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