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Benefits and Pensions MonitorLeading Court Decisions of 2007 This case is under appeal. Cousins et al v. Marine Atlantic Inc. (Federal Court) is the first non-Ontario case to consider whether there is a requirement to distribute surplus on a partial plan wind-up. The court found modest definitional distinctions between the federal and Ontario statutes to be insufficient to yield a different result from Monsanto. In light of this, the question remains as to whether the laws of other provinces (that had not taken steps to specifically deal with surplus distribution on partial wind-up, such as Alberta and B.C.) will be interpreted to require distribution of surplus on partial wind-up. In this case, the court also ruled that due to limitation periods, there would be no requirement to distribute surplus in certain past partial wind-ups where the actuarial reports had been fully approved. Accordingly, unlike the Monsanto decision which leaves the temporal scope of matters unclear, in this case it is not expected that many past partial wind-ups will be re-opened. This case is under appeal. Issue Of Costs While it allowed a class proceeding to continue, Potter v. Bank of Canada (Ontario Court of Appeal) is also important in that it upholds the notion that in pension class actions (here relating to allegations of improper payment of expenses), the plaintiffs generally cannot seek an order that amounts be paid out of the pension fund to the class members. In addition, on the issue of costs, the court adopted the normal ‘loser pays’ approach (here the results on appeal were divided). However, the court determined that by seeking to protect the pension fund from improper expenses, all plan members benefited and so the fees relating to continuing the class proceeding were properly charged to the fund. Interestingly, the court also ordered that certain costs of the employer were also payable from the pension fund since it succeeded in arguing that any damages ordered be paid to the pension fund and so had ‘protect[ed] the fund from the direct distribution claim.’ Authorson (Ontario Court of Appeal) was one of several decisions rendered in litigation over failure to provide interest on disabled veterans pensions. The remedy in such claims is ‘restitution’ (being placed in the position the plaintiff would otherwise have been in if not for the breach). The court opined that in the determination of the level of damages, it may include hindsight, but it cannot assume perfect knowledge. Thus, it rejected an investment approach which adopted in each year an asset allocation of equity, bonds, and cash which reflected an optimal mix for that year. Harbert v. General Chemical – There, the Ontario Court of Appeal found that an administrator’s lien for delinquent contributions is not enforceable under the federal Bankruptcy and Insolvency Act. Standard Tests Laronde v. Workplace Health, Safety and Compensation Commission and N.B. – In this case, the termination of WCB at age 65 (or continuation of compensation for only two years in the case of an injury occurring after attainment of age 65) was found by the New Brunswick Court of Appeal not to constitute discrimination based on age contrary to section 15(1) of the Charter. The court reasoned that the provision did not fail on the standard tests and, in particular, was not disrespectful to human dignity and was premised on the notion, supported by statistical evidence, that most workers retire by age 65. This may be of interest to Ontario employers grappling with the so-called ‘end of mandatory retirement,’ in particular, the issue of termination of benefits or coverage at age 65. Patrick v. Telus – The B.C. Court of Appeal upheld the trial decision finding that a pension committee was within its powers to change approaches on granting or denying ‘consent’ benefits. Bennett v. British Columbia – This case confirms that, in proper circumstances, unionized employees are not precluded from commencing a class action with respect to employment benefits.
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Greg Winfield is with McCarthy Tétrault LLP