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Financial Regulation - Financial Services Tribunal Act, 2017. Brewers Retail Inc. v. Campbell
In Brewers Retail Inc. v. Campbell (Ont CA, 2023) the Court of Appeal considered an appeal from a motion judge's unusual 'reverse' class action certification, where the private parties together sought to use the class action distribution procedures to implement a negotiated pension indexing scheme.
In these quotes the court considers the appellant's [the Financial Services Regulatory Authority (FSRA)] arguments that the Financial Services Tribunal (“FST”) had exclusive jurisdiction over the matter, and that thus the class action was inappropriate:[7] In 2019, the Financial Services Regulatory Authority of Ontario (“FSRA”) replaced FSCO. Initially, FSRA affirmed FSCO’s support for the settlement agreement but, later, it resiled.
[8] When the parties began the class proceeding, the Chief Executive Officer of the FSRA (the “CEO”)[1] sought to have the proceeding stayed, claiming that the Financial Services Tribunal (“FST”) had exclusive jurisdiction over the matter. The motion judge rejected that claim. By orders dated February 10, 2022, the court dismissed the stay motion and ordered certification (the “Orders”).
[9] FSRA appeals against the Orders. It contends that the PBA establishes a comprehensive framework for the regulation of pension plans and that the issues raised in the dispute are within the exclusive jurisdiction of the FST. FSRA maintains that, if left uncorrected, the Orders will undermine the carefully calibrated legislative and regulatory scheme which governs the regulation of pension plans and employers will be able to commence collateral court proceedings instead of engaging with the regulator in accordance with the statutory review process.
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[31] On November 24, 2020, FSRA issued a NOID advising that it was refusing to register Plan Amendment No. 9, the 2013 amendment, and another amendment that Brewers had proposed in 2015.
[32] In December 2020, Brewers requested a hearing by the FST so it could challenge the NOID. The Committee was added as a party to the FST proceeding. Brewers also advised FSRA that it intended to proceed with the class proceeding settlement approval process.
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[45] The motion judge stated that the court had jurisdiction over the Application as a matter of its inherent jurisdiction unless it was “clearly and unequivocally” deprived of that jurisdiction. He found that FSRA had not identified any provision in the PBA or other statute which excluded the court’s authority to adjudicate pension disputes or to engage in statutory and contractual interpretation with respect to those disputes. He pointed to “ample precedent” for the court engaging in such pension decisions, including one case where the court determined it had jurisdiction to decide pension-related disputes in the face of direct opposition by the pension regulator: Anova Inc. Employee Retirement Pension Plan (Administrator of) v. Manufacturers Life Insurance Co. (1994), 1994 CanLII 7519 (ON SC), 121 D.L.R. (4th) 162 (Ont. Gen. Div.).
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ISSUES 1 and 2: The FST does not have exclusive jurisdiction over the Application
[49] FSRA’s central contention on this appeal is that the FST has exclusive jurisdiction over the subject matter of the Application and the court must defer to it. As both Issues 1 and 2 rest on that contention, I deal with them together. I make the following three points by way of introduction.
[50] First, the parties are agreed that the question of jurisdiction is a question of law and subject to review on a standard of correctness.
[51] Second, s. 8 of the Financial Services Tribunal Act, 2017, S.O. 2017, c. 34, Sched.17 (the “FSTA”) plays a major role in deciding these issues. It reads as follows:The Tribunal has exclusive jurisdiction to,
(a) exercise the powers conferred on it under this Act and every other Act that confers powers or assigns duties to it; and
(b) determine all questions of fact or law that arise in any proceeding before it under any Act mentioned in clause (a). [Emphasis added.] [52] Third, given the sheer number of arguments the parties raise on Issues 1 and 2, in setting out their positions, I summarize only their main arguments.
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Analysis
[64] There is no dispute that the court has jurisdiction to hear applications under the CPA. Nor is there any dispute that the court has inherent equitable jurisdiction to vary or amend trusts in certain circumstances: see Re Dickson et al. and Richardson (1981), 1981 CanLII 1842 (ON CA), 32 O.R. (2d) 158 (C.A.), at pp. 168-69. With the Supreme Court’s adoption of the exclusive jurisdiction model in Weber v. Ontario Hydro, 1995 CanLII 108 (SCC), [1995] 2 S.C.R. 929, at paras. 50-58, the court’s jurisdiction in civil proceedings is ousted only when the subject matter of the dispute falls within the exclusive jurisdiction of a statutory decision-maker.
[65] In my view, neither s. 8 of the FSTA nor the general statutory scheme in the PBA contains clear and unequivocal wording that ousts the court’s jurisdiction. While the motion judge did not expressly advert to s. 8 of the FSTA or the general PBA statutory scheme, he considered and addressed FSRA’s argument that the FST has exclusive jurisdiction over the dispute. At paras. 38-39 of his reasons, the motion judge said that FSRA had not identified any provision in the PBA or other statute which excludes the court’s jurisdiction. I agree. Consequently, I see no error in the motion judge dismissing the motion.
[66] Section 8 of the FSTA gives the FST exclusive jurisdiction over “all questions of fact or law that arise in any proceeding before it”. On a plain reading of s. 8, it does not explicitly oust the court’s jurisdiction to decide all pension disputes or to approve settlements that may involve interpretations of the PBA and result in amendments to a pension trust: its exclusive jurisdiction is limited to questions of fact or law arising from “any proceeding before it”.
[67] In this regard, the wording of s. 8 can usefully be contrasted with the statutory language in s. 45 of the Labour Relations Act, R.S.O. 1990, c. L.2, the statutory provision at issue in Weber. Section 45 provided for “binding settlement by arbitration” of “all differences between the parties arising from the interpretation, application, administration or alleged violation of the [collective] agreement”. The Supreme Court confirmed that s. 45 established a model of “exclusive jurisdiction” for labour arbitration, ousting the court’s ability to adjudicate civil actions based solely on collective agreements. Justice McLachlin (as she then was) found the words, “all differences between the parties” ousted the court’s jurisdiction in “all proceedings arising from the differences between the parties, however those proceedings may be framed”: at para. 50. The courts did not have concurrent jurisdiction because s. 45 established a model of “exclusive jurisdiction” for labour arbitration.
[68] That is not this case here. Section 8 of the FSTA does not give the FST the authority to decide “all differences between the parties arising from the interpretation, application, administration or alleged violation” of the PBA, the language found in Weber to oust the court’s jurisdiction. Section 8 gives the FST exclusive jurisdiction over only all questions of law or fact that “arise in any proceeding before it”. The questions before the FST in this case are those framed by the NOID, which focusses on whether certain Plan amendments comply with ss. 14 and 14.1 of the PBA. Those questions are not co-extensive with the questions of fact and law that arise in this class proceeding. Of necessity, both the factual and legal matters in this proceeding are broader because they are designed to address all the Indexing Issues, not only those identified in the NOID.
[69] Furthermore, while s. 8 may give the FST concurrent or overlapping jurisdiction over the common issues in the Application, the FST does not have the power to approve the Settlement Agreement or vary the pension trust. The Application calls on the court to consider those remedies and the questions of fact or law that necessarily underpin them. Thus, assuming that the common issues in the Application are ones the FST hearing would decide, at most there is concurrent or overlapping jurisdiction over the limited matters that arise in the FST proceeding.
[70] The scheme of the PBA also does not oust the court’s jurisdiction. The PBA is not comprehensive legislation; it provides minimum standards that pension plans must meet for registration in Ontario: see e.g., Buschau v. Rogers Communications Inc., 2006 SCC 28, [2006] 1 S.C.R. 973, at para. 35; Lomas, at para. 45. The courts have repeatedly exercised jurisdiction over a variety of pension disputes, including approving settlements that require the amendment of a pension plan’s text: see e.g., Montreal Trust Company of Canada v. Ontario (Superintendent of Financial Services), 2009 ONFST 1.
[71] In Montreal Trust, the company and pension plan members settled a dispute over surplus distribution. They took their agreement to the Superior Court by way of a class proceeding. The court approved the terms of the settlement and ordered that the pension plan and trust instrument be amended to give effect to the surplus distribution, while stipulating that its order was subject to all necessary regulatory approvals. When the Ontario regulator refused to consent to the distribution of surplus under the court order, alleging non-compliance with the PBA, the company took the matter to the FST. The FST acknowledged the court’s inherent jurisdiction to remodel the terms of the pension trust to effect a settlement of a dispute over pension plan terms, and affirmed the validity of the court’s order. The Superior Court has certified class actions for settlement purposes involving pension disputes on multiple other occasions: see e.g., Kidd v. Canada Life, 2011 ONSC 6324, 22 C.P.C. (7th) 156; Toronto District School Board v. Field, 2010 ONSC 3865; 98 C.P.C. (6th) 36.
[72] Moreover, I do not accept FSRA’s submission based on Lomas. In Lomas, a former employee of the respondent company and a contributing member of the respondent’s pension plan brought an application for an order winding up the pension plan or directing the respondent to make a wind up application under s. 68 of the PBA. This court dismissed the application. However, it did not find, as FSRA contends, that the PBA is a comprehensive statutory regime which deprives the court of jurisdiction over pension disputes. Rather, this court decided a much narrower point, namely, that the court does not have jurisdiction to make an order compelling an employer to commence wind up proceedings under the PBA.
[73] As this court explained at paras. 71-84 of Lomas, the statutory scheme governing the Superintendent’s powers in relation to the wind up of pension plans was one basis for its conclusion that the court lacked jurisdiction. The power to initiate an involuntary wind up was explicitly given to the Superintendent under the PBA and required the Superintendent to follow a detailed process. Together, the PBA and the Financial Services Commission of Ontario Act, 1997, S.O. 1999, c. 28, created “a carefully calibrated, multi-layered process for deciding whether a wind up will be ordered when the wind up has not been initiated by the employer”: at para. 72.
[74] This case is very unlike Lomas. The most obvious distinction is that this case does not involve the court’s jurisdiction to order the wind up of a pension plan, and it is that matter which Lomas decided. As well, unlike in Lomas, there is no comprehensive scheme governing the very matters in issue. Further, the remedies sought by the parties in this proceeding are available only through the courts, whereas in Lomas, the power to grant the remedy sought was expressly given to the regulator in the legislation. Neither FSRA nor the FST can approve the Settlement Agreement or sanction amendments to the Plan and pension trust in accordance with it.
[75] I hasten to add that I do not intend my analysis to suggest that the FST will never have exclusive jurisdiction in any pension dispute. One example will demonstrate this. For the purpose of this example, assume that Brewers was concerned about its interpretation and administration of the Plan based on the Indexing provisions and the sole step it took to address those concerns was to file Plan Amendment No. 9. Just to be clear, in this example remove the true history to this proceeding and leave the sole background to be as described in the prior sentence. Imagine that the CEO responded by issuing a NOID advising Brewers that it was refusing to register Plan Amendment No. 9. If, instead of seeking a hearing before the FST, Brewers attempted to have the validity of Plan Amendment No. 9 decided by the court, on reasoning similar to that in Lomas, arguably the court could be found to be without jurisdiction because of the statutory scheme governing the CEO’s powers together with those given to the FST under s. 8 of FSRA. . Prince v Chief Executive Officer of the Financial Services Regulatory Authority of Ontario
In Prince v Chief Executive Officer of the Financial Services Regulatory Authority of Ontario (Div Court, 2023) the Divisional Court considered the appellant's argument that, in a professional discipline tribunal hearing [here before Financial Services Tribunal, acting under the Mortgage Brokerages, Lenders and Administrators Act, 2006 (the 'MBLAA')] that the standard of proof was higher than the normal civil standard of 'balance of probabilities' (it wasn't):[1] The Appellant appeals from a decision of the Financial Services Tribunal (the “Tribunal”) under the Mortgage Brokerages, Lenders and Administrators Act, 2006. (the “MBLAA”).
[2] The Appellant requested a hearing before the Tribunal after receiving a notice of proposal to revoke her mortgage licence based on a reasonable belief that she was not suitable to be licensed as a mortgage agent. The grounds for this belief were the Appellant’s past conduct, false statements by the Appellant in her application to be licensed on three subsequent renewals and for misleading Financial Services Regulatory Authority of Ontario (“FSRA”) investigators.
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[11] The Appellant submitted that a sliding scale or higher standard should be applied in circumstances such as this. Counsel referred the panel to Australian authorities to that effect and to a strongly worded minority opinion by the Chief Justice of the Supreme Court of New Zealand that a higher standard should be applied in circumstances where serious allegations and penalties are engaged: Z v. Dental Complaints Assessment Committee [2008] NZSC 55; [2009] 1 NZLR 1.
[12] I disagree.
[13] It is well settled law in Canada that there is one civil standard of proof at common law, which is proof on the balance of probabilities, notwithstanding the seriousness of the allegations or the consequences: F.H. v. McDougall, 2008 SCC 53 at para. 40 [2008] 3 SCR 41 (CanLII). This decision is binding on us as it was on the tribunal below.
[14] The Tribunal correctly applied the civil standard of proof to the hearing evidence and carefully set out its reasons for rejecting the Appellant’s evidence. It did not commit any legal error in its application of the standard of proof. Further, the prosecution’s case was established by clear and cogent evidence, most of which was not contested. The issue before the Tribunal was in respect of the appellant’s explanations for the impugned conduct, explanations which were rejected by the tribunal for reasons that are discussed below. I would not give effect to this ground of appeal.
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