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Pensions - Pension Benefits Act (Ontario). 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. . Monteiro v. CEO Financial Services Regulatory Authority
In Monteiro v. CEO Financial Services Regulatory Authority (Div Court, 2023) the Divisional Court considered pension claims by a long-term night-school teacher lacking credentials. Here the court sets out the Pension Benefits Act appeal procedures and rights:Right of Appeal and Standard of Review
[37] The Appellant’s right to appeal the Tribunal’s order to this Court is set out in s. 9(1) of the PBA. The standard of review on an appeal of a decision of the Tribunal is the appellate standard. That means that the standard of correctness applies to questions of law including statutory interpretation and the scope of the decision maker’s authority. For questions of fact and mixed fact and law where the legal principle is not readily extractable, the standard is one of palpable and overriding error: Canada (Minister of Citizenship and Immigration v. Vavilov, 2019 SCC 65, [2019] S.C.J. No. 65 at para. 37, citing Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at para. 8. . Monteiro v. CEO Financial Services Regulatory Authority
In Monteiro v. CEO Financial Services Regulatory Authority (Div Court, 2023) the Divisional Court considered pension claims by a long-term night-school teacher lacking credentials. Here the court sets out the associated application, appeal procedure, involved parties, statutory history and administrative steps in the case:[1] Oscar Monteiro (the “Appellant”) taught part-time night school credit courses for the Toronto Board of Education (“TBE”) [1] between September 1980 – June 1989 (the “TBE Services”) without being formally qualified as a teacher. He also taught similar courses for other school boards prior to obtaining his teaching qualifications in 2003 (the “Other Services”). In this decision, I refer to the TBE Services and the Other Services, collectively, as the “Services”.
[2] The Appellant did not receive any pension credits (“Credits”) from the Ontario Teacher’s Pension Plan (the “Plan”) for any of the TBE Services. Nor did he receive any Credits for any of his Other Services, save 16.5 days earned in 1978-79. In the period from about 1980 to 2003, the Appellant did not make the required employee contributions to the Plan.
[3] Starting in 2006, the Appellant has attempted to obtain Credits for his non-qualified teaching Services. After he was turned down by the Plan’s Board (the “OTPPB”), he turned to the Financial Services Regulatory Authority (the “FSRA”). After considering the Appellant’s request the Respondent, Chief Executive Officer of the FSRA (the “CEO"), issued a Notice of Intention to Decide (“NOID”), stating the intention to refuse the Appellant’s request. The Appellant then applied to the Ontario Financial Services Tribunal (the “Tribunal”) to reverse the NOID and grant him Credits for the TBE Services. Although he did not raise the issue with the FSRA, the Appellant also sought a Tribunal order granting him Credits for the Other Services as well.
[4] On December 15, 2021, after a hearing de novo, the Tribunal dismissed the Appellant’s application. Instead, it ordered the CEO to carry out the terms of its NOID. The Appellant appeals that order to this court.
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[12] The Respondent OTPPB is the administrator of the Plan. The OTPPB’s statutory obligations are set out below. Participating employers have an obligation to enroll eligible members in the Plan.
[13] The Respondent CEO is responsible for the management and administration of the Financial Services Regulatory Authority (the “FSRA”), an independent regulatory agency created under the Financial Services Regulatory Authority of Ontario Act[2]. Under s. 3(1) and 3(3) of that statute, two of the objects of the FSRA are to promote good administration of pension plans and to protect and safeguard the pension benefits and rights of pension plan beneficiaries.
[14] The FSRA and its CEO are required to ensure the compliance of a pension plan or fund’s administrator with the requirements of the Pensions Benefit Act[3] (“PBA”), its regulations, the FSRA’s rules and the terms of the pension plan. Under s. 87(1) of the PBA, the CEO may make an order requiring a pension plan or fund’s administrator to take or refrain from taking any action in respect of a pension plan or a pension fund in order to ensure such compliance.
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[19] The uncontradicted evidence of Michael McAllister, the OTPPB’s Director of Quality and Risk Management, was that it “has always limited Plan membership to properly qualified teachers.” Further, in the OTPPB’s “experience, during the period of Alleged Service the controls on the part of school boards regarding unqualified teachers were lacking.”[6]
[20] Mr. McAllister also testified that in the normal course, when an LOP is granted by the Minister, a copy goes to the relevant board of education and another copy goes to the employee.
Statutory Obligations of the OTPPB
[21] Under s. 3 of the Teacher’s Pension Act[7], (the “TPA”), the OTPBB is required to administer the Plan in accord with the TPA, the Plan’s terms, the PBA and its regulations. Section 19(1) of the PBA imposes similar requirements, as does ss. 147.1(7)(a) of the Income Tax Act (Canada.)[8]. The Minister of Finance may revoke a pension plan’s registration if it is not administered according to the Income Tax Act (Canada.): s. 147.1(11).
[22] Section 22(1) of the PBA requires the OTPPB to “exercise the care, diligence and skill in the administration and investment of the pension fund that a person of ordinary prudence would exercise in dealing with the property of another person.” As the Tribunal found, based on the plain wording of the provision, that standard is not one of strict liability; it is reasonableness, not perfection.
[23] The PBA places a fiduciary duty on the OTPPB to each of the Plan’s members. That duty must be interpreted in light of the OTPPB’s duty of even-handedness to each class of beneficiaries under the Plan.[9] That means, in part, that each class of beneficiaries receives exactly what the Plan’s terms call for, nothing more, nothing less. The OTPPB may not “give an advantage or impose a burden when that advantage or burden is not found in the terms of the plan documents”[10]. It would breach the OTPPB’s fiduciary duties to its members if it granted benefits to persons who were not legitimately entitled to those benefits.[11]
Statutory Requirements for Plan Credits
[24] From 1980 – August 1, 1984, the terms of the Plan were contained in the Teacher’s Superannuation Act, 1980, (the “1980 TSA”).[12] During that period, s. 24(1) of 1980 TSA limited participation in the Plan to persons who were “enrolled” in accord with the Plan’s terms. The term “employed” was defined in s. 1(1)(d)(xiv) of the 1980 TSA as excluding anyone who “is not qualified as a teacher under the Education Act and the regulations under that Act”.
[25] Section 1(2) of the 1980 TSA stated that every person who received a certificate of qualification, letter of standing or LOP “shall be deemed to be qualified as a teacher for the purposes of this Act so long as his certificate or letter of standing or letter of permission granted in respect of him, remains valid”.
[26] Under s. 24 of the 1980 TSA, the requirement to contribute to the Plan and thus obtain Credits is limited to those “employed”, as defined above.
[27] The 1980 TSA was amended in 1983 (the “1983 TSA”), but its terms requiring Plan members to be “qualified as a teacher” remained virtually identical to those of its previous iteration.[13]
[28] Thus, the relevant statutory regime required the Appellant to have been granted an LOP each year in order to be eligible for membership in the Plan. No authority has been presented to this court that demonstrates a change in this obligation at any time before 2003.
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[30] The Appellant first raised the issue of his Credits for the TBE Services in 2006, 17 years after he ended his work with the TBE. Lacking possession of any LOPs for the TBE Services, the Appellant made a number of requests to the Toronto District School Board (the “TDSB”), the successor of the TBE, to search its records. He asked the TDSB to find what he claimed to be his missing LOPs. Evidence presented to the Tribunal demonstrates that the TDSB made a number of unsuccessful searches of its records for any LOPs that may have been granted to the Appellant for the period during which he provided the TBE Services.
[31] In his email to the Appellant of April 21, 2009, Jim Bliangas of the TDSB wrote “we have done a thorough search and have found nothing to indicate that you had an LOP." In an email fifteen months later, on July 21, 2010, Cori Byberg of the TDSB, explained the TDSB’s inability to locate any LOPs for the Appellant as follows:I would like to assure you that we have done an exhaustive search of all [TDSB] records in an effort to satisfy your inquiry. I can confirm that there are no Letters of Permission on file for any of the work you have performed for TDSB and the former Toronto Board of Education. I'm sure that you can appreciate that we are not able to provide you with documentation that does not exist. [32] In a decision dated November 30, 2016, a six-member panel of the OTPPB’s Benefits Adjudication Committee rejected the Appellant’s claim to Credits allegedly earned while performing the TBE Services. It determined that he had not been qualified as a teacher at the time he performed the TBE Services. The Appellant was not the only person in that position. The OTPPB had previously rejected claims to Credits by other non-qualified teachers who failed to prove that they had received LOPs during their terms of service. As it argued before the Tribunal, the OTPPB felt that its duty of even-handedness under the PBA prevented it from making an exception for the Appellant.
[33] Following this decision, the Appellant applied to the FSRA for a determination that he was entitled to Credits for the Services. His application did not deal with the Other Services. On March 19, 2021, the CEO issued the NOID, stating that the FSRA intended to deny his request.
[34] The Appellant then applied to the Tribunal to rescind the NOID and for an order granting him Credits for the TBE Services. Although the issue had not been before the FSRA, the Appellant nonetheless sought an additional order, granting him Credits for the Other Services.
The Tribunal’s Decision
[35] The Tribunal found that neither the PBA nor the terms of the Plan require the FSRA to grant Credits to the Appellant for the TBE Services in the absence of an LOP for each school year in which Credits are sought. It further found that the onus lay with the Appellant to prove that he had obtained LOPs for the period during which he offered the TBE Services.
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Issue No 1: Did the Tribunal err in law in finding that the Appellant required an LOP for each year in which he claimed Credits for the Services?
[39] In an appeal of the NOID of the CEO, the Tribunal’s jurisdiction is constrained by s. 89(9) of the PBA to ensuring compliance with the statute and its regulations. Section 89(9) reads as follows:Power of Tribunal
(9) At or after the hearing, the Tribunal by order may direct the Chief Executive Officer to make or refrain from making the intended decision indicated in the notice and to take such action as the Tribunal considers the Chief Executive Officer ought to take in accordance with this Act, the regulations and the Authority rules, and for such purposes, the Tribunal may substitute its opinion for that of the Chief Executive Officer. [40] Thus, the Tribunal’s jurisdiction is strictly limited to remedies available under the PBA. It could order the CEO to carry out the NOID, refrain from doing so, or otherwise comply with the provisions of the PBA. It may not exercise its discretion to make orders contrary to the PBA and by implication, the terms of the Plan. The Tribunal could not order the CEO to grant Credits to the Appellant in the absence of LOPs for the years that he worked as a non-qualified teacher for the TBE or any other school board. Thus, in order to grant him credits for the TBE Services or Other Services, it must have found that he had been granted LOPs for the relevant period of time.
[41] The PBA does not allow for exceptions to the application of the eligibility criteria of the 1980 TSA and the 1983 TSA. It does not allow the Tribunal to expand the definition of the term “qualified as a teacher” to include non-qualified teachers. Nor does it allow the Tribunal to decide whether the Appellant should have received LOPs for a period when he did not receive them. Rather, it clearly limits eligibility for Credits to those who have been found to have been granted a certificate of qualification, a letter of standing, or an LOP.
[42] The Appellant asserts that the decision of this court, as upheld by the Ontario Court of Appeal in Hall v. Ontario Teachers' Pension Plan Board [14] stands for the proposition that all part-time teachers should have been entitled to Credits for their service prior to 1984. Based on the Hall decision, he says that he should have received Credits for his unqualified part-time teaching as well. However, as the Tribunal pointed out, Hall was concerned with the pension entitlements of qualified part-time teachers, not their non-qualified colleagues. Because of this distinction, Hall does not assist the Appellant.
[43] For those reasons, I find that the Tribunal was correct in making the legal finding that under the terms of the Plan and the relevant statutes and regulations, the Appellant was only eligible to receive Credits for the Services if it is proven that he had an LOP for each year claimed. It had no discretion to find otherwise. . Carvalho v. Amorim
In Carvalho v. Amorim (Ont CA, 2022) the Court of Appeal considered 'living separate and apart' for purposes of Ontario's Pension Benefits Act:[11] As conceded by Ms. Amorim, the application judge started with the correct legal test. Section 44(1) of the Pension Benefits Act provides that every pension paid to a member who has a spouse is to be paid out on a “joint and survivor pension” basis unless, pursuant to s. 44(4)(b), the member and his or her spouse are living “separate and apart” on the date that the first pension payment is due.[2] In determining whether Mr. Carvalho and Ms. Amorim were living “separate and apart” at the relevant time, the application judge turned to the case law under s. 8 of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.). He described the following indicia, derived from Greaves v. Greaves (2004), 2004 CanLII 25489 (ON SC), 4 R.F.L. (6th) 1 (Ont. S.C.), at para. 34, as relevant to his determination of whether the parties were living separate and apart:a. Physical separation, however, this is not the deciding factor as spouses may remain together for economic reasons;
b. A withdrawal by one or both spouses from the matrimonial obligation with the intent of destroying the matrimonial consortium or of repudiating the marital relationship;
c. the absence of sexual relations however this is not a conclusive factor;
d. discussions of family problems and communications between the spouses;
e. presence or absence of joint social activities; and
f. the true intent of a spouse as opposed to a spouse’s stated intent.
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