Canadian Cases on Pensions & Benefits

CANADIAN CASES ON PENSIONS & BENEFITS Second Series/Deuxième série Recueil de jurisprudence canadienne en matière de retraite et d’avantages sociaux

VOLUME 31 (Cited 31 C.C.P.B. (2nd))

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[Indexed as: Provincial Court Judges’ Assn. of British Columbia v. British Columbia (Attorney General)] Provincial Court Judges’ Association of British Columbia (Respondent / Appellant on Cross Appeal/Petitioner) and Attorney General of British Columbia (Appellant/Respondent on Cross Appeal/Respondent) British Columbia Court of Appeal Docket: Vancouver CA43875 2017 BCCA 63 Saunders, Frankel, Stromberg-Stein JJ.A. Heard: January 16-17, 2017 Judgment: February 7, 2017* Judges and courts –––– Justices, magistrates and provincial courts — Re- muneration –––– Judicial Compensation Commission (JCC) made recommendations for remuneration and associated benefits for judges of Provincial Court of British Columbia — JCC recommended increase in salary of 2.9 per cent in first year, 1.5 per cent in second year and 2 per cent in third year, change in pension accrual rate from 3 per cent to 3.25 per cent, and that judges who worked full-time past age of 71 collect both pension and full-time pay — Gov- ernment rejected JCC’s principal recommendations — Provincial Court Judges’ Association’s application for judicial review of government’s response was granted — Trial judge found government was required to justify, on standard of simple rationality, that JCC’s recommendations were unfair or unreasonable within meaning of Judicial Compensation Act — Trial judge found government’s primary rationalization for rejecting JCC’s recommendations was that it gave insufficient weight to government’s policy of fiscal restraint as necessary for achievement of government’s fiscal plan, including management of its debt — Trial judge found government failed to establish rational link between fiscal restraint and debt reduction as government goals and proposed modifications to salaries that would justify characterizing recommendations as unfair and unreasonable — Trial judge found there was no indication that JCC failed to address important aspect of government’s submissions or that it made error of law in rejecting submissions — Trial judge found while government provided reason for rejecting recommendations, it did not support it with reasonable factual foundation — Trial judge found government’s response to JCC’s salary recommendations failed to meet standard of rationality — Trial judge found that as

* A corrigendum issued by the court on February 10, 2017 has been incorpo- rated herein. 162 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

there was no rational link between fiscal restraint as policy and purported unfair- ness or unreasonableness of recommendations was established, government’s response to JCC’s pension accrual rate recommendations failed to meet standard of rationality — Government’s response was set aside and was remitted back for reconsideration — Government appealed; association cross-appealed — Appeal allowed in part; cross-appeal dismissed — Resolution to be quashed — Resolu- tion was fatally flawed as being based on incorrect legal premise of salaries and benefits applicable at time resolution was passed — Legislative Assembly never having had opportunity to consider issue of Provincial Court judges emoluments in context of court ordered framework, and it would be wrong to pronounce on resolution that used state of affairs that had been erased by court order as base point for discussion — Issue was one of new legal obligations rather than new facts — Final report to be remitted to assembly, and certain conditions of remittal removed. Cases considered by Saunders J.A.: Provincial Court Judges’ Assn. (New Brunswick) v. New Brunswick (Minister of Justice) (2005), 2005 SCC 44, [2003] S.C.C.A. No. 458, 2005 CarswellNB 405, 2005 CarswellNB 406, EYB 2005-93017, 255 D.L.R. (4th) 513, [2005] S.C.J. No. 47, 336 N.R. 201, 367 A.R. 300, 346 W.A.C. 300, 14 C.P.C. (6th) 1, 30 Admin. L.R. (4th) 1, 201 O.A.C. 293, 49 Alta. L.R. (4th) 211, [2006] 1 W.W.R. 407, [2005] 2 S.C.R. 286, (sub nom. Provincial Court Judges Assn. of New Brunswick v. New Brunswick (Minister of Justice)) 135 C.R.R. (2d) 55, 135 C.R.R. (2d) 57, (sub nom. New Brunswick Provincial Court Judges’ Association v. New Brunswick (Minister of Justice)) 288 N.B.R. (2d) 202, (sub nom. New Brunswick Provincial Court Judges’ Association v. New Brunswick (Minister of Justice)) 751 A.P.R. 202, (sub nom. Ontario Judges’ Assn. v. Ontario) 85 O.R. (3d) 79 (note), 2005 CSC 44 (S.C.C.) — considered Provincial Court Judges’ Assn. of British Columbia v. British Columbia (Attorney General) (2015), 2015 BCCA 136, 2015 CarswellBC 766, 18 C.C.P.B. (2nd) 157, 383 D.L.R. (4th) 701, [2015] 8 W.W.R. 515, 369 B.C.A.C. 269, 634 W.A.C. 269, 74 B.C.L.R. (5th) 307, 96 Admin. L.R. (5th) 256 (B.C. C.A.) — considered R. v. Campbell (1997), 11 C.P.C. (4th) 1, (sub nom. Reference re Public Sector Pay Reduction Act (P.E.I.), s. 10) 150 D.L.R. (4th) 577, 118 C.C.C. (3d) 193, (sub nom. Provincial Court Judges Assn. (Manitoba) v. Manitoba (Minister of Justice)) 46 C.R.R. (2d) 1, [1997] S.C.J. No. 75, (sub nom. Reference re Remuneration of Judges of the Provincial Court (P.E.I.)) 206 A.R. 1, (sub nom. Reference re Remuneration of Judges of the Provincial Court (P.E.I.)) 156 W.A.C. 1, (sub nom. Reference re Remuneration of Judges of the Provincial Court (P.E.I.)) 156 Nfld. & P.E.I.R. 1, (sub nom. Reference re Remuneration of Judges of the Provincial Court (P.E.I.)) 483 A.P.R. 1, 217 N.R. 1, (sub nom. Reference re Remuneration of Judges of the PCJA (BC) v. BC (AG) Saunders J.A. 163

Provincial Court (P.E.I.)) 121 Man. R. (2d) 1, 49 Admin. L.R. (2d) 1, (sub nom. Reference re Remuneration of Judges of the Provincial Court of Prince Edward Island) [1997] 3 S.C.R. 3, [1997] 10 W.W.R. 417, 1997 Car- swellNat 3038, 1997 CarswellNat 3039 (S.C.C.) — referred to R. v. Palmer (1979), [1980] 1 S.C.R. 759, 30 N.R. 181, 14 C.R. (3d) 22, 17 C.R. (3d) 34 (Fr.), 50 C.C.C. (2d) 193, 106 D.L.R. (3d) 212, 1979 CarswellBC 533, 1979 CarswellBC 541, [1979] S.C.J. No. 126 (S.C.C.) — followed Statutes considered: Judicial Compensation Act, S.B.C. 2003, c. 59 Generally — referred to s. 6(2) — referred to

APPEAL by Attorney-General and CROSS-APPEAL by Provincial Court Judges’ Association from judgment reported at Provincial Court Judges’ Assn. of British Columbia v. British Columbia (Attorney General) (2016), 2016 BCSC 1420, 2016 CarswellBC 2147, 27 C.C.P.B. (2nd) 226, 87 B.C.L.R. (5th) 146, [2016] 11 W.W.R. 797 (B.C. S.C.), granting application by association for judicial review of determination regarding provincial judge salaries.

S. Gudmundseth, Q.C., A.D. Gay, Q.C., for Appellant J. Arvay, Q.C., A. Latimer, for Respondent

Saunders J.A.:

1 The constitutional implications of the principle of judicial independence make the establishment of judicial salaries and benefits of more than usual delicacy. Judges are appointed by the executive branch of government on the authority of legislation enacted by the legislative branch, but are constrained from direct discussion with those branches on those subjects in the interests of the deep constitutional commitment to separation of powers and preservation of institutional independence: R. v. Campbell, [1997] 3 S.C.R. 3 (S.C.C.), para. 134; Provincial Court Judges’ Assn. (New Brunswick) v. New Brunswick (Minister of Justice), 2005 SCC 44 (S.C.C.) (“Bodner”). 2 At the same time, it is only the legislative branch (historically Parlia- ment, in British Columbia named the Legislative Assembly) that has the authority for taxation and fiscal management. This principle, too, is a constitutional pillar of our parliamentary democracy. 3 How to square that circle has been addressed by the Supreme Court of Canada, this court, and other courts across Canada. Of the many cases on the subject, P.E.I. Reference; Bodner and Provincial Court Judges’ 164 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

Assn. of British Columbia v. British Columbia (Attorney General), 2015 BCCA 136 (B.C. C.A.) (“Provincial Court Judges 2015”), are notable for this appeal. 4 This appeal concerns a resolution of the Legislative Assembly, having received a report and recommendations from the 2013 Judges Com- pensation Commission, establishing salaries, allowances and benefits for Provincial Court judges for the three years April 1, 2014 to March 31, 2017 and arises in unprecedented circumstances of a court order, made after the resolution, that materially altered the existing framework for judicial emoluments. I agree that the resolution of the Legislative Assem- bly should be quashed as the judge on judicial review concluded, and the matter remitted to the Legislative Assembly for fresh consideration, but for different reasons. I consider Provincial Court Judges 2015 so altered the legal foundation for the Legislative Assembly’s resolution that, without fault to the parties or the Legislative Assembly, the resolution is fatally flawed as being based on an incorrect legal premise of the salaries and benefits applicable at the time the resolution was passed. In that circumstance and the Legislative Assembly never having had the opportunity to consider the issue of Provincial Court judges emoluments in the context of that court ordered framework, it would be wrong for us to pronounce on a resolution that takes as its base point for discussion, a state of affairs that has been erased by court order. The situation calls for an order remitting the matter to the Legislative Assembly for fresh consideration knowing the effect of Provincial Court Judges 2015. 5 It was said to us during the hearing that jurisprudence generally for- bids the Legislative Assembly from considering new factual matters not existing at the time of a Commission’s work: PEI Reference and Bodner. This is so. There is, however, a difference between new facts, and a change of legal obligations. I consider it is always open for any person or institution, including, indeed particularly, a branch of government, to rely upon the law as it is known to them, in making a decision. Certainly where the matter has been determined by the courts, there is no barrier to directing the matter for reconsideration by the Legislative Assembly on that correct legal foundation. 6 Nor does this result tread upon the 2013 Commission’s work. With- out fault to the 2013 Commission, the starting place was not as it thought. It is for the Legislative Assembly, armed with the new 2011–2014 salary grid and benefits, to consider the discussion of the issues and conclusions in the 2013 Commission’s report. PCJA (BC) v. BC (AG) Saunders J.A. 165

7 How did this all happen? The resolution of the Legislative Assembly in issue was the product of a legislative process set out in the Judicial Compensation Act, S.B.C. 2003, c. 59. By the Act, the Legislative As- sembly triennially assigns the question of study and recommendation in respect to Provincial Court judges’ salaries, allowances and benefits to a Judicial Judges Compensation Commission, an independent five person body. The Commission is obliged to receive evidence and submissions and to write a report with recommendations on the issues before it. It is made up of two persons nominated by the Minister (Attorney General), two by the Chief Judge of the Provincial Court, and a chairperson selected by those four individuals. The Commission’s terms of reference are defined in the Act. A preliminary report with recommendations must be delivered to the Attorney General and the Chief Judge, and thereafter a final report must be laid before the Legislative Assembly for response by the Legislative Assembly, all on a timetable established by the Act. Any response of the Legislative Assembly is by resolution. It may reject one or more recommendations and make a substitution, failing which the recommendations become the result. The Act directs payments from the consolidated revenue fund according to the resolution of the Legislative Assembly or the Commission report, whichever pertains. 8 In this case, the 2013 Commission process had concluded before the 2010 Commission’s recommendations were legally settled, that is, there was overlap such that the salaries, allowances and benefits for the years addressed by the 2010 Commission were still in doubt when the 2013 Commission and the Legislative Assembly addressed the years April 1, 2014 to March 31, 2017. The Legislative Assembly had rejected recommendations of the 2010 Commission, principally a recommendation for the third year that salaries be lifted by the three–year increase in the Brit- ish Columbia ConsumerPrice Index (later determined to be 4.9%) and a recommendation the rate of annual pension accrual be increased from 3% to 3.5%. On judicial review, the Legislative Assembly’s first resolution was quashed and the matter was remitted to the Legislative Assembly. By its second resolution, the Legislative Assembly substituted the recommended consumer price index increase with a 1.5% increase for the third year, bringing the salary to $234,605 for the period ending March 31, 2014. The Provincial Court Judges’ Association sought judicial review of the second resolution, and an appeal followed. The appeal was not concluded until after the Legislative Assembly passed the resolution in issue in this appeal. By Provincial Court Judges 2015, released March 27, 166 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

2015, this court ordered the implementation of the 2010 Commission’s recommendations. 9 Not being prescient and needing to start somewhere, the 2013 Com- mission, with the agreement of the parties, took as the starting point for its study and recommendations, the salary, allowances and benefits in effect March 31, 2014. Thus the 2013 Commission’s report was pre- mised on a starting salary of $234,605 and a 3% rate of pension accrual. This was in contrast to the salary increase of 4.9% for the third year, an increase that brought the salary for the year ending March 31, 2014 to $242,464 (see 2016 BCSC 1420 (B.C. S.C.), para. 57), and the increase to 3.5% for the rate of pension accrual, ordered in Provincial Court Judges 2015. 10 Starting from a base of the salary and benefits in effect when it commenced its work, the 2013 Commission made eight recommendations. These included a recommendation that the pension accrual rate be enhanced from 3% to 3.25% per year of service, and salaries be lifted from $234,605 on the following schedule: effective April 1, 2014 a 2.9% lift to $241,500 effective April 1, 2015 a 1.5% lift to $245,122 effective April 1, 2016 a 2.0% lift to $250,024 11 The final report and recommendations of the 2013 Commission were laid before the Legislative Assembly, along with a document from the Attorney General setting out the Executive’s response and recom- mending acceptance of some, but not all, terms. In particular the response advised against the recommendations to increase the pension accrual rate, and recommended annual salary increases of 1%, 1.5%, and 1.5% over the three years. 12 On March 24, 2014, after speeches by the Attorney General and the justice critic of Her Majesty’s Loyal Opposition, the Legislative Assem- bly unanimously passed a resolution rejecting the proposed increase to the rate of pension accrual and substituting the lower salary grid proposed in the Executive’s response, a grid higher than the salary the government had proposed to the Commission. The resolution both set the PCJA (BC) v. BC (AG) Saunders J.A. 167

salaries to be paid and spoke of those amounts as representing a lift. The resolution moved: That pursuant to section 6 (2) of the Judicial Compensation Act the Legislative Assembly: a. reject the following recommendations of the Report of the 2013 Judges Compensation Commission as laid before this Assembly on February 18, 2014 as unfair and/or unreasonable for the reasons outlined in Gov- ernment’s Proposed Response to the Report of the 2013 Judges Compensation Commission filed in this House; and b. set the remuneration, allowances or benefits that are to be substituted for the rejected recommendations; as follows: 1. The recommended salary for puisne judges for April 1, 2014 to March 31, 2015 of $241,500, an increase of 2.9%, is rejected. The salary for April 1, 2014 to March 31, 2015 is set at $236,950, which is a 1.0% increase. 2. The recommended salary for puisne judges for April 1, 2015 to March 31, 2016 of $245,122, an increase of 1.5%, is rejected. The salary for April 1, 2015 to March 31, 2016 is set at $240,504, which is a 1.5% increase on the substituted salary for fiscal year 2014/15. 3. The recommended salary for puisne judges for April 1, 2016 to March 31, 2017 of $250,024, an increase of 2.0%, is rejected. The salary for April 1, 2016 to March 31, 2017 is set at $244,112, which is a 1.5% increase. 4. The recommended increase in the pension accrual rate for judges from 3% to 3.25% effective April 1, 2014 is rejected. The pension accrual rate is set at 3%. 5. Recommendation 5 that, effective April 1, 2014, government take steps to continue judges as active members in the Public Service Pension Plan to age 75 is accepted in part. Recom- mendation 5(d), to the extent that it applies to any retroactive measures, including return of pension payments, making back–contributions, or making interest payments, is rejected. That the Legislative Assembly accept the remaining recommendations contained in the report. [Emphasis added.] 13 On March 27, 2015, this court released Provincial Court Judges 2015, Mr. Justice Harris dissenting. The majority, for reasons of Mr. Jus- 168 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

tice Chiasson, concluded that the Legislative Assembly had not met its constitutional obligations in respect to judicial independence, and allowed the appeal. On the basis that the resolution before the court was the second one concerning the 2010 Commission’s recommendations, and having been advised judicial review likely would be sought of the resolution on the 2013 Commission’s report and recommendations, the majority ordered implementation of the recommendations of the 2010 Commission, without remittal to the Legislative Assembly. Thus, on March 27, 2015, the salary of provincial court judges increased by 4.9% for the year April 1, 2013 to March 31, 2014, and the pension accrual rate became 3.5% for a year of service. As of April 1, 2014, however, the resolution of the Legislative Assembly passed on March 24, 2014, in respect to the 2013 Commission’s recommendations took effect for salaries and pension accrual rate after March 31, 2014. 14 In summary, the pension accrual rate started at 3% per year of service, was recommended by the 2010 Commission to move to 3.5% per year, remained at 3% per year by virtue of the two Legislative Assem- bly’s resolutions on the 2010 Commission’s report, was recommended by the 2013 Commission to move to 3.25% per year effective April 1, 2014, was ordered to increase to 3.5% per year by Provincial Court Judges 2015 for the period covered by the 2010 Commission’s report, and then, by reason of the Legislative Assembly’s resolution of March 24, 2014, was re–set to 3% per year. 15 The salary that was recommended and the actual salary in effect as a result of these over–lapping events is set out in the table below. In it JCC indicates the Commission, and LA indicates the Legislative Assembly: Year 2010 JCC Re- LA resolution 2013 JCC LA resolution By Order of (April 1 — port to 2010 JCC Report to 2013 JCC this court March 31) Report Report Mar 27, 2015 2013 — 2014 Previous sala- $234,605 (pre- $242,464 ry plus accu- vious salary (previous sala- mulated BC plus 1.5%) ry plus accumu- Consumer lated CPI Price Index increase esti- increase mated at 4.9%) 2014 — 2015 $241,500 $236,950 ($234,605 ($234,605 plus 2.9%) plus 1.0%) 2015 — 2016 $245,122 $240,504 (1.5% lift) (1.5% lift) PCJA (BC) v. BC (AG) Saunders J.A. 169

2016 — 2017 $250,024 $244,112 (2.0% lift) (1.5% lift) 16 Two things are notable in respect to the Legislative Assembly’s response to the 2013 Commission. First, the resolution of the Legislative Assembly demonstrates a unanimous intention to provide a salary increase to Provincial Court judges for each year covered by the 2013 Commission’s report which, although not to the level recommended, exceeded the government’s position before the Commission. Second, as the Table demonstrates, the combined effect of Provincial Court Judges 2015 and the Legislative Assembly’s resolution in respect to the 2013 Commission’s recommendations was to increase the judges’ salary for the year 2013/14, and then decrease it for the years 2014/15 and 2015/16, even below the level recommended by the Commission for the year 2014/15. 17 The diminishment of salaries, and rate of pension accrual, not intended by the Legislative Assembly in March 2014, carries its own constitutional complexity. While reductions are contemplated by PEI Refer- ence, the reasons for judgment of Chief Justice Lamer explain the special scrutiny applied to diminishments. Certainly one cannot say with any de- gree of confidence that the Legislative Assembly intended that compara- tive result. 18 This quagmire of multiple reports, resolutions and court proceedings is set for the addition of another report and recommendations from the 2016 Commission. They have been provided to the Attorney General and the Chief Judge, but have not yet been laid before the Legislative Assem- bly. Counsel for the appellant advised that the Legislative Assembly is unlikely to act on the work of the 2016 Commission until the autumn because a provincial election is required this spring. 19 I have set out, perhaps in excessive detail, the sequence whereby the Legislative Assembly has passed a resolution that unintentionally had the effect of reducing the Provincial Court judges’ emoluments from those established by Provincial Court Judges 2015. Without fault on the part of the Commission or the Legislative Assembly, the resolution now exists in a make–believe landscape. It is these circumstances that persuade me it is inappropriate to dissect the response of the legislative branch of government to the 2013 Commission’s recommendations. Doing so would only give weight to what has become a false premise, further moving this process, already fraught with artificiality because the parties cannot negotiate with each other to resolve the tangle, into a world of 170 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

pretend. That exercise of review, in my view, would fail to accord the respect owed by the courts to the Legislative Assembly. 20 These circumstances are unprecedented, and call for a practical, and respectful, approach. Certainly the Act does not contemplate such events as have occurred here. Doing the best I can with this out of the ordinary situation, and striving for resolution that addresses reality, I would quash the resolution of the Legislative Assembly and remit the 2013 Commis- sion’s recommendations to it, considering Provincial Court Judges 2015 and the order entered in that appeal. 21 In reaching this conclusion, I recognize that much has been said ably by the parties for and against the resolution under review and the judge’s reasons for judgment. No doubt the ideas advanced as to the content required will inform the response provided by government, but I do not propose to address them, for to do so is to proceed further down what has become a make–believe path. 22 The Provincial Court Judges’ Association has cross–appealed, seeking implementation of the recommendations. For the same reasons, I have not reviewed in detail the response provided to the 2013 Commis- sion’s recommendations. I would not accede to the cross appeal. 23 Last, the appellant applies to adduce fresh evidence said to be relevant to one of the recommendations of the 2013 Commission. Given my view of the case, the proposed evidence is not capable of altering the result and thus, in my view, the application fails to meet the criteria of R. v. Palmer (1979), [1980] 1 S.C.R. 759 (S.C.C.). 24 In conclusion, I agree the resolution should be quashed. I would allow the appeal only to the extent of deleting the second paragraph of the order and substituting therefore an order that the Final Report of the 2013 Judges Compensation Commission be remitted to the Legislative Assem- bly for reconsideration. I would dismiss the cross appeal, and I would dismiss the application to adduce fresh evidence.

Frankel J.A.:

I agree

Stromberg-Stein J.A.:

I agree Appeal allowed in part; cross-appeal dismissed. Doyle v. Zochem Inc. 171

[Indexed as: Doyle v. Zochem Inc.] Melissa Doyle (Plaintiff) and Zochem Inc., Horsehead Corp., Horsehead Holding Corp. and Stephanie Wrench (Defendant) Ontario Superior Court of Justice Docket: 794/12 2017 ONSC 920 Trimble J. Heard: October 31, 2016 Judgment: February 6, 2017 Civil practice and procedure –––– Costs — Particular orders as to costs — Costs on solicitor and own client basis –––– Employee worked for nine years at defendant employer, and was first employed as plant supervisor before taking on role as health and safety coordinator — In course of her work for employer, employee supervised all-male group of workers and required ongoing cooperation of her maintenance counterpart, R — R regularly made lewd comments towards employee — Employee made complaint against R but harassment resumed and R refused to assist employee in regular performance of work — At production meeting, employee raised legitimate workplace safety issues and was demeaned by R and by chief engineer — Employee reported matter and its history to assistant general manager, who advised her to stop being emotional, conducted cursory investigation of sexual harassment complaints, and fired employee five days later without cause — Employee successfully brought action for wrongful dismissal — Issue arose as to costs — Plaintiff was awarded partial indemnity costs in amount of $322,829.98 — Plaintiff was successful — Both parties played hardball equally when it came to offers to settle and employer’s submissions on offers were flawed because offers to settle should not be considered on issue by issue basis, but on whether offer, as whole, was more favourable than result — Based on manner of dismissal and its aftermath, it was reasonable to advance claims for mental distress, loss of short term and long term disability, and for future care costs — What contributed complexity to this action more than any other factor was defence of after acquired cause. Cases considered by Trimble J.: A & A Steelseal Waterproofing Inc. v. Kalovski (2010), 2010 ONSC 2652, 2010 CarswellOnt 3455, [2010] O.J. No. 2167 (Ont. S.C.J.) — referred to Aacurate General Contracting Ltd. v. Tarasco (2015), 2015 ONSC 5980, 2015 CarswellOnt 14640, 51 C.L.R. (4th) 314 (Ont. S.C.J.) — considered 172 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

Bell Canada v. Olympia & York Developments Ltd. (1994), 17 O.R. (3d) 135, 26 C.P.C. (3d) 368, 1994 CarswellOnt 520, 111 D.L.R. (4th) 589, 70 O.A.C. 101, [1994] O.J. No. 343, 1994 ONCA 239 (Ont. C.A.) — referred to Boucher v. Public Accountants Council (Ontario) (2004), 2004 CarswellOnt 2521, [2004] O.J. No. 2634, 48 C.P.C. (5th) 56, 71 O.R. (3d) 291, 188 O.A.C. 201 (Ont. C.A.) — referred to Davies v. Clarington (Municipality) (2009), 2009 ONCA 722, 2009 Carswell- Ont 6185, [2009] O.J. No. 4236, 77 C.P.C. (6th) 1, 254 O.A.C. 356, (sub nom. Davies v. Clarington (Municipality)) 312 D.L.R. (4th) 278, 100 O.R. (3d) 66 (Ont. C.A.) — referred to Elbakhiet v. Palmer (2014), 2014 ONCA 544, 2014 CarswellOnt 9411, 121 O.R. (3d) 616, 323 O.A.C. 300, [2014] O.J. No. 3302 (Ont. C.A.) — considered Foulis v. Robinson (1978), 21 O.R. (2d) 769, 92 D.L.R. (3d) 134, 8 C.P.C. 198, 1978 CarswellOnt 466, [1978] O.J. No. 3596 (Ont. C.A.) — referred to Gardiner v. MacDonald Estate (2016), 2016 ONSC 2770, 2016 CarswellOnt 7196 (Ont. S.C.J.) — referred to Gonawati v. Teitsson (2002), 2002 CarswellOnt 1007, [2002] O.J. No. 1340 (Ont. C.A.) — referred to Grammatico v. Medeiros Estate (2012), 2012 ONSC 5640, 2012 CarswellOnt 12326, 81 E.T.R. (3d) 307, 15 C.C.L.I. (5th) 308 (Ont. S.C.J.) — referred to Hamfler v. 1682787 Ontario Inc. (2011), 2011 ONSC 3331, 2011 CarswellOnt 15441, 38 C.P.C. (7th) 398, [2011] O.J. No. 6190 (Ont. S.C.J.) — referred to King v. Gulf Canada Ltd. (1992), 45 C.C.E.L. 238, 60 O.A.C. 139, 1992 Cars- wellOnt 974, [1992] O.J. No. 2761 (Ont. C.A.) — referred to Martellacci v. CFC/INX Ltd. (1997), 1997 CarswellOnt 885, 28 C.C.E.L. (2d) 75, 10 C.P.C. (4th) 143, [1997] O.J. No. 6383 (Ont. Gen. Div.) — referred to Mayer v. 1474479 Ontario Inc. (2014), 2014 ONSC 2622, 2014 CarswellOnt 5416, 33 C.C.L.I. (5th) 150, [2014] O.J. No. 1984 (Ont. S.C.J.) — considered Moon v. Sher (2004), 2004 CarswellOnt 4702, [2004] O.J. No. 4651, 246 D.L.R. (4th) 440, 192 O.A.C. 222 (Ont. C.A.) — referred to Phanlouvong v. Northfield Metal Products (1994) Ltd. (2015), 2015 ONSC 33, 2015 CarswellOnt 19 (Ont. S.C.J.) — referred to Skye v. Matthews (1996), 87 O.A.C. 381, 47 C.P.C. (3d) 222, [1996] O.J. No. 44, 1996 CarswellOnt 37 (Ont. C.A.) — referred to 394 Lakeshore Oakville Holdings Inc. v. Misek (2010), 2010 ONSC 7238, 2010 CarswellOnt 9939, [2010] O.J. No. 5692 (Ont. S.C.J.) — referred to Statutes considered: Courts of Justice Act, R.S.O. 1990, c. C.43 s. 131 — considered Employment Standards Act, 2000, S.O. 2000, c. 41 Generally — referred to Doyle v. Zochem Inc. Trimble J. 173

Evidence Act, R.S.O. 1990, c. E.23 Generally — referred to Human Rights Code, R.S.O. 1990, c. H.19 Generally — referred to Rules considered: Rules of Civil Procedure, R.R.O. 1990, Reg. 194 R. 1.04(1) — considered R. 49.10 — considered R. 49.13 — considered R. 57.01 — considered R. 57.01(1) — considered

ADDITIONAL REASONS related to costs from judgment reported at Doyle v. Zochem Inc. (2016), 2016 ONSC 3188, 2016 CarswellOnt 19295, 30 C.C.P.B. (2nd) 13 (Ont. S.C.J.).

A. Assuras, for Plaintiff M. Smith, R. Leck, for Defendants

Trimble J.:

1 On May 16, 2016, Belleghem, J. released his reasons for decision [reported at 30 C.C.P.B. (2nd) 13] holding that Zochem improperly dismissed Doyle from her employment. He awarded damages as follows: Damages in Lieu of Notice $ 55,849.991 Moral damages $ 60,000.00 Damages under the Human Rights Code $ 25,000.00 Pre-judgment interest $ 8,839.17 Sub Total: $149,689.16 2 Belleghem, J retired as a Judge of the Superior Court shortly after releasing his decision and was unable to address the costs of the action. I have that task.

BACKGROUND: 3 In the original Statement of Claim of February 8, 2012, Doyle claimed $800,000 against Zochem and its parent company, for general

1 79,666.45, less a credit of $23,816.96 paid under the Employment Standards Act. 174 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

damages, moral damages, damages for retaliatory discharge and intentional infliction of mental distress, breach of contract re failing to provide sick leave and long term disability benefits, aggravated damages and punitive damages. She claimed $250,000 against Wrench personally for damages for retaliatory discharge, aggravated damages and punitive damages. In August, 2013 she increased her claim against the corporate defendants to $2.6 million and her claim against Wrench to $1.6 million. 4 In its defence, the Defendant admitted that it initially dismissed Doyle without cause, but pleaded after acquired cause as its defence. 5 Belleghem, J. dismissed Doyle’s claims for intentional infliction of mental distress, loss of short term and long term disability, past loss of income, future loss of income and care costs, and punitive and aggravated damages. Belleghem, J. also dismissed, completely, Zochem’s defence of after acquired cause, finding that there was no factual basis for it. 6 Belleghem was extremely uncomplimentary of Wrench, Zochem’s main actor in Doyle’s dismissal. He said, among other things, that she was callous, grossly insensitive, brusque, dismissive, inept, and uncaring. Her conduct, however, was not intended to harm Doyle, although harm was the by–product. Instead, Belleghem, J. held that Wrench was acting at the behest of and in her capacity as an employee of Zochem. He dismissed the claim against Wrench, personally. 7 The trial took 28 days. It is obvious from Belleghem, J.’s reasons that the trial was hard and bitterly fought. He characterized Zochem’s approach to terminating Doyle, expressed through its employee, Wrench, as hardball and callous. It appears that Zochem maintained that approach during the trial. Zochem certainly maintained that approach in the costs argument before me.

THE CHALLENGE: 8 At paragraph 338, the learned Trial Judge said: “Otherwise, as the plaintiff has been successful against the defendant, Zochem, subject to any applicable rule 49 offers, the plaintiff shall be entitled to be awarded her costs against Zochem in the discretion of the judicial officer, determining the cost award, on a scale within the discretion of such officer.” 9 The trial judge is the person most able to decide the issue of entitlement to and quantum of costs. He or she saw and heard the witnesses, observed the conduct of counsel, made evidentiary rulings as the trial Doyle v. Zochem Inc. Trimble J. 175

progressed, responded to issues arising from inadequate production or disclosure, received and assessed the evidence, and made the findings of fact necessary to decide the issues. 10 Many of the findings of fact made in a trial are relevant to the issue of costs. When further findings of fact need to be made in the costs phase of the trial, the trial judge, having heard the evidence at trial, can make those findings necessary in the costs assessment phase if the trial based on the evidence he or she received during the trial, or can draw infer- ences from that evidence. 11 While I stand in the shoes of the learned trial judge, I was not present at the trial. I have not heard any of the evidence, was not in the court- room, did not see or hear the witnesses, did not see the conduct of counsel for any of the 28 days of this trial, and am not asked by counsel to review any transcripts of the trial. 12 How am I to assess the costs? 13 The Plaintiff says that I am bound by findings of fact that the learned Trial Judge made. I must accept his comments on the witnesses and positions taken by the parties. I must give his directions and recommendations as to costs serious consideration. Belleghem, J. was at the trial; I was not. He was in the best position to make his comments, recommendations and directions based on the evidence he heard, and the conduct he observed. 14 The Defendant says that, except for this statement that the Plaintiff should have her costs, I am not bound by Belleghem’s comments, recommendations and directions. I must defer to him on findings of fact where I have no direct evidence to the contrary. Where I do not need to rely on findings at trial, I am free to make my own determination of facts as they pertain to costs. Where I am required to make findings of fact that Bel- leghem, J. did not make, I am free to do so, provided my findings of fact are consistent with those that Belleghem, J. made. 15 For the reasons stated above, I am a pale imitation of Belleghem, J. I do not operate in a vacuum, however. I have had the benefit of detailed submissions of counsel. I have also had the benefit of the thoughts, findings and recommendations of Belleghem, J. in his carefully considered and lengthy Reasons for Judgment. To some extent, I stand in a better position than Belleghem, J. in that I am aware of things of which he was not, such as offers to settle. 176 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

16 Belleghem, J. held in para. 338, that the plaintiff was entitled to her costs throughout. Both counsel agree that Doyle’s entitlement to costs, therefore, is determined. Both counsel agree that I have jurisdiction only as to the scale of Doyle’s costs and how they might be affected by Rule 49 offers or by the factors under Rule 57.01. Also, I must determine Wrench’s entitlement to costs, and the scale of those costs.

POSITIONS OF THE PARTIES: The Plaintiff: 17 The Plaintiff seeks her costs on a substantial indemnity basis throughout, in the amount of $606,338.95, comprising $496,661.50 for fees, $64,566.00 in HST on fees, and disbursements of $48,161.45 (inclusive of HST). Her reasons for doing so are largely those Belleghem, J. gave for reaching the decision he reached. Doyle said in para. 103 of her submissions: The Plaintiff seeks costs as against Zochem on a substantial indemnity scale for all of her claims and for the tort claim. The Court must show its disapproval of the conduct of the Defendants. Their conduct was reprehensible and offensive. They played hardball with an employee that they knew was depressed and taking medication for her depression. They treated Doyle callously and unfairly. They alleged, but failed to prove deceit and criminal conduct (extortion). There was no arguable defence for almost all of the Claims asserted by the Plaintiff that she succeeded upon. 18 In addition to seeking her costs on a substantial indemnity basis, Doyle says Wrench should be denied her costs. Her position is based principally on Belleghem, J.’s comments in paragraph 337 of the Judgement: When costs are considered, for the reasons given above, I recommend that the defendant, Wrench, not be awarded costs, despite dismissal of the action against her, and that the plaintiff Doyle, be awarded costs for the prosecution of her action against Wrench on a substantial indemnity basis. I find that the action against Wrench oc- cupied approximately 50 percent of the total trial time. 19 Doyle’s counsel admitted that the fees set out in her substantial indemnity Bill of Costs, in fact, are her solicitor and client bill. She agreed that substantial indemnity costs are approximately 85% of the reasonable solicitor and client bill, and partial indemnity rates are approximately 65%. Therefore, the fees sought, depending on the scale of costs, should be $422,162.28 or $322,829.98, depending on the scale I award. Doyle v. Zochem Inc. Trimble J. 177

The Defendant 20 The Defendant says that Doyle should be awarded no costs for the following principle reasons: a) The claimed costs are disproportional in the extreme to the amounts claimed ($1.05 million in the original Statement of Claim, and $4.2 million in the Amended Statement of Claim); b) The Plaintiff was successful on a minor portion of her claims (when analyzed from a dollar claimed perspective); c) The claimed costs are disproportional in the extreme to the amount awarded ($149,689.16, or $140,849.49 net of pre–judgment interest); d) The Defendant made 5 offers to settle, the last of which was $133,196.23, or approximately $7,653.26 short of the judgment awarded, before pre–judgment interest. At least two of the offers made (after adjusting for costs payable under those offers) would have resulted in a “windfall” for the Plaintiff; e) While none of the Defendants’ offers were accepted, the last one made was only $7, 653.26 short of the judgment (before interest) and “near miss” offers require serious consideration; f) The Plaintiff made no offer until the afternoon before the trial, of $360,000 plus costs disbursements and interest, which was 2.5 times the amount awarded to the Plaintiff at trial. g) The Plaintiff’s conduct during the trial requires sanction. 21 Zochem admits that any consideration of offers to settle must come under R. 49.13, since none of the Defendants’ offers met the criteria of R. 49.10. 22 Zochem refers me to Elbakhiet v. Palmer, 2014 ONCA 544 (Ont. C.A.), and Mayer v. 1474479 Ontario Inc., 2014 ONSC 2622 (Ont. S.C.J.) as dispositive of the issue of costs. In Elbakhlet, the Plaintiff claimed $1.9 million and received damages of $145,000. The trial judge awarded costs of $580,000. The Court of Appeal reduced the costs to $100,000 inclusive of disbursements. In Mayer, the Plaintiff claimed $2 million (having amended up from $1.1 million). The jury awarded $137,300. The Plaintiff sought costs of $422,055.41 but was denied costs, altogether. 178 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

THE LAW: 23 In assessing costs, I must consider the cases that have outlined broad principles with respect to costs under s. 131 of the Courts of Justice Act, and Rule 57.01. Section 131 says that costs are discretionary. Rule 57.01(1) says: In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing, (0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer; (0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed; (a) the amount claimed and the amount recovered in the proceeding; (b) the apportionment of liability; (c) the complexity of the proceeding; (d) the importance of the issues; (e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding; (f) whether any step in the proceeding was, (i) improper, vexatious or unnecessary, or (ii) taken through negligence, mistake or excessive caution; (g) a party’s denial of or refusal to admit anything that should have been admitted; (h) whether it is appropriate to award any costs or more than one set of costs where a party, (i) commenced separate proceedings for claims that should have been made in one proceeding, or (ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and (iii) any other matter relevant to the question of costs. R.R.O. 1990, Reg. 194, r. 57.01 (1); O. Reg. 627/98, s. 6; O. Reg. 42/05, s. 4 (1); O. Reg. 575/07, s. 1. Doyle v. Zochem Inc. Trimble J. 179

24 Costs awards have a number of purposes, including to a) indemnify (partly) successful litigants, b) encourage settlement, c) correct behaviour of the parties, and d) discourage frivolous or ill–founded litigation (see 394 Lakeshore Oakville Holdings Inc. v. Misek, 2010 ONSC 7238 (Ont. S.C.J.), at para. 10). Generally costs should follow the event (see Bell Canada v. Olympia & York Developments Ltd. (1994), 17 O.R. (3d) 135 (Ont. C.A.)), be proportional to the issues in the action and the outcome, and be reasonable for the losing part to pay, all circumstances considered (see Boucher v. Public Accountants Council (Ontario) (2004), 71 O.R. (3d) 291 (Ont. C.A.) and Moon v. Sher, [2004] O.J. No. 4651 (Ont. C.A.)). Conduct of the parties is also relevant where it deserves sanction (see Davies v. Clarington (Municipality) (2009), 100 O.R. (3d) 66 (Ont. C.A.)). One party’s playing “hardball” is a relevant factor to consider (see 394 Lakeshore, supra.) 25 A Judge in fixing of costs is engaged in a different exercise than an Assessment Officer engaged in assessing costs. The Judge does not engage in an arithmetical exercise. Rather, she or he fixes costs in an amount that is reasonable for the unsuccessful party to pay rather than determines the exact costs of the successful litigant (Davies, supra at para. 52, Boucher, supra, at para. 26). 26 Costs, generally, should be proportional to the issues in the action and amount awarded (Elbakhiet, supra, at para. 36). It does not follow, however, that a reasonable amount for costs cannot exceed the award of damage in appropriate circumstances (A & A Steelseal Waterproofing Inc. v. Kalovski, 2010 ONSC 2652 (Ont. S.C.J.) at para. 21). Proportionality should not override other considerations, and determining proportionality should not be a purely retrospective inquiry based on the award. It should not be used to undercompensate a litigant for costs legitimately incurred (Aacurate General Contracting Ltd. v. Tarasco, 2015 ONSC 5980 (Ont. S.C.J.) at para. 13 to 17). In Aacurate, supra, McCarthy, J. said: I am mindful that the principle of proportionality calls upon the court to consider the amount claimed for costs in relation to the amount recovered in the judgment, as well as the reasonable expectation of the parties. In my view, however, proportionality cannot and should not be routinely invoked to save litigants from the actual costs of proceedings in circumstances where those litigants have put forth a wholly unmeritorious defence to a legitimate claim or have caused the proceeding to become unduly prolonged or complicated. The principle should be applied thoughtfully and in a balanced fashion along with the other factors set out in rule 57.01. 180 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

27 An undue focus on proportionality ignores principles of indemnity and access to justice (see Gardiner v. MacDonald Estate, 2016 ONSC 2770 (Ont. S.C.J.) at para. 65). The trial judge must make an award that is fair and appropriate, overall. 28 In exercising its discretion on the basis of these legal principles, and in determining what costs are payable, the court should consider the following questions in the following order: a) Which was the successful party, and in what way? b) Are there Offers to Settle under Rule 49.10 and what impact do they have? c) What effect do the enumerated factors in Rule 57.01(1) have? d) Are there any Offers to Settle that should be considered under Rule 49:13; e) How does proportionality under R. 1.04(1) affect the analysis? f) What is fair and reasonable for the paying party to pay?

DECISION: 29 As indicated at the outset of these reasons, Belleghem, J. held that Doyle should have her costs. Therefore, the only remaining issue is the scale of costs and reasonableness of the amount. 30 For the reasons that follow, Doyle is entitled to her partial indemnity costs, throughout. I fix her partial indemnity fees at $322,829.98, HST on those fees at $41,967.90, and disbursements at $47,786.45. In addition, I award Doyle a further $12,000, all inclusive, for the May12, 2016 ap- pointment to settle Belleghem, J.’s order, and for appearing before me to argue costs. I also deny Wrench her costs.

ANALYSIS: Which party was the successful party, and in what way? 31 The Plaintiff was successful. She recovered judgment. Doyle, however, was not as successful as she had hoped to be. She was unsuccessful on most of the significant claims she made. 32 Zochem is more pointed in its submissions about Doyle’s success. It engaged in a tortured analysis (in this respects, as in many other aspects of its costs submissions) and noted that Doyle was only successful on 3% of her claims (5% if one removes the claim for punitive damages which was abandoned at the outset of trial), when calculated as a ratio of the Doyle v. Zochem Inc. Trimble J. 181

claims advanced in the Amended Statement of Claim to her recovery.2 Zochem says that Doyle claimed 20 times the amount she received. Zochem then says, hyperbolously: This amount of recovery, particularly in light of the above–noted offers, ought to be viewed as abysmal. In this case, the plaintiff’s unrealistic expectations drove [the] matter to a lengthy, expensive trial. Courts have been highly critical of this behaviour on the part of plaintiffs.3 33 I will have more to say on Offers to Settle shortly. Suffice it to note at this point that Zochem played hardball equally when it came to Offers to Settle as it did in its dismissing Doyle and in the litigation. It is the “hardball” approach to litigation, more than Doyle’s “unrealistic expectations” that drove this trial, as I address later in these reasons. 34 A more significant victory for Doyle (and one which Zochem, with its hardball approach to costs ignores) is her successful defeat of the defence of after acquired cause, a defence which Zochem pursued vehe- mently, but which Belleghem, J. dismissed as flimsy and based on flimsy evidence. Belleghem, J. recognized that some of the evidence concerning Doyle was relevant to the defence of the allegations against Wrench, personally. However, he noted that most of the “mud” evidence was adduced by Zochem in pursuit of its defence of after acquired cause. Bel- leghem, J. characterised the after–acquired cause claim, and the evidence adduced largely by the Defence in support of it, as follows: [18] Related to the “Notice Period”, or “cause” issue, is whether Zochem can rely on “After Acquired cause”. The “cause” pleaded is “extortion”. The flimsy evidence in support is: Doyle borrowed money from Philips, a contractor she was dating – (Philips testified he told her she did not need to repay it); and refusing to pay $10,000 for $2,000 drapes to a friend of an employee, (Viveiros) who got her a “deal” on the drapes — (Neither Viveiros nor the drape seller testified). [19] The original termination was purportedly “Without Cause”. Zochem agrees that Doyle’s work performance was not relevant to the termination itself as a “cause”. It argues, however, that her allegedly poor performance, at least in part, explains Wrench’s motive for firing Doyle, i.e. it meets Doyle’s claim that her termination was “re-

2 Para. 38 to 40 Zochem’s submissions. 3 Para. 41 Zochem’s submissions. 182 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

taliatory”. This “performance” issue consumed a substantial portion of the trial time. It was woven into two defense arguments. Initially it was to defend the alleged “Good Faith” of Zochem, – tied to Wrench’s allegations of “deceit” by Doyle, her alleged abuse of the “lieu hour” system, and Doyle’s alleged abuse of her position to “ex- tort”, referred to above. [20] Secondly the performance evidence was tendered relative to Wrench as a personal defendant, – the alleged Tort of “Intentional Infliction of Emotional distress”. All of this “performance”, “deceit”, “abuse of position” evidence, and other marginally relevant glimpses into Doyle’s personal, medical, and dating life, were tossed like mud into the defense arguments to “illuminate” Wrench’s true motivation. As I understand it, most of this evidence was meant to show that Wrench never “intended” to cause Doyle any “distress” by how she dealt with her during and after the termination, i.e., she had legitimate work related reasons for how she treated Doyle. Doyle, for her part, and despite a tendency to overstate her strengths and underplay her performance, managed to explain or sidestep most of this so–called “irrelevant” evidence. At times she even turned the mere fact that some of these allegation[s] were made against her into (almost) convincing evidence that Wrench must have had the animus which she was so adamant to deny. [21] I admonished counsel early on in the trial about the questionable utility of what appeared to be “collateral fact” evidence. However, [i]n the end, it is safe to say that both counsel contributed equally to the fact that this evidence dominated almost the whole trial. Conse- quently, all this evidence was as relevant, or not, to the entire case against Wrench personally, as it was to the case against Zochem. Her actions were Zochems as well as her own. This entire body of evidence had to do with why, and how, Wrench, both in her own behalf, towards Doyle, and in her managerial capacity, as Zochems vicariously responsible agent, towards Doyle, did the termination. It in- forms both the “Intentional Infliction of Distress” claim, (against Wrench personally), and the “Moral Damages” claim against Zochem, (next below). This should be a serious cost consideration, at the appropriate time. 35 He noted that Zochem called “copious evidence” on the after acquired cause defence (paragraph 182). He said further, [198] In rejecting this defence of “after acquired cause”, and finding that the plaintiff was in fact, wrongfully dismissed, I am giving effect to the following observation, of Justice Halvorson, of the Saskatche- wan Court of Queen’s Bench where he notes in his decision in Boyes Doyle v. Zochem Inc. Trimble J. 183

v. Saskatchewan Wheat Pool, 1982 CanLii 2639 (SK QB), at para. 16: It is not uncommon in a wrongful dismissal trial for the employer to dredge up every incident arising during the term of employment which might tend to show the employee in an unfavourable light, and the court must be dil- igent to distinguish between those incidents which com- prise the grounds for the dismissal and those advanced for the sole purpose of discrediting the employee. [199] For these reasons, I am satisfied that the plea for after acquired cause must fail. I find that Doyle was wrongfully dismissed. 36 In other words, as between Doyle and Zochem, the latter bears the lion’s share of the blame for pursuing a line of evidence that was collateral, and designed to smear Doyle in the litigation. Doyle was successful in her defence of an issue on which the “. . .evidence dominated almost the whole trial.”

Offers to Settle (Rule. 49.10 and 49.13) 37 There are no offers to settle from either party which trigger the cost consequences of Rule 49.10. Zochem made 5 offers which require consideration under Rule 49.13, which says: Despite Rules 49.03, 49.1o and 49.11, the court, in exercising its discretion with respect to costs, may take into account any offer to settle made in writing, the date of the offer was made and the terms of that offer. 38 The Defendant made the following offers: a) March 27, 2013 Damages in lieu of notice — 9 mo.s net of ESA 18,671 payments. Damages for health, dental and life ins. — 9 mo.s 900 Short term disability benefits 37,342 Breach of Human Rights Code 50,000 Costs 60,000 Disbursements 4,000 PJI 4,350 Total 175,236 184 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

39 This offer was open until one minute after the commencement of the trial. b) July 23, 2013 $220,000 all inclusive. Zochem’s counsel said that it was increasing the March 27, 2013 offer. The increased offer was only open until July 31, after which the March 27, 2013 offer remained. Counsel said: “This time–sensitive offer is made in a good faith effort by our client to attempt an early settlement for the economic benefit of both parties. Should this offer not be acceptable to your client, we are instructed not to engage in any further settlement discussion but to proceed to trial in reliance on our client’s Rule 49 offer.” c) December 3, 2013 $85,000, all inclusive. This was for all heads of damage (except the claim for pecuniary damages arising from the failure to provide long–term disability benefits), interest, costs and disbursements. Zochem said it would try the issue of the LTD claim. This offer was open only to January 3, 2014. It did not leave the March, 2013 offer open for acceptance. d) June 29, 2014 Damages in lieu of notice — 12 mo.s, net of ESA 41,272 payments Damages for health, dental and life coverage — 9 1,200 mo.s Profit sharing bonus 2,600 Human Rights Code Damages & mental distress 45,000 PJI TBD Costs TBD Total 90,072 40 This offer was open for acceptance until one minute after trial. e) October 29, 2015 Damages in lieu of notice — 12 mo.s net of ESA 47,930.34 payments Damages for health, dental and life coverage — 9 1,200.00 mo.s Profit sharing bonus 2,600.00 13 hours lieu pay 455.39 Doyle v. Zochem Inc. Trimble J. 185

Pension plan contribution — 12 mo.s 9,608.00 Human Rights Code Damages, moral damages & 55,000.00 mental distress LTD claim 15,000.00 OHUIP 1,402.50 PJI TBD Costs TBD Total 133,196.23 41 This offer was open until one minute after the commencement and was not severable. 42 All parties agreed that none of these offers met the requirements of Rule 49.10. 43 Zochem argued that the trial result (by which it means the award of money at the trial, only) must be weighed in relation to the various offers, including with respect to “. . .the costs incurred [by the Plaintiff] at the time the offers were made”. In this latter respect, Zochem’s counsel lead me through a labyrinthine analysis of a) what the costs portions of the various offers were or would have been at the time the time they were made, and b) the costs that the Plaintiff had actually incurred as of the date of the various offers. It did this in order to show that the Plaintiff would have sustained a significant “windfall” had she accepted the various offers when they were made. 44 Zochem’s submissions on the offers are flawed. Offers to settle should not be considered on an issue by issue basis, but on whether the offer, as a whole, is more favourable than the result (see Skye v. Mat- thews (1996), 47 C.P.C. (3d) 222 (Ont. C.A.)). With its offers of July and March, 2013, Zochem requires the court to do an analysis of what the costs portions of that those offers would have been at the time the offer was made, and then do an analysis of the Plaintiff’s bill of costs to see what the actual solicitor and client bill would have been, in order to determine the windfall.4 Zochem continues its creative calculus by saying that its last offer is only $7,653.26 short of the judgment, yet the Plaintiff spent $441,786.50 in solicitor and client fees after the date of that offer in order to gain that $7,653.26.

4 Para. s 19 to 25, Zochem’s submissions. 186 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

45 Zochem requires the Court to perform extraordinary calculus in order to support Zochem’s position on costs. No authority was given to support the proposition that the Court is required to do the calculus suggested. I decline to do it. 46 Zochem’s offers, when viewed in light of Belleghem, J.’s comments about Zochem’s approach to Doyle’s dismissal and the litigation in general, can be seen as an extension of its hardball tactics, taken from a position of power. It made its first offer. It increased it slightly for a short period then removed it from the table. It then made two offers of about half of its earlier offers one of which had a very short acceptance win- dow. The time limits placed on three of the offers are reminiscent of the ‘take it or leave it’ approach Belleghem, J. found that Zochem applied to the termination letter. This is reminiscent of how it presented its termination package to Doyle. 47 There is merit in Zochem’s argument that its last offer, served 32 days before trial, is relevant under Rule 49.13 as it falls short of the judgment by only $7,653.26. There is also merit in Zochem’s argument that Doyle made only one offer, and only on the eve of trial. I have considered this in my fixing of costs.

Rule 57.01 48 I have considered the following aspects of Rule 57.01.

a) Principle of indemnity, experience of counsel, rates and hours. 49 Zochem took no open issue with the rates or experience of Plaintiffs’ counsel. Inferentially, however, Zochem took the position that the time on the file was excessive, caused by Doyle’s counsel being poorly organ- ized, giving poor time estimates and then missing them grossly, advancing spurious causes of action, changing witness lists, and making snap demands and snap decisions. Likewise, Doyle makes allegations of inef- ficiency against Zochem’s lawyer. 50 Most of the issues that both parties raise about things done that increased costs require me to make findings of fact that I cannot make on the record before me. Each submitted emails and correspondence on the various issues they raised. I am not confident that I saw from either or both a complete record on the issues each complained of concerning the other. Further, neither lawyer called up the record or any part of it in support of his or her position about the trial related conduct of the other, nor submitted affidavit evidence. Doyle v. Zochem Inc. Trimble J. 187

51 I have reviewed Doyle’s Bill of Costs. I was not provided with dock- ets, nor does it seem that they were asked for. I cannot say that the hours worked were unreasonable given the nature of the litigation. Further, the ratio between time spent preparing to time spent in trial is slightly over 1:1.

b) What would the unsuccessful party reasonably expect to pay? 52 Based on the Defendants’ Bill of Costs, Zochem cannot be surprised about the time and disbursements incurred by the Plaintiff. Zochem’s time and disbursements are considerably more than the Plaintiffs’. For example, the solicitor and client fees incurred by the Plaintiff are $496,661.50 and the Defendant, $682,413. Zochem’s solicitor and client bill is $185,751.50 or 37.4% higher that the Plaintiff’s.

c) The amount claimed v. the amount recovered. 53 There is a significant discrepancy here. I address this as part of my discussion of proportionality.

d) Complexity of the case and importance of the issue. 54 This case was complex. In retrospect, however, the case was more complex than it needed to be. Doyle contributed to the unnecessary complexity by pursuing causes of action which had little or no hope of success. The claim for long term benefits is an example. She did not sue the LTD carrier. 55 What contributed complexity to this action, more than any other factor was Zochem’s defence of after acquired cause. According to Bel- leghem, J., the defence had little merit. Zochem knew it had no cause to dismiss Doyle, and therefore, dismissed Doyle without cause. Wrench began looking for cause in order to prevent the sexual harassment complaint from ‘rearing its ugly head’. She charged a number of employees with finding that cause. They could not. Zochem raised specious concerns regarding Doyle’s performance. Belleghem, J. dismissed every one of them. Notwithstanding the paucity of credible evidence, Zochem pursued the defence and introduced the “mud” evidence which, as Bel- leghem, J. found, consumed half the trial time. 56 The issues were important, especially to Doyle. She was terminated. She was given a “take it or leave it” notice payment. Her dismissal came at a time where her sexual harassment complaint had been investigated and determined to amount to little by the very woman who terminated 188 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

her. The investigation was one sided and the outcome obvious before the investigation began. 57 This litigation was important, too, to Zochem, but for reasons unrelated to the litigation. As Belleghem, J. found, Zochem’s parent company wanted to sell Zochem. It needed to rationalize the workforce which meant dismissing Doyle, the only female employee. It wanted to make her sexual harassment complaint go away before it ‘reared its ugly head’, which meant having Doyle sign a release of all claims including under the Human Rights Code.

e) Proportionality and Reasonableness 58 Zochem urges me to award Doyle no costs based on its purely financial analysis: her claim vastly exceeded her recovery, her fees and disbursements were vastly disproportional to the recovery, her recovery barely exceeded Zochem’s last offer, and Doyle would have been better off accepting at least 3 of the 5 offers Zochem made. Further, Zochem puts proportionality forward as an overriding principle. 59 This focus is too narrow. The cases tell us that a) proportionality should be approached holistically and in conjunction with Rule 57.01 considerations, b) proportionality is considered based on the amount recovered AND the issues in the action, and c) proportionality is the con- joined twin of reasonableness. 60 While the Plaintiff’s claim for costs is excessive on Zochem’s analysis, it is not so, looking at the action as a whole. Doyle’s costs were driven, in large measure, by the Defence. Belleghem, J. found that the defence of after acquired cause and the evidence in support of it took half the time at trial. What did Bellegham, J. say about the defence of after acquired cause and the evidence adduced in furtherance of it? Para. 18 and 193 — After acquired cause was a “flimsy defence” supported by “flimsy evidence”. Para. 4, 65 and 192 — the “extortion” and alleged abused of position claimed was without foundation. Doyle is alleged to have used her position to extract a loan from a contractor, then not repay it. The alleged creditor said he never expected it to be paid back. Doyle was alleged to have agreed to buy drapes from another employee, taken them, and not paid for them. That employee and the seller were never called to testify. Para. 193 – But for Zochem putting forward the flimsy defense of after acquired cause based on Doyle’s alleged deceit, dishonesty and Doyle v. Zochem Inc. Trimble J. 189

abuse of her position of authority, all of the related evidence would have been excluded as irrelevant collateral evidence. Para. 194 — “Zochem’s written submissions dealt only with Doyle’s relationship with Philips and Viveiros to support the claim for “after acquired cause”. However, much evidence was led by Zochem, purportedly for the purpose of meeting Doyle’s claim that Wrench personally intended to cause Doyle distress, the personal tort action against Wrench, some of which dealt with alleged dishonesty and deceit. This conduct will not support a claim for after acquired cause. Lest Zochem’s counsel did not intend to abandon the efficacy of this evidence, either to impugne Doyle’s credibility generally, or to support a claim that the alleged abuse of authority vis–`a–vis Philips and Viveiros could somehow be augmented by Doyle’s alleged dishonesty and deceit towards Wrench, the after acquired cause pleading should be put to rest.” Para. 197 — “I accept Doyle’s evidence that she never behaved dis- honestly towards Wrench She never held out Critchow’s sign out sheet as her own. She always reported her lieu hours as required, and as accepted, by Chesiuk. She never engaged in any conduct that could, by any stretch of the imagination, be characterized as “egre- gious conduct that destroys the very foundation of the employment relationship”. 61 More generally, Belleghem, J. commented on Wrench’s animus and behaviour. Some of his comments are: Para. 13 — “Wrench’s experience was limited to accounting. . . . She mangled the termination process. She ventured into a minefield of legal and emotional issues, the complexity of which she could hardly have imagined. Her Human Rights Code “investigation”, (her first), into the sexual harassment complaints, was biased, prejudged, hur- ried, and incomplete. Her termination letter told Doyle that if she refused the 6–month Common Law severance package being offered, she would only get her 8 week minimums under The Employment Standards Act, i.e., forfeit her Common Law notice rights, despite the termination being allegedly “without Cause”. She was given a week to accept or reject. Her pension entitlements were 2 years late being given. She gave no rational written, or verbal explanation for how various numbers in the package were arrived at, to help identify ar- eas of disagreement. Even when Doyle refused the package, part of her ESA minimums, specifically referred to in the termination letter, were not paid until later. This was because, as Wrench candidly testified, she was “learning on the job”. She received, but ignored, Human Resources advice from the HudBay H.R. second in command, 190 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

Karl Austmann (Austmann). (HudBay is Zochem’s parent company, and Zochem had no H.R. department). She purported to investigate, and then deny, a Short Term disability claim made by Doyle, despite an “Administrative Services Only” contract Zochem had with a neutral Third Party Insurer to adjudicate such claim,” Para. 14 — “Wrench’s expertise was finance. This is why she was made Assistant General Manager (AGM). Zochem’s General Man- ager (GM), Mike Humphries, (Humphries), had appointed her in De- cember 2010 as AGM to ready the company for imminent sale. At human resources, (HR,) Wrench was a novice. Her focus was prima- rily on what Humphries likely asked her to manage, the “bottom line” i.e. finances. Intimately involved in a matter of grave personal importance to all persons concerned, her purported “delegation” of the termination process to a neutral third party “expert”, Cheryl Lang, (Lang), was both flawed and incomplete. In short, she dis- played a capricious and cavalier attitude to both the problem and the persons. It is for this reason that Doyle brought her personally into this action.” Para. 101 — “In Wrench’s cross–examination a number of serious inconsistencies between Ghanam’s evidence and Wrench’s evidence respecting Doyle’s NCF’s were brought out that show nothing more than Wrench’s antipathy towards Doyle.” Para. 103 — “Performance was not made an issue, either at termination, or in the trial. The relevance of the NCF’s has only to do with the state of mind of Wrench when she fired Doyle, i.e. whether she was motivated to terminate Doyle, or interact with Doyle the way she did in the course of the termination process, because of what she believed of Doyle’s performance, or whether there were extraneous matters which motivated her.” Para. 107 — Wrench attempted to make much of an accident involving a jumbo mould that flipped June 10, 2011 that could have resulted in injury. Doyle was not involved in the accident. Wrench was merely looking for evidence of poor performance to justify terminating Doyle. Para. 132 — Wrench was manipulative in her evidence. “Two times, at least, during cross–examination, Wrench testified that she was bothered when she saw Doyle cry. However, in her examination for discovery, October 24, 2012, she refused to answer a similar question. It was answered later. The question was: “did it bother you to see her cry?” The answer ultimately given on April 18, 2013 was: “no, Wrench was not bothered by seeing Doyle cry.” Wrench said she does not recall giving this answer. She said she did not see a Doyle v. Zochem Inc. Trimble J. 191

chart of answers which was given by Zochem’s counsel to Doyle’s counsel. She said the answer is not correct, but that the answer could be viewed different ways. She does not recall answering it that way. It would not be her intention to have it look this way. This kind of testimony suggests that the witness is trying to control perception of the situation, by the content of her testimony, which brings into question her credibility.” Para. 134 — Wrench was untruthful. “Wrench tried to leave the im- pression that she did not know why Doyle was unhappy in her work, (in the plant, is what I find). Wrench knew about Doyle’s depression because Olgivie told her she was on antidepressants. If Wrench were a little more empathetic, she could certainly speculate why Doyle, emotionally fragile because of her mental health, and to whom she had thoughtfully delivered a Christmas plate, might find her job challenging. She could not help but take account of the fact that Doyle was supervising a number of men. That put her in a particularly difficult and vulnerable position, because she had to rely so heavily on Rogers, in particular, who advertised his taste in art, and interest in women, with his office d´ecor. The above, in light of her reaction to Doyle’s disclosure on July 14 [of the sexual harassment by Rogers], and her very rapid disposition of the matter, suggests strongly that she knew that Doyle was unhappy, and why, and is simply being misleading. It is certainly in her interest, and that of Zochem, who has taken on defence of her personal case, and to whom she is therefore indebted, to do so. I find her evidence that she knew “nothing” about the sexual harassment complaint before July 14, 2011 to be improbable.” Para. 154 — Wrench was untruthful. “Wrench referred to the termination letter. In it, she said Doyle was offered six–month’s salary less deductions, and that they would “make payment based on a signed release”. This supports Doyle’s perception that it was a “take it or leave it” proposition. Wrench confirms that she said that if she would not sign the release they would pay the statutory payments pursuant to ESA, but “nothing further”. It is clear that there was no intent to negotiate expressed in the letter, and that Doyle was being asked to release all claims, including any Human Rights Code claims she might have, for six months’ salary in lieu of notice, or face only being paid the ESA payments. “ Para. 160 — Wrench acted unreasonably. “After termination, according to Wrench, when Doyle applied for STD, she spoke to Lang [the HR consultant], who suggested she get legal advice. Zochem had the right to have Doyle examined with respect to the disability, so she got a recommendation for a lawyer from Lang, and ordered the med- 192 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

ical report. When she got the report [which supported Doyle’s position], she decided to deny STD payments, because the lawyer said the complaint arose from the fact of the termination, instead of exac- erbating a prior condition. A different basis for denial was put forward at trial.” Para. 163 to 164 — Wrench had no experience with or training in the Human Right’s Code. She investigated the sexual harassment complaint after she decided to terminate the person making the complaint. Her investigation and course of action following it was per- functory and incorrect. Para. 165 to 166 — Wrench said at trial that her investigation of the Human Rights issue had nothing to do with the dismissal. Including the HRC claim in the release and emails to others about preventing the Human Rights complaint from ‘rearing its ugly head’ indicate that eliminating the HRC complaint to ready the company for sale was a factor in the dismissal. Para. 169 — Wrench said that she was always willing to negotiate the termination. Her termination letter and the events at the meeting with Doyle indicate that it was a ‘take it or leave it’ proposition. Wrench never invited negotiations or offered to extend the offer beyond July 29. Para. 173 — Wrench avoided answering questions directly. She prevaricated. Para. 175 — Wrench never told Doyle that her dismissal was because of performance issues. She told her the opposite — her job was not in jeopardy. Para. 184 — After making the decision to terminate Doyle, Wrench denied short term disability despite medical opinion by the company’s doctor of choice who supported the LTD claim. Para. 188 — Wrench’s hard line with Doyle supports the conclusion that Doyle’s dismissal was a way of getting rid of the only female in a plant staffed by men, and of getting rid of the sexual harassment complaint before Zochem could be sold. Para. 214 to 219 — Zochem’s behaviour, for the most part through Wrench, provided ample evidence for a moral damages claim. Zochem needed to be rid of Doyle and her sexual harassment complaint in order to “trim the fat” and get Zochem ready for sale. Wrench’s dealings with Doyle were “completely disingenuous”. She tried to “dig up dirt” in order to find cause for Doyle’s dismissal, enlisted others to support her, but could find none. After acquired Doyle v. Zochem Inc. Trimble J. 193

cause was never supported, and was nothing more than a “red herring”. Para. 228 — The only reason to dismiss Doyle was her gender and her sexual harassment complaint. Para. 241 et seq. — The termination was cold and brusque. Doyle’s personal privacy was callously invaded when someone else cleared out her personal effects and went into her purse to obtain car keys in order to bring her car to the front of the office building, all without her knowledge or consent. Para. 253 – The basis for denial of STD benefits was spurious. All Zochem had to do was pay the six month’s STD, (that was the maximum length of STD payable) on a “without prejudice basis,” claim- ing credit for the same six–month severance it was already prepared to pay. “This would have been a positive show of good faith. How- ever, taking the position it did, merely added to the breach of its obligation of good faith, giving rise to the moral damage claim. The manner in which the STD claim was handled simply perpetuated the highly focused tunnel vision approach taken by Wrench and Zochem to getting rid of Doyle”.

Substantial or Partial Indemnity? 62 Doyle says that I should award substantial indemnity costs for the action. She relies heavily on Belleghem, J.’s comments and recommendations. The pre–trial conduct of the Defendants, through Wrench, was reprehensible. The conduct of the Defendants at trial, and that of their counsel, was also reprehensible. This conduct should be punished through a higher scale if costs. 63 I have carefully considered the comments, findings and recommendations of Belleghem, J. as well as all the factors in Rule 57.01 and the jurisprudence. Subject to my analysis of Doyle’s claim for substantial indemnity costs from Wrench, below, I award Doyle partial indemnity costs for the action. I decline to award her substantial indemnity costs for the following reasons: a) First, she made no offer to settle that complied with Rule 49.10. Doyle made no offer to settle until the eve of trial. There were some settlement discussions. However, following those discussions, the Defendants made offers. The Plaintiff did not, despite the Defendants’ entreaties to do so. A court is permitted to consider the parties settlement positions, whether they are consistent, whether they are reasonable, and any party’s refusal to respond 194 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

(see Martellacci v. CFC/INX Ltd. (1997), 10 C.P.C. (4th) 143 (Ont. Gen. Div.). b) Second, Belleghem, J.’s recommendation that I award Doyle costs at a substantial indemnity basis for the 50% of the trial that was devoted to scrutiny of Wrench’s evidence (para. 337) is at odds with other findings he made. The most significant of Belleghem, J.’s findings conflicting with his recommendation re solicitor and client costs is his finding that a) the “mud” evidence was as relevant (partially, although tangentially) to Doyle’s claim for damages against Wrench, as it was to Zochem’s defence, and b) both counsel contributed equally to the fact that this evidence dominated almost the whole trial. c) Third, the amounts that Doyle claimed are excessive, on any reasonable reading of the Reasons for Judgment. She knew that. Her counsel in her costs submissions conceded that the claims were excessive when she said that everyone knew this, including the Defendant. d) Fourth, Doyle’s claim was unsuccessful in many respects, including the claims involving the most significant amounts. e) Fifth, both parties invited me to criticise the other, and the other’s counsel, for things done at trial. I was not present at trial. I was not given a complete record to adjudicate on the defalcations submitted to me. In any event, a court should be wary of second guessing how a trial was conducted (see Foulis v. Robinson (1978), 21 O.R. (2d) 769 (Ont. C.A.). f) Sixth, the Defendants’ last offer is relevant. The Defendant played hardball in making its offers, no doubt. The Defendant is entitled to do so. It made an offer 32 days before trial, which was only $7600 less than the judgment (net of pre–judgment interest) that was open until one minute after the commencement of trial. This offer did not trigger favourable Rule 49.10 consequence for the Defendant. It is still one which, because it was so close to the amount of the judgment, should be taken into consideration in fixing costs.

Disbursements 64 Zochem claims a reduction of $20,213.49 from Doyle’s claim for disbursements of $48,161.45. Zochem says that these disbursements were all related to the tort of intentional infliction of mental distress and the Doyle v. Zochem Inc. Trimble J. 195

Plaintiff’s claim for short term and long term disability, and future care costs. Zochem says that where disbursements are solely related to unsuccessful claims, they should not be allowed (see Phanlouvong v. Northfield Metal Products (1994) Ltd., 2015 ONSC 33 (Ont. S.C.J.) at para. 21). 65 Disbursements may be allowed, in the judge’s discretion, where it was reasonable to retain and call the witness to testify as to the effects of the Defendant’s acts on the Plaintiff. If it was reasonable to call the witness, the disbursement will be allowed, even though the award did not include anything for the heads of damages on which the witness spoke. The party seeking the disbursement, however, must have called the witness to testify or filed a report, in order to have the disbursement paid (see Grammatico v. Medeiros Estate, 2012 ONSC 5640 (Ont. S.C.J.) at para. 61–62). 66 In this case, based on the manner of the dismissal and its aftermath, it was reasonable to advance claims for mental distress, loss of short term and long term disability, and for future care costs. The long term disability claim was still–born, however, the insurer not having been made a party. Doyle, having made the claims, was obliged to put her best foot forward in advancing them (see Grammatico, supra, para. 62). Therefore, the real issue with respect to recovery of the disbursement is whether the disbursement was reasonably incurred, the report was served, and/or the expert was called. There is no allegation that any expert ‘ran amok’, and on that basis the disbursement should be disallowed (see Hamfler v. 1682787 Ontario Inc., 2011 ONSC 3331 (Ont. S.C.J.)) 67 It is usual and reasonable in any case where bodily or psychiatric injury is claimed to produce medical notes and records relevant to the claims made. Those disbursements are allowed. 68 Medical–legal reports were commissioned from Dr.s Kerr, Guirguis, and Dimitrakoudis, which were submitted to the Defendant. From the Reasons for Judgment, the reports of Dr.s Kerr and Guirguis were submitted to the Court under the Evidence Act. Dr. Kerr’s report was specifically referred to in the Reasons for Judgment. Dr.s Guirguis’ recommendations were referred to as well, although it is not clear whether Belleghem, J. relied on Dr. Guirguis’ notes and records or his report. The disbursements related to these doctors are allowed. 69 Collins Barrow prepared a report on future losses, including loss of pension. Accountant Posel testified. Even though the claims for STD and LTD payments, and future losses were not allowed, Belleghem, J. relied 196 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

on the accountant for his award of future pension losses. These disbursements are allowed. 70 Dr. Cooper prepared reports and testified. These disbursements are allowed. 71 The only disbursement I disallow is $375.00 paid for Dr. Dimi- trakoudis’ report. He does not appear to have been called. It is unclear whether his report was filed with the Court. The onus to satisfy me of the recoverability of the disbursement is on the Plaintiff, which she has not discharged.

Wrench’s Claim for and Exposure To Costs 72 Doyle seeks costs from Wrench on a substantial indemnity basis notwithstanding that Wrench was successful in her defence. Doyle cites Bel- leghem, J. saying that Wrench’s actions on behalf of Zochem made the trial necessary. Wrench’s conduct was such that Belleghem, J. recommended that Doyle be awarded her costs of prosecuting her case against Wrench on a substantial indemnity basis, notwithstanding that Wrench was successful in her defence that her employer was vicariously liable (see para. 337). He estimated that scrutiny of the actions of Wrench took 50% of the trial’s time. 73 Wrench, on the other hand, seeks her costs from Doyle on a partial indemnity basis. Without quantifying her claim, she seeks a proportionate share of the defence Bill of Costs, notwithstanding Belleghem, J.’s comments that both counsel contributed equally to the fact that the “mud” evidence dominated the trial. That evidence was as relevant to the claim for moral damages against Zochem and the claim of intentional infliction of mental distress against Wrench as it was to Zochem’s defence of after acquired cause. Wrench was never determined to be acting out of the scope of her employment. 74 The Defendants rely on Stradiotto v. BMO Nesbitt Burns Inc. 2017 ONSC 1760, in which the Plaintiffs were unsuccessful in obtaining a cost award against bank employees for whom the bank was vicariously liable. In that case, Mew, J. held that the employees were not necessary parties to the action, and it made no commercial sense and was unreasonable that the employees should be responsible for the costs of an action in which they were not necessary parties, but the employer was (at p 45). 75 Dealing first with Doyle’s claim for costs from Wrench, personally, I deny that claim, notwithstanding Belleghem, J.’s recommendations. Based on Belleghem, J.’s findings, Wrench was a necessary party even if Doyle v. Zochem Inc. Trimble J. 197

it were solely for the purpose of oral discovery. Based on Zochem’s approach to the trial, I have no doubt that the Defendants would have produced representatives for oral examinations other than Wrench in order to control damaging evidence. I also have no doubt that the Defendants would have vociferously resisted any order that she be produced on behalf of the Defendants. Further, the action against her was reasonable, based on the evidence. A different judge hearing the same evidence reasonably may have come to the opposite conclusion. 76 Awarding costs against a successful litigant is an extraordinary remedy. A successful party has a reasonable expectation of an award of costs, and should not be deprived of costs except in special circumstances (see Bell Canada, supra; Gonawati v. Teitsson, 2002 Carswell- Ont 1007 (Ont. C.A.)). In an employment case, the circumstances to justify an award of costs against a successful litigant include reprehensible conduct or conduct by the employer that is contrary to its moral commitment in a company policy or correspondence (see King v. Gulf Canada Ltd. (1992), 45 C.C.E.L. 238 (Ont. C.A.)). 77 In this case, I see no special circumstances that suggest that an award of costs against a successful party, on a substantial indemnity basis is warranted. In saying this, I am cognizant of Belleghem, J.’s comments and recommendations. I differ, however, for four reasons: a) First, Belleghem, J. neither made an award of costs to or against Wrench, nor set the scale of costs. He left it to me to decide. b) Second, Wrench’s misconduct identified in the Reasons for Judg- ment is not sufficient to sustain an award of costs against a successful party, even one whose success is as tainted as Wrench’s. c) Third, the lawyers argued bitterly over various other incidences of alleged misconduct during the trial, each of the other. Their comments in the costs argument, one of the other, provide me with insight as to how hard fought this case was. While Zochem’s tac- tic and Wrench were criticised by Belleghem, J., I cannot conclude that the Defendant’s lawyer was the sole cause of difficulties. As indicated above, I doubt that either presented me with the complete evidence on any point. Most of the events over which counsel fought required evidence beyond correspondence. No one called forward the record of the trial, nor submitted any affidavit in support of their position on the various alleged transgressions of the other. 198 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

d) Fourth, I consider the impact of Zochem’s last offer. It was close enough to the result at trial that when coupled with the extreme amounts Doyle claimed, all things considered, the extreme remedy of an award of costs against a successful litigant is not awarded. 78 I now turn to Wrench’s claim for costs from Doyle. I deny Wrench her costs, although she was successful in the action. Denial of costs to a successful litigant should only be done in exceptional circumstances (see Bell Canada, supra). In this case, such circumstances exist. 79 At paragraph 14, Belleghem, J. says that given Wrench’s actions in dismissing Doyle it is understandable that she was named personally. Belleghem. J. found that Wrench’s actions were all taken on behalf of her employer, Zochem, in furtherance of its mandate to put the company into shape for sale, and those actions gave rise to this action. Belleghem, J. says at paragraph 255: “. . .There is also no question that Wrench was a primary author of the actions that gave rise to Doyle’s mental distress. Given the central role that Wrench played on behalf of Zochem throughout the termination process, there is no feasible way of separating out the actions of Wrench from those of Zochem with respect to the evidence called at trial. In other words, whether or not Doyle had made specific claims against Wrench, personally, the trial would not have been shortened. Therefore, any cost consideration on behalf of Wrench should take into account the fact that it was Wrench’s actions, albeit on behalf of Zochem, that were the fundamental reason for this trial having become necessary. I make this comment because, while I am dismissing the action against Wrench personally, it is my view that this dismissal should not entitle her to any cost consideration in her favour, as all of the evidence required to have been led by her in her personal defence would have had to have been led in the case against Zochem in any event, in which Doyle has been successful.” 80 I agree wholeheartedly with Belleghem, J. at para. 264 where he says: “Based on my comments above, Wrench should most certainly not be entitled to any costs, despite the fact that the claim against her is being dismissed. Denial of costs may be sufficient justice. . ..” 81 If I am wrong in denying Wrench her costs, I would not have fixed her costs in any amount. There are two reasons for this. First, the De- fendants submitted one bill of cost. No specific amount was claimed on behalf of Wrench. The Defendants merely asked that she be awarded a Doyle v. Zochem Inc. Trimble J. 199

‘proportionate share’ of the defence costs. Her obligation is to set out the specific amount she seeks. She did not do so. 82 Second, and in any event, where there are several defendants all represented by the same counsel, and the action is dismissed against one of them, the successful defendant is entitled to costs. The costs that may be awarded, however, are those incremental or additional costs made necessary by the presence in the action of the successful defendant (see Orkin on Costs, title 209.1, p. 1–17). 83 In this case, Wrench has no costs to be awarded. Why do I say this? 84 The Defendants presented no evidence as what, if any, increased or incremental costs were generated by Wrench’s presence in the action. 85 Further, based on Belleghem, J.’s Reasons for Judgment, I find that no time or work in this file would have been saved had Wrench not been a party. The Defendants would have called her as a witness, in any event. Her evidence was necessary. She was the main actor in Doyle’s dismissal. She would have given all of the “mud” evidence even as a witness. It was central to the defence of after acquired cause which I find (based on the Defendants’ hardball approach to this case) the Defendants would have advanced even if the Plaintiff had not claimed against Wrench personally. This defence required the “mud” evidence to be called.

ORDER: 86 The Plaintiff shall have her costs on a partial indemnity basis as follows: Fees: $322,829.98 HST on fees $ 41,967.90 Disbursements $ 47,786.45. Settling Order and Costs argument $ 12,000.00, all inclusive Total $424,584.33 87 These costs are to be paid by March 31, 2016, at 4 p.m. 88 Wrench’s claim for costs is dismissed. Costs awarded. 200 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

[Indexed as: Doyle v. Zochem Inc.] Melissa Doyle (Plaintiff / Respondent) and Zochem Inc., Horsehead Corporation, Horsehead Holding Corporation, and Stephanie Wrench (Defendants / Appellants) Ontario Court of Appeal Docket: CA C62270 2017 ONCA 130 K.M. Weiler, S.E. Pepall, G.T. Trotter JJ.A. Heard: January 13, 2017 Judgment: February 15, 2017 Labour and employment law –––– Employment law — Termination and dismissal — Remedies — Damages for mental distress arising from dismissal (Wallace damages) –––– Employee worked with employer for nine years and was only woman in plant — Employee was 44 when she was terminated and 48 at time of trial — Employee was sexually harassed by plant maintenance manager — Employee was terminated without cause — Trial judge found that employee’s gender and sexual harassment complaint were likely most significant reasons for why she was terminated — Employer was ordered to pay $60,000 in moral damages for breach of its implied contractual obligation of good faith in manner of employee’s dismissal — In additional to moral damages, trail judge held that employee was entitled to general damages of 10 months’ salary in lieu of notice of termination and $20,000 damages for sexual harassment claim — Employer appealed award of moral damages — Appeal dismissed — Although trial judge considered relevant factors: fact that employees were instructed to “dig up dirt” on employee’s performance; and that employee was told her job was not in jeopardy, when in facts her termination was in motion; that another employee advised manager about employee’s medical condition; and that employee’s keys were taken from her purse and her car was brought around, as well as irrelevant factors, award was nonetheless justified — Ultimately, cause was not pursued, and manager’s dealings with employee were completely “disingenuous” — Trial judge’s consideration of employer’s misrepresentation that employee’s job was secure and that she would be given chance to improve, coupled with employer’s sudden termination and further representation that her services were no longer needed, were not improper considerations in this context — Trial judge’s consideration of sexual harassment complaint and subsequent investigation were related to manner of termination, even though decision to terminate employee had already been made — Employer’s denial of short term disability benefits without adequate evidence was breach of good Doyle v. Zochem Inc. 201 faith obligation — More serious aspects of employer’s conduct were appropriately considered by trial judge and his assessment of moral damages were not diminished by lesser irrelevant considerations he took into account. Human rights –––– Remedies — Damages — Miscellaneous –––– Employee worked with employer for nine years and was only woman in plant — Employee was sexually harassed by plant maintenance manager — Employee was terminated without cause — Trial judge found that employee’s gender and sexual harassment complaint were likely most significant reasons for why she was terminated — Employer was ordered to pay $60,000 in moral damages for breach of its implied contractual obligation of good faith in manner of employee’s dismissal and $20,000 damages for sexual harassment claim under Human Rights Code — Employer appealed — Appeal dismissed — Employer failed to implement compliance procedures required by law to address sexual harassment in workplace — While there was overlap of conduct, conduct relating to award of moral damages and that relating to Code damages for sexual harassment was not identical — Telling employee during termination meeting that she was being irresponsible towards manager and that his reputation was on line was in effect attack on employee’s reputation for veracity; this comment was consideration in award of damages for bad faith in manner of termination, but not for sexual harassment — Jurisprudence did not support submission that damages under Code should be deducted from moral damages — Moral damages were awarded as result of manner of dismissal, where employer engaged in conduct during course of dismissal that was unfair or in bad faith, that caused mental distress — In contrast, Code damages were remedial, not punitive in nature, and compen- sated for intrinsic value of infringement of rights under Code — Such damages were compensation for loss of right to be free from discrimination and experience of victimization — Given awards in question vindicated different interests in law, trial judge did not err in awarding Code damages and moral damages. Cases considered by K.M. Weiler J.A.: Boucher v. Wal-Mart Canada Corp. (2014), 2014 ONCA 419, 2014 Carswell- Ont 6646, 120 O.R. (3d) 481, 318 O.A.C. 256, 2014 C.L.L.C. 210-037, 16 C.C.E.L. (4th) 239, 374 D.L.R. (4th) 293, [2014] O.J. No. 2452 (Ont. C.A.) — considered Elgert v. Home Hardware Stores Ltd. (2010), 2010 ABQB 65, 2010 Carswell- Alta 157, 20 Alta. L.R. (5th) 384, 84 C.P.C. (6th) 369, 486 A.R. 188, [2010] A.J. No. 91 (Alta. Q.B.) — considered Gismondi v. Toronto (City) (2003), 2003 CarswellOnt 1498, 24 C.C.E.L. (3d) 1, 171 O.A.C. 1, 226 D.L.R. (4th) 334, 2003 C.L.L.C. 210-043, 64 O.R. (3d) 688, [2003] O.J. No. 1490 (Ont. C.A.) — considered Gismondi v. Toronto (City) (2004), 2004 CarswellOnt 718, 2004 CarswellOnt 719, 329 N.R. 193 (note), [2003] S.C.C.A. No. 312, 195 O.A.C. 199 (note) (S.C.C.) — referred to 202 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

Keays v. Honda Canada Inc. (2008), 2008 SCC 39, 2008 CarswellOnt 3743, 2008 CarswellOnt 3744, 66 C.C.E.L. (3d) 159, (sub nom. Honda Canada Inc. v. Keays) 2008 C.L.L.C. 230-025, EYB 2008-135085, [2008] S.C.J. No. 40, 376 N.R. 196, 239 O.A.C. 299, 294 D.L.R. (4th) 577, (sub nom. Honda Canada Inc. v. Keays) [2008] 2 S.C.R. 362, 92 O.R. (3d) 479 (note), (sub nom. Honda Canada Inc. v. Keays) 63 C.H.R.R. D/247 (S.C.C.) — considered Lane v. ADGA Group Consultants Inc. (2008), 2008 CarswellOnt 4677, [2008] O.J. No. 3076, (sub nom. Lane v. ADGA Group Consultants Inc.) 295 D.L.R. (4th) 425, 2008 C.L.L.C. 230-037, 240 O.A.C. 333, 91 O.R. (3d) 649, (sub nom. ADGA Group Consultants Inc. v. Lane) 64 C.H.R.R. D/132 (Ont. Div. Ct.) — considered McNevan v. AmeriCredit Corp. (2008), 2008 ONCA 846, 2008 CarswellOnt 7512, 245 O.A.C. 28, 94 O.R. (3d) 458, [2008] O.J. No. 5081, 305 D.L.R. (4th) 233, 2009 C.L.L.C. 210-027 (Ont. C.A.) — distinguished Pate Estate v. Galway-Cavendish and Harvey (Township) (2013), 2013 ONCA 669, 2013 CarswellOnt 15222, 117 O.R. (3d) 481, 16 M.P.L.R. (5th) 179, 312 O.A.C. 244, 2014 C.L.L.C. 210-010, 368 D.L.R. (4th) 193, 12 C.C.E.L. (4th) 83, 6 C.C.L.T. (4th) 37 (Ont. C.A.) — considered Peoples v. Ontario (Ministry of Training, Colleges & Universities) (2008), 2008 CarswellOnt 7706 (Ont. S.C.J.) — considered R. v. M. (R.E.) (2008), 2008 SCC 51, 2008 CarswellBC 2037, 2008 CarswellBC 2038, [2008] S.C.J. No. 52, 83 B.C.L.R. (4th) 44, [2008] 11 W.W.R. 383, 60 C.R. (6th) 1, 235 C.C.C. (3d) 290, 297 D.L.R. (4th) 577, 380 N.R. 47, 260 B.C.A.C. 40, 439 W.A.C. 40, [2008] 3 S.C.R. 3 (S.C.C.) — referred to Strudwick v. Applied Consumer & Clinical Evaluations Inc. (2016), 2016 ONCA 520, 2016 CarswellOnt 10413, 349 O.A.C. 360, 34 C.C.E.L. (4th) 235, 84 C.H.R.R. D/257, 2016 C.L.L.C. 210-051 (Ont. C.A.) — considered Sylvester v. British Columbia (1997), 1997 CarswellBC 1024, 212 N.R. 51, 146 D.L.R. (4th) 207, 91 B.C.A.C. 124, 148 W.A.C. 124, [1997] 6 W.W.R. 625, 34 B.C.L.R. (3d) 1, 29 C.C.E.L. (2d) 1, [1997] S.C.J. No. 58, [1997] 2 S.C.R. 315, 97 C.L.L.C. 210-012, 43 C.C.L.I. (2d) 1, 1997 CarswellBC 1025 (S.C.C.) — considered Wallace v. United Grain Growers Ltd. (1997), 152 D.L.R. (4th) 1, 219 N.R. 161, 1997 CarswellMan 455, 1997 CarswellMan 456, [1997] S.C.J. No. 94, 123 Man. R. (2d) 1, 159 W.A.C. 1, 97 C.L.L.C. 210-029, [1997] 3 S.C.R. 701, 36 C.C.E.L. (2d) 1, 3 C.B.R. (4th) 1, [1999] 4 W.W.R. 86, [1997] L.V.I. 2889-1, [1997] A.C.S. No. 94 (S.C.C.) — considered Youkhanna v. Spina’s Steel Workers Co. (2001), 2001 CarswellOnt 3915, 15 C.C.E.L. (3d) 99, [2001] O.J. No. 4279 (Ont. S.C.J.) — considered Statutes considered: Human Rights Code, R.S.O. 1990, c. H.19 Generally — referred to Doyle v. Zochem Inc. K.M. Weiler J.A. 203

s. 7(2) — considered Rules considered: Rules of Civil Procedure, R.R.O. 1990, Reg. 194 R. 49 — referred to

APPEAL by employer from decision reported at Doyle v. Zochem Inc. (2016), 2016 ONSC 3188, 2016 CarswellOnt 19295, 30 C.C.P.B. (2nd) 13 (Ont. S.C.J.), ordering employer to pay moral and human rights based damages to employee.

Martin A. Smith, Rachel C. Leck, for Appellants Angela Assuras, for Respondent

K.M. Weiler J.A.: A. Overview 1 The trial judge ordered the appellant, Zochem, to pay $60,000 in moral damages for the breach of its implied contractual obligation of good faith in the manner of dismissal of its employee, the respondent, Doyle [reported at 30 C.C.P.B. (2nd) 13]. The overarching issue on this appeal is whether those damages should be reduced. 2 In addition to awarding moral damages, the trial judge held that Doyle was entitled to general damages of ten months’ salary in lieu of notice of termination and $25,000 damages for her sexual harassment claim under the Human Rights Code, R.S.O. 1990, c. H.19 (the Code). These amounts were not appealed. 3 Zochem accepts the trial judge’s findings of fact. However, it con- tends that the trial judge erred in law in the amount he awarded for moral damages because he considered pre and post termination conduct that was irrelevant to the manner of termination, as well as factors that did not breach Zochem’s obligation of good faith in dismissing Doyle. In addition, Zochem submits that the award of moral damages overlaps and duplicates the award for Doyle’s sexual harassment claim under the Code. As a result of these alleged errors, Zochem submits that the award for moral damages should be reduced to $20,000. 4 At the conclusion of the appellant’s oral argument, the panel held that the award of moral damages should not be reduced and dismissed the appeal with reasons to follow. We then heard submissions on costs. 5 These are the reasons for dismissing the appeal. In brief compass, while some of the factors the trial judge considered could not form part of a claim for moral damages, based on the relevant factors he did con- 204 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

sider, the amount awarded is justified and in harmony with recent jurisprudence. The award of damages for sexual harassment under the Human Rights Code is not “double counting” because the award serves a different purpose than the award of moral damages and the same conduct may ground separate awards. 6 The factual background and reasons for these conclusions are set out below.

B. Factual background 7 For nine years, Doyle, worked for the respondent, Zochem, a company with about 50 employees that produces zinc oxide. In the period leading up to Doyle’s termination, the plant where she worked was being prepared for sale. Doyle was the plant supervisor and health and safety coordinator, and had a total of 20 years’ experience supervising employees. She was the only woman working in the plant. Wrench, the assistant general manager, worked in the office. Doyle was 44 when she was terminated and 48 at the time of trial. 8 In order to perform her job, Doyle needed the cooperation of Rogers, the plant maintenance manager. Zochem considered him to be irreplacea- ble. Rogers sexually harassed Doyle. At para. 68 of his reasons, the trial judge listed “just a few” of the examples of this harassment: • He would stare at her breasts and purport to take a picture of them; • He told her Philips [an independent contractor who had done work for the appellant and with whom Doyle had had a ‘romantic relationship’] had an “anaconda” in his pants and she should date him; • He said the “girls”, referring to her breasts, looked “good”; • He referred to their private parts as their “little friends”; • He described “bunny ears”, meaning her feet up behind her ears (as a sexual position); • He kept telling her she needed to get “laid”, or needed “a little pounding”, asking if she was “getting any”; • He told her how another employee had “the best body”; • A particularly gross example of this “locker room talk” related to her request to have him make a forklift attachment. When she later saw him with something with a chain on it, which appeared to be what she had asked him to make, he told her in fact it was just a Doyle v. Zochem Inc. K.M. Weiler J.A. 205

device that he was going to put her feet in to pull over her head so he could “get at her”. She said she felt like “a piece of meat”. 9 At a July 14, 2011 production meeting, during which Doyle raised legitimate safety concerns, Rogers and another co-worker, who were aware that Doyle was to be terminated, felt free to ignore the safety issues she raised and demeaned and belittled her in front of the others. She left the meeting in tears. Doyle, unaware that Wrench was going to terminate her and that the termination letter was already in the making, turned to Wrench and made a complaint of sexual harassment. Wrench did a “cursory” investigation of the complaint and heard from Rogers, but did not give Doyle an opportunity to respond. Wrench knew that Doyle suffered from clinical depression for which she was being medicated. 10 Doyle was terminated without cause on July 19, 2011. The trial judge found that Doyle’s gender and her sexual harassment complaint were likely the most significant reasons for why she was terminated. 11 There was considerable evidence about the impact of the dismissal upon Doyle. She felt betrayed, abused, sad and upset. She was placed upon medication for anxiety as she had been shaking constantly. She had migraines, chest pains and sleep disturbances. A doctor at the Centre for Addiction and Mental Health (“CAMH”) recommended she be admitted to CAMH. Doyle declined but was placed under the care of a psychiatrist. She had significant sleep issues, including nightmares about Rog- ers’ harassment, and the workplace meeting of July 14. She was diag- nosed as having a major depressive disorder, with anxiety.

C. The law 12 Beginning with Wallace v. United Grain Growers Ltd., [1997] 3 S.C.R. 701 (S.C.C.), at para. 95, the Supreme Court of Canada recognized that there is an obligation of good faith in the manner of dismissal of an employee and, at paras. 88 and 98, specified that damages are available where an employer engages in conduct that is “unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive.” Initially the award, now known as moral damages, involved compensation through an addition to the period of notice. However, in Keays v. Honda Canada Inc., 2008 SCC 39, [2008] 2 S.C.R. 362 (S.C.C.), at para. 59, the Court essentially did away with the distinction between aggravated damages and moral damages and held that these damages should be recognized through a fixed monetary award rather than 206 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

through an extension of the notice period: see S.R. Ball, Canadian Em- ployment Law, loose-leaf (2016), vol. 2 (Toronto: Thomson Reuters Can- ada Ltd., 2007), at § 22: 20.19 (1.1), p. 22-59 and § 22:20.19 (1.2), p. 22- 60. 13 The factors relevant to an award of moral damages are not limited to the examples in Honda, at para. 59 and Wallace, at paras. 98, 101. Nor, is the time frame limited to the moment of dismissal. Pre and post termination conduct may be considered in an award for moral damages, so long as it is “a component of the manner of dismissal”: Gismondi v. Toronto (City) (2003), 64 O.R. (3d) 688 (Ont. C.A.), at para. 23, leave to appeal to refused (2004), [2003] S.C.C.A. No. 312 (S.C.C.); Ball, at § 22:20.19(1.1), p. 22-50.

D. Factors considered in award of moral damages 14 The question of moral damages is a fact specific exercise. At the outset of the appeal and during oral argument, although arguing that the trial judge considered irrelevant factors, Zochem conceded that an award of moral damages could be grounded on certain factors relied upon by the trial judge, namely, that employees had been instructed by Wrench to “dig up dirt” on the performance of Doyle; that Doyle was told her job was not in jeopardy when, in fact, Wrench had already put the “wheels in motion” with respect to her termination; that an employee advised Wrench about Doyle’s medical condition in breach of her privacy; and that Doyle’s keys were taken from her purse and her car was brought around. 15 In my view, although the trial judge considered both factors that were relevant and irrelevant to an award of moral damages, the award was nonetheless justified. 16 As found by the trial judge at para. 13, Wrench “mangled the termination process”. Among other things, Wrench recruited employees to “dig up dirt” to discredit Doyle in order to justify her termination and created performance reviews to bootstrap the pre-existing determination to terminate Doyle. Ultimately, cause was not pursued. The trial judge found that Wrench’s dealings with Doyle were “completely disingenuous”. Wrench assured Doyle that her job was not in jeopardy when in fact the decision to terminate had already been made and the termination letter was probably already in the making. Doyle v. Zochem Inc. K.M. Weiler J.A. 207

17 After the termination decision had already been made, as found by the trial judge, Wrench’s response to Doyle’s sexual harassment complaint was insensitive to the point of verging on cruel. 18 The termination was cold and brusque. Moreover, in spite of being told a few days earlier that her job was not in jeopardy, on July 19, Wrench took Doyle to the board office. On the way, Wrench said to Doyle, “We don’t need you here anymore, and wish you all the best on your further endeavours.” She then turned Doyle over to Cheryl Lang, a third-party Human Resources consultant, to do the actual termination. At some point during the meeting with Lang, Lang told Doyle that she was being irresponsible because Rogers’ reputation was on the line, the infer- ence being that she should abandon her claim of sexual harassment against Rogers. The trial judge observed at para. 248: This was like rubbing salt into a wound for Doyle. She was being asked to sign off any rights she may have had arising out of her years of harassment, and at the same time, if she chose to do so, add to her pain by doing something to reinstate the reputation of her harasser. 19 As the appellant acknowledges, when Doyle was terminated, her car was brought around without her permission. Her car keys had been taken from her purse in order to do so. 20 Although the letter of termination presented with a full release contained a sentence suggesting that Doyle seek legal advice before accepting the benefits offered, she was pressured to immediately sign the release without it. In addition, as stated by the trial judge at para. 249: Numerous other relatively minor defects in the termination process were touched on by plaintiff’s counsel. The record of employment was not provided. The pension entitlement was at least a year late. ESA severance was referred to in the termination letter, but not provided until later. Although Doyle’s pay was usually simply deposited to her account, the deposit was cancelled, and Lang was instructed to get a signed release in exchange for the cheques, rather than simply having the money deposited in the account. When it was deposited, the ESA severance was missing for a couple of weeks. There was never any lucid explanation to Doyle about how her various financial claims were being calculated, and Zochem’s rationale for their calculations. Wrench was focused entirely on getting Doyle terminated, and getting a release from her, in order to fulfill Humphries expectation, just as she had done with Chesiuk. The defects in the termination process constituted a model of ineptitude. 208 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

21 Zochem submits that the trial judge’s criticism of it for its failure to provide some form of “progressive discipline” before terminating Doyle violates a fundamental principle of employment law that an employer is not obligated to provide progressive discipline leading up to an employee’s dismissal if it is not alleging “just cause”. In support of its position, Zochem relies on McNevan v. AmeriCredit Corp., 2008 ONCA 846, 94 O.R. (3d) 458 (Ont. C.A.), at paras. 41, 43, 50, in which Epstein J.A., on behalf of the majority, held that failure to warn about dissatisfaction in job performance is not a relevant consideration when determining moral damages: ...McNevan’s contract of employment contained no implied term to provide feedback - positive or negative - to an employee, as a necessary precursor to dismissal without just cause... AmeriCredit does not allege that McNevan was dismissed for cause. 22 Doyle points out that, at para. 55 of her reasons, Epstein J.A. observed “On its own, that failure [to warn the employee] cannot amount to bad faith” (emphasis added). As well, at para. 61, Epstein J.A. commented that when considering alleged bad faith, the employer’s conduct should be “considered as a whole” along with its overall impact on the employee. 23 As mentioned, the question of moral damages is a fact specific exercise. A significant distinguishing factor that was not present in McNevan, is that, in this case, there is evidence of untruthful, misleading or unduly insensitive conduct. In the context of this case, the trial judge found at para. 231 of his reasons that Wrench held out to Doyle a promise that she would be given a chance to “improve” and also told her that her job was not in jeopardy even though the decision to terminate her had already been made. In these circumstances, it was open to the trial judge to consider the appellant’s conduct in this regard. 24 I also note that Elgert v. Home Hardware Stores Ltd., 2010 ABQB 65, 486 A.R. 188 (Alta. Q.B.), at para. 40, cited by the appellant, refers with approval to the decision in Peoples v. Ontario (Ministry of Training, Colleges & Universities), 2008 CarswellOnt 7706 (Ont. S.C.J.), at paras. 16-21, a case in which staff were critical of the plaintiff’s management style. The Ministry commissioned an investigation, but it failed to review with the plaintiff the result or to give her an opportunity to respond before dismissing her. It was held that dismissal without giving the plaintiff an opportunity to respond, to take training to improve her skills, and Doyle v. Zochem Inc. K.M. Weiler J.A. 209

the Ministry’s failure to engage in progressive discipline were factors that entitled the plaintiff to moral damages. 25 Therefore, the trial judge’s consideration of Zochem’s misrepresentation, that Doyle’s job was secure and that she would be given a chance to improve, coupled with Zochem’s sudden termination of Doyle and the further representation that her services were no longer needed, were not improper considerations in the context of this case. 26 The appellant further submits that the trial judge’s consideration of the meeting on July 14, 2011 and the subsequent sexual harassment investigation were unrelated to the manner of termination, in part, because the decision to terminate Doyle had already been made. I would reject this submission. This court’s decision in Gismondi holds that it is not just conduct at the moment of termination that may be considered, but conduct that is a component of the manner of dismissal. 27 Given that the decision to dismiss had already been made, Wrench’s cursory investigation and attendant dismissal of Doyle’s complaint of sexual harassment are proper considerations respecting moral damages. The trigger for that complaint and investigation was the July 14 meeting. Furthermore, at para. 278 of his reasons, the trial judge accepted Doyle’s evidence that she became disabled and unable to perform the major duties of her job following the July 14, 2011 meeting. Thus the July 14, 2011 meeting also served as the trigger for Doyle’s short term disability claim which was wrongfully denied. 28 Despite a letter from Zochem’s own doctor that Doyle would qualify for short term disability benefits of six months, Wrench, acting as the self-appointed claims adjudicator for Zochem’s self-funded benefits, denied them. 29 The appellant submits that the denial of short term disability benefits, while temporally related, is arguably a distinct decision made outside the manner of termination. In any event, Zochem submits that even if it was proper to include it within the framework of moral damages, at most, a nominal amount is warranted for two reasons. The first is that Doyle did not meet the test for an award for mental distress in that she suffered no specific or additional mental distress arising from the denial. Alterna- tively, Zochem submits that the financial consequences of the refusal to pay were negligible. She was able to return to work in six months. Fur- ther, the Supreme Court of Canada held in Sylvester v. British Columbia, [1997] 2 S.C.R. 315 (S.C.C.), at para. 2 that an employee’s short term 210 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

disability payments received during the notice period should be deducted from damages awarded for wrongful dismissal. 30 I would reject Zochem’s arguments. The employer’s denial of short term disability benefits without adequate evidence has been considered a breach of the good faith obligation: Youkhanna v. Spina’s Steel Workers Co. (2001), 15 C.C.E.L. (3d) 99 (Ont. S.C.J.) per MacFarland J. as she then was. 31 Zochem accepts the trial judge’s findings. The trial judge found, at para. 253 of his reasons, that Zochem’s conduct in refusing short term disability benefits added to the breach of its obligation of good faith and perpetuated its tunnel vision approach to getting rid of Doyle. An excerpt from Doyle’s psychiatrist’s opinion is quoted by the trial judge in para. 92 of his reasons, to the effect that when an occupational problem is part of the constellation of factors, a circular situation can lead to delayed improvement. Re-engaging in a gradual return to work was a necessary part of Doyle’s rehabilitation and treatment but the combination of the denial of short term disability benefits and Zochem’s termination of Doyle made accommodation impossible. 32 Zochem’s argument that the financial consequences were negligible ignores the timing of the payments. Short term disability benefits would have started right away and would have been for the full amount of Doyle’s salary for six months. Although Doyle was dismissed in July, 2011, she did not receive the ten months’ salary payment in lieu of reasonable notice until after the trial judge made his award and gave his reasons in May 2016. 33 The trial judge found, at para 95 of his reasons, that Doyle could not keep up her mortgage payments and lost her home. She moved in with her mother, sleeping on the couch, and borrowed money from friends and her grandmother. Her credit cards went into default. She stored her furniture and, in addition to those charges, was constantly getting calls from collection agencies. The denial of Doyle’s short term disability benefits contributed to these losses. 34 Zochem’s argument respecting short term disability benefits is unsup- ported in law and on the facts. 35 I acknowledge that, as Zochem submits, the trial judge referenced some considerations that were irrelevant to an assessment of moral damages. I will give a few examples. The trial judge commented that the dismissal arose, in part, because the company was getting ready to be sold; the General Manager did not select the “most logical choice for his Doyle v. Zochem Inc. K.M. Weiler J.A. 211

successor”, a person who would not have terminated Doyle; Zochem terminated at least four key employees; and the appellant planned the dis- missals of two employees well in advance. These business considerations could not form the basis of a moral damages award. Although Doyle submits that the trial judge referred to this evidence to put the more important facts into perspective, it is not apparent from the reasons that was what he was doing. 36 The appellant also points to aspects of the termination meeting of which the trial judge was critical and submits that what took place is standard practice in employment law and not bad faith. An example is the trial judge’s criticism that payment of damages in lieu of notice was conditional upon the signing of a full release of all claims. 37 The trial judge found at para. 171 of his reasons that Doyle was not given an appropriate explanation of the release or sufficient time to consider it. Nor, despite her repeated requests, was Doyle given an explanation as to how the single figure mentioned was calculated. 38 In Strudwick v. Applied Consumer & Clinical Evaluations Inc., 2016 ONCA 520, 34 C.C.E.L. (4th) 235 (Ont. C.A.), at para 101, Epstein J.A. awarded Strudwick aggravated damages for conduct that included: Paperwork [which] had been prepared by the company that was designed to deprive her of various legal rights. When she would not sign, she was not given money the company then owed her. She was further humiliated by having to gather her belongings and leave under the stare of her co-workers. 39 Strudwick illustrates that, while some conduct during a dismissal meeting viewed in isolation would not constitute bad faith, the same conduct when part of a course of conduct on the part of an employer that inflicts mental distress on an employee may legitimately inform the result. Zochem is attempting to parse too narrowly what is and is not a component of the manner of dismissal and to have this court look at various aspects of its conduct in isolation instead of considering it in context and as a whole. 40 It is trite law that a trial judge’s reasons must be read as a whole and in context: see R. v. M. (R.E.), 2008 SCC 51, [2008] 3 S.C.R. 3 (S.C.C.), at para. 16. When that is done in this case, the trial judge’s conclusion at para. 184 that Zochem’s letter of termination, coupled with the circumstances surrounding the termination process itself, echoed the “hard line” tone taken by Wrench throughout her dealings with Doyle, is amply supported. 212 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

41 The more serious aspects of Zochem’s conduct were appropriately considered by the trial judge. His assessment of moral damages is not diminished by the lesser irrelevant considerations he did take into account. The assessment of damages “... is not the equivalent of a mathe- matical equation in which an error in a sub-calculation produces an error in the outcome”: Pate Estate v. Galway-Cavendish and Harvey (Town- ship), 2013 ONCA 669, 368 D.L.R. (4th) 193 (Ont. C.A.), at para. 82, per Lauwers J.A. in dissent but not with respect to this comment. 42 Zochem’s argument that the quantum of moral damages ought to be reduced on the basis that the trial judge took into account irrelevant considerations is dismissed.

E. Awarding both moral damages, taking into consideration sexual harassment, and Human Rights Code damages for infringing Doyle’s right to freedom from harassment was not double recovery 43 Zochem submits that the $20,000 award of Code damages ought to be deducted from the $60,000 award of moral damages because the same conduct underlies both awards. With respect to both awards the trial judge commented that the investigation of harassment was too short, was unreasonable, was not impartial, and ignored advice to deal with the sexual harassment complaint before proceeding with termination. The “tip line” set up by the employer to deal with sexual harassment was inadequate as it did not provide anonymity to Doyle. The employer failed to implement compliance procedures required by law to address sexual harassment in the workplace. 44 I would reject this submission. While there is an overlap of conduct, the conduct relating to the award of moral damages and that relating to Code damages for sexual harassment is not identical. An example of bad faith conduct meriting moral damages given in Honda, at para.59 is at- tacking an employee’s reputation. Zochem submits that it did not engage in an attack on Doyle’s reputation at the time of dismissal. However, telling Doyle during the termination meeting that she was being “irresponsible” towards Rogers and that his reputation was on the line was in effect an attack on Doyle’s reputation for veracity. This comment would be a consideration in the award of damages for bad faith in the manner of termination, but not for sexual harassment. 45 More importantly, the two judgments on which Zochem relies in support of its submission have no application to Code damages. In the first, Doyle v. Zochem Inc. K.M. Weiler J.A. 213

Honda, at para. 60, the Supreme Court held that the award of moral damages duplicated the punitive damages, and that “[t]he Court must avoid the pitfall of double-compensation or double-punishment that has been exemplified in this case.” In the second, Strudwick, at para. 104, Wallace damages were deducted from aggravated damages to avoid overlap. 46 Neither of these decisions supports the submission that damages under the Code should be deducted from moral damages. In fact, in Strudwick, a separate award for Code damages was not deducted from either moral damages or aggravated damages. 47 What this jurisprudence does illustrate is that when damages vindicate the same interests in law, the courts take care to avoid double-recovery. Moral damages are awarded as a result of the manner of dismissal, where the employer engages in conduct during the course of dismissal that is unfair or is in bad faith, that caused mental distress: Honda, at para. 57. As indicated in that decision at para. 56, the normal distress and hurt feelings resulting from dismissal are not compensable. 48 In contrast, Code damages are remedial, not punitive in nature, and compensate for the intrinsic value of the infringement of rights under the Code. Such damages are compensation for loss of the right to be free from discrimination and the experience of victimization: see the decision of Ferrier J. on behalf of the Ontario Divisional Court in Lane v. ADGA Group Consultants Inc. (2008), 91 O.R. (3d) 649 (Ont. Div. Ct.), at para. 148 (involving discrimination in the workplace and termination due to the employee’s bi-polar disorder), cited with approval in Strudwick, at paras. 57-60 (involving discrimination in the workplace and termination due to sudden loss of hearing). The right to be free from sexual harassment in the workplace is contained in s. 7(2) of Part I of the Code under the heading, “Freedom from Discrimination” and the damages awarded under this provision serve the same purpose, namely, compensation for loss of the right to be free from discrimination and the experience of victimization. 49 Where, as here, the awards in question vindicate different interests in law, there will be no overlap in the damages awarded although the same conduct is considered: Boucher v. Wal-Mart Canada Corp., 2014 ONCA 419, 120 O.R. (3d) 481 (Ont. C.A.), at para. 70. 50 Given that the awards in question vindicate different interests in law, the trial judge did not err in awarding both Code damages and moral damages. 214 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

F. The quantum of moral damages should not be reduced 51 Zochem submits that the quantum of damages ought to be reduced to $20,000. 52 I have already rejected the bases for Zochem’s submissions that the award should be reduced. 53 In this case, the $60,000 awarded by the trial judge for moral damages is not so inordinately high as to warrant appellate intervention having regard to the conduct and the corresponding awards of damages in the jurisprudence — for example, an award of $200,000 for aggravated damages in Boucher, at paras. 72, 76, 77; $70,000 for aggravated damages in Strudwick, at para. 104; and $75,000 for aggravated damages and $25,000 in Wallace damages in Pate Estate. 54 For these reasons the appeal was dismissed.

G. Costs 55 Doyle served an offer to settle the appeal on Zochem. She offered to settle the appeal on the basis that if the offer was accepted prior to June 24, 2016 the appeal would be dismissed without costs. If accepted after that date, costs were to be paid on a full indemnity scale. The offer was open for acceptance until one minute after commencement of the appeal. Based on her offer, Doyle seeks full indemnity costs of $43,600 plus disbursements and HST as well as the costs of a motion reserved to the panel hearing the appeal. 56 This court is not bound to give effect to rule 49 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Furthermore, while an offer to settle does not have to contain a compromise, the fact that it does not is a factor to consider. For these reasons, I would not award full indemnity costs. 57 I would, however, award costs on a substantial indemnity scale of $40,000 including the costs of the motion, plus HST of $69.99 and disbursements of $538.40 on the basis that Zochem’s conduct in pursuing this appeal was a continuation of its oppressive conduct towards Doyle.

S.E. Pepall J.A.:

I agree Doyle v. Zochem Inc. G.T. Trotter J.A. 215

G.T. Trotter J.A.:

I agree Appeal dismissed. 216 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

[Indexed as: Bloom Lake General Partner Ltd., Re] In the matter of the plan of compromise or arrangement of: Bloom Lake General Partner Limited, Quinto Mining Corporation, 8568391 Canada Limited, Cliffs Québec Iron Mining ULC, Wabush Iron Co. Limited, Wabush Resources Inc. (Petitioners) and The Bloom Lake Iron Ore Mine, Limited Partnership, Bloom Lake Railway Company Limited, Wabush Mines, Arnaud Railway Company Limited, Wabush Lake Railway Company Limited (Mises en cause) and Michael Keeper, Terence Watt, Damien Lebel and Neil Johnson, Syndicat des métallos, sections locales 6254 et 6285, Morneau Shepell Ltd, in its capacity as replacement pension plan administrator, Her Majesty in right of Newfounland and Labrador, as represented by the superintendent of pensions, The Attorney General of Canada, acting on behalf of the office of the Superintendent of Financial Institutions, Régie des rentes du Québec, Ville de Sept-Îles (Mises en cause) and FTI Consulting Canada Inc. (Monitor) Quebec Superior Court Docket: 500-11-048114-157 Hamilton J. Heard: December 20, 2016 Judgment: January 30, 2017 Faillite et insolvabilité –––– Compétence en matière de faillite et d’insolvabilité — Compétence des tribunaux — Compétence du tribunal de faillite — Compétence territoriale — Faillites etrang`´ eres –––– Debiteurs ´ ex- ploitaient une mine dans la province de Terre-Neuve-et-Labrador et une installation portuaire dans la province de Québec — Employés de la mine et de l’installation portuaire participaient aux régimes de retraite des débiteurs — Débiteurs etaient´ les administrateurs des régimes de retraite, lesquels etaient´ ré- gis en partie par une loi de Terre-Neuve-et-Labrador — En particulier, des fiducies présumées et des sûretés avaient et´´ e créées en vertu de la loi de Terre- Neuve-et-Labrador — Débiteurs ont eprouv´´ e des difficultés financières et se sont placés sous la protection de la Loi sur les arrangements avec les créanciers des compagnies — Ordonnance initiale a et´´ e emise´ et un contrôleur a et´´ e nommé — Contrôleur a déposé une requête faisant valoir que le Tribunal devrait demander l’aide de la Cour suprême de Terre-Neuve-et-Labrador — Requête Bloom Lake General Partner Ltd., Re 217

rejetée — En principe, toutes les questions se rapportant a` l’insolvabilité d’un débiteur doivent etreˆ tranchées par un seul tribunal — Toutefois, il peut survenir des situations où un tribunal puisse demander l’aide d’un autre tribunal — Tri- bunal saisi d’une question d’insolvabilité a le pouvoir discrétionnaire de prendre cette décision — En l’espèce, les arguments avancés au soutien d’un renvoi des questions a` un autre tribunal n’étaient pas convaincants — Simple fait qu’un litige est régi par une loi etrang`´ ere n’est pas une bonne raison pour envoyer un dossier a` une juridiction etrang`´ ere — Il n’y avait rien de particulièrement unique a` propos des dispositions applicables de la loi en question — Par conséquent, il n’était pas nécessaire de demander l’aide de la Cour suprême de Terre-Neuve- et-Labrador. Bankruptcy and insolvency –––– Bankruptcy and insolvency jurisdiction — Jurisdiction of courts — Jurisdiction of Bankruptcy Court — Territorial jurisdiction — Foreign bankruptcies –––– Debtors operated mine in province of Newfoundland and Labrador and port facility in province of Quebec — Em- ployees of mine and port facility were members of debtors’ pension plans — Debtors were administrators of pension plans which were governed in part by Act of Newfoundland and Labrador — In particular, deemed trusts and liens had been created pursuant to Act of Newfoundland and Labrador — Debtors exper- ienced financial difficulties and sought protection under Companies’ Creditors Arrangement Act — Initial order was issued and monitor was appointed — Monitor brought motion asserting that Court should seek assistance of Supreme Court of Newfoundland and Labrador — Motion dismissed — In principle, all issues relating to debtor’s insolvency are decided by one single court — How- ever, there are cases where court may decide to seek assistance of another court — Court hearing insolvency matter has discretionary power to make that decision — Here, arguments put forward in support of referral of issues to another court were not convincing — Mere fact that dispute is governed by foreign law is not good reason to send case to foreign jurisdiction — There was nothing particularly unique about relevant provisions of Act in question — Therefore, assistance of Supreme Court of Newfoundland and Labrador was not necessary. Cases considered by Hamilton J.: AbitibiBowater Inc., Re (2012), 2012 SCC 67, 2012 CarswellQue 12490, 2012 CarswellQue 12491, 352 D.L.R. (4th) 399, 71 C.E.L.R. (3d) 1, 95 C.B.R. (5th) 200, (sub nom. Newfoundland and Labrador v. AbitibiBowater Inc.) 438 N.R. 134, [2012] S.C.J. No. 67, [2012] A.C.S. No. 67, (sub nom. Newfoundland and Labrador v. AbitibiBowater Inc.) [2012] 3 S.C.R. 443 (S.C.C.) — considered Bloom Lake General Partner Ltd., Re (2015), 2015 CarswellQue 6175, EYB 2015-254025, [2015] Q.J. No. 6111, 2015 QCCS 3064 (Que. Bktcy.) — referred to 218 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

Bloom Lake General Partner Ltd., Re (2015), 2015 QCCA 1351, EYB 2015- 255623, 2015 CarswellQue 7720, [2015] Q.J. No. 7736 (C.A. Que.) — referred to Boucher c. Stelco Inc. (2004), 2004 CarswellQue 327, 39 C.C.P.B. 214, [2004] R.J.Q. 807, (sub nom. Bourdon v. Stelco Inc.) 241 D.L.R. (4th) 266, REJB 2004-54686, 2004 CarswellQue 12240, [2004] Q.J. No. 1842, [2004] J.Q. No. 1842 (C.A. Que.) — referred to Canada (Minister of Indian Affairs & Northern Development) v. Curragh Inc. (1994), 27 C.B.R. (3d) 148, 114 D.L.R. (4th) 176, 1994 CarswellOnt 294, [1994] O.J. No. 953 (Ont. Gen. Div. [Commercial List]) — distinguished Chatigny v. Emerson electrique´ du Canada ltée (2013), 2013 QCCA 163, EYB 2013-217541, 2013 CarswellQue 602, 8 C.C.P.B. (2nd) 215 (C.A. Que.) — referred to Constructions Beauce-Atlas inc. c. Pomerleau inc. (2013), EYB 2013-226033, 2013 QCCS 4077, 2013 CarswellQue 8372 (C.S. Que.) — followed Eagle River International Ltd., Re (2001), 2001 SCC 92, 2001 CarswellQue 2725, 2001 CarswellQue 2726, 30 C.B.R. (4th) 105, (sub nom. Sam Lévy & Associates Inc. v. Azco Mining Inc.) 207 D.L.R. (4th) 385, (sub nom. Lévy (Sam) & Associés Inc. v. Azco Mining Inc.) 280 N.R. 155, (sub nom. Sam Lévy & Associés Inc. v. Azco Mining Inc.) [2001] 3 S.C.R. 978, REJB 2001- 27203, 2001 CSC 92, [2001] S.C.J. No. 90 (S.C.C.) — considered Essar Steel Algoma Inc., Re (2016), 2016 ONSC 595, 2016 CarswellOnt 1040, 33 C.B.R. (6th) 313 (Ont. S.C.J. [Commercial List]) — considered Essar Steel Algoma Inc., Re (2016), 2016 ONCA 138, 2016 CarswellOnt 2444, 33 C.B.R. (6th) 172 (Ont. C.A.) — considered Montreal, Maine & Atlantic Canada Co. / Montreal, Maine & Atlantique Canada Cie, Re (2013), EYB 2013-228346, 2013 QCCS 5194, 2013 Car- swellQue 10709 (C.S. Que.) — considered Nortel Networks Corp., Re (2015), 2015 ONSC 1354, 2015 CarswellOnt 2936, 23 C.B.R. (6th) 264 (Ont. S.C.J. [Commercial List]) — considered Saini v. Canada (Minister of Citizenship & Immigration) (2001), 2001 FCA 311, 2001 CarswellNat 2309, 206 D.L.R. (4th) 727, 278 N.R. 127, (sub nom. Canada (Minister of Citizenship & Immigration) v. Saini) [2002] 1 F.C. 200, 2001 CarswellNat 3172, 19 Imm. L.R. (3d) 199, 214 F.T.R. 320 (note), [2001] F.C.J. No. 1577 (Fed. C.A.) — followed Stormbreaker Marketing and Productions Inc. c. World Class Events Ltd. (2013), 2013 QCCA 269, EYB 2013-218059, 2013 CarswellQue 1038 (C.A. Que.) — considered Ted Leroy Trucking Ltd., Re (2010), 2010 SCC 60, 2010 CarswellBC 3419, 2010 CarswellBC 3420, 12 B.C.L.R. (5th) 1, (sub nom. Century Services Inc. v. A.G. of Canada) 2011 D.T.C. 5006 (Eng.), (sub nom. Century Services Inc. v. A.G. of Canada) 2011 G.T.C. 2006 (Eng.), [2011] 2 W.W.R. 383, 72 C.B.R. (5th) 170, 409 N.R. 201, (sub nom. Ted LeRoy Trucking Ltd., Bloom Lake General Partner Ltd., Re 219

Re) 326 D.L.R. (4th) 577, (sub nom. Century Services Inc. v. Canada (A.G.)) [2010] 3 S.C.R. 379, [2010] G.S.T.C. 186, (sub nom. Leroy (Ted) Trucking Ltd., Re) 296 B.C.A.C. 1, (sub nom. Leroy (Ted) Trucking Ltd., Re) 503 W.A.C. 1 (S.C.C.) — considered Timminco Ltd., Re (2012), 2012 ONSC 2515, 2012 CarswellOnt 5390 (Ont. S.C.J. [Commercial List]) — distinguished Timminco lt´ee, Re (2014), EYB 2014-232146, 2014 CarswellQue 384, 2014 QCCS 174, 9 C.B.R. (6th) 173, 9 C.C.P.B. (2nd) 100 (Que. Bktcy.) — referred to Yukon Zinc Corp., Re (2015), 2015 BCSC 836, 2015 CarswellBC 1357, 25 C.B.R. (6th) 171, 4 P.P.S.A.C. (4th) 80, 77 B.C.L.R. (5th) 379, [2016] 1 W.W.R. 781 (B.C. S.C.) — referred to Yukon Zinc Corp., Re (2015), 2015 BCSC 1961, 2015 CarswellBC 3121, 5 P.P.S.A.C. (4th) 9 (B.C. S.C.) — distinguished Statutes considered: Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 Generally — referred to s. 187(7) — considered Code civil du Qu´ebec, L.Q. 1991, c. 64 art. 2809 — considered art. 3083-3133 — referred to art. 3135 — considered Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36 Generally — referred to s. 16 — considered s. 17 — considered Employment Pension Plans Act, S.A. 2012, c. E-8.1 s. 58 — referred to s. 60 — referred to Miners Lien Act, R.S.Y. 2002, c. 151 Generally — referred to Pension Benefits Act, R.S.M. 1987, c. P32 s. 28 — referred to Pension Benefits Act, S.N.B. 1987, c. P-5.1 s. 51 — referred to Pension Benefits Act, 1997, S.N. 1996, c. P-4.01 Generally — referred to s. 32 — considered Pension Benefits Act, S.N.S. 2011, c. 41 s. 80 — referred to Pension Benefits Act, R.S.O. 1990, c. P.8 s. 57 — referred to 220 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

Pension Benefits Act, 1992, S.S. 1992, c. P-6.001 s. 43 — referred to Pension Benefits Standards Act, S.B.C. 2012, c. 30 s. 58 — referred to Pension Benefits Standards Act, 1985, R.S.C. 1985, c. 32 (2nd Supp.) Generally — referred to s. 8(1) — considered s. 8(2) — considered R´egimes compl´ementaires de retraite, Loi sur les, RLRQ, c. R-15.1 art. 49 — referred to

MOTION brought by monitor asserting that Court should seek assistance of Su- preme Court of Newfoundland and Labrador because many issues were governed by legislation enacted by legislature of Newfoundland and Labrador.

Bernard Boucher, for Petitioners Sylvain Rigaud, Chrystal Ashby, for Monitor Nicholas Scheib, Andrew Hatnay, for mises en cause Michael Keeper, Terence Watt, Damien Lebel, and Neil Johnson Daniel Boudreault, for mise en cause Syndicat des métallos, sections locales 6254 et 6285 Ronald A. Pink, for mise en cause Morneau Shepell Ltd, in its capacity as replacement pension plan administrator Doug Mitchell, Edward Béchard-Torres, for mise en cause Her Majesty in Right of Newfoundland and Labrador, as represented by Superintendent of Pensions Pierre Lecavalier, for mise en cause Attorney General of Canada, acting on behalf of office of the Superintendent of financial institutions Sophie Vaillancourt, Roberto Clocchiatti, for mise en cause Régie des rentes du Québec Martin Roy, for mise en cause Ville de Sept-Îles

Hamilton J.: INTRODUCTION 1 The debtors have filed proceedings under the Companies’ Creditors Arrangement Act (“CCAA”).1 They owe substantial liabilities under two pension plans, including special payments, catch-up special payments and wind-up deficiencies. The Monitor has filed a motion for directions

1 R.S.C. 1985, c. C-36. Bloom Lake General Partner Ltd., Re Hamilton J. 221

with respect to the priority of the various components of the pension claims. 2 A preliminary issue has arisen as to whether the Court should request the aid of the Supreme Court of Newfoundland and Labrador (the “NL Court”) with respect to the scope and priority of the deemed trust and other security created by the Newfoundland and Labrador Pension Bene- fit Act (“NLPBA”),2 which regulates in part the pension plans.

CONTEXT 3 On May 19, 2015, the Petitioners Wabush Iron Co. Limited and Wabush Resources Inc. and the Mises-en-cause Wabush Mines (a joint venture of Wabush Iron and Wabush Resources), Arnaud Railway Com- pany and Wabush Lake Railway Company Limited (together the “Wabush CCAA Parties”) filed a motion for the issuance of an initial order under the CCAA, which was granted the following day by the Court. 4 Prior to the filing of the motion, Wabush Mines operated (1) the iron ore mine and processing facility located near the Town of Wabush and Labrador City, Newfoundland and Labrador, and (2) the port facilities and a pellet production facility at Pointe-Noire, Qu´ebec. Arnaud Railway and Wabush Lake Railway are both federally regulated railways that transported iron ore concentrate from the Wabush mine to the Pointe- Noire port. The operations had been discontinued and the employees terminated or laid off prior to the filing of the CCAA motion. 5 The Wabush CCAA Parties have two pension plans for their employees which include defined benefits: • A hybrid pension plan for salaried employees at the Wabush mine and the Pointe-Noire port hired before January 1, 2013, known as the Contributory Pension Plan for Salaried Employees of Wabush Mines, Cliffs Mining Company, Managing Agent, Arnaud Rail- way Company and Wabush Lake Railway Company (the “Sala- ried Plan”); and • A pension plan for unionized hourly employees at the Wabush mine and Pointe-Noire port, known as the Pension Plan for Bar- gaining Unit Employees of Wabush Mines, Cliffs Mining Com-

2 S.N.L. 1996, c. P-40.1. 222 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

pany, Managing Agent, Arnaud Railway Company and Wabush Lake Railway Company (the “Union Plan”). 6 Wabush Mines was the administrator of both plans. 7 The majority of the employees covered by the plans reported for work in Newfoundland and Labrador while some reported for work in Québec. Moreover, some of the employees covered by the Union Plan worked for Arnaud Railway, which is a federally regulated railway. The result is that the Salaried Plan is governed by the NLPBA, while the Union Plan is governed by both the NLPBA and the federal Pension Benefits Standards Act (“PBSA”).3 Further, the Union suggests that the Québec Supplemen- tal Pension Plans Act (“SPPA”)4 might be applicable to employees or retirees who reported for work in Québec. Both plans are subject to regulatory oversight by the provincial regulator in Newfoundland and Labra- dor, the Superintendent of Pensions (the “NL Superintendent”), while the Union Plan is also subject to regulatory oversight by the federal pension regulator, the Office of the Superintendent of Financial Institutions (“OSFI”). The Québec regulator, Retraite Québec, might also have a role to play. 8 On June 26, 2015, in the context of approving the interim financing of the debtors, the Court ordered the suspension of payment by the Wabush CCAA Parties of the monthly amortization payments and the annual lump sum “catch-up” payments coming due under the plans, and confirmed the priority of the Interim Lender Charge over the deemed trusts with respect to the pension liabilities. The Court also ordered the suspension of payment of other post-retirement benefits, including life insurance, health care and a supplemental retirement arrangement plan.5 9 On December 16, 2015, the NL Superintendent terminated both plans effective immediately on the basis that the plans failed to meet the solvency requirements under the regulations, the employer has discontinued all of its business operations and it was highly unlikely that any potential buyer of the assets would agree to assume the assets and liabilities of the

3 R.S.C. 1985 (2nd Supp.), c. 32. 4 CQLR, c R-15.1, s. 49. 5 2015 QCCS 3064 (Que. Bktcy.); motion for leave to appeal dismissed, 2015 QCCA 1351 (C.A. Que.). Bloom Lake General Partner Ltd., Re Hamilton J. 223

plans.6 On the same date, OSFI terminated the Union Plan effective immediately for the same reasons.7 10 Both the NL Superintendent and OSFI reminded the Wabush CCAA Parties of the employer’s obligation upon termination of the plan to pay into the pension fund all amounts that would be required to meet the solvency requirements and the amount necessary to fund the benefits under the plan. They also referred to the rules with respect to deemed trusts.8 11 On January 26, 2016, the salaried retirees received a letter from Wabush Mines notifying them that the NL Superintendent had directed Wabush Mines to reduce the amount of monthly pension benefits of the members by 25%.9 Retirees under the Union Plan had their benefits reduced by 21% on March 1, 2016.10 12 On March 30, 2016, the NL Superintendent and OSFI appointed Morneau Shepell Ltd as administrator for the plans.11 13 The Wabush CCAA Parties paid the monthly normal cost payments for both plans up to the termination of the plans on December 16, 2015. As a result, the monthly normal cost payments for the Union Plan were fully paid as of December 16, 2015.12 The monthly normal cost payments for the Salaried Plan had been overpaid in the amount of $169,961 as of December 16, 2015.13 14 However, the Wabush CCAA Parties ceased making the special payments in June 2015 pursuant to the order issued by the Court, with the

6 Exhibit R-13. 7 Exhibit R-14. 8 Exhibits R-13 and R-14. 9 Exhibit RESP-7. 10 Affidavit of Terence Watt, sworn December 14, 2016, par. 19. 11 Exhibit R-15. 12 There is a debate as to whether the Wabush CCAA Parties were required to pay the full monthly payment for December or only a pro-rated portion. The amount at issue for the period from December 17 to 31, 2015 is $21,462. 13 Exhibit R-16. 224 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

result that unpaid special payments as of December 16, 2015 total $2,185,752 for the Salaried Plan14 and $3,146,696 for the Union Plan.15 15 Further, the Wabush CCAA Parties did not make the lump sum “catch-up” special payments that came due after June 2015. The amount payable is now calculated to be $3,525,125.16 These amounts became known with certainty only when the actuarial report was completed and filed in July 2015, but some of these amounts may relate to the pre-filing period. 16 Finally, the plans are underfunded. The Plan Administrator estimates the wind-up deficits as at December 16, 2015 to be approximately $26.7 million for the Salaried Plan and approximately $27.7 million for the Union Plan. 17 As a result, according to the Monitor, the total amounts owing are approximately $28.7 million to the Salaried Plan and $34.4 million to the Union Plan. 18 The Plan Administrator filed a proof of claim in respect of the Sala- ried Plan that includes a secured claim in the amount of $24 million and a restructuring claim in the amount of $1,932,940,17 and a proof of claim with respect to the Union Plan that includes a secured claim in the amount of $29 million and a restructuring claim in the amount of $6,059,238.18 19 The differences in the numbers are not important at this stage. It is sufficient to note that there are very large claims and that the Plan Ad- ministrator claims the status of a secured creditor with respect to a substantial part of its claims. 20 It is also important to note that the Wabush CCAA Parties held assets both in Newfoundland and Labrador and in Qu´ebec. Many of the Qu´ebec assets have been sold and have generated substantial proceeds currently held by the Monitor. 21 The Monitor is now working through the claims procedure. In that context, the Monitor applies to the Court for an order declaring that:

14 Exhibit R-16. 15 Exhibit R-17. 16 Exhibit R-17. 17 Exhibit R-18. 18 Exhibit R-19. Bloom Lake General Partner Ltd., Re Hamilton J. 225

a) normal costs and special payments outstanding as at the date of the Wabush Initial Order are subject to a limited deemed trust; b) normal costs and special payments payable after the date of the Wabush Initial Order, including additional special payments and catch up payments established on the basis of actuarial reports issued after the Wabush Initial Order, constitute unsecured claims; c) the wind-up deficiencies constitute unsecured claims; and d) any deemed trust created pursuant to the NLPBA may only charge property in Newfoundland and Labrador. 22 Those issues are not yet before the Court. A preliminary issue has arisen as to whether the Court should request the aid of the NL Court with respect to the scope and priority of the deemed trust and the lien created by the NLPBA and whether the deemed trust and the lien extend to assets located outside of Newfoundland and Labrador.

POSITION OF THE PARTIES 23 All parties agree that (1) the Court has jurisdiction to deal with all of the issues, and (2) the Court has the discretion to request the aid of the NL Court. 24 Three parties suggest that the Court should exercise that discretion and request the aid of the NL Court: • The Plan Administrator; • The representatives of the salaried employees and retirees; and • The NL Superintendent. 25 The representatives of the salaried employees and retirees have proposed that the following questions should be resolved by the NL Court: 1. The Supreme Court of Canada has confirmed in Indalex that provincial laws apply in CCAA proceedings, subject only to the doctrine of paramountcy. Assuming there is no issue of paramountcy, what is the scope of section 32 in the NPBA [NLPBA] deemed trusts in respect of: a) unpaid current service costs; b) unpaid special payments; and, c) unpaid wind-up liability. 226 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

2. The Salaried Plan is registered in Newfoundland and regulated by the NPBA. a) (i) Does the PBSA deemed trust also apply to those members of the Salaried Plan who worked on the railway (i.e., a federal undertaking)? (ii) If yes, is there a conflict with the NPBA and PBSA if so, how is the conflict resolved? b) (i) Does the SPPA also apply to those members of the Sala- ried Plan who reported for work in Québec? (ii) If yes, is there a conflict with the NPBA and SPPA and if so, how is the conflict resolved? (iii) Do the Quebec SPPA deemed trusts also apply to Qué- bec Salaried Plan members? 3. Is the NPBA lien and charge in favour of the pension plan administrator in section 32(4) of the NPBA a valid secured claim in favour of the plan administrator? If yes, what amounts does this secured claim encompass? 26 Three other parties suggest that the Court should not transfer any issues to the NL Court and should decide all of the issues: • The Monitor; • The Syndicat des métallos, sections locales 6254 et 6285; and • The Ville de Sept-ˆıles. 27 The Ville de Sept-ˆıles argues that the request to transfer should be dismissed because it is too late. 28 Finally, two parties do not take a position on the request to transfer: • The Attorney-General of Canada, acting on behalf of OSFI; and • Retraite Québec.

ANALYSIS 1. The jurisdiction of the CCAA Court 29 In principle, all issues relating to a debtor’s insolvency are decided before a single court.19 This rule is based on the “public interest in the expeditious, efficient and economical clean-up of the aftermath of a fi-

19 Eagle River International Ltd., Re, 2001 SCC 92 (S.C.C.), par. 25-28. Bloom Lake General Partner Ltd., Re Hamilton J. 227

nancial collapse.”20 This public interest favours a “single control” of insolvency proceedings by one court as opposed to their fragmentation among several courts.21 30 The Supreme Court in Sam L´evy concluded as follows with respect to the relevant test: 76 In the present case, we are confronted with a federal statute that prima facie establishes one command centre or “single control” (Stewart, supra, at p. 349) for all proceedings related to the bankruptcy (s. 183(1)). Single control is not necessarily inconsistent with transferring particular disputes elsewhere, but a creditor (or debtor) who wishes to fragment the proceedings, and who cannot claim to be a “stranger to the bankruptcy”, has the burden of demonstrating “sufficient cause” to send the trustee scurrying to multiple jurisdictions. Parliament was of the view that a substantial connection sufficient to ground bankruptcy proceedings in a particular district or division is provided by proof of facts within the statutory definition of “locality of a debtor” in s. 2(1). The trustee in that locality is mandated to “recuperate” the assets, and related proceedings are to be controlled by the bankruptcy court of that jurisdiction. The Act is concerned with the economy of winding up the bankrupt estate, even at the price of inflicting additional cost on its creditors and debtors.22 (Emphasis added) 31 Although the Sam L´evy case was decided in the context of the Bank- ruptcy and Insolvency Act (“BIA”),23 the same principles apply in the context of the other insolvency legislation, including the CCAA.24 The CCAA court has jurisdiction to deal with all of the issues that arise in the

20 Ibid, par. 27. 21 Ibid, par. 64. 22 Ibid, par. 76. 23 R.S.C. 1985, c. B-3. 24 Ted Leroy Trucking Ltd., Re, 2010 SCC 60 (S.C.C.), par. 22; AbitibiBowater Inc., Re, 2012 SCC 67 (S.C.C.), par. 21; Montreal, Maine & Atlantic Canada Co. / Montreal, Maine & Atlantique Canada Cie, Re, 2013 QCCS 5194 (C.S. Que.), par. 24-25; Nortel Networks Corp., Re, 2015 ONSC 1354 (Ont. S.C.J. [Commercial List]), par. 24; Essar Steel Algoma Inc., Re, 2016 ONSC 595 (Ont. S.C.J. [Commercial List]), par. 29-30, judgment of Court of Appeal ordering (i) Cliffs to seek leave to appeal the Order, (ii) the hearing of the leave to appeal motion be expedited, and (iii) the issuance of a stay pending the disposition of the leave to appeal motion, 2016 ONCA 138 (Ont. C.A.). 228 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

context of the CCAA proceedings.25 The stay of proceedings under the CCAA gives effect to this principle by preventing creditors from bringing proceedings outside the CCAA proceedings without the authorization of the CCAA court. 32 There are clear efficiencies to having a single court deal with all of the issues in a single judgment. 33 The general rule is therefore that the Court should rule on all issues that arise in the context of these insolvency proceedings.

2. The discretion to ask for the assistance of another court 34 There are however situations where another court can deal more effi- ciently with specific issues. The CCAA Court has jurisdiction to ask for the assistance of another court under Section 17 CCAA: 17 All courts that have jurisdiction under this Act and the officers of those courts shall act in aid of and be auxiliary to each other in all matters provided for in this Act, and an order of a court seeking aid with a request to another court shall be deemed sufficient to enable the latter court to exercise in regard to the matters directed by the order such jurisdiction as either the court that made the request or the court to which the request is made could exercise in regard to similar matters within their respective jurisdictions. 35 The representative of the salaried employees and retirees also pleaded the notion of forum non conveniens under the Civil Code: 3135. Even though a Qu´ebec authority has jurisdiction to hear a dispute, it may, exceptionally and on an application by a party, decline jurisdiction if it considers that the authorities of another State are in a better position to decide the dispute. 36 The Supreme Court held in Sam L´evy26 that Article 3135 C.C.Q. does not apply in bankruptcy matters because of Section 187(7) BIA, which provides: 187 (7) The court, on satisfactory proof that the affairs of the bankrupt can be more economically administered within another bankruptcy district or division, or for other sufficient cause, may by order transfer any proceedings under this Act that are pending before it to another bankruptcy district or division.

25 Section 16 CCAA provides that the orders of the CCAA court are enforced across Canada. 26 Supra note 19, par. 62. Bloom Lake General Partner Ltd., Re Hamilton J. 229

37 While Section 17 CCAA is not as explicit, the Court is satisfied that it is not necessary or appropriate to refer to Article 3135 C.C.Q. in the present context. The CCAA court is not being asked to decline jurisdiction, but rather it is being asked to seek the assistance of another court. 38 The Court is therefore satisfied that, notwithstanding the general rule that it should rule on all issues that arise in the context of these insolvency proceedings, it can seek the assistance of another court. It is a discretionary decision of this Court, based on factors such as cost, expense, risk of contradictory judgments, expertise, etc.

3. Specific grounds 39 The arguments put forward in support of the referral of the issues to the NL Court can be summarized as follows: a) Legal considerations: • These are complex and important issues of provincial law; • The courts in Newfoundland and Labrador possess far greater expertise in interpreting the NLPBA than does the courts in Qu´ebec, although these specific questions have not yet been considered by any court in Newfoundland and Labrador; • The interpretation of the NLPBA is a question of the intention of the legislator in Newfoundland and Labrador, and the NL Court is better situated to determine this intention; b) Factual considerations: • It is a question of purely local concern and it may signifi- cantly impact a large number of residents of Newfoundland and Labrador; • The province of Newfoundland and Labrador is closely connected to the dispute: a majority of the employees reported for work in the province and the Wabush CCAA Parties maintained significant business operations in the province; • If justice is to be done and be seen to be done it is important that consequential decisions on provincial legislation be made by the courts of that province; • The representatives of the salaried employees and retirees want the NL Court to interpret the NLPBA; 230 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

c) Practical considerations: • The law of another province is treated as a question of fact in Québec, with the result that the conclusion on a matter of foreign law is not binding on subsequent courts and can only be overturned in the presence of a palpable and overriding error; • It might be difficult to prove the law of Newfoundland and Labrador in a Québec court given the lack of jurisprudence on the specific issues; • There will be increased costs if the Québec Court interprets the NLPBA because of the need to retain experts to provide legal opinions; • There is no reason to believe that fragmenting the proceedings will result in additional delay; • The judgment to be rendered will be a precedent and only a decision of the courts of Newfoundland and Labrador would be an authoritative precedent; • Other persons or parties may wish to intervene on the issue of the scope of the Section 32 NLPBA deemed trusts, which would be more practical in the NL Court. 40 These arguments do not convince the Court that this is an appropriate case to refer the issues to the NL Court.

a) Legal considerations 41 This is the key argument put forward by the parties suggesting that the NLPBA issues be referred to the NL Court: the issues relate to the NLPBA, and the NL Court is best qualified to interpret the NLPBA. 42 The Court accepts as a starting point that the NLPBA applies in the present matter the pension plans are regulated by the NL Superintendent in accordance with the NLPBA (although OSFI also regulates the Union Plan in accordance with the PBSA) and the plans expressly provide that they are interpreted in accordance with the NLPBA. 43 The Court also accepts the obvious proposition that the NL Court is more qualified to deal with an issue of Newfoundland and Labrador law than the courts of Qu´ebec, particularly since Newfoundland and Labra- dor is a common law jurisdiction and Qu´ebec is a civil law jurisdiction. Bloom Lake General Partner Ltd., Re Hamilton J. 231

44 However, that does not mean that the Court will automatically refer every issue governed by the law of another jurisdiction to the courts of that other jurisdiction. 45 First, there are rules in the Civil Code with respect to how Québec courts deal with issues governed by foreign law. Articles 3083 to 3133 C.C.Q. set out the rules to determine which law is applicable to a dispute before the Québec courts, and Article 2809 C.C.Q. sets out how the foreign law is proven before the Québec courts. 46 Further, pursuant to these rules, Québec courts regularly hear matters governed by foreign law. The Court of Appeal recently held that the fact that a dispute is governed by foreign law does not have much weight in a forum non conveniens analysis: [98] Si on revoie les considérations du Juge, portant sur dix points, pour conclure que le for géorgien est préférable, deux aspects principaux en ressortent, soit les coûts et la loi applicable. [99] Quant a` cette dernière considération, elle n’est pas d’un grand poids, a` mon avis. Parce que le débat porte sur les faits plutôt que sur le droit. Parce que la common law est tout de même familière aux tribunaux québécois. Parce que faire la preuve de la loi d’un Etat´ américain n’est pas un grand défi, c’est même chose courante. [100] Et surtout, parce que le critère de la loi applicable ne constitue pas en soi un facteur important. Dans tout litige international, les conflits de lois sont l’ordinaire et non l’exception.27 47 In other words, the mere fact that a dispute is governed by foreign law is not a good reason to send the case to the foreign jurisdiction. This principle was applied in a CCAA context in the MMA case.28 48 There are examples in the insolvency context of the court with jurisdiction over the insolvency declining to send an issue governed by foreign law to the foreign court. In Sam Lévy, the Supreme Court declined to send an insolvency matter to British Columbia simply because there was a choice of B.C. law, stating, “The Quebec courts are perfectly able to apply the law of British Columbia.”29

27 Stormbreaker Marketing and Productions Inc. c. Weinstock, 2013 QCCA 269, par. 98-100. 28 MMA, supra note 24, par. 20. 29 Sam L´evy, supra note 19, par. 61. 232 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

49 In Lawrence Home Fashions Inc./Linge de maison Lawrence inc. (Syndic de), Justice Schrager, then of this Court, stated: [18] In any event, should equitable set-off under Ontario law become relevant to the case, Qu´ebec judges sitting in such matters, on the presentation of the appropriate evidence, are readily capable of dealing with foreign law issues. Indeed, this is a frequent occurrence particularly in insolvency matters.30 50 The Ontario courts rejected similar arguments in Essar Algoma: [80] Ontario courts can and do often apply foreign law. In this case I do not consider the fact that the law to be applied is Ohio law much of a factor, if any.31 51 The Monitor submitted cases in which Qu´ebec courts have interpreted different provisions of the pension laws of other provinces.32 The Court also notes that it dealt to a more limited extent with the deemed trust under the NLPBA in its decision dated June 26, 2015. 52 There are nevertheless circumstances where the CCAA court has referred legal issues to the courts of another province. The Curragh33 and Yukon Zinc34 judgments were cited as examples of such cases. However, in both cases, the legal issues related to the Yukon Miners Lien Act.35 Justice Farley in Curragh wrote: This legislation and its concept of the lien affecting the output of the mine or mining claim is apparently unique to the Yukon Territory.36 53 Moreover, both cases involved real rights on property in Yukon. 54 The parties also pointed to Timminco as precedent authority directly on point supporting the transfer of a pension issue by the CCAA court to the jurisdiction where the pension plan is registered and has been admin-

30 2013 QCCS 3015, par. 18. 31 Supra note 24, par. 80. See also Nortel Networks, supra note 24, par. 29. 32 Chatigny v. Emerson electrique´ du Canada lt´ee, 2013 QCCA 163 (C.A. Que.); Boucher c. Stelco Inc. [2004 CarswellQue 327 (C.A. Que.)], 2004 CanLII 13895. 33 Canada (Minister of Indian Affairs & Northern Development) v. Curragh Inc., [1994] O.J. No. 953 (Ont. Gen. Div. [Commercial List]) 34 Yukon Zinc Corp., Re, 2015 BCSC 1961 (B.C. S.C.). 35 R.S.Y. 2002, c. 151. 36 Supra note 33, par. 11. See also Yukon Zinc, supra note 34, par. 47 and 57. Bloom Lake General Partner Ltd., Re Hamilton J. 233

istered.37 However, Timminco is not a precedent in that the parties in that case consented to the referral of the issue and Justice Morawetz simply gave effect to their consent. 55 Without concluding that the Court would only refer a legal issue if the foreign law at issue is unique, the Court concludes that the arguments favouring the referral of a legal issue are stronger when the foreign law is unique. 56 It is therefore important to examine the issues that might be referred to the NL Court and the uniqueness of the NLPBA provisions that are at issue in the present matter. 57 The representatives of the salaried employees and retirees identify the relevant questions as being the scope of the deemed trust and of the lien and charge under Section 32 NLPBA, as well as the interaction between the NLPBA and the federal and Qu´ebec statutes. 58 Section 32 NLPBA provides: 32. (1) An employer or a participating employer in a multi-employer plan shall ensure, with respect to a pension plan, that (a) the money in the pension fund; (b) an amount equal to the aggregate of (i) the normal actuarial cost, and (ii) any special payments prescribed by the regulations, that have accrued to date; and (c) all (i) amounts deducted by the employer from the member’s remuneration, and (ii) other amounts due under the plan from the employer that have not been remitted to the pension fund are kept separate and apart from the employer’s own money, and shall be considered to hold the amounts referred to in paragraphs (a) to (c) in trust for members, former members, and other persons with an entitlement under the plan. (2) In the event of a liquidation, assignment or bankruptcy of an employer, an amount equal to the amount that under subsection (1) is considered to be held in trust shall be considered to be separate from and form no part of the estate in liquidation,

37 Timminco Ltd., Re, 2012 ONSC 2515 (Ont. S.C.J. [Commercial List]). 234 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

assignment or bankruptcy, whether or not that amount has in fact been kept separate and apart from the employer’s own money or from the assets of the estate. (3) Where a pension plan is terminated in whole or in part, an employer who is required to pay contributions to the pension fund shall hold in trust for the member or former member or other person with an entitlement under the plan an amount of money equal to employer contributions due under the plan to the date of termination. (4) An administrator of a pension plan has a lien and charge on the assets of the employer in an amount equal to the amount required to be held in trust under subsections (1) and (3). 59 The first point is that there is nothing particularly unique about Sec- tion 32 NLPBA. 60 There is a very similar deemed trust provision in Section 8(1) and (2) PBSA: 8 (1) An employer shall ensure, with respect to its pension plan, that the following amounts are kept separate and apart from the employer’s own moneys, and the employer is deemed to hold the amounts referred to in paragraphs (a) to (c) in trust for members of the pension plan, former members, and any other persons entitled to pension benefits under the plan: (a) the moneys in the pension fund, (b) an amount equal to the aggregate of the following payments that have accrued to date: (i) the prescribed payments, and (ii) the payments that are required to be made under a workout agreement; and (c) all of the following amounts that have not been remitted to the pension fund: (i) amounts deducted by the employer from members’ remuneration, and (ii) other amounts due to the pension fund from the employer, including any amounts that are required to be paid under subsection 9.14(2) or 29(6). (2) In the event of any liquidation, assignment or bankruptcy of an employer, an amount equal to the amount that by subsection (1) is deemed to be held in trust shall be deemed to be separate from and form no part of the estate in liquidation, Bloom Lake General Partner Ltd., Re Hamilton J. 235

assignment or bankruptcy, whether or not that amount has in fact been kept separate and apart from the employer’s own moneys or from the assets of the estate. 61 In Québec, the SPPA provides: 49. Until contributions and accrued interest are paid into the pension fund or to the insurer, they are deemed to be held in trust by the employer, whether or not the latter has kept them separate from his property. 62 There are similar deemed trusts and/or liens in every Canadian province outside Québec except Prince Edward Island: Ontario,38 British Co- lumbia,39 Alberta,40 Saskatchewan,41 Manitoba,42 Nova Scotia43 and New Brunswick.44 63 The second point is that there is no Newfoundland and Labrador jurisprudence interpreting the relevant provisions of the NLPBA. The NL Superintendent pleaded that “the courts of Newfoundland & Labrador possess far greater expertise in interpreting the PBA [NLPBA] than does the Superior Court of Québec.” While this is undoubtedly true with respect to the NLPBA as a whole, it is not true with respect to Section 32 NLPBA. In an earlier ruling also issued in the Yukon Zinc matter, Justice Fitzpatrick of the B.C. Supreme Court refused to decline jurisdiction and refer a matter involving the Yukon Miners Lien Act to the courts of Yu- kon and one of the factors that went against referring the matter to the Yukon court was the lack of jurisprudence in the Yukon court.45 64 Moreover, in this case, because of the similarities between the NLPBA and the federal and other provincial pension laws, the judge interpreting the NLPBA will likely refer to decisions of the courts of other provinces interpreting their legislation or the federal PBSA.

38 Ontario Pension Benefits Act, R.S.O. 1990, c. P.8, s. 57. 39 British Columbia Pension Benefits Standards Act, S.B.C. 2012, c. 30, s. 58 40 Alberta Employment Pension Plans Act, S.A. 2012, c. E-8.1, s. 58 and 60. 41 Saskatchewan Pension Benefits Act, 1992, S.S. 1992, c P-6.001, s. 43 42 Manitoba Pension Benefits Act, C.C.S.M., c. P32, s. 28. 43 Nova Scotia Pension Benefits Act, S.N.S. 2011, c. 41, s. 80. 44 New Brunswick Pension Benefits Act, S.N.B. 1987, c P-5.1, s. 51. 45 Yukon Zinc Corp., Re, 2015 BCSC 836 (B.C. S.C.), par. 90. 236 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

65 The Québec Court should be in as good a position as the NL Court in that exercise. 66 Finally, as is typical in these cases, there is a close interplay between the NLPBA and the CCAA. The first question proposed by the representatives of the salaried employees and retirees is: “Assuming there is no issue of paramountcy, what is the scope of section 32 in the NPBA [NLPBA] deemed trusts”. The scope of the NLPBA is not relevant if the NLPBA does not apply because of a conflict with the CCAA and federal paramountcy. In that sense, there may not even be a need to deal with the interpretation of the NLPBA. 67 Moreover, there are issues in this case with the federal PBSA and the Québec SPPA. The representatives of the salaried employees and retirees suggest that the following questions are relevant: 2. The Salaried Plan is registered in Newfoundland arid regulated by the NPBA. a) (i) Does the PBSA deemed trust also apply to those members of the Salaried Plan who worked on the railway (i.e., a federal undertaking)? (ii) If yes, is there a conflict with the NPBA and PBSA if so, how is the conflict resolved? b) (i) Does the SPPA also apply to those members of the Sala- ried Plan who reported for work in Québec? (ii) If yes, is there a conflict with the NPBA and SPPA and if so, how is the conflict resolved? (iii) Do the Quebec SPPA deemed trusts also apply to Québec Salaried Plan members? 68 The representatives of the salaried employees and retirees and the NL Superintendent suggest that, in the interests of simplicity and expediency, all of these questions should be referred to the NL Court. 69 The Court has great difficulty with this suggestion. On what basis should the Court conclude that the NL Court is in a better position to decide whether the Québec SPPA and deemed trust apply to employees who reported for work in Québec (question 2(b)(i) and (iii)) and how the conflict between the NLPBA and the SPPA should be resolved (question 2(b)(ii))? The first are pure questions of Québec law, and the last is a question where the laws of Québec and of Newfoundland and Labrador have equal application. There are similar questions with respect to the federal PBSA (question 2(c)), which the Court is in as good a position to decide as the NL Court. Bloom Lake General Partner Ltd., Re Hamilton J. 237

70 The Court will not refer issues of Qu´ebec law or federal law to the NL Court, and if those issues are too closely interrelated to the NLPBA issues, or if in the interests of simplicity and expediency they should all be decided by the same court, then the solution is not to refer any issues to the NL Court. 71 In the earlier Yukon Zinc ruling where Justice Fitzpatrick refused to refer the matter to the courts of Yukon, she found that the issues related to the interrelationship between the Yukon Miners Lien Act and the rights asserted by others under B.C. law, in relation to assets the majority of which were located in British Columbia: [89] As for the law to be applied to the various issues, it is clear that whatever forum is used to resolve these issues, there will be a blend of both British Columbian contract law and Yukon miner’s lien law. The majority of the concentrate is located in British Columbia and was in this Province well before the 2015 Procon Lien was registered. Further, the contract rights are to be decided in accordance with British Columbian law, particularly as to if, and if so, when, title to the concentrate passed from Yukon Zinc to Transamine. [90] This is not akin to the situation discussed in Ecco Heating Products Ltd. v. J.K. Campbell & Associates Ltd., 1990 CanLII 1631 (BC CA), [1990] 48 B.C.L.R. (2d) 36 (C.A.), where the major issue arose under builder’s lien legislation in British Columbia and where the court referred to the “extensive existing relevant jurisprudence” in British Columbia: at 43-44. It is common ground here that there is no case law on the issues of scope and priority under the MLA that arise here, let alone relevant Yukon jurisprudence. [91] It is quite apparent that some issues arise under the MLA and, in particular, issues relating to Procon’s rights in relation to the concentrate remaining in Yukon which is claimed by Transamine under British Columbian law. Transamine argues that this Court can take judicial notice of the MLA: see Evidence Act, R.S.B.C. 1996, c. 124, s. 24(2)(e). In any event, Procon has fully researched the issues as they arise under the MLA and made submissions on them. To turn the tables on Procon, if I were to decline jurisdiction in favour of the Yukon courts, there equally would be issues as to the Yukon court interpreting and applying British Columbian law on the contract issues. [92] It would be impossible in the circumstances to bifurcate the issues based on the applicable law. Even if bifurcation was available, it would be neither a practical nor an efficient strategy in resolving the issues between Yukon Zinc, Procon and Transamine. 238 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

(Emphasis added) 72 In the present matter, the bulk of the assets on which the deemed trust or the lien created by the NLPBA may apply are the proceeds of the sale of assets in Qu´ebec. 73 On balance, the legal considerations do not favour referring the issues to the NL Court.

b) Factual considerations 74 The parties suggesting that the NLPBA issues be referred to the NL Court also argue that these are essentially local issues that should be decided by the local court. 75 It is clear that there are significant factual links between these issues and the province of Newfoundland and Labrador. 76 In particular, the Wabush mine is located in Newfoundland and Lab- rador and most of the employees reported to that mine. As a result, many of the retirees are currently resident in Newfoundland and Labrador. The representatives of the salaried employees and retirees want the NL Court to interpret the NLPBA. 77 However, there are equally strong factual links to the province of Québec: the Pointe-Noire facility is in Québec and most of the railway joining the Wabush mine and the Pointe-Noire facility is in Québec. There are almost as many employees and retirees in Québec: Salaried Plan Union Plan Newfoundland and 313 1,005 Labrador Québec 329 661 Other 14 6646 78 As a result, this is not a matter of purely local concern in Newfound- land and Labrador. 79 Although the representatives of the salaried employees and retirees want the NL Court to interpret the NLPBA, more than half of the persons that they represent live in Québec.

46 Watt Affidavit, par. 16. Bloom Lake General Partner Ltd., Re Hamilton J. 239

80 It is also worth noting that the Union, which represents more employees and retirees, asks that the case remain in Qu´ebec, even though most of their members reside in Newfoundland and Labrador.

c) Practical considerations 81 The parties suggesting that the NLPBA issues be referred to the NL Court argue that the law of Newfoundland and Labrador is in principle a question of fact in a Qu´ebec court which is proven with expert witnesses. They argue that this has a series of somewhat inconsistent consequences: • The parties will have to hire experts, which is costly and time consuming; • It will be difficult to find experts because these questions have never been litigated before; • If there is an appeal, the interpretation of the NLPBA will be treated as a question of fact and therefore only subject to be overturned if there is a palpable and overriding error. 82 This seems to exaggerate the difficulty. The Court can take judicial notice of the law of another province.47 This is particularly true when it is an issue of interpreting a statute.48 In this case, where the parties plead that it will be difficult to find an expert, it seems unlikely that the Court would require expert evidence. This is particularly so when the provisions of the NLPBA which are at issue are similar to the provisions of the federal PBSA with respect to which expert evidence is not admissible. If there is no expert evidence to be offered, then there is no expense. A finding of fact with respect to expert evidence may attract the higher standard for appellate review of a palpable and overriding error.49 This does not mean that every ruling on an issue of foreign law attracts the same standard. If the judge decides the interpretation of the NLPBA without considering the credibility of expert witnesses, then there is no reason for the Court of Appeal to apply the higher standard for appellate review.

47 Article 2809 C.C.Q. 48 Constructions Beauce-Atlas inc. c. Pomerleau inc., 2013 QCCS 4077 (C.S. Que.), par. 14. 49 Saini v. Canada (Minister of Citizenship & Immigration), 2001 FCA 311 (Fed. C.A.), par. 26. 240 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

83 In terms of cost, it is difficult to see how the cost of continuing the proceedings in Québec will be higher than the cost of hiring attorneys in Newfoundland and Labrador and debating part of the issues there. The Union and Sept-ˆıles argued that it would be more expensive for them to argue the issues in Newfoundland and Labrador, and they added that they pay their own costs, unlike the representatives of the salaried employees and retirees and the Plan Administrator. 84 Another issue is the delays that the referral might create. 85 Sept-ˆıles bases its argument that it is too late now to raise the issue of a transfer on the fact that the Court already dealt with some of these issues 18 months ago. The representatives of the salaried employees and retirees plead that they raised the issue of a possible transfer of issues to the NL Court at the hearing of the motion for approval of the Claims Procedure Order on November 16, 2015. 86 The Court will not dismiss the issue for lateness. However, it is relevant that the issue is being debated now as opposed to 18 months ago. If the issue had been debated at that time, the Court might have been less concerned about the possible delays that would result from referring the issues to the NL Court. 87 The parties suggesting that the NLPBA issues be referred to the NL Court plead that there is no reason to believe that fragmenting the proceedings will result in additional delay. They do not however offer the Court any concrete indication of how quickly the case could proceed through the NL Court and any appeal. 88 The Court is concerned by the possible delay. The parties pointed to Timminco, where the CCAA Court transferred a pension issue to the Québec Superior Court, as an example of how these referrals should work. In that case, the parties consented to refer the Québec pension aspects of the CCAA file that was being litigated in Ontario to a Québec court. Even in those circumstances, the delay between the referral (Octo- ber 18, 2012)50 and the final judgment of the Québec court (January 24, 2014)51 was over 15 months. 89 Finally, the Court does not consider the question of whether its decision will or will not be treated as a precedent to be a relevant consideration. Similarly, the Court does not consider the possibility of intervenants

50 Supra note 37. 51 2014 QCCS 174 (Que. Bktcy.). Bloom Lake General Partner Ltd., Re Hamilton J. 241

to be relevant. The Court’s focus is on resolving the difficulties of the parties appearing before it. If the government of Newfoundland and Lab- rador wishes to obtain a judgment from the courts of the province on the interpretation of the NLPBA, it can refer a matter to the Court of Appeal of Newfoundland and Labrador.52

CONCLUSION 90 For all of the foregoing reasons, the Court concludes that it is not appropriate in the present circumstances to refer the proposed questions to the NL Court.

FOR THESE REASONS, THE COURT: 91 DECIDES that it has jurisdiction to deal with the issues related to the interpretation of the Newfoundland and Labrador Pension Benefits Act in the context of the present proceedings under the Companies’ Creditors Arrangement Act and that it will not refer those issues to the Supreme Court of Newfoundland and Labrador; 92 THE WHOLE WITHOUT JUDICIAL COSTS. Motion dismissed.

52 Judicature Act, R.S.N.L. 1990, c. J-4, Section 13. 242 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

[Indexed as: R. v. Francis] HER MAJESTY THE QUEEN, ATTORNEY GENERAL OF CANADA, ROYAL CANADIAN MOUNTED POLICE (APPLICANTS) and RUTH ELAINE FRANCIS AND RONALD BRIAN COOK (RESPONDENTS) RUTH ELAINE FRANCIS (APPLICANT) and HER MAJESTY THE QUEEN, ATTORNEY GENERAL OF CANADA, ROYAL CANADIAN MOUNTED POLICE AND RONALD BRIAN COOK (RESPONDENTS) Saskatchewan Court of Queen’s Bench Docket: Regina DIV 2/00 2017 SKQB 28 D.E.W. McIntyre J. Judgment: January 27, 2017 Pensions –––– Federal and provincial pension plans — Federal pension plans — Division of benefits –––– Husband was member of RCMP, and was facing mandatory retirement in less than one year — Parties’ marriage ended, and wife failed to make equalization payment to husband and failed to transfer RRSP funds and funds from her retirement account as ordered in 2007 judgment — Judgment also provided that wife had vested interest in any pension benefit payable to husband under terms of his pension plan, and provided that wife receive one-third of pension benefit payable to husband — Wife did not make equalization payment called for by 2007 judgment and did not transfer RRSP funds or funds from her retirement account as specified in judgment — Judgment further provided that administrator of pension plan or federal government was to pay wife’s share of husband’s pension benefits directly to wife — Husband applied to have amounts payable by wife set off against amounts payable to wife from his pension, and in 2011, husband was found to be entitled to receive amount of $109,012 from wife under 2007 judgment out of amounts payable to wife from husband’s pension — Under 2011 judgment , RCMP was ordered to calculate deemed but unpaid payment to wife of percentage of pension paid each month to husband — After deemed cumulative payments plus costs payable to husband totalled $109,012, RCMP was to pay percentage of monthly pension amounts to wife directly — Wife applied for order that federal Crown comply with 2011 order — Her Majesty the Queen, Attorney General of Canada and RCMP (Crown) applied for order to vary or set aside court’s order insofar as it required payment directly to wife — Any restrictions on transfer of pension to third party which may exist resultant of legislation does not limit R. v. Francis 243

court’s jurisdiction to order periodic payments to be made by spouse in receipt of pension benefit to non-recipient spouse and to constitute spouse in receipt of pension benefit as trustee — It was appropriate and within court’s jurisdiction to order that under Family Property Act, wife had interest in any pension benefits payable to husband to extent of relevant formula — It was appropriate to order husband to pay to wife her share of his monthly pension benefit as and when he was in receipt of same and to designate husband as trustee to receive on her behalf her share of his monthly pension benefit and to pay same to her forthwith upon receipt of same — Adjustment to payment to wife might be necessary for income tax — Part of judgment designating pension administrator trustee of wife’s share of husband’s pension and directing administrator to pay her share to her directly was beyond jurisdiction of court. Cases considered by D.E.W. McIntyre J.: Clarke v. Clarke (1990), 28 R.F.L. (3d) 113, 113 N.R. 321, [1990] 2 S.C.R. 795, 73 D.L.R. (4th) 1, 101 N.S.R. (2d) 1, 275 A.P.R. 1, 1990 CarswellNS 49, 1990 CarswellNS 261, EYB 1990-67378, [1990] S.C.J. No. 97 (S.C.C.) — considered Fisher v. Fisher (1983), [1983] 2 W.W.R. 602, 21 Sask. R. 235, 31 R.F.L. (2d) 274, 1983 CarswellSask 124 (Sask. Q.B.) — considered Francis v. Cook (2007), 2007 SKQB 136, 2007 CarswellSask 201, 38 R.F.L. (6th) 170, 60 C.C.P.B. 199, [2007] 8 W.W.R. 522, 295 Sask. R. 36 (Sask. Q.B.) — referred to Lock v. Lock (1992), 39 R.F.L. (3d) 47, 99 Sask. R. 222, 1992 CarswellSask 47 (Sask. Q.B.) — considered Wiebe v. Wiebe (1988), 72 Sask. R. 17, 18 R.F.L. (3d) 408, 1988 CarswellSask 82 (Sask. Q.B.) — considered Statutes considered: Canadian Forces Superannuation Act, R.S.C. 1970, c. C-9 Generally — referred to Family Property Act, S.S. 1997, c. F-6.3 Generally — referred to Garnishment, Attachment and Pension Diversion Act, R.S.C. 1985, c. G-2 Generally — referred to Pt. II — referred to Pension Benefits Division Act, S.C. 1992, c. 46, Sched. II Generally — referred to s. 3 — considered ss. 4-8 — referred to s. 4(1) — considered s. 4(2) — considered s. 8(1) — considered s. 8(4) — considered 244 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

Pension Benefits Standards Act, 1985, R.S.C. 1985, c. 32 (2nd Supp.) Generally — referred to s. 25 — considered Public Service Superannuation Act, R.S.C. 1985, c. P-36 Generally — referred to Royal Canadian Mounted Police Superannuation Act, R.S.C. 1985, c. R-11 s. 9(7) — considered

APPLICATION by wife for order that federal Crown comply with 2011 order regarding husband’s pension; APPLICATION by Crown for order to vary or set aside court’s order insofar as it required payment directly to wife.

E.F. Anthony Merchant, Q.C., for Ruth Francis Ronald Miller, for Ronald Cook Marlon Miller, for Her Majesty the Queen, Attorney General of Canada and Royal Canadian Mounted Police

D.E.W. McIntyre J.:

1 The present applications arise out of a judgment after trial involving the equalization of the marital property of Ruth Francis (the petitioner) and Ronald Cook (the respondent) under The Family Property Act, SS 1997, c F-6.3. The major item in dispute was Mr. Cook’s pension. Mr. Cook was a member of the Royal Canadian Mounted Police [RCMP]. This was a second marriage for both. At the time of the trial, Mr. Cook was facing mandatory retirement in less than a year. 2 Ms. Francis’ position was that Mr. Cook’s pension ought to be divided on an if-and-when basis. At paras. 47 and 48 of the trial judgment ([Francis v. Cook] 2007 SKQB 136, 295 Sask. R. 36 (Sask. Q.B.)) the following order was made: 47 I make the following orders: (a) The petitioner is to pay to the respondent the sum of $52,069.45 representing equalization of the non-taxa- ble property after the offset on account of the severance entitlement, and the respondent shall have judgment accordingly; (b) The petitioner shall transfer to the respondent, from her RRSP funds, $37,435.40, together with any interest earned by the RRSP funds on the said sum from date of trial to date of transfer, to an eligible fund as designated by the respondent; R. v. Francis D.E.W. McIntyre J. 245

(c) The petitioner shall transfer to the respondent, from her LIRA, $14,129.06 together with any interest earned by the LIRA on the said sum from date of trial to date of transfer, to an eligible fund as designated by the respondent; (d) The petitioner shall have a vested interest in any pension benefit payable to the respondent under the terms of his pension plan. The monthly payment is to be calculated as follows: Number of months of the re- × .33 of the spondent’s participation in his Benefit pay- pension plan from commence- able ment of his participation in the pension plan to January 4, 2000 Total months of the respondent’s participation in his pension plan This sum is to be adjusted in accordance with any cost of living increase in the benefit. To protect the interest of the petitioner from any action of the respondent which may have the effect of defeating her interest, the respondent and the pension administrator are trustees of the petitioner’s share; (e) The administrator of the pension plan or the Govern- ment of Canada is directed to pay the petitioner’s share of the respondent’s pension benefits, when due and payable, direct to her. The terms of the order with respect to the pension are drawn from the orders made in Lock v. Lock, supra, and Fisher v. Fisher, [1983] 2 W.W.R. 602; (1983), 21 Sask. R. 235 (Q.B.). 48 It is assumed the petitioner will provide a copy of this order to the administrator of the respondent’s pension plan. In the event of any difficulty in the implementation or enforcement of any part of this order, including the petitioner’s pension entitlement, either party may apply to me, on 14 days’ notice, for any further order that may be necessary. In particular, if there is any issue with respect to payment direct to the petitioner of her portion of the respondent’s pension 246 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

benefit, application may be made for an alternate remedy including any adjustment for tax which may be required. 3 Ms. Francis did not make the equalization payment called for by the judgment, nor did she transfer RRSP funds or funds from her LIRA as called for by the judgment. Mr. Cook made application to have the amounts payable by Ms. Francis setoff against the amounts payable to Ms. Francis from his pension. The following order was made January 19, 2011: 1. IT IS HEREBY ORDERED AND ADJUDGD THAT the Re- spondent shall be entitled to receive the amount of $109, 012.00, payable to the Respondent by the Petitioner pursuant to the Judgment of McIntyre J., dated April 24th, 2007 out of the amounts payable to the Petitioner from the Respondent’s pension pursuant to the same judgment, and that the Respon- dent shall provide to the Petitioner quarterly statements indicating the monies collected and the remaining balance owing. 2. IT IS HEREBY ORDERED AND ADJUDGED THAT the costs payable to the Petitioner taxed on column 3 by the Re- spondent shall, upon taxation or upon the agreement of counsel, be applied to the aforesaid property equalization payment of $109,012.00 and that a statement indicating that the application of the solicitor client costs having been properly applied against the property equalization payment, be provided by the Respondent to the Petitioner. 3. IT IS HEREBY ORDERED AND ADJUDGED THAT the Royal Canadian Mounted Police shall, when they commence the payment of pension payments to Ronald Brian Cook, pursuant to the Judgment of McIntyre J., dated April 24th, 2007 calculate a deemed but unpaid payment to Ruth Elaine Fran- cis of 27.97% of the pension paid each month to Ronald Brian Cook and after the deemed cumulative payments plus the costs payable to the Petitioner total the sum of $109,012.00, thereafter the Royal Canadian Mounted Police shall pay directly to Ruth Elaine Francis 27.97% of any monthly pension amounts due to Ronald Brian Cook. 4. IT IS FURTHER ORDERED AND ADJUDGED THAT if there is difficulty in the implementation or enforcement of any part of this Order, including the Petitioner’s pension entitlement, either party may apply to the Honourable Mr. Justice McIntyre, on 14 days notice, for any further Order that may be necessary. R. v. Francis D.E.W. McIntyre J. 247

4 The Attorney General of Canada took the position this Court did not have jurisdiction to order the Federal Crown to make payment of pension benefits to Ms. Francis. This resulted in Ms. Francis bringing an application seeking an order that the Federal Crown comply with the order of April 12, 2011. 5 Her Majesty the Queen, the Attorney General of Canada, and the RCMP [Crown] take the positon that an order cannot be made which directs the RCMP to divert a portion of Mr. Cook’s pension benefits directly to Ms. Francis, on a monthly basis. They have made an application seeking to vary or set aside the court’s order insofar as it requires payment directly to Ms. Francis. It is suggested the order be amended stipu- lating that the pension be divided as provided for by the Pension Benefits Division Act, SC 1992, c P-46, Sch II [PBDA] in an amount determined by the court or as agreed by the parties. In the alternative, it suggests the order be varied to one of a financial support order and the parties could then apply for a diversion of the pension benefit pursuant to Part II of the Garnishment, Attachment and Pension Diversion Act, RSC 1985, c G-2 [GAPDA]. 6 In making its application, the Crown’s position may be summarized as follows: 7. RCMP pension payment are immune from seizure, attachment and execution under the Royal Canadian Mounted Police Superannuation Act, except as provided in Part II of the Garnishment, Attachment and Pension Diversion Act, and the Pension Benefits Division Act. 8. Pension benefits may only be diverted on a periodic basis under Part II of the Garnishment, Attachment and Pension Diversion Act and only where the order of payment is a financial support order. 9. Pension benefits may be divided under the provisions of the Pen- sion Benefits Division Act and paid by lump sum to the person entitled. 10. The Federal Crown is immune from orders of specific performance directing payment to third parties where this is no statutory authority allowing for same. 11. The Court has the inherent power to vary or set aside orders where the Court lacked jurisdiction. 248 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

7 It is useful to reproduce that portion of the judgment which dealt with Mr. Cook’s pension and concluded that an if-and-when division would be appropriate. 19 As of the date of application the respondent had 30 years of service. As at the date of trial he was entitled to retire on full pension but he has chosen to continue to work. He will face mandatory retirement at 58, in less than a year. 20 The petitioner’s position with respect to the pension is that it ought to be divided on an if-and-when basis and there ought not to be any exemption for the value of the respondent’s pension as of the date of marriage. It is argued that in terms of assets of any signifi- cance, the petitioner brought the family home into the marriage and the respondent had his pension. The petitioner says that as the family home is not entitled to an exemption it would be unfair and inequitable to grant the respondent an exemption with respect to his pension. 21 If the pension is not to be divided on an if-and-when basis the petitioner led expert evidence as to the value of the pension in a number of scenarios. The respondent did not call any expert evidence but did put forward the evidence of Peter Murphy, a senior policy analyst with the Compensation Centre of the RCMP. He was not proffered as an expert witness but was called for the purpose of explaining the calculation of pension benefits accrued during cohabitation subject to division under The Pension Benefits Division Act, S.C. 1992, c. P-46, Sch. II. The evidence was heard subject to objection. 22 In Schafer v. Shafer (1996), 25 R.F.L. (4th) 410 (Ont. Ct.J. (Gen. Div.)); appeal dismissed (1998), 37 R.F.L. (4th) 104 (Ont. C.A.), the court observed at para. 50: 50 There was some actuarial evidence led on the “value” which is determined by Pension Benefits Division Act. Mr. Woods stated, and I agree, that the Pension Benefits Division Act “value” is one which is generally totally un- reliable as an accurate valuation for specific individuals for purposes of the Family Law Act. Appealing though it may be to rely on a quick and easy solution to these difficulties of valuation, the Act remains merely a mechanism for transferring monies out of the plan. While the Pension Benefits Division Act provides for its own method of valuing pensions it does so for the federal government’s own specific purposes. These include maintaining the integrity of the plan, benefitting the members as a whole, but again, only with a view to a mechanism for transferring out certain monies. These methods, however, have noth- R. v. Francis D.E.W. McIntyre J. 249

ing to do with provincial laws relating to property rights and the disposition of those as between former spouses. In the Canada Gazette, Part II, Vol. 128, No. 21, the Regula- tions to the Pension Benefits Division Act are followed by a Regulatory Impact Analysis statement. Of interest is the following paragraph: ... It should be noted that the purpose of the Act and the regulations is to provide a mechanism for making payments out of the pension funds, not to fix the value of the pension as between spouses in property settlements made upon the breakdown of their relationship. 23 Mr. Murphy was not an expert witness. He could not give evidence as to the value of the respondent’s pension plan. The calculation under the Pension Benefits Division Act is not evidence as to the value of the respondent’s pension. Mr. Murphy’s evidence is admissible only insofar as it pertains to the calculation pursuant to the Pen- sion Benefits Division Act. The respondent led no evidence as to the value of the pension as of the date of marriage. 24 In Lock v. Lock, supra [(1992), 99 Sask R 222 (Sask QB)], the husband was a staff sergeant with the Royal Canadian Mounted Po- lice who had 31 years of service and was eligible to retire although he continued to work. In dealing with the husband’s pension the court observed at para. 26, 29, 32, 36-38, 43-46: [26] As the husband is eligible to retire immediately, his wife is entitled to insist on compensation equal to the benefits she would have received if her husband had elected to receive his pension benefits immediately. ... [29] It was also concluded that the value of pension assets shall be reduced to account for taxes and that evidence should be called as to the appropriate tax rates.... [32] As to the husband, I am valuing his pension as at October 23, 1991, as he was, by that date, entitled to receive full pension benefits. ... [36] There are precedents for capitalizing an unmatured pension and ordering a division of the value after making adjustments for contingencies and income tax. See Fisher, supra, additional reasons at (1983), 22 Sask. R. 238 (Q.B.); Topliss v. Topliss (1983), 33 R.F.L. (2d) 436, 23 250 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

Sask. R. 289 (Q.B.); and Mamer v. Mamer (1987), 63 Sask. R. 277 (Q.B.). This approach can never be entirely precise because no one can say that assumptions necessarily made by actuaries will always prove out. On the other hand, when a pension has matured, its value each month is known. [37] In Clarke v. Clarke, [1990] 2 S.C.R. 795, 101 N.S.R. (2d) 1, 275 A.P.R. 1, 28 R.F.L. (3d) 113, 73 D.L.R (4th) 1, 113 N.R 321, Madam Justice Wilson makes the point that the valuation of a matured pension being paid out on a monthly basis is relatively simple. In that case, the Su- preme Court of Canada restored the trial judgment which had directed that one-half the monthly benefits be paid to the wife on a continuing basis. [38] In this case, the wife asks for a cash payment and the balance in monthly payments, payable as a portion of the husband’s pension when he retires. I agree with this method of payment. The wife’s share of the husband’s monthly pension benefit when he elects to take his pension shall be calculated in accordance with the equations hereinafter set out. ... [43] As to the balance of the value of the husband’s pension I hereby declare that the wife is entitled to an interest in any benefit payable in future to the husband or his spouse if the husband dies, from his pension plan, a monthly payment to be calculated in accordance with the following equation: 49,107.40 × 2,805.74 = $577.70 238,500.00 (present monthly pension if husband retires in October of 1991) [44] This sum shall be adjusted upward in accordance with any future cost of living increase in the benefit. [45] In summary, the wife is to receive a cash payment of $27,545 from assets other than pension and severance (see para. [13]) together with a further cash payment of $19,000 for a total of $46,545. She may enter judgment for that amount. She will also receive a monthly sum for future pension benefits when her husband retires as here- inbefore set forth. R. v. Francis D.E.W. McIntyre J. 251

[46] In addition, in order to protect the interest of the wife from any dealings by the husband in relation to his pension which may have the effect of defeating her interest, there will be an order that the trustee of the plan or the Government of Canada be directed to pay the wife’s share of her husband’s pension benefits when due and payable direct to her, and which share shall be adjusted upward in accordance with any future cost of living increase in the benefit. 25 While the court in Lock, supra, used an actuarial present value to express the terms of the formula, this is not necessary. Jack Patter- son, Pension Division and Valuation, Family Lawyers’ Guide, 2d ed. (Aurora: Canada Law Book, 1995) reviews the if-and-when approach to dividing pensions in chapters 21 and 22. They set out one method of expressing the formula at p. 229 as follows: Number of months of participation in × Benefits paya- the pension plan during the period the ble parties cohabited within marriage Total months of participation in the 2 pension plan 26 In Ramsay v. Ramsay, [1994] 3 W.W.R. 562; (1994), 119 Sask. R. 81 (Q.B.), the husband was in receipt of his pension. He wanted to split the income stream while the wife wanted a lump sum division. The court observed at para. 26: 26 The better way to share the pension benefits would be to allocate to the wife one-half of the actual monthly payments (see Clarke v. Clarke, [1990] 2 S.C.R. 795). This would avoid the artificiality inherent in the capitalized sum calculation arising from the use of assumptions. Re- lated to this is the income tax factor. In paying out the capitalized amount a deduction must be made for income tax. But if the wife receives her one-half of the gross instalments, she will pay tax at her own personal rate. The monthly payments are precise sums. As well, if the wife shares the instalments she will benefit from future ad hoc increases to the pension which are not reflected in the capitalized sum. These payments are made voluntarily by the employer to counter growth in the cost of living. The court went on to address the pros and cons of the two options in the context of the circumstances of the parties and concluded that in the circumstances a lump sum division would work best for the parties. 252 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

27 The calculation under the Pension Benefits Division Act uses a period subject to division which is from the date of marriage to date of petition. The calculation results in a maximum amount that can be transferred to the petitioner of $70,175.73. 28 The actuarial valuations advanced by the petitioner address a number of scenarios. Based upon pension accrued from commencement of his employment to an assumed termination as of the date of petition resulted in the following calculations: Actuarial Present Value of Pension Accrued to January 4, 2000, Before Tax Retirement Age Valuation Date 50, Earliest Re- 55, Selected 58, Mandatory tirement Age, Age Unreduced Retirement Age, Unreduced Pen- Pension $ Unreduced Pen- sion $ sion $ January 4, 2000 599, 673 438,824 355,624 September 5, N/A 625.198 541,128 2005 29 In the case of pension accrued from commencement of employment to date of trial the calculation was: Actuarial Present Value of Pension Accrued to September 19, 2005, Before Tax 55.7, Earliest Age for Un- 58, Mandatory Retirement Age reduced Pension $ Unreduced Pension $ 936,572 812,501 30 The actuary estimated the respondent’s pension income at retirement would be $50,000.00 per year with an average income tax rate of 24%. ... 34 The first question is whether to divide the pension on an if-and- when basis or to order the transfer of a lump sum. In the text by E. Diane Pask and Cheryl A. Hass, Division of Pensions looseleaf (To- ronto: Carswell, 1990) at p. VII-21, the authors identify various factors which have been considered by courts in determining whether or not an if-and-when award ought to be made. Those factors include the ages of the parties, the length of the marriage, the number of years to retirement and the value of the plan relative to the value of other family property. Other factors that have been considered include the desire for an equal sharing of the risk, the existence of valu- R. v. Francis D.E.W. McIntyre J. 253

ation problems, or the relationship between the length of the marriage and the length of the contributions. There are risks associated with an if-and-when distribution. One such risk is if the member pre- deceases the spouse. If the respondent were to predecease the petitioner, it may be her benefits will cease. There was no evidence in this regard. Another negative feature is that an if- and-when approach maintains an economic tie between spouses. 35 While the length of the marriage at hand was of moderate duration, the respondent is entitled to retire with full pension and in fact, faces mandatory retirement in less than a year. Without deciding on the appropriate actuarial valuation of the pension, the evidence indicates the maximum the respondent could transfer to the petitioner under the Pension Benefits Division Act is $70,000.00 which is likely to be insufficient to satisfy a division of the pension and the respondent appears to have little other assets available to him. 36 The petitioner, in seeking an if-and-when approach, must be assumed to understand the risks and accept them. In the circumstances, the if-and-when approach would be appropriate to distribute the respondent’s pension entitlement. I note once again the Court has no evidence as to the value of the respondent’s pension as of the date of marriage. In the circumstances the if-and-when approach is the only means available which will reasonably reflect the true value of the pension and in particular the value of the pension as of the date of marriage. 8 The judgment goes on to conclude that to exempt the full value of Mr. Cook’s pension, as of the date of marriage, from distribution would be unfair and inequitable given that he would share in the full value of the family home, without exemption. It was determined it would be fair and equitable for Ms. Francis to receive one-third of the pension benefit payable to Mr. Cook. 9 The judgment concludes: 42 In seeking a division of the respondent’s pension the petitioner had argued it could be calculated as of either the date of separation, date of application or date of trial. The Act requires that family property be valued as of either date of petition or date of trial. The date of petition value is appropriate here. The respondent made contributions after the date of petition and there is no basis, in the circumstances, for the petitioner to share in any benefit that may accrue af- 254 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

ter date of petition. The formula to be used for the if-and- when division of the pension will be: Number of months of the respondent’s × .33 of the Ben- participation in his pension plan from efit payable commencement of his participation in the pension plan to January 4, 2000 Total months of the respondent’s participation in his pension plan 43 The pension benefit to be received by the respondent is subject to tax and this must be factored into any division of the pension benefit. If the pension can be divided at source and paid directly to the petitioner and the respondent then each will pay tax on the funds that they receive and the tax implication is satisfied. If a pension benefit cannot be paid directly to the petitioner then there will need to be an adjustment for tax. This will be addressed in the order to be made. 10 The Crown describes the legislative framework around Mr. Cook’s pension as follows in its brief: 22. Subsection 9(7) of the Royal Canadian Mounted Police Superan- nuation Act exempts RCMP pension payments from attachment or seizure and provides as follows: 9(7) Subject to Part II of the Garnishment, Attachment and Pension Diversion Act and the Pension Benefits Divi- sion Act, (a) a benefit under this Part or Part III is not capable of being assigned, charged, anticipated or given as security and any transaction that purports to assign, charge, anticipate or give as security any such benefit is void; (b) a benefit to which a contributor, survivor or child is entitled under this Part or Part III is not capable of being surrendered or commuted during the lifetime of that person except under section 12.1 or subsection 18(2) and any other transaction that purports to so surrender or commute any such benefit is null and void; and (c) a benefit under this Part or Part III is exempt from attachment, seizure and execution, either at law or in equity. R. v. Francis D.E.W. McIntyre J. 255

23. To facilitate division of pension benefits and diversion of pension benefits one must look to federal legislation. 24. Generally, under GAPDA, salary and remuneration, as those terms are defined in the legislation, may be garnished. However, in respect of pension diversion, specific restrictions exist. Part II of GAPDA applies to divert pension benefits. Specifically, in accordance with section 31 of GAPDA, pension benefits identified in the Schedule may only be diverted where there is a financial support order. 25. Subsection 33(1) of the GAPDA provides as follows: Subject to this Part and the regulations, where (a) any court in Canada of competent jurisdiction has, either before or after January 1, 1984, (i) made a financial support order re- quiring a person to pay an amount to a child or other person, or (ii) made an order permitting the enforcement of a financial support order described in subparagraph (i), and the order referred to in subparagraph (i) or (ii) is valid and subsisting, and (b) the person against whom the financial support order has been made is a recipient, a person named in the financial support order may make an application to the Minister for diversion of a pension benefit payable to the recipient. 26. Where the nature of the order in the marital breakdown is not one of financial support but rather division of matrimonial property, pension benefits are to be divided pursuant to the PBDA. The PBDA allows an applicant to receive a one-time lump sum payment of the actuarial present value of pension benefits earned during the marriage or other periods specified in a court order. Subsection 4(2) of the PBDA 27. The value may be determine as a percentage up to a maximum of 50% or an agreed upon lump sum that does not exceed the maximum... 256 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

11 Counsel in its brief refers to s. 8(1) and 8(4) of the PBDA. Pertinent provisions of the PBDA include: 3 In the event of any inconsistency between this Act and the regulations made under this Act and any other law, this Act and the regulations shall prevail to the extent of the inconsistency. 4 (1) A member of a pension plan or a spouse, former spouse or former common-law partner of a member may, in the circumstances described in subsection (2), apply to the Minister to divide the member’s pension benefits between the member and the spouse, former spouse or former common-law partner. (2) The circumstances in which an application may be made are: (a) where a court in Canada of competent jurisdiction, in proceedings in relation to divorce, annulment of marriage or separation, makes an order that provides for the pension benefits to be divided between the member and the spouse, former spouse or former common- law partner; or (b) where the member and the spouse, former spouse or former common-law partner are living separate and apart, having lived separate and apart for a period of at least one year and, either before or after they commenced to live separate and apart, (i) a court in Canada of competent jurisdiction makes an order that provides for the pension benefits to be divided between them, or (ii) the member and the spouse, former spouse or former common-law partner have entered into a written agreement that provides for the pension benefits to be divided between them. ... 8 (1) A division of pension benefits shall be effected by (a) subject to subsection (4), transferring an amount representing fifty per cent of the value of the pension benefits that have accrued to the member of the pension plan during the period subject to division, as determined in accordance with the regulations, to the spouse, former spouse or former common-law partner, R. v. Francis D.E.W. McIntyre J. 257

if that pension plan is a retirement compensation arrangement, or, in any other case, to (i) a pension plan selected by the spouse, former spouse or former common-law partner that is registered under the Income Tax Act, if that pension plan so permits, (ii) a retirement savings plan or fund for the spouse, former spouse or former common-law partner that is of the prescribed kind, or (iii) a financial institution authorized to sell immediate or deferred life annuities of the prescribed kind, for the purchase from that financial institution of such an annuity for the spouse, former spouse or former common-law partner; and (b) adjusting, in accordance with the regulations, the pension benefits that have accrued to the member of the pension plan under that pension plan, notwithstanding the provisions of that pension plan or the Act under which it is established or by which it is provided. ... (4) If the court order or agreement provides, or the interested parties agree, that the terms of the court order or agreement shall be satisfied by the payment of a lump sum amount and that lump sum amount, together with such interest as may be required by the regulations, is less than the amount that would otherwise be transferred in accordance with paragraph (1)(a), that lump sum amount, together with that interest, shall be transferred in accordance with that paragraph in lieu of the greater amount. 12 The Supreme Court of Canada in Clarke v. Clarke, [1990] 2 S.C.R. 795 (S.C.C.) (QL) [Clarke] had occasion to deal with an if-and-when division of a pension. In that instance, the pensioner’s spouse had been employed by the Royal Canadian Airforce and on separation was in receipt of a monthly annuity pursuant to the Canadian Forces Superannua- tion Act, RSC 1970, c C-9. The trial judge found the pension to be matrimonial property and ordered that one-half of the monthly pension payments received by Mr. Clarke should be paid to Ms. Clarke, after adjusting the amount to be received by 15% for income tax. 258 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

13 At para. 68 Wilson J., speaking for the court, began her review of issues which include the if-and-when division. 68 The Court of Appeal in this case placed great reliance on the legislative prohibitions against alienation in finding that the respondent’s pension benefits could not be characterized as matrimonial assets. This prohibition is found in s. 8(6) of the Canadian Forces Superannuation Act, as amended by the Garnishment, Attachment and Pension Diversion Act, S.C. 1980-81-82-83, c. 100, s. 41, and reads: 8 ... (6) Except as provided by Part II of the Garnishment, At- tachment and Pension Diversion Act, amounts payable under this Part are not capable of being assigned, charged, attached, anticipated or given as security and any transaction purporting to assign, charge, attach, anticipate or give as security any such amount is void. The only relevant exception provided for by Part II of the Garnish- ment, Attachment and Pension Diversion Act is s. 22 and it deals with support orders: 22.(1) In this Part, ... “financial support order” means, subject to subsection (2), an order or judgment for maintenance, alimony or support (including an order or judgment for arrears of payments) made pursuant to the Divorce Act or pursuant to the law of a province relating to family financial support; 69 In oral argument before this Court the respondent submitted that this restriction on alienation prevents the courts from diverting or attaching periodic pension payments in any manner. By implication, therefore, the pension cannot be matrimonial property. The respondent further submitted that the legislature made it quite clear that the strict prohibition applied to property division since it amended the Act to make a specific exception for maintenance. As I understand the respondent’s submissions, he argues that not only are non-assignable pensions not property, but it is constitutionally beyond the power of the province to deal with pensions that arise out of employment in the federal sphere. 70 The appellant for her part submits that the restrictions on alienation were never intended to apply in the matrimonial context and are not a bar to characterizing pensions as matrimonial property. In any event, the appellant submits that the type of order made by the trial R. v. Francis D.E.W. McIntyre J. 259

judge in this case or the type of order where a trust is imposed on the recipient spouse by the court for the benefit of the non-recipient spouse avoids any conflict between the two Acts because the pension administration is not interfered with in those circumstances and the actual pension payments are not being attached. 71 Again I find myself in agreement with the appellant. In my view, s. 8(6) does not place any concrete legal barriers in the way of a finding that pensions are property and therefore matrimonial assets. The first branch of the respondent’s argument, that non-assignable pensions are not property, has already been touched upon. In my opinion, while there may not be a market for such pensions, they have a value to the named recipient (evidenced by the abundance of litigation on the issue) even if they cannot be transferred to others. They do not cease to be assets on that account. Indeed, at common law all choses in action were unassignable but they were nonetheless recognized as property. I agree with the comments of Dea J. in McAlister that, if anything, a legislative prohibition against alienation is a rec- ognition of the value of such rights and of their essential nature as “property”. 72 I turn now to the second branch of the respondent’s argument, namely that the province may not constitutionally deal with the pension as a matrimonial asset. The reason for this, it is said, is that if the pension is treated as a matrimonial asset and subject to division, a conflict will arise between the Matrimonial Property Act and the Ca- nadian Forces Superannuation Act. In order to avoid this conflict, the respondent submits, the provincial legislation should be read as not including pensions within its definition of matrimonial assets. I do not agree. 14 After a review of the approach to be taken in determining questions of paramountcy Wilson J. continued: 76 Having found that both Parliament and the Nova Scotia legislature were acting within the confines of their respective jurisdictions in enacting the provisions under review, the question becomes whether by virtue of the operation of the doctrine of paramountcy the federal provision should prevail. The test to be used in determining whether a conflict exists between the provisions was identified by Dickson J. (as he then was) in Multiple Access Ltd. v. McCutcheon, [1982] 2 S.C.R. 161, at p. 191: In principle, there would seem to be no good reasons to speak of paramountcy and preclusion except where there is actual conflict in operation as where one enactment says “yes” and the other says “no”; “the same citizens are 260 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

being told to do inconsistent things”; compliance with one is defiance of the other. In that case, this Court found that no inconsistency or conflict existed where both the federal and provincial legislatures had enacted sub- stantially similar measures dealing with the problem of insider trading. 77 Is there conflict between a provision prohibiting the attachment of pension payments and a provision including such payments as property subject to division between the spouses? If such payments are matrimonial assets is the judge being told to do inconsistent things — to protect the payments against attachment for the benefit of the pension recipient and to deprive him of part of the payments for the benefit of his or her spouse? Would compliance with the Matrimonial Property Act involve defiance of the Canadian Forces Superannua- tion Act? If the answer to these questions is yes, then there is conflict under the test in Multiple Access Ltd. and the provincial legislation would be inoperative to the extent of the inconsistency. 78 The appellant submits that the answer to these questions is no. She submits first and foremost that the restrictions on alienation were never intended to apply in the matrimonial context because, in the case of a married recipient, the pension was intended to provide security for the recipient’s spouse as well as for the recipient following the recipient’s retirement. Indeed, she submits, in many cases the recipient’s spouse will have earned an interest in the pension during the period of the marriage by her contribution to it. It cannot have been the intention of Parliament to foreclose the spouse from earning such an interest or from receiving the benefit of it when the marriage comes to an end. 79 I believe that support for this submission of the appellant is to be found in s. 22(1) of the Garnishment, Attachment and Pension Diver- sion Act. That section provides the only legislative exception to the prohibition against attachment, etc. It provides that where a court has ordered support or maintenance in favour of a non-recipient spouse, pension benefits may be diverted so that such an order may be ade- quately enforced. It seems to me that by specifically providing a mechanism by which such orders could be enforced against a pension, Parliament has unequivocally demonstrated an intention to ensure that the financial needs of a recipient’s family were not ad- versely affected by the prohibition in s. 8(6). 80 Moreover, while it was necessary for Parliament to enact such provision for the protection of non-recipient spouses in respect of orders for support or maintenance, it was not necessary for it to add R. v. Francis D.E.W. McIntyre J. 261

anything with respect to orders for the division of matrimonial property. I say this for three reasons which relate directly to the absence of operational conflict between the federal and provincial Acts. 81 The first is that the language of s. 8(6) does not capture what is done when a division of assets is ordered by a court. The section specifically lists the prohibited acts. It does not include asset division by a court pursuant to matrimonial property legislation. 82 Second, it is clear that when a court does order a division of assets, equal or otherwise, it is not necessarily dealing with the assets in specie. The process of ordering a division of assets is in the nature of an accounting. The court does not order that the pension be divided, but rather that each partner to the marriage should share in the value of the assets accumulated during the union. As Cory J. remarked in Rawluk v. Rawluk, [1990] 1 S.C.R. 70, at p. 92: The distinction between a share in ownership and a share in property value through an equalizing transfer of money is more than an exercise in judicial formalism. This distinction ... reflects conceptual and practical differences between ownership and equalization. Ownership encom- passes far more than a mere share in the value of property. It includes additional legal rights, elements of control and increased legal responsibilities. In addition, it may well provide psychological benefits derived from pride of ownership. Where the property at issue is one to which only one spouse has contributed, it is appropriate that the other spouse receive only an equalizing transfer of money. 83 When faced with possible restrictions on the transfer of a pension to a third party, several courts have attempted to avoid any conflict by imposing a trust in favour of the non-recipient spouse upon the benefits of the pension in the hands of the named recipient. The imposition of a trust as opposed to a court order for payment is more advantageous to the non-recipient spouse for enforcement purposes and ensures that the named recipient does not prejudice his or her partner’s interest. This method of distribution was employed in George, supra, under a legislative scheme which did not specify that pensions were matrimonial assets and also in Rutherford where the relevant Act specified that pensions were family assets. Appellate courts accepted the propriety of the trust approach in both Herchuk and Hierlihy, supra. ... 262 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

86 In my view the courts have been overly cautious on this issue. The imposition of a trust is not in my opinion necessary to avoid conflict with the federal legislation for the reasons I have already given. As a remedy, however, it may prove to be the most effective way of ensuring that a non-recipient spouse’s interest in the value of the pension is protected. 87 Third, to the extent that a court may in fact deal with the pension in specie, it may only do so when the non-recipient spouse has acquired a beneficial interest in it. Prior to the enactment of the various statutory regimes family assets were dealt with at common law on the basis of the doctrine of the presumption of advancement and the equitable doctrines of resulting and constructive trusts. These doctrines proved inadequate in redressing many of the inequities that arose in the context of family property. The provincial legislatures responded by enacting various statutory schemes to remedy the problem. A typical feature of these schemes is the deeming of most property items to be matrimonial assets. With the exception of some statutorily excluded items the value of real and personal property has been decreed to be subject to equal sharing by both spouses. 88 For all of the above reasons I find that no conflict exists between the federal and provincial legislation within the meaning of Multiple Access Ltd. Neither the order made in this case nor the imposition of a trust results, in my view, in conflict for the reasons given by Seaton J.A. No attempt is being made to alienate the pension qua pension. The recipient spouse is simply required to pay a certain amount to the non-recipient spouse each month after maturation of the pension. 15 It is worth noting the court’s observation with respect to methods of dividing a pension at para. 90: 90 Courts, generally speaking, employ two methods of dividing pensions. The first is to award lump sum compensation to the non-recipient spouse either by way of a money payment or a transfer of assets. The second is to preserve the jurisdiction of the court until the pension matures either by ordering periodic payments to be made to the non-recipient spouse or impressing the pension with a trust. When selecting the appropriate method of distribution it is important to bear in mind that the primary goal of the legislation is to effect the adjustment of property in an equitable manner. Of equal importance in some cases is the desire to sever the financial ties between the parties. These two goals may occasionally come into conflict. A fair distribution in some cases may require the parties to wait until the pension matures before it is subject to division. This will necessitate a continuing financial association between the parties. Capitalizing the R. v. Francis D.E.W. McIntyre J. 263

pension for an immediate accounting may succeed in severing the financial ties between the parties but result in hardship to one of them if, for example, there are no other substantial assets to be divided. The preferable result in any given case will obviously depend upon a number of factors and it is my view that appellate courts should not lightly interfere with the discretion of the trial judge in this regard. 16 The above referenced authorities make it clear that any mechanism which may exist in pension legislation to “value” a member’s pension does not determine value for the purposes of The Family Property Act, and any formula in pension legislation for determining the amount the pension plan can transfer to the member’s spouse does not limit the court’s ability under The Family Property Act to determine the amount a spouse may have to pay to equalize the value of a member’s pension entitlement. This is not to say that pension legislation which contains a mechanism to value and effect a transfer to a member’s spouse is not useful. For some, it is a practical mechanism to put a value on pension entitlement and to affect a transfer of up to one-half of that value. It is of value in that spouses can utilize these legislative provisions without incurring the cost of an actuary to value a spouse’s pension entitlement. 17 As the Supreme Court of Canada in Clarke has concluded, any restrictions on the transfer of a pension to a third party which may exist as a result of legislation does not limit the court’s jurisdiction to order periodic payments to be made by a spouse in receipt of a pension benefit to a non-recipient spouse and to constitute the spouse in receipt of the pension benefit a trustee. The order in this instance constituted both Mr. Cook and the pension administrator, as trustees of Ms. Francis’ share. This was the kind of order made in Lock v. Lock (1992), 99 Sask. R. 222 (Sask. Q.B.) [Lock]. The principle concern here is whether it was appropriate to make the pension administrator a trustee. 18 Jack Patterson in Pension Division and Valuation, Family Lawyers’ Guide, 2d ed (Aurora: Canada Law Book, 1995) [Pension Division and Valuation] deals with the if-and-when approach to dealing with a pension as family property. At pages 30-32 the author comments on the development of the if-and-when approach as follows: DEVELOPMENT OF THE “IF-AND-WHEN”APPROACH Pensions first became recognized as family property in legislation in the western provinces. Rutherford v. Rutherford was an early case under the B.C. legislation. Originally, no attempt was made to value the pension benefits as of the valuation date. Instead, part of the member’s pension benefits 264 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

was allocated to the spouse, once the member retired or otherwise ceased to be employed. This is referred to as the “if-and-when” approach. ... DIVISION OF PENSION CREDITS AT SOURCE Walsh J. [Marsham v Marsham (1987), 38 DLR (4th) 481 at 500 (Ont HC)] also points out that ... legislative action is needed at both the federal and provincial levels permitting a division of pension credits, either in accordance with the terms of a judgment or of a domestic contract, at no cost or tax disad- vantage to either spouse in such a manner that each spouse’s interest and rights in the pension plan are protected and completely independent of the other spouse. Although Marsham imposed a trust on the plan members, the pre- ferred method, had it been available, would have been to order a division of pension credits at the source. However, the Public Service Superannuation Act (“PSSA”), which was applicable to this case, made no such provision for credit-splitting at the source at that time. While there has been some legislative action in accommodating family law problems and in introducing non-member spouse privileges to transfer rights to an RRSP, it still requires strict caution and careful negotiation with the plan administrator, in many cases, to exercise this option without the non-members spouse incurring penalties. The subject of a lump sum transfer of rights is covered in Chapter 23. 19 The if-and-when approach is dealt with in more detail in Chapters 21 and 22. The author notes at pages 227-228: GENERAL DESCRIPTION It is not always feasible to attempt to divide family property by an exchange of assets on the valuation date as stated in Chapter 4. There simply may not be enough liquid assets to accomplish this objective. In this case, we are forced to split the pension itself in order to meet the equalization requirements. Section 9(1)(d) of the Ontario Family Law Act, provides the legislative framework for the “if-and-when” concept: 9.-(1) In an application under section 7, the court may order, R. v. Francis D.E.W. McIntyre J. 265

..... (d) that, if appropriate to satisfy an obligation imposed by the order, (i) property be transferred to or in trust for or vested in a spouse, whether absolutely, for life or for a term of years, or (ii) any property be portioned or sold. Marsham v. Marsham, referred to in Chapter 4, is illustrative of the use of the if-and-when approach where a trust could be set up to protect the rights of the member’s spouse. The if-and-when approach, or division of pension proceeds, requires that once the plan member reaches retirement or leaves active service for any other reason, the spouse is entitled to a part of the pension benefits payable to the plan member. ... TRUST ARRANGEMENTS FOR ADMINISTRATIVE PURPOSES In addition to the three formulae, there are three methods of handing the administration of the arrangement: (a) plan member holds spouse’s share in trust; (b) pension plan administrator holds spouse’s share in trust; or (c) a combination of above two methods which is useful when the administrator is limited by s. 56 of the R.R.O., Reg, 909, of the Pension Benefits Act (“OPBA”) to 50% of the pension, assuming termination of employment at the valuation date. The balance can be provided for by a trust imposed on the plan member. PLAN MEMBER HOLDS SPOUSE’S SHARE IN TRUST This is the historical method of dealing with the if-and-when method. One early Canadian case was Rutherford v. Rutherford and there were still earlier cases outside Canada. Marsham v. Marsham is an example of the use of this approach. 266 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

PENSION ADMINISTRTOR HOLDS SPOUSE’S SHARE IN TRUST This method, a much later development, depended on reform in pension legislation providing the administrator with flexibility in accepting the responsibility for holding the spouse’s share in trust. This method of dividing pension payments at source has the advantage of protecting the spouse if the member moves to a foreign coun- try and might otherwise refuse to pay a share of the pension to the former spouse. It has the advantage of allowing possible source reporting of each spouse’s share of the pension on separate T4s. 20 At page 47 the author refers to the Pension Benefit Standards Act, 1985, RSC 1985, c 32 (2d Supp) [PBSA] as an example of legislation which appears to facilitate designating a pension plan administrator as a trustee for the recipient spouse: The federal PBSA provides the maximum flexibility in this regard. Section 25 of the PBSA requires the plan administrator to: (a) recognize a court order or a domestic assignment arising from provincial property law; (b) on receipt of assignment by the participating member of all or part of the pension to the spouse, effective as of the date of separation, to treat the spouse as having been a plan member who ceased such membership on the effective date of assignment; and (c) to so advise the spouse. With no further instructions from such spouse, the implementation or settlement of the family property would then include splitting pension payments at source and, presumably, source reporting for tax purposes by payee. 21 In Wiebe v. Wiebe (1988), 72 Sask. R. 17 (Sask. Q.B.) [Wiebe] the husband had a pension pursuant to the Public Service Superannuation Act, RSC 1985, c P-36 [PSSA]. The court, on the one hand, determined the capitalized value of the husband’s pension and determined an appropriate cash payment to equalize the value. The court also turned its mind to alternate methods of distributing the value of the pension plan. The court observed beginning at para 15: 15 ...This particular pension has provisions that make vesting it at source very difficult. R. v. Francis D.E.W. McIntyre J. 267

16 In Section 10(10) of The Public Service Superannuation Act, R.S.C. 1985, c. P-36, reads as follows: Except as provided by Part II of the Garnishment, Attach- ment and Pension Diversion Act, amounts payable under this Part are not capable of being assigned, charged, attached, anticipated or given as security and any transaction purporting to assign, charge, attach, anticipate or give as security any of those amounts is void. 22 The court then referred to the GAPDA and continued 16 ... The above statutes allow for the attachment of pension benefits to satisfy spousal or child support orders. The witness Evan William Smith gave evidence on this point. He is in charge of survivor benefits for the Public Service Superannuation Act. His evidence was that the administrative branch of the Public Service Superannuation Act would not honour a judgment dividing a pension benefit at source pursuant to the provisions of The Matrimonial Property Act judgment. His evidence is that he will not divide the pension and send one cheque to the petitioner and one cheque to the respondent. He interprets s. 10(1) of the Public Service Superannuation Act to mean that the respondent’s pension may not be garnisheed or attached by court order pursuant to the provisions of The Matrimonial Property Act division. This point does not seem to have been directly judicially considered. The following cases have some bearing on this point. Greenwood v. Greenwood, U.F.C. 394, 12 Sask. R. at 287; MacPhail v. MacPhail, 75 N.S.R. (2d) at 205; Britney v. Britney, 13 R.F.L. (3d) at 11; Lavigne v. Robern; Attorney General of Canada (intervenor), 12 C.P.C. (2d) at 87. 17 In the Greenwood case, supra, Madam Justice Carter vested 40% of the respondent’s pension in the petitioner as tenants in common when received. This was a Canadian National Railway pension pursuant to the Public Service Superannuation Act. The respondent started to collect his pension and the C.N.R. refused to honour Judge Carter’s judgment. Correspondence from the assistant regional counsel for the Canadian National Railway advised counsel that “... The C.N.R. was not bound by the court order and would take no steps to vest the pension in the wife or recognize the court order.” A further application was made to the court pursuant to Rule 344 of the 268 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

Queen’s Bench Court Act. The court’s response was “the respondent was bound by the order and must pay or face the consequences”. 18 The MacPhail case dealt with the respondent in receipt of an armed services pension. The court found that the petitioner was entitled to half of the respondent’s monthly pension benefits and they should be paid directly to her. The judgment does not show what success if any, the petitioner had in directly attaching the respondent’s pensions benefits at source. 19 In Britney v. Britney, supra, the respondent’s armed forces pension was divided as matrimonial property. The respondent did not pay as required. The pension payments were then regarded by the court as maintenance so that they could be collected by way of garnishment. There may be some problems with treating pension payments as maintenance. If a petitioner dies before the respondent, her estate will probably not be able to collect the balance of the petitioner’s matrimonial property entitlements because maintenance ter- minates on the death of the recipient. The petitioner or her estate is entitled to the monthly pension payments as long as they are received by the respondent. The court should not have to resort to a fiction so as to enable the petitioner to collect her lawful share of the respondent’s pension. 20 In Lavigne v. Robern et al, supra, “Judgment had been obtained against the defendant and on his examination as a judgment debtor it was established that he had made himself ‘judgment proof’”. A receiver was appointed to receive the defendant’s pension benefits on the termination of his employment. In this case, the cause of action was for breach of fiduciary duty and the trial judge’s findings were akin to a finding of fraud. This case deals with the receivers and when they should be appointed. It is not clear that a receiver could be appointed to collect a matrimonial property judgment. Section 10(10) of the Public Service Superannuation Act does not facilitate the division of a pension at source. The respondent could escape the consequences of the judgment by moving to some foreign jurisdiction. Pensions are matrimonial property and in most provinces are divisible. In many situations they are one of the principal assets of the parties. The pension assets should be divisible at source and the pension asset should be attachable at source. 23 The court concluded it would be appropriate to give the husband the option to either pay out the value which had been placed on the wife’s share of the husband’s pension or alternatively to pay her half of his pension entitlement monthly as he received it. In this event, the husband was made a trustee for the wife’s share of his pension. R. v. Francis D.E.W. McIntyre J. 269

24 Drawing my review of the above material dealing with an if-and- when division of a pension, I would observe: a. The Family Property Act does provide the necessary legislative framework for the “if-and-when concept” in s. 26(2): 26(2) In order to effect a distribution pursuant to this Part, the court may make any order that it considers fit in the circumstances whether or not it affects title to family property. (3) Without limiting the generality of subsection (2), the court may do any of the following: (a) order a spouse to pay money in a lump sum or over a specified period, with or without interest, or vest an interest in any family property in the other spouse; (b) order a spouse to pay to the other spouse a sum equivalent to the value of the other spouse’s interest in any family property as determined by the court; ... (e) order the partition or division of family property; ... (h) order that a spouse create a trust pursuant to which family property would be held in trust for a spouse pursuant to any terms and conditions that the court thinks fit; (k) declare that a spouse has an interest in family property notwithstanding that the spouse in whose favour the order is made had no prior legal or equitable interest in the family property; ... (r) make an order with respect to any matter or give any direction that, in the opinion of the court, is necessary. b. The if-and-when approach, involving the division of the pension benefits payable to the plan member can be achieved by either: i. Designating the plan member as a trustee who receives and holds the non-member spouse’s share in trust, paying it to the spouse as and when the plan member receives it or; 270 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

ii. The pension plan administrator holds the non-member spouse’s share in trust and pays the non-member spouse’s share directly to that spouse; c. Jack Patterson, in Pension Division and Valuation, was of the view there needs to be legislative provision for the plan administrator to accept the responsibility of holding the non-member spouse’s share in trust and cites the PBSA as an example; d. Clarke dealt with a circumstance where the trial judge ordered the plan member to pay to his spouse one half of the pension payment he received. While no trust had been imposed in the circumstances before the court, the court did observe that in various other cases the spouse in receipt of a pension had been declared a trustee of the other spouse’s interest in the benefits received by the member spouse. The court was of the view the imposition of a trust was not necessary although “it may prove to be the most effective way of ensuring that a non-recipient spouse’s interest in the value of the pension is protected” (para 86). The court also observed at para. 82: “...when a court does order a division of assets, equal or otherwise, it is not necessarily dealing with the assets in specie. The process of ordering a division of assets is in the nature of an accounting. The court does not order that the pension be divided, but rather that each partner to the marriage should share in the value of the assets accumulated during the union”. At para. 87 the court stated: “...to the extent that a court may in fact deal with the pension in specie, it may only do so when the non-recipient spouse has acquired a beneficial interest in it”. As well, at para. 88: “Neither the order made in this case nor the imposition of a trust results, in my view, in conflict for the reasons given by Seaton J.A. No attempt is being made to alienate the pension qua pension. The recipient spouse is simply required to pay a certain amount to the non-recipient spouse each month after maturation of the pension”. e. The court in Wiebe observed that the PSSA and GAPDA made vesting the pension at source “very difficult” and the question of whether the court could order a pension plan administrator to divide a pension benefit at source and send a cheque to each of the R. v. Francis D.E.W. McIntyre J. 271

member and the non-member spouse “does not seem to have been directly judicially considered”. 25 The PBDA provides in ss. 4-8 for a lump sum division of benefits. The PBDA does not contain a provision similar to s. 25 of the PBSA. Section 9(7) of the Royal Canadian Mounted Police Superannuation Act, RSC 1985, c R-11 provides: 9(7) Subject to Part II of the Garnishment, Attachment and Pension Diversion Act and to the Pension Benefits Division Act, (a) a benefit under this Part or Part III is not capable of being assigned, charged, anticipated or given as security and any transaction that purports to assign, charge, anticipate or give as security any such benefit is void; (b) a benefit to which a contributor, survivor or child is entitled under this Part or Part III is not capable of being surrendered or commuted during the lifetime of that person except under section 12.1 or subsection 18(2) and any other transaction that purports to so surrender or commute any such benefit is null and void; and (c) a benefit under this Part or Part III is exempt from attachment, seizure and execution, either at law or in equity. 26 The order which was made in this instance designated the respondent, Mr. Cook, and the pension administrator as trustees of the petitioner’s share of the respondent’s monthly pension benefits. The terms of the order were drawn from the orders made by this Court in Lock and Fisher v. Fisher (1983), 21 Sask. R. 235 (Sask. Q.B.) [Fisher]. 27 In Lock, the husband was a staff sergeant in the RCMP and valuation and division of his pension was one of the issues before the court. The court ordered the trustee of the RCMP pension plan or the Government of Canada to pay the wife’s share of her husband’s pension benefits directly to her. The Federal Crown was not before the court and there was no discussion as to the court’s jurisdiction to make the order in question. 28 In Fisher, the husband was a member of the Regina Police Service governed by the Regina Police Superannuation and Benefits Plan and in that instance the husband was given the choice of either making a lump sum payment to his spouse or alternatively to pay her a monthly amount in respect of her share of his pension. The order declared the wife to have 272 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

a vested one-half interest in the pension benefit and the husband was designated a trustee of that interest on behalf of the wife. 29 In my view, it is appropriate and within the court’s jurisdiction to order that under The Family Property Act Ms. Francis has an interest in any pension benefits payable to Mr. Cook, to the extent of the formula set out. It is appropriate to order Mr. Cook to pay to Ms. Francis her share of his monthly pension benefit as-and-when he is in receipt of the same and to designate Mr. Cook as a trustee to receive on her behalf her share of his monthly pension benefit and to pay the same to her forthwith upon receipt of the same. As recognized as para. 48 of the judgment, 2007 SKQB 136 (Sask. Q.B.), an adjustment to the payment to Ms. Fran- cis may have to be made for income tax. 30 That part of the judgment (2007 SKQB 136 (Sask. Q.B.)) of April 25, 2007 which designated the pension administrator a trustee of Ms. Fran- cis’ share of Mr. Cook’s pension and directed the administrator to pay her share to her directly was beyond the jurisdiction of this Court. I am satisfied, based upon the analysis in Clarke, that to make such an order there needs to be a legislative framework which allows a pension administrator to accept that role of trustee and to split pension payments at source. The PBSA is an example of such legislation. There are no similar provisions in the PBDA which applies to Mr. Cook’s pension. 31 Paragraph 48 of the judgment (2007 SKQB 136 (Sask. Q.B.)) provides: 48...if there is any issue with respect to payment direct to the petitioner of her portion of the respondent’s pension benefit, application may be made for an alternate remedy including any adjustment for tax which may be required. 32 It would be appropriate for Ms. Francis to make such application, if the parties are unable to work matters out for themselves. It is not necessary to comment on any of other issues raised by either party. In the circumstances, there will be no order as to costs. Order accordingly. Nestl´e Canada inc. c. Qu´ebec (Tribunal administratif) 273

[Indexed as: Nestlé Canada inc. c. Québec (Tribunal administratif)] Nestlé Canada inc. (Requérante) c. Tribunal administratif du Québec (Intimé) c. Comité de retraite du régime de rentes des Teamsters, local 1999 (groupe 973) et Régie des rentes du Québec (Mis-en-cause) Cour supérieure du Québec Docket: C.S. Montréal 500-17-090930-150 2016 QCCS 5915 Lalonde, J.C.S. Heard: 20 octobre 2016 Judgment: 2 décembre 2016 Régimes de retraite –––– Regimes ´ de retraite privés — Administration des régimes de retraite — Modification du régime — Si autorisé –––– Employeur a fermé un entrepôt et a cessé de contribuer au régime de retraite etant´ donné que ses employés n’étaient plus membres du régime — Comité de retraite a modifié le régime de retraite afin de constater le retrait de l’employeur du ré- gime de retraite — Tribunal administratif du Québec a confirmé la modification, estimant que l’autorisation de l’employeur n’était pas nécessaire pour l’enregistrement de la modification — Comité de retraite a ainsi et´´ e autorisé a` enregistrer la modification au régime — Employeur a déposé une requête visant a` obtenir le contrôle judiciaire de la décision rendue par le Tribunal — Requête de l’employeur accordée — Bien que la question en litige fût une question de droit, il fallait faire preuve de déférence a` l’égard de la décision du Tribunal puisqu’elle etait´ finale et que le Tribunal jouissait d’une compétence exclusive — Ainsi, la norme de contrôle applicable etait´ celle de la décision raisonnable — En l’espèce, la décision du Tribunal n’appartenait pas aux issues possibles acceptables — Loi sur les régimes complémentaires de retraite précisait que le consentement ecrit´ de l’employeur etait´ requis avant de modifier le ré- gime — De plus, en raison de la modification, l’employeur devait s’acquitter de nouvelles obligations financières — Comme l’employeur etait´ directement touché par la modification, son autorisation etait´ requise et l’intervention du tribunal etait´ justifiée — Par conséquent, le dossier a et´´ e renvoyé a` la Régie des rentes du Québec pour réexamen. Droit administratif –––– Norme de contrôle — Divers –––– Norme de contrôle révisée - décision raisonnable — Employeur a fermé un entrepôt et a cessé de contribuer au régime de retraite etant´ donné que ses employés n’étaient plus membres du régime — Comité de retraite a modifié le régime de retraite afin de 274 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

constater le retrait de l’employeur du régime de retraite — Tribunal administratif du Québec a confirmé la modification, estimant que l’autorisation de l’employeur n’était pas nécessaire pour l’enregistrement de la modification — Comité de retraite a ainsi et´´ e autorisé a` enregistrer la modification au régime — Employeur a déposé une requête visant a` obtenir le contrôle judiciaire de la dé- cision rendue par le Tribunal — Requête de l’employeur accordée — Bien que la question en litige fût une question de droit, il fallait faire preuve de déférence a` l’égard de la décision du Tribunal puisqu’elle etait´ finale et que le Tribunal jouissait d’une compétence exclusive — Ainsi, la norme de contrôle applicable etait´ celle de la décision raisonnable — En l’espèce, la décision du Tribunal n’appartenait pas aux issues possibles acceptables — Loi sur les régimes com- plémentaires de retraite précisait que le consentement ecrit´ de l’employeur etait´ requis avant de modifier le régime — De plus, en raison de la modification, l’employeur devait s’acquitter de nouvelles obligations financières — Comme l’employeur etait´ directement touché par la modification, son autorisation etait´ requise et l’intervention du tribunal etait´ justifiée — Par conséquent, le dossier a et´´ e renvoyé a` la Régie des rentes du Québec pour réexamen. Pensions –––– Private pension plans — Administration of pension plans — Amendment of plan — Whether permitted –––– Employer closed down warehouse and stopped contributing to pension plan as its employees no longer participated in plan — Pension committee amended pension plan to acknowledge withdrawal of employer from pension plan — Quebec Administrative Tribunal confirmed amendment, holding that employer’s approval was not necessary for registration of amendment — Pension committee was therefore allowed to register amendment to plan — Employer brought motion seeking judicial review of Tribunal’s decision — Employer’s motion granted — While question at issue was question of law, Tribunal’s decision commanded deference given that it was final and Tribunal’s exclusive jurisdiction — Hence, relevant standard of review was reasonableness — Here, Tribunal’s decision failed to fall within range of possible, acceptable outcomes — Supplemental Pension Plans Act specifically provided that employer’s written acknowledgment was required prior to any amendment to plan — Further, as result of amendment, employer faced new financial obligations — As employer was directly affected by amendment, its approval was required and intervention of Court was justified — Therefore, matter was remitted to Quebec’s pension plan board for reconsideration. Administrative law –––– Standard of review — Miscellaneous –––– Revised standard of review - reasonableness — Employer closed down warehouse and stopped contributing to pension plan as its employees no longer participated in plan — Pension committee amended pension plan to acknowledge withdrawal of employer from pension plan — Quebec Administrative Tribunal confirmed amendment, holding that employer’s approval was not necessary for registration of amendment — Pension committee was therefore allowed to register amend- Nestlé Canada inc. c. Québec (Tribunal administratif) 275 ment to plan — Employer brought motion seeking judicial review of Tribunal’s decision — Employer’s motion granted — While question at issue was question of law, Tribunal’s decision commanded deference given that it was final and Tribunal’s exclusive jurisdiction — Hence, relevant standard of review was reasonableness — Here, Tribunal’s decision failed to fall within range of possible, acceptable outcomes — Supplemental Pension Plans Act specifically provided that employer’s written acknowledgment was required prior to any amendment to plan — Further, as result of amendment, employer faced new financial obligations — As employer was directly affected by amendment, its approval was required and intervention of Court was justified — Therefore, matter was remitted to Quebec’s pension plan board for reconsideration. Cases considered by Lalonde, J.C.S.: C. (A.) c. Québec (Tribunal administratif) (2013), EYB 2013-223722, 2013 QCCS 2808, 2013 CarswellQue 6262 (C.S. Que.) — referred to Kelly c. Québec (Régie des rentes) (2014), D.T.E. 2014T-216, EYB 2014- 236544, 2014 CarswellQue 4013 (T.A.Q.S.A.E.) — followed Louben Sportswear inc. c. Caisse de retraite des industries de la mode (U.I.O.V.D.) (2014), EYB 2014-239506, 2014 QCCS 3260, 2014 Carswell- Que 6631, 12 C.C.P.B. (2nd) 227 (C.S. Que.) — referred to Louben Sportswear inc. c. Caisse de retraite des industries de la mode (U.I.O.V.D.) (2015), 2015 QCCA 42, EYB 2015-246867, 2015 CarswellQue 148, 20 C.C.P.B. (2nd) 74 (C.A. Que.) — considered Multi-Marques Distribution inc. c. Québec (Tribunal administratif) (2008), 2008 QCCA 597, EYB 2008-131788, 2008 CarswellQue 2446, D.T.E. 2008T-351, 66 C.C.P.B. 161, [2008] R.J.Q. 853 (C.A. Que.) — considered New Brunswick (Board of Management) v. Dunsmuir (2008), 2008 SCC 9, 2008 CarswellNB 124, 2008 CarswellNB 125, D.T.E. 2008T-223, [2008] S.C.J. No. 9, (sub nom. Dunsmuir v. New Brunswick) 2008 C.L.L.C. 220-020, 64 C.C.E.L. (3d) 1, 69 Imm. L.R. (3d) 1, 69 Admin. L.R. (4th) 1, 372 N.R. 1, (sub nom. Dunsmuir v. New Brunswick) 170 L.A.C. (4th) 1, (sub nom. Dunsmuir v. New Brunswick) 291 D.L.R. (4th) 577, [2008] A.C.S. No. 9, 329 N.B.R. (2d) 1, (sub nom. Dunsmuir v. New Brunswick) [2008] 1 S.C.R. 190, 844 A.P.R. 1, (sub nom. Dunsmuir v. New Brunswick) 95 L.C.R. 65, 2008 CSC 9 (S.C.C.) — followed Régie intermunicipale de police des Riverains c. Québec (Régie des rentes) (2010), 2010 QCCA 343, EYB 2010-170059, 2010 CarswellQue 1360, D.T.E. 2010T-190, 81 C.C.P.B. 38, [2010] R.J.Q. 516 (C.A. Que.) — referred to Statutes considered: Régimes complémentaires de retraite, Loi sur les, RLRQ, c. R-15.1 en général — referred to Chapitre XIII — referred to 276 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

art. 24 — considered art. 146.45 [ad. 2015, c. 7, art. 1] — considered art. 198 — considered art. 199 — considered art. 201 — considered art. 228 — considered

Me Geneviève Beaudin, pour la requérante Me Nancy Aubé, pour l’intimé Me Jean Saint-Pierre, pour le mis-en-cause Comité de retraite du régime des rentes des Teamsters, local 1999 (groupe 973) Me Louis Robillard, pour la mise-en-cause Régie des rentes du Québec

Lalonde, J.C.S.:

1 Le Tribunal est saisi d’un pourvoi en contrôle judiciaire d’une déci- sion du Tribunal administratif du Québec (ci-après le TAQ), section des affaires economiques,´ rendue le 10 septembre 2015. 2 Pour l’essentiel, le TAQ a décidé que le consentement de Nestlé Can- ada inc. (ci-après Nestlé) n’était pas nécessaire pour enregistrer son retrait du régime de retraite interentreprises. Par conséquent, le TAQ reconnaˆıt au Comité de retraite (ci-après le Comité) le droit d’enregistrer l’amendement (2010-2) constatant le retrait de Nestlé a` titre d’employeur auprès de la Régie des rentes du Québec (ci-après RRQ), sans le consentement de Nestlé. 3 Il faut savoir que le retrait d’un employeur du régime de retraite interentreprises fait naˆıtre pour celui-ci une obligation statutaire de contribuer au déficit actuariel de la caisse de retraite des employés. 4 Nestlé considère la décision du TAQ a` la fois incorrecte et déraison- nable et c’est pourquoi elle en sollicite la révision judiciaire.

Le contexte 5 Entre 1997 et le 31 décembre 2010, Nestlé verse des cotisations a` la caisse du régime de retraite interentreprises pour le bénéfice de ses em- ployés travaillant a` son entrepôt frigorifique de Dorval. Ce régime de retraite est administré par le Comité. 6 Le 31 décembre 2010, Nestlé procède a` la fermeture de cet entrepôt et cesse de cotiser au régime de retraite, n’ayant plus d’employé participant activement a` ce régime de retraite. Nestlé Canada inc. c. Québec (Tribunal administratif) Lalonde, J.C.S. 277

7 En juillet 2011, le Comité amende unilatéralement le régime de retraite en procédant a` l’enregistrement de l’amendement 2010-2 auprès de la RRQ (aujourd’hui Retraite Québec). L’amendement fait etat´ du retrait de Nestlé du régime de retraite interentreprises. 8 Le Comité, etant´ soumis a` la Loi sur les régimes complémentaires de retraite (ci-après LRCR), s’acquitte de ses obligations statutaires en produisant notamment le rapport actuariel requis etablissant´ le déficit du régime de retraite a` 1 116 000 $. Il s’agit là de la dette de l’employeur qui se retire du régime de retraite selon la responsabilité statutaire qui lui incombe en vertu de l’article 228 LRCR. Cette responsabilité financière découle du manque d’actifs nécessaires a` l’acquittement des droits des participants et bénéficiaires visés par le retrait. 9 On comprendra que c’est le retrait de l’employeur du régime de retraite qui enclenche son obligation statutaire de combler, en partie du moins, le manque d’actifs du régime de retraite. Le Comité réclame egalement´ de Nestlé la cotisation d’équilibre pour l’année 2010, soit la somme de 57 000 $. 10 Si l’employeur ne paie pas cette réclamation du Comité, les droits de retraite accumulés par les employés participants, ceux visés par le retrait, seront réduits en conséquence. Or Nestlé refuse de payer. 11 Dans une première décision rendue le 3 juillet 2012, la RRQ autorise la modification visant le retrait de Nestlé et enregistre l’amendement 2010-2 (R-3). 12 Le 2 décembre 2013, suite a` la contestation de Nestlé, la RRQ révoque sa première décision et décide que le consentement de Nestlé s’avère nécessaire a` son retrait du régime de retraite. 13 La seconde décision de la RRQ fut portée en appel devant la section economique´ du TAQ. 14 Par sa décision du 10 septembre 2015, le TAQ infirme la seconde décision de la RRQ (D-27288-026) et rétablit la première décision de la RRQ (D-27288-025) qui autorise l’enregistrement de l’amendement au régime de retraite lequel constate le retrait de Nestlé. 15 Insatisfaite de la décision du TAQ, Nestlé se pourvoit en contrôle judiciaire et en sollicite la cassation. Le pourvoi vise aussi a` confirmer la seconde décision de la RRQ, soit celle rendue le 2 décembre 2013, par laquelle la RRQ refuse l’amendement au régime de retraite vu l’absence de consentement de Nestlé a` son retrait du régime de retraite. 278 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

16 C’est dans ce contexte que le Tribunal doit procéder a` la révision judiciaire de la décision du TAQ.

La norme de contrôle applicable 17 Parce que la question centrale s’avère une question de droit, Nestlé soutient que c’est la norme de la décision correcte qui s’applique. Le Tribunal ne partage pas cet avis. 18 L’arrêt Dunsmuir enseigne que pour etablir´ la norme de contrôle applicable, le tribunal de révision doit d’abord vérifier si les tribunaux supérieurs ont déjà et´´ e appelés a` déterminer la norme de contrôle en pareilles circonstances. A` défaut, l’exercice de révision judiciaire com- mande de procéder a` l’analyse relative a` la norme de contrôle applicable. 19 Or en semblable matière, la Cour d’appel du Québec a eu a` se pencher sur cette analyse dans l’affaire Multi-Marques Distribution inc. c. Québec (Tribunal administratif)1. Il en ressort que même en présence d’une question essentiellement juridique, c’est la norme de la décision raisonnable qui s’applique en raison du fait que le législateur a choisi de confier au TAQ, en dernier ressort et de fa¸con exclusive, les questions relatives a` la gestion des régimes complémentaires de retraite.2 20 Nul doute qu’en l’instance, c’est la norme de la décision raisonnable qui s’applique. L’exercice consiste a` vérifier si le choix d’interprétation des dispositions législatives pertinentes, fait par le TAQ, comporte les attributs de la raisonnabilité tels qu’ils ont et´´ e définis par l’arrêt Dunsmuir.3

1 2008 QCCA 597 (C.A. Que.). 2 Voir egalement´ C. (A.) c. Québec (Tribunal administratif), 2013 QCCS 2808 (C.S. Que.) et Régie intermunicipale de police des Riverains c. Québec (Régie des rentes), 2010 QCCA 343 (C.A. Que.). 3 [2008] 1 S.C.R. 190 (S.C.C.), par. 47. « La norme déférente du caractère raisonnable procède du principe a` l’origine des deux normes antérieures de raisonnabilité : certaines questions soumises aux tribunaux administratifs n’appellent pas une seule solution précise, mais peuvent plutôt donner lieu a` un certain nombre de conclusions raisonnables. Il est loisible au tribunal administratif d’opter pour l’une ou l’autre des différentes solutions rationnelles acceptables. La cour de révision se demande dès lors si la décision et sa justification possèdent les attributs de la raisonnabilité. Le caractère raisonnable tient principalement a` la justification de la décision, a` la transparence et a` l’intelligibilité du processus décisionnel, ainsi qu’à l’appartenance de la décision Nestlé Canada inc. c. Québec (Tribunal administratif) Lalonde, J.C.S. 279

21 Vérifions maintenant si la décision du TAQ appartient aux issues possibles acceptables en regard de la preuve et du droit. 22 Comme prémisse, il est admis que Nestlé n’a jamais donné son consentement a` l’amendement qui constate son retrait du régime de retraite.

La révision judiciaire 23 Aussi bien le dire dès maintenant, le Tribunal, en tout respect, est d’avis que la décision du TAQ rendue le 10 septembre 2015, n’appartient pas aux issues possibles acceptables dans les circonstances particulières a` la présente instance. Voici pourquoi. 24 D’abord la question que pose le TAQ (par. 41), n’est pas la bonne. En l’espèce, il ne s’agissait pas de déterminer si l’obligation de combler sa part du déficit actuariel au régime de retraite incombe a` Nestlé en vertu de la modification (2010-2) ou si elle s’impose a` elle en vertu de la LRCR. Il s’agissait plutôt de déterminer si la LRCR prévoyait un retrait implicite du régime de retraite en cas de fermeture du lieu de travail des employés ou si le consentement de Nestlé etait´ nécessaire a` son retrait. 25 De toute evidence,´ la LRCR, telle qu’en vigueur a` l’époque pertinente, ne prévoit pas la notion de retrait implicite. Restait donc a` véri- fier si le consentement ecrit´ de Nestlé etait´ nécessaire a` l’enregistrement, par le comité, de la modification constatant le retrait de Nestlé du régime de retraite. 26 Avec respect pour l’opinion contraire, le Tribunal est d’avis que le TAQ etablit´ une fausse prémisse lorsqu’il affirme que : « Avant son adoption comme après, cette obligation est inscrite dans la loi. Ce n’est pas l’amendement, mais la loi qui est la source de cette obligation. L’enregistrement de la modification a pour effet de rendre effective la dette de l’employeur. Cette obligation s’impose a` l’employeur en vertu de la loi, mais elle devient exigible au moment de l’enregistrement » (par. 45).

aux issues possibles acceptables pouvant se justifier au regard des faits et du droit. » 280 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

27 Pour se convaincre de l’inexactitude de cette affirmation, qu’il suffise pour l’instant de s’en remettre aux premiers alinéas des articles 198 et 201 de la LRCR qui stipulent : art. 198 : « Le retrait d’un employeur partie a` un régime interentreprises est conditionnel a` la modification du régime en ce sens. Cette modification est subordonnée a` l’autorisation de la Régie. art. 201 : « Le comité de retraite qui demande l’enregistrement d’une modification visant le retrait d’un employeur partie a` un régime interentreprises doit joindre a` sa demande, outre ce que prévoit l’article 24, les renseignements suivants : 1. le nom de l’employeur visé et la date d’entrée en vigueur de la modification; 2. les noms des participants et des bénéficiaires visés, chacun devant etreˆ identifié comme etant,´ a` la date visée au paragraphe 1, un participant actif, un participant non actif pour lequel aucune rente n’est servie, un participant non actif pour lequel une rente est servie ou un bénéficiaire; 3. une copie de l’avis prévu a` l’article 200 accompagnée d’une déclaration du comité de retraite attestant qu’il a transmis un tel avis a` chacun des participants et des bénéficiaires visés. (Notre emphase) 28 Nous sommes au titre du « Retrait d’un employeur partie a` un régime interentreprises » et ces dispositions sont applicables a` Nestlé. Or, l’article 201 de la LRCR réfère spécifiquement a` l’article 24, lequel prévoit qu’un consentement ecrit´ de l’employeur est nécessaire a` toute modification du régime de retraite.4 29 Le retrait de l’employeur au sens des articles 198, 201 et 24 est donc nécessaire pour enclencher la liquidation des droits des participants et des bénéficiaires au sens du chapitre XIII de la LRCR. 30 Plus loin dans son raisonnement, le TAQ ajoute a` la loi, lorsqu’il enonce´ qu’il serait absurde que l’employeur qui pose tous les gestes permettant de conclure a` une situation de retrait puisse empêcher l’exigibilité de sa dette en refusant que son retrait soit enregistré (par. 46). Rappelons que la LRCR ne prévoit pas de retrait implicite. Même si le résultat paraˆıt absurde aux yeux du TAQ, décider d’un retrait implicite

4 L’article 24 LRCR est repris intégralement en annexe A. Nestlé Canada inc. c. Québec (Tribunal administratif) Lalonde, J.C.S. 281

en passant a` côté des dispositions législatives applicables n’est pas la solution. 31 Le Tribunal ne peut accepter comme etant´ raisonnable la déduction que tire le TAQ de son interprétation de l’article 24 LRCR pour conclure que : Puisque la modification au Régime ne crée pas d’obligation nouvelle pour Nestlé, son consentement n’est donc pas requis » (part. 47). 32 En concluant de la sorte, le TAQ ignore l’article 228 LRCR qui, sans equivoque,´ crée une obligation nouvelle pour Nestlé, d’où la réclamation monétaire de plus d’un million de dollars du syndicat contre l’employeur. 33 La notion de consentement requis, expliquée au paragraphe 48 de la décision, s’avère tout a` fait conforme a` l’esprit de la loi (par. 48). Il fallait l’appliquer aux faits de l’instance. Ce n’est pas ce que fait le TAQ en enon¸´ cant les paragraphes 49 et 50. [49] Par contre, l’on ne voit pas la logique qui sous-tendait la nécessité pour un employeur de souscrire a` une obligation im- posée par la loi a` l’égard de laquelle il n’a aucune latitude et qu’il a de facto posé tous les gestes y donnant ouverture. [50] Nestlé propose une interprétation restrictive des articles 198, 24, 201 et 203 de la loi. 34 Le Tribunal est d’avis que l’application combinée des articles 201 et 24 LRCR ne requière pas d’interprétation. La conjugaison de ces deux articles est claire et s’avère le reflet de la volonté législative. Le consentement ecrit´ de l’employeur est impératif lorsque le Comité requiert l’enregistrement d’une modification visant le retrait d’un employeur faisant partie d’un régime interentreprises. 35 En cherchant une interprétation extrinsèque aux dispositions législa- tives pertinentes, le TAQ a exercé un choix d’interprétation législatif qui n’appartient pas aux issues possibles acceptables au regard des faits (l’absence de consentement de Nestlé) et du droit (les articles 24, 198, 201 LRCR). 36 Le TAQ a` bon droit s’est référé a` sa propre décision du 9 janvier 2014 dans l’affaire Kelly c. Québec (Régie des rentes)5. Mais, ce sont les

5 D.T.E. 2014T-216 (T.A.Q.S.A.E.). 282 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

paragraphes 30, 31 et 63 de cette décision qu’il aurait dû appliquer; il convient de les reproduire : [30] De plus, en vertu des articles 1 et 22 de la loi, un employeur comme Distribution pourrait se substituer a` lui-même ou se retirer du Régime tout en demeurant un employeur. [31] Selon eux, dans le présent cas, Distributions et Frozen Bakery sont des personnes morales. Elles bénéficient des services des employés, versent les salaires, sont parties du Régime, y cotisent et sont parties aux contrats d’emplois. Elles sont aussi les employeurs selon les conventions collectives. [63] Toutefois, comme la Régie et les mis en cause le plaident, ces retraits d’employeurs ne sont pas en vigueur. L’article 198 de la loi est clair, un retrait d’employeur est conditionnel a` la modification du régime, elle-même subordonnée a` l’autorisation de la Régie. De tels retraits ne prennent effet qu’à la date de cette modification qui, en vertu de l’article 19 de la loi, entre en vigueur au plus tôt a` la date de son enregistrement auprès de la Régie. En outre, les modalités et conditions prévues aux articles 200 a` 203 s’appliquent. (Notre emphase) 37 Il fallait en conclure que, sans amendement dûment enregistré, il n’y avait pas retrait de l’employeur. Sans retrait, il ne peut etreˆ question d’appliquer le processus de liquidation prévu a` l’article 228 LRCR. 38 En vertu de l’article 199 LRCR, le consentement de l’employeur n’est pas requis qu’en cas de faillite ou d’insolvabilité. Ce n’est que dans ces seules circonstances que le régime peut etreˆ modifié pour procéder au retrait de l’employeur failli ou insolvable du régime de retraite, sans son consentement. 39 Il faut en comprendre qu’en toute autre situation le consentement ecrit´ de l’employeur s’avère nécessaire. 40 Le Tribunal est d’avis que le TAQ a eu tort d’écarter l’enseignement de la Cour d’appel dans l’arrêt Louben6, lequel enonce´ que : [2] Pour qu’il y ait retrait du régime de retraite inter employeurs, une demande de modification de celui-ci aurait dû etreˆ formulée par la Guilde des manufacturiers de vêtements de Mode du Québec et le Conseil du Québec, Unité-HERE avant la terminaison du régime le

6 Louben Sportswear inc. c. Caisse de retraite des industries de la mode (U.I.O.V.D.), 2015 QCCA 42 (C.A. Que.). Nestl´e Canada inc. c. Qu´ebec (Tribunal administratif) Lalonde, J.C.S. 283

1er décembre 2012, et ce, en raison de l’article 207.6 de la Loi sur les régimes complémentaires de retraite. Or, aucune demande en ce sens n’a et´´ e présentée. (Notre emphase) 41 Cet arrêt confirme le jugement de première instance par lequel la cour supérieure distinguait le cas d’un employeur qui cessait de cotiser a` un régime de retraite parce qu’il n’avait plus d’employés couverts et le fait de se retirer de ce dit régime.7 42 Examinant les paragraphes 61 a` 63 du syllogisme juridique emprunté par le TAQ pour arriver a` sa conclusion, le Tribunal est d’avis que l’interprétation retenue des articles 14.1 et 228 LRCR n’est d’aucun se- cours au raisonnement privilégié par les décideurs administratifs. 43 Comme il a et´´ e dit dans l’affaire Casavant8 : [40] Avant de procéder a` l’enregistrement d’une modification, la Régie veut s’assurer que l’employeur consent expressément aux obligations qui lui incombent en vertu de cette modification. [61] Le consentement ecrit´ de l’employeur est ainsi particularisé a` chaque modification et ne peut etreˆ général. [62] Le raisonnement de la Régie sur le consentement implicite gén- eral´ a` l’enregistrement de toutes modifications vide l’article 24 LRCR de son sens et lui enlève toute utilité. (Notre emphase) 44 Le principe, c’est l’article 24 LRCR qui le prévoit spécifiquement. Il etait´ déraisonnable de conclure que parce que l’obligation emanait´ de la loi, le consentement de l’employeur n’était pas requis. De toute evidence,´ l’enregistrement de la modification au régime de retraite recherchée par le syndicat portait atteinte aux obligations de l’employeur. 45 Si le législateur avait voulu reconnaˆıtre un retrait implicite du fait de la fermeture d’un lieu de travail ou si l’employeur ne compte plus de participants actifs, il l’aurait clairement exprimé, comme il l’a fait plus récemment par le projet de loi 349. (voir art. 146.45).

7 2014 QCCS 3260 (C.S. Que.) par. 30. 8 DTE 2011T-199. 9 Loi modifiant la loi sur les régimes complémentaires de retraite relativement au financement, RLRQ, c. R-15.1. « 146.45. Lorsqu’un employeur ne compte plus de participants actifs a` son service, le régime doit etreˆ modifié afin qu’il soit procédé au retrait de cet employeur du régime avec effet au plus tard a` la 284 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

46 Il ressort clairement de ces amendements majeurs a` la LRCR que lorsque le législateur désire qualifier le retrait d’un employeur d’un régime interentreprises en raison du fait qu’il ne compte plus de participants, il le fait en termes explicites et clairs. 47 Tel n’était pas le cas pour Nestlé lorsque celle-ci a fermé son entrepôt frigorifique de Dorval le 31 décembre 2010. La loi applicable a` cette période (art. 24 LRCR) prévoyait que le consentement de l’employeur etait´ nécessaire a` l’amendement qui constatait son retrait. 48 Le Tribunal est d’avis que le choix d’interprétation formulé par le TAQ, eu egard´ aux dispositions législatives applicables a` notre cas d’espèce, ne fait pas partie des issues possibles acceptables en regard des faits et du droit. 49 La décision rendue par le TAQ le 10 septembre 2015 s’avère donc déraisonnable et justifie l’intervention du pouvoir de contrôle et surveil- lance de la cour supérieure. 50 POUR CES MOTIFS, le Tribunal : 51 ACCUEILLE le pourvoi en contrôle de la requérante Nestlé Canada Inc.; 52 CASSE a` toutes fins que de droit la décision rendue par le Tribunal administratif du Québec le 10 septembre 2015; 53 RETOURNE le dossier a` la Régie des rentes du Québec (Retraite Québec) pour qu’elle se prononce sur la demande d’amendement no. 2010-2, en exigeant le consentement de l’employeur Nestlé Canada Inc. ou en refusant la demande d’amendement; 54 SANS FRAIS de justice. Requête accordée.

date de fin de l’exercice financier au cours duquel le dernier participant a cessé d’accumuler des droits. (. . .) » Nestlé Canada inc. c. Québec (Tribunal administratif) Lalonde, J.C.S. 285

ANNEXE A LOI SUR LES REGIMES´ COMPLEMENTAIRES´ DE RETRAITE CHAPITRE III ENREGISTREMENT D’UN REGIME´ DE RETRAITE ET DE SES MODIFICATIONS 24. Tout régime de retraite doit etreˆ enregistré auprès de Retraite Québec, ainsi que chacune de ses modifications. L’employeur ou, s’il en est un de formé, le comité de retraite présente a` Retraite Québec la demande d’enregistrement, accompagnée: 1° d’une copie du régime ou de la modification qu’il certifie conforme et, si le régime est garanti, d’une copie du contrat d’assurance certifiée conforme par l’assureur; 2° dans le cas où la demande vise l’enregistrement du régime, de ses nom et adresse ou, s’il s’agit d’un comité de retraite, des noms et adresses de ses membres; 3° du consentement ecrit´ de l’employeur aux obligations qui lui incombent en vertu du régime ou de la modification, sauf dans les cas suivants: a) le comité atteste qu’il a obtenu ce consentement de l’employeur et qu’il peut le présenter a` Retraite Qué- bec sur demande; b) la modification est rendue obligatoire par application d’une nouvelle disposition législative ou régle- mentaire n’accordant aucune latitude a` l’employeur; c) la modification a et´´ e apportée en application du chapitre X.1 ou résulte de l’application de l’article 199; 4° (paragraphe abrogé); 5° (paragraphe abrogé); 6° des autres documents ou renseignements déterminés par règlement; 7° des frais prescrits par règlement. 286 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

[Indexed as: Ontario (Ministry of Community and Social Services) and OPSEU (Hinchcliffe), Re] IN THE MATTER OF AN ARBITRATION Under THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT Ontario Public Service Employees Union (Hinchcliffe) (Union) and The Crown in Right of Ontario (Ministry of Community and Social Services) (Employer) Ontario Grievance Settlement Board Docket: 2012-1207 Janice Johnston, V-Chair Heard: December 21, 2016 Judgment: January 11, 2017 Labour and employment law –––– Labour law — Collective agreement — Employee benefits — Pensions –––– 2013 November Minutes of Settlement (MOS) provided for phased retirement arrangement beginning on November 25, 2013 and ending July 31, 2017, date upon which grievor would cease employment — In February 2014, employer announced to all union employees that it would be introducing changes to post-retirement benefits (PRB) effective Janu- ary 1, 2017 — Union took position that grievor was entitled to PRB in place at beginning of her phased retirement arrangement in November 2013 — Union commenced grievance challenging employer’s right to make change and parties negotiated and signed broad MOS addressing numerous issues in November 2016 — Union brought application seeking production of various documents pertaining to employer’s decision to change PRB, alleging breach of original MOS as it related to PRB — Application dismissed — Grievor was not retired nor deemed to be retired in November 2013, since that retiring had element of no longer working in same job and receipt of pension, neither of which was true for grievor — Grievor’s rights with regard to PRB were covered by corporate MOS, which was intended to catch and resolve all claims and demands as they related to PRB issues — Grievor was to be treated same as any other employee whose rights were initially affected when corporate changes were announced and for whom parties subsequently concluded agreement of how changes would be implemented — There was simply nothing in original MOS addressing situation which occurred, namely change to benefits grievor was to receive upon her retirement in July 2017 — MOS were silent and Court could not add or imply provision that was not there — Exception to concept of finality could occur if one of parties acted in bad faith; however, there was absolutely no foundation for such bald allegation. Ontario and OPSEU (Hinchcliffe), Re Johnston, V-Chair 287

Cases considered by Janice Johnston, V-Chair: Bingham v. Ontario (Ministry of Government Services) (2011), 2011 Carswell- Ont 15942 (Ont. P.S.G.B.) — considered Canada Post Corp. v. C.U.P.W. (1993), 36 L.A.C. (4th) 216, 1993 CarswellNat 1743, [1993] C.L.A.D. No. 1221 (Can. Arb.) — considered Fisher & Ludlow Inc. v. CAW-Canada, Local 504 (2012), 2012 CarswellOnt 7325, 220 L.A.C. (4th) 436 (Ont. Arb.) — considered O.P.S.E.U. v. Ontario (Ministry of Environment) (2011), 2011 CarswellOnt 13227 (Ont. Grievance S.B.) — referred to Ontario (Ministry of Community Safety and Correctional Services) and de Boer, Re (2006), 2006 CarswellOnt 11492 (Ont. Grievance S.B.) — followed Ontario (Ministry of Transportation) and OPSEU, Re (2003), 2003 CarswellOnt 9912 (Ont. Grievance S.B.) — considered Ontario (Ministry of the Environment) and Younger, Re (2007), 2007 Carswell- Ont 10611 (Ont. Grievance S.B.) — considered Palmer v. Canadian Security Intelligence Service (2010), 2010 PSLRB 11, 2010 CRTFP 11, 2010 CarswellNat 352, 2010 CarswellNat 353, 191 L.A.C. (4th) 442, [2010] C.P.S.L.R.B. No. 11 (Can. P.S.L.R.B.) — referred to Selkirk College v. B.C.G.E.U. (1996), 59 L.A.C. (4th) 14, 1996 CarswellBC 3030, [1996] B.C.C.A.A.A. No. 489 (B.C. Arb.) — considered Toronto (City) v. Toronto Civic Employees Union, Local 416 (2002), 106 L.A.C. (4th) 159, 2002 CarswellOnt 4748 (Ont. Arb.) — considered U.F.C.W., Locals 175 & 633 v. Cuddy Food Products (2003), 121 L.A.C. (4th) 56, 2003 CarswellOnt 5805 (Ont. Arb.) — considered West Park Hospital v. O.N.A. (1993), 37 L.A.C. (4th) 160, 1993 CarswellOnt 1283, [1993] O.L.A.A. No. 12, [1993] O.L.A.A. No. 1212 (Ont. Arb.) — considered

APPLICATION by union seeking production of various documents pertaining to employer’s decision to change post-retirement benefits, alleging breach of original minutes of settlement.

Heather McIvor, for Employer

Janice Johnston, V-Chair:

1 This case has a long history. It has come back before me as the union alleges that the employer has violated the Minutes of Settlement that were signed on November 20, 2013. 2 The November 20th Minutes of Settlement provide for a phased retirement arrangement beginning on November 25, 2013, and ending on July 31, 2017, the date upon which the grievor will cease employment. 288 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

3 In February, 2014, the Employer announced to all OPSEU employees that it would be introducing changes to the Post-Retirement Benefits (the “PRB”) effective January 1, 2017. The union took the position that the grievor was entitled to the PRB in place at the beginning of her phased retirement arrangement in November, 2013. The employer rejected this and took the position that the grievor would receive the PRB in place as of January 1, 2017. 4 After the announcement of the changes to the PRB, OPSEU filed grievances challenging the Employer’s right to make the change. The parties negotiated and signed broad Minutes of Settlement addressing numerous issues on November 11, 2016. 5 The union sought production of various documents pertaining to the employer’s decision to change the PRB, which the employer refused to produce. The parties agreed that there were two issues before me: i) Are the union’s allegations of a breach of the original Min- utes of Settlement as it relates to PRB resolved by the broad generic Minutes of Settlement signed in November, 2016; ii) If the answer to question 1 is no, is the union entitled to the production it seeks? 6 The original Minutes of Settlement (the “original MOS”) read as follows: Memorandum of Settlement Between: BARBARA HINCHCLIFFE Grievor -and- ONTARIO PUBLIC SERVICE EMPLOYEES UNION Union -and - THE CROWN IN RIGHT OF ONTARIO as represented by The Ministry of Community and Social Services Employer WHEREAS the Grievor, through her bargaining agent OPSEU, filed the above noted grievance alleging in part that the employer failed to discharge its duty to accommodate her disability; and WHEREAS the Parties agree to the full and final settlement of the above-referenced grievance, without precedent and without prejudice, on the following terms: Ontario and OPSEU (Hinchcliffe), Re Johnston, V-Chair 289

1. The parties agree that subject to the approval of the Deputy Minister, Ministry of Community and Social Services, the Grievor will participate in a Phased Retirement arrangement for the period commencing November 25, 2013, to July 31, 2017. The terms of this arrangement are as follows: a. The Grievor hereby irrevocably resigns as of July 31, 2017. b. The Grievor is employed as a full-time employee for the purposes of terms and conditions of employment such as but not limited to pay and coverage under the employer group life, supplementary health, vision care, hearing aids and dental plans. c. The Grievor will be paid a salary of $1008.11 weekly during the arrangement (i.e. 66% of $1527.44 that is the full-time salary rate of her classification in effect on January 1, 2013). d. The Grievor shall be treated as a full-time employee in terms of group insurance premiums for supplementary health and dental benefits (i.e. the Employer will cover 100% of such premiums). e. Pursuant to Section 26 of the Public Service Pension Plan, the Grievor and the Employer shall each make pension contributions in respect of full-time credit and salary. The Grievor agrees that she will pay 60% of her pension premiums. The Employer agrees to cover the remaining 40% differential, in addition to the Em- ployer’s standard pension premiums (i.e. the Em- ployer shall pay 70% of total cost, and the Grievor shall pay 30%). f. The Grievor shall accrue continuous service during this arrangement at 100% of full-time for the purposes of Article 53 Termination Payments, and such Termi- nation Payments are payable at the end of this arrangement. g. This arrangement is subject to compliance with the requirements for Preretirement Part-time Employment under the Public Service Pension Plan and Prescribed Compensation under the Income Tax Act. As such, it is understood that pension credit accrued after No- vember 25, 2013 may be subject to reversal and pen- alty should the Grievor join any other employer’s registered pension plan including but not limited to 290 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

defined contribution type plans, defined benefit type plans and deferred profit sharing type plans, during the term of the arrangement. h. This arrangement ceases to operate in the event of the Grievor’s death during the expected term of the arrangement. In such an event, death benefits relating to full-time employees and death benefits under the Pub- lic Service Pension Plan shall apply. 2. While the phased retirement arrangement is in place, the Grievor will attend at the workplace and perform Disability Adjudicator duties in accordance with the following schedule: a. The Grievor will work six and a quarter (6.25) hours per each day of work. b. The Grievor shall attend the workplace and work three (3) days per week, Tuesday, Wednesday, and Thurs- day, with the exception of paragraph 2(c). c. The Grievor shall, on every fourth week, work one additional day. Her schedule on this week will be Mon- day, Wednesday, Thursday, and Friday. The first “four-day week” shall be the week of December 9, 2013. For clarity, the following “four-day week” shall be January 6, 2014 (and so on). d. The Parties acknowledge that if the Griever is sched- uled to work a “four-day week”, pursuant to paragraph 2(c), and a statutory holiday falls on Monday or Friday of that week, the Grievor shall instead work the “four-day week” the following week (and will work Tuesday, Wednesday and Thursday the statutory holiday week). For clarity, the following “four-day week” will then fall two full weeks later, rather than three full weeks later. 3. The Grievor acknowledges her obligations pursuant to the Public Service of Ontario Act to notify and seek a determination from her Ethics Executive should she be engaged in employment or in an undertaking that could create a conflict of interest with her position as a public servant. 4. Throughout the duration of the phased retirement arrangement, the Grievor agrees to participate in regular meetings with the Employer to set performance targets, pro-rated to time worked, and discuss performance with respect to those targets. Ontario and OPSEU (Hinchcliffe), Re Johnston, V-Chair 291

5. It is understood that, effective November 25, 2013, the Grievor will be entitled to Short-Term Sickness Plan benefits afforded to full-time employees. 6. The parties agree that neither the Employer nor the Grievor shall attempt to recover any monies owing pursuant to pay discrepancies up to the date of execution of this MOS. 7. The Grievor agrees that, in order to implement any changes to the phased retirement schedule as detailed in paragraph 2, unless agreed to by the parties, she will be required to participate in an Independent Medical Examination (IME). The Em- ployer will involve the Grievor and the Union in the selection of the IME provider. After receiving the IME report, the Em- ployer will meet with the Grievor and the Union to discuss what changes to the arrangement, if any, are appropriate. 8. The Grievor also agrees that she shall not make future application to, nor accept future employment with, the Ontario Public Service. 9. The Grievor hereby releases and forever discharges the Crown in Right of Ontario and the Employer, its servants, agents and directors of and from all actions, causes of action, grievances, claims and demands of every nature and kind arising out of or as a result of the grievance and the circumstances giving rise to the grievance, including but not limited to all claims under the Ontario Human Rights Code, the Pub- lic Service of Ontario Act, 2006, the Employment Standards Act, the OPSEU Collective Agreement, and the common law. 10. Nothing in this settlement constitutes an admission or conces- sion of liability or wrongdoing by any party. 11. All parties agree that the terms of this settlement shall remain confidential and shall not be communicated by any party to any other person, except by the Grievor to immediate family (with the condition of confidentiality), financial and legal ad- visors, as required by law, or as required to allow the Em- ployer to implement the terms of the settlement. 12. The parties agree that this settlement constitutes the entire agreement between the parties and supersedes any and all prior oral or written agreements, arrangements or understandings between them. 13. The Grievor and Union agree that the above-noted grievance is hereby fully and finally resolved and withdrawn. 292 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

14. The parties agree that Vice Chair Janice Johnston shall remain seized with the implementation or interpretation of this settlement. Dated at Toronto, this November 20, 2013. 7 The parties revisited the original MOS in 2014 and in August and September, 2014, signed supplemental Minutes of Settlement. 8 On November 11, 2016, the following Minutes of Settlement with regard to the changes to the PRB were signed at the Corporate level (the “corporate MOS”): MEMORANDUM OF SETTLEMENT Between: The Crown in Right of Ontario as represented by the Treasury Board Secretariat (“the Employer”) -and- Ontario Public Service Employees Union (“the Union”) WHEREAS in February 2014, the Employer announced to all On- tario Public Service employees, including employees in the bargaining units represented by OPSEU, that it would be introducing changes to Post-Retirement Benefits effective January 1, 2017 (“PRB Changes”); AND WHEREAS the Union and employees in the bargaining units represented by OPSEU have filed numerous individual, group and union policy grievances concerning the PRB Changes; AND WHEREAS the parties have a mutual desire to resolve all outstanding matters regarding the PRB Changes as they relate to OPS employees in the bargaining units represented by OPSEU; NOW THEREFORE the parties agree to a full and final settlement of any and all outstanding matters related to the PRB Changes on a without prejudice and without precedent basis on the following terms and conditions: PRB for eligible OPSEU Pension Plan Members who have commenced receipt of a pension before January 1, 2017 1. All members of the OPSEU Pension Plan who have at least 10 years of pension credit before January 1, 2017 and have commenced receipt of a pension before January 1, 2017 shall be eligible to receive Post-Retirement Benefits on the following “status quo” terms (hereinafter referred to as the “PRB Plan A”): Ontario and OPSEU (Hinchcliffe), Re Johnston, V-Chair 293

i. The level of Post-Retirement Benefits: as nearly as may be, on the same terms and conditions as are from time to time applicable to similar benefits for active employees pursuant to the Collective Agreement between the parties; and ii. No Shared Cost: the Employer pays 100 percent of the Post- Retirement Benefit premium costs of the PRB Plan A. PRB for OPSEU Pension Plan Members who have not commenced receipt of a pension before January 1, 2017 and who were hired before January 1, 2017 2. Any member of the OPSEU Pension Plan who has not commenced receipt of a pension before January 1, 2017, and who was hired prior to January 1, 2017, will be permitted at retirement to elect to enrol in one of the following: i. PRB Plan A, provided that the eligible member pays 50 percent of the premium costs to participate in the benefits plan, excluding the premium costs of the Basic Life Insurance coverage that is currently provided under Articles 37.4 and 65.4 of the current Collective Agreement, which shall be paid by the Employer; or ii. A Post-Retirement Benefits plan, which is 100 percent Em- ployer-paid (attached hereto as Appendix A and hereinafter referred to as “PRB Plan B”). PRB Plan B is currently priced at 50 percent of the PRB Plan A as it stood in 2016, as determined in the sole discretion of the Employer. PRB Plan B will remain 100 percent Employer paid for eligible employees hired prior to January 1. 2017 provided they meet one of the following eligibility criteria: i. The person has at least ten (10) years of pension credit prior to January 1, 2017; or ii. The person has at least twenty (20) years of pension credit and retires to an immediate unreduced pension. Any member who does not make an enrolment election at retirement under this paragraph will automatically be enrolled in PRB Plan B. A member who has elected to participate in PRB Plan A may make an application in December of any year to cease to participate in PRB Plan A and to enrol in PRB Plan B effective January 1 of the following year. A person who has elected, or was deemed to have elected, to participate in PRB Plan B may make an application in December of any year to cease to participate in PRB Plan B and to enrol in PRB Plan A effective January 1 of the following year. However, should a per- 294 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

son make a further election at a later date to re-enrol in PRB Plan B, that person is no longer eligible to participate in PRB Plan A. PRB for OPSEU Pension Plan Members hired on or after January 1, 2017 who have at least 20 years of pension credit and who retire to an immediate unreduced pension 3. Any employee hired on or after January 1, 2017 who has 20 years of pension credit and retires to an immediate unreduced pension is only eligible to enrol in the PRB Plan B, as described above in Para- graph 2(ii) upon retirement. Such members will be required to pay 100 percent of the premium costs to participate in this benefits plan. Members who do not enrol at retirement may make an application within 31 days of termination of similar coverage under another plan. Thereafter, any decision to opt out of PRB Plan B coverage is irrevocable. 4. The Union agrees to withdraw Union grievance #2015-0999-0042 (GSB# 2015-2664) and Union grievance #2016-0999-0043. The Union further agrees that any grievances (individual, group or union) in respect of Post-Retirement Benefits not identified in this settlement are hereby withdrawn. The Union will notify the GSB of its withdrawal of all of the grievances forthwith upon the execution of this Agreement. 5. OPSEU represented employees who elected to retire after Febru- ary 18, 2014 will be eligible to apply to restricted competitions for OPSEU represented positions having a posting period that closes prior to December 31, 2017. In these competitions, such individuals shall have their seniority at the date of their retirement considered for the purposes of Article 6 of the OPSEU collective agreement as if they were an active employee. 6. The undersigned unanimously agree to recommend these terms of settlement to their respective principals. This settlement shall be considered null and void unless the parties’ respective principals fully endorse all terms and conditions set out herein by 6 p.m. Wednesday, November 16, 2016. 7. The parties agree that the terms and conditions of this settlement shall remain strictly confidential until the settlement has been fully endorsed by the respective principals of both parties. Both parties agree that they will not disclose or discuss the terms of this settlement in a public manner before 6 p.m. Wednesday, November 16, 2016, unless otherwise agreed. 8. The Union hereby releases and forever discharges the Crown in Right of Ontario, the Employer, its employees, Ministers, Deputy Ontario and OPSEU (Hinchcliffe), Re Johnston, V-Chair 295

Ministers, office holders, directors, servants, and agents of and from all actions, causes of action, grievances, claims and demands as they relate to the PRB Changes announced on February 18, 2014 referenced herein and from the grievances referenced in paragraph 4 above. 9. The parties agree that this agreement is without prejudice to either parties’ position with respect to whether or not post-retirement benefits form part of the OPSEU collective agreement. 10. This Memorandum of Settlement constitutes the entire agreement between the parties and supersedes any and all other oral or written agreements, arrangements, or understandings in connection with or incidental to these PRB Changes. Any disputes arising from the implementation of this settlement will be referred to the Grievance Set- tlement Board. Dated this 11th day of November, 2016

ARGUMENT 9 Counsel for the employer started her argument by referencing paragraph 1 and 2 of the original MOS. Paragraph 1 provides for a phased retirement of approximately 3.5 years. The grievor would be working part-time during this period but would receive enhanced entitlements as set out in paragraph 1 (c), (d) and (e). Paragraph 2 sets out the agreed-to work arrangements. The remaining paragraphs set out other agreed-to items and some are generic. Counsel pointed to paragraph 12, which stipulates that the MOS constitutes the entire agreement between the parties. 10 Counsel suggested that the language in the original MOS was clear and unambiguous. Both parties knew when they negotiated the MOS that they were intended to cover a three-year period. Things can change in that time and the union could have negotiated a clause to protect the rights of the grievor in the event of change and did not. Counsel pointed out that it is not my role to add to the MOS and I should not do so. 11 In February, 2014, the changes to the PRB were announced and this resulted in a number of complaints and grievances. These were all resolved by the corporate MOS signed on November 11, 2016. Counsel suggested that the corporate MOS on their face were clear and that I had no jurisdiction to add to or modify them. In her view, the rights of the grievor to PRB are covered by the corporate MOS. 12 Employer counsel suggested that in reviewing the corporate MOS I should apply the same principles as I did when reviewing the original MOS. Specifically, I should give words their plain meaning and read the 296 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

agreement as a whole. It is clear that the parties intended to resolve “all outstanding matters regarding the PRB changes” and that there is no carve-out for the grievor. Counsel referred to the third and fourth preamble clause and argued that “all” matters were resolved, not just certain grievances. The fourth preamble refers to “any and all,” not specific cases. 13 Paragraph 2 of the corporate MOS is applicable to the grievor and sets out her rights, as on the date the corporate MOS were signed she had not commenced receipt of a pension. Paragraph 4 makes it clear that all grievances in respect of PRB are withdrawn, which covers the original MOS. Paragraph 8 is a full release clause and provides: The Union hereby releases and forever discharges the Crown in Right of Ontario, the Employer, its employees, Ministers, Deputy Ministers, office holders, directors, servants, and agents of and from all actions, causes of action, grievances, claims and demands as they relate to the PRB Changes announced on February 18, 2014. Paragraph 10 is an entire agreement clause and provides: This Memorandum of Settlement constitutes the entire agreement between the parties and supersedes any and all other oral or written agreements, arrangements, or understandings in connection with or incidental to these PRB Changes. 14 Employer counsel pointed out that this language is very clear and that the corporate MOS were intended to catch and resolve any and all disputes or matters with regard to PRB issues. 15 In support of her position, counsel for the employer referred to the following cases: Fisher & Ludlow Inc. v. CAW-Canada, Local 504, 2012 CarswellOnt 7325 (Ont. Arb.) (the “Fisher case”); Bingham v. Ontario (Ministry of Government Services), 2011 CarswellOnt 15942 (Ont. P.S.G.B.) (the “Bingham case”); Ontario (Ministry of the Environment) and Younger, Re, 2007 CarswellOnt 10611 (Ont. Grievance S.B.) (the “Younger Case”); Selkirk College v. B.C.G.E.U., 1996 CarswellBC 3030 (B.C. Arb.) (the “Selkirk case”); Canada Post Corp. v. C.U.P.W., 1993 CarswellNat 1743 (Can. Arb.); Toronto (City) v. Toronto Civic Employees Union, Local 416, 2002 CarswellOnt 4748 (Ont. Arb.) and U.F.C.W., Locals 175 & 633 v. Cuddy Food Products, 2003 CarswellOnt 5805 (Ont. Arb.). 16 Counsel for the employer relied on the cases set out above in support of a few basic principles. The Fisher case reiterated the principle that when a transaction has been reduced to writing, extrinsic evidence is in Ontario and OPSEU (Hinchcliffe), Re Johnston, V-Chair 297

general inadmissible to contradict, vary, add to or subtract from the terms of the document. This is often referred to as the “parol evidence rule”. The onus is on the union to establish that an ambiguity exists that would justify hearing testimony as to the meaning of the words. In our case, the original MOS is clear and unambiguous with a list of entitlements and does not contain any reference to the PRB. 17 Employer counsel suggested that the Younger case makes it clear that an arbitrator cannot undo Minutes of Settlement or add to them because an issue was not addressed or thought of at the time the Minutes were signed. The Selkirk case stands for the principle that an arbitrator has no jurisdiction to change the terms of a settlement on the basis that information that became available after the Minutes were signed would have altered the positions of the parties. 18 Counsel for the union phrased the first issue before me as “did the corporate MOS resolve the breach of the original MOS”. The employer says the corporate MOS resolved all outstanding matters and issues pertaining to PRB including the grievor’s. Counsel disagreed and argued that the allegation of a breach of Ms. Hinchcliffe’s MOS does not fall under the matters resolved by the corporate MOS. 19 Union counsel suggested that Ms. Hinchcliffe was deemed to be retired as of November 25, 2013, as that is when her phased retirement began. She is therefore entitled to the PRB in place at that time. Counsel suggested that an implied term in the original MOS was that Ms. Hinch- cliffe was to receive benefits including the PRB in place as of November, 2013. The determination by the employer that she is not entitled to the PRB in place in November, 2013, is a breach of the original MOS. 20 Counsel for the union argued that a plain reading of the original MOS makes it clear that the grievor was participating in a phased retirement and that by signing the MOS the grievor gave up her right to continued employment after July 31, 2017. She did so based on an understanding of certain PRB and there was no reason to suspect that there would be a change. 21 Counsel distinguished the cases relied upon by the employer on the basis that they involved situations where information was or ought to have been known at the time of the settlement, or involved an assump- tion that was unwarranted. In the case before me, there was no reason for the parties to assume that PRB might change. 22 Union counsel turned next to the corporate MOS and reiterated that in the view of the union the issues raised with regard to Ms. Hinchcliffe did 298 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

not fall under the corporate MOS and were not resolved by it. She pointed to the second paragraph in the preamble, which states, “AND WHEREAS the Union and employees in the bargaining units represented by OPSEU have filed numerous individual, group and union policy grievances concerning the PRB Changes,” and she suggested that it was these matters that were settled. Ms. Hinchcliffe does not have a grievance regarding the PRB changes. The issue before me does not fall under this settlement. In addition, she pointed to paragraph 4 of the corporate MOS, which states, “The Union agrees to withdraw Union grievance #2015-0999-0042 (GSB# 2015-2664) and Union grievance #2016-0999- 0043. The Union further agrees that any grievances (individual, group or union) in respect of Post-Retirement Benefits not identified in this settlement are hereby withdrawn” and again argued that we are not dealing with a grievance in respect of PRB. 23 Counsel for the union suggested that the issue before me - is the employer breaching the original MOS by taking the position that the grievor is not entitled to the PRB in place in November, 2013 - can be determined only by reviewing the original MOS. It is not resolved by the corporate MOS. In support of her argument, counsel referred to Ontario (Ministry of Transportation) and OPSEU, Re [2003 CarswellOnt 9912 (Ont. Grievance S.B.)] (Brown) GSB #2445/02 2003. 24 Union counsel turned at this point to what I will refer to as the production issue. She agreed that the terms of the original MOS were clear on their face. She pointed to paragraph 1, which provides that “the parties agree that subject to the approval of the Deputy Minister (the “DM”), Ministry of Community and Social Services, the Grievor will participate in a phased retirement arrangement for the period commencing November 25, 2013, to July 31, 2017”, in support of the proposition that broadly speaking, because the MOS were subject to the approval of the DM, that the employer knew at the time that the MOS were entered into that it intended to change PRB for employees. The DM either knew or ought to have known that the PRB changes were coming and the employer therefore acted in bad faith by agreeing to MOS that could not be fulfilled as envisioned. As the PRB changes were announced approximately three months later, the employer acted in bad faith. To establish that the alleged bad faith existed, counsel asserted that the union was entitled to the production requested. 25 Prior to the hearing, union counsel advised counsel for the employer that the union was raising the allegation of bad faith and requested any Ontario and OPSEU (Hinchcliffe), Re Johnston, V-Chair 299

and all communication and documents tending to show the date that the government intended to change PRB for employees. She took the position that it was a proper request as she was seeking documents that were arguably relevant to this matter. In support of her argument, she referred to Palmer v. Canadian Security Intelligence Service, 2010 PSLRB 11 (Can. P.S.L.R.B.) and O.P.S.E.U. v. Ontario (Ministry of Environment) [2011 CarswellOnt 13227 (Ont. Grievance S.B.)] (Watters) (the “Madan” case) GSB #2010-2112, 2010-2113; 2010-2114, 2010-2114, 2010-2115, 2010-2116, 2010-2117. 26 In the Madan case, V.C Watters refers to West Park Hospital v. O.N.A. (1993), 37 L.A.C. (4th) 160 (Ont. Arb.) (Knopf) and sets out the factors considered when a request for disclosure is contested: 1. the information requested must be arguably relevant; 2. the requested information must be particularized so there is no dispute as to what is desired; 3. the decision-maker should be satisfied that the information is not being requested as a “fishing expedition”; 4. there must be a clear nexus between the information being requested and the positions in dispute at the hearing; and 5. the decision-maker should be satisfied that disclosure will not cause undue prejudice. 27 Counsel for the union reviewed the factors. She suggested that the information was arguably relevant as there is no question that the date the PRB decision was made is relevant to whether or not the employer entered into the MOS with Ms. Hinchcliffe in bad faith; that the request was not a fishing expedition as the allegation of bad faith is based on the fact that the employer knew change was coming when it entered into the MOS and there is a clear nexus between the information requested and the bad faith allegation; and that there is no suggestion that the disclosure will cause undue prejudice. 28 In conclusion, union counsel requested that I order the production requested so that the issue of whether or not the employer acted in bad faith in signing off on the original MOS as written can be determined. The corporate MOS do not bar the union from requesting the litigation of the question as to whether or not the employer entered into the original MOS in bad faith. 29 In reply, counsel for the employer disagreed with the assertion of union counsel that the issue before me was a breach of the original MOS and that the issue of PRB was tangential to this. The issue in this case is 300 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

the change to PRB and whether or not the grievor is swept up in the corporate MOS. Counsel also disagreed with the assertion that the Grievor was deemed retired as of November, 2013, and suggested that her retirement will commence when she stops working on July 31, 2017. 30 Employer counsel also disagreed with the assertion that when the parties were negotiating the original MOS, there was no reason to assume that PRB would change and pointed out that there was equally no reason to assume that they would not change. It was always a possibility that they could change and no assurances were given that they would remain consistent. The language in the corporate MOS is very concrete and specific and when taken as a whole the intentions of the parties is very clear. 31 Employer counsel pointed out that the case law suggests that clear and cogent evidence is required to ground allegations of bad faith. In this case, to say that the DM may have been aware that some sort of change to the PRB may be coming, when no one involved in the negotiation of the original MOS was aware, is not enough to ground an allegation that the employer acted in bad faith in deliberately withholding this information. It is highly speculative to even suggest that the DM knew anything about a decision being made on a central basis that affected PRB. All the DM did was approve the phased retirement aspect of the original MOS as the specifics of the MOS are confidential.

DECISION 32 A fundamental principle in collective agreement or other contract interpretation, in this case two different MOS, is that words are to be given their plain or ordinary meaning. It is my role to give effect to the intentions of the parties based on the words they themselves have chosen. In doing so, I will assume that the parties chose to use the words or phrases that they did for a reason. It is my role to give the language used by the parties a meaning that it can reasonably bear and that is internally consistent. I must determine what makes the most sense in all of the circumstances and what is a reasonable and logical interpretation. It is my job to interpret the MOS as written by the parties. I cannot rewrite them. 33 The parties agree that the original MOS are silent regarding PRB. That issue is not mentioned in the MOS. Given that silence, clearly the issue before me, however it is articulated, is what PRB is the grievor entitled to? 34 The corporate MOS provide for two groupings of employees. Those who have commenced receipt of a pension prior to the signing of the Ontario and OPSEU (Hinchcliffe), Re Johnston, V-Chair 301

MOS and those who will commence receipt of a pension after the MOS are signed. Paragraph 2 of the corporate MOS stipulates that the terms that follow apply to “any member of the OPSEU Pension Plan who has not commenced receipt of a pension before January 1, 2017”. Although the grievor’s employment was subject to a phased retirement arrangement, she does not actually stop working, retire and commence receiving her pension until July 31, 2017. 35 Therefore, if I conclude that the corporate MOS catch the grievor, she would fall into the category of employees whose PRB are affected by the changes announced in February, 2014. I cannot accept the proposition put forward by the union that the grievor was deemed to be retired in November, 2013, as it seems to me that retiring has an element of no longer working in the same job and the receipt of a pension, neither of which was true for the grievor. Obviously there can be exceptions to this statement, but in this case, I do not conclude that the grievor either retired or can be deemed to be retired in November, 2013. 36 The next question is whether or not the grievor’s situation is caught by the corporate MOS. Given that the original MOS are silent on the issue of PRB, is the question of what PRB the grievor is entitled to resolved by the corporate MOS? The parties in the corporate MOS chose very broad, sweeping and all-encompassing language. In applying the principles set out above in paragraph 32 of this decision, I must assume that the parties meant it when they said “the parties have a mutual desire to resolve all outstanding matters regarding the PRB changes as they relate to OPS employees in the bargaining units represented by OPSEU” and “the parties agree to a full and final settlement of any and all outstanding matters related to the PRB Changes”. While there is reference to the settlement of specific grievances, the parties also used broad, additional specific language to sweep in any and all outstanding matters relating to PRB. 37 As was pointed out by employer counsel, paragraph 8 of the corporate MOS is a full release clause and provides: The Union hereby releases and forever discharges the Crown in Right of Ontario, the Employer, its employees, Ministers, Deputy Ministers, office holders, directors, servants, and agents of and from all actions, causes of action, grievances, claims and demands as they relate to the PRB Changes announced on February 18, 2014. 302 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

In addition, paragraph 10 is an entire agreement clause and provides: This Memorandum of Settlement constitutes the entire agreement between the parties and supersedes any and all other oral or written agreements, arrangements, or understandings in connection with or incidental to these PRB Changes. 38 In giving these words their plain and ordinary meaning, I must assume that the parties meant it when they used the words highlighted above. The language used is clear and there is no carve-out or exception stipulated for the grievor or any other employee in the grievor’s situation. Although I am not dealing with a grievance relating to the PRB changes, there can be no doubt that what is being asserted in this case is a claim or demand relating to the PRB changes. It appears to me that the corporate MOS were intended to catch and resolve all claims and demands as they relate to PRB issues. 39 Accordingly, I conclude that the rights of the grievor with regard to PRB are covered by the corporate MOS. She is to be treated the same as any other employee whose rights were initially affected when the corporate changes were announced and for whom the parties subsequently concluded an agreement on how the changes would be implemented. This decision could end at this point, but for the sake of completeness, I would like to briefly address the original MOS and the union’s allegations of bad faith. 40 Turning to the original MOS, there is simply nothing in those Min- utes addressing the situation which has occurred, namely a change to the benefits the grievor shall receive upon her retirement on July 31, 2017. The MOS are silent. While I may have some sympathy for the situation the grievor is in, I cannot add or imply a provision that is not there. In the Younger case at paragraph 17, VC O’Neil pointed out: Moreover, the case law is clear that a settlement will not be set aside because a party later feels he or she might not have entered into it on the same terms if further information had been available to them, (see Re Selkirk College v. British Columbia Government and Service Employees’ Union (1996), 59 L.A.C. (4th) 14 (Chertkow, B.C.) at pg. 11) or because each and every possible compensation issue which might have been addressed by the perfectly informed party was not included in the final package of settlement terms (see Re Canada Post Corp and CUPW, (1993) 36 L.A.C. (4th) 216 (Jolliffe) at pg. 14). As well, the fact that the parties did not specifically cover every possible entitlement does not diminish the effect of comprehensive Ontario and OPSEU (Hinchcliffe), Re Johnston, V-Chair 303

release language. (See Toronto (City) v. Toronto Civic Employees’ Union, Local 416, (2002) 106 LAC. (4th) 59 (Luborsky) at pg. 6. These observations are equally applicable to the case before me and I completely agree with them. 41 I also agree with the following comments made by VC O’Neil in Ontario (Ministry of Community Safety and Correctional Services) and de Boer, Re [2006 CarswellOnt 11492 (Ont. Grievance S.B.)] (O’Neil) PSGB #P-2005-1033 at pg. 10: It is very important as a matter of policy that agreements voluntarily signed be upheld, or workplace parties would not be able to have confidence in the finality of agreements made and their ability to govern their affairs accordingly. The question of finality of agreements is fundamental to the entire legal system, and is especially important in the ongoing operation of any workplace. Otherwise, parties would be constantly wondering which agreement they could count on, and which one would be subject to being reconsidered indefi- nitely in the future. It would be overly prejudicial to the employer and all concerned to create a precedent which would amount to a questioning of the finality of the agreement between the parties that lead to the grievor’s voluntary retirement, and the severance of the employment relationship that followed. 42 An exception to this concept of finality could occur if one of the parties acted in bad faith. Therefore, while I understand why counsel for the union attempted to suggest that there was bad faith in this case, there is absolutely no foundation for such a bald allegation. I agree with employer counsel that to say that the DM may have been aware that some sort of change to the PRB may be coming, when no one involved in the negotiation of the original MOS was aware, is not enough to ground an allegation that the employer acted in bad faith or deliberately withheld this information. It is highly speculative to suggest that the DM knew something about a decision being made on a central basis that affected PRB and then for some reason decided to penalize the grievor by remaining silent. Accordingly the production request is in my view a “fishing expedition” and not an appropriate request for production. 43 Accordingly, to summarize, in my view there has been no violation of the original MOS and the grievor’s rights with regard to PRB are as stipulated in the corporate MOS. Application dismissed. 304 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

[Indexed as: De Bonis c. Québec (Commission de la construction)] Dino De Bonis et Richard Gauthier (Parties demanderesses) c. Commission de la construction du Québec (Partie défenderesse) Tribunal administratif du travail Docket: T.A.T. CM-2016-3121, CM-2016-3166 2016 QCTAT 6803 Alder, juge administrative Heard: 31 août 2016 Judgment: 30 novembre 2016 Régimes de retraite –––– Regimes ´ de retraite fédéraux et provinciaux — Ré- gimes de retraite provinciaux –––– Paiement des prestations de retraite partielle — En 2015, des employés ont et´´ e informés qu’ils avaient droit a` des prestations de retraite partielle sans egard´ au fait qu’ils etaient´ encore des employés actifs — Employés ont demandé a` recevoir des prestations de retraite partielle en conformité avec le Règlement sur les régimes complémentaires d’avantages sociaux dans l’industrie de la construction — Commission de la construction du Québec a précisé que si les employés décidaient de recevoir des prestations de retraite partielle après qu’ils soient devenus admissibles, il etait´ possible que certaines prestations mensuelles soient perdues — Employés ont demandé a` recevoir le paiement rétroactif des prestations impayées, sans succès — Em- ployés ont déposé une requête devant le Tribunal administratif du travail contestant la décision de la Commission — Requête accordée — En tant qu’administratrice du régime de retraite, la Commission ne disposait d’aucun pouvoir discrétionnaire et etait´ tenue d’appliquer l’art. 10 du Règlement — Commission devait agir avec diligence et dans le meilleur intérêt des participants au régime de retraite — Rien dans l’art. 10 ne suggérait que les prestations de retraite partielle n’étaient disponibles qu’à compter de la date indiquée a` l’art. 126.1 du Règlement — Jusqu’en 2014, il n’y avait qu’une seule date pour chaque participant au régime de retraite — Depuis 2014, la pleine retraite et la retraite partielle pouvaient etreˆ demandées a` des dates différentes — Précision faite par la Commission n’apparaissait pas dans le Règlement — Commission n’a pas informé les employés adéquatement — Manière dont la Commission avait interprété le Règlement etait´ déraisonnable — Par conséquent, les déci- sions de la Commission ont et´´ e annulées. Pensions –––– Federal and provincial pension plans — Provincial pension plans –––– Availability of partial pension plan benefits — In 2015, employees were informed that they were entitled to receive partial pension benefits regard- De Bonis c. Québec (Commission de la construction) 305 less of fact that they were still active employees — Employees applied to receive partial pension benefits in accordance with Regulation Respecting Com- plementary Social Benefit Plans in the Construction Industry — Commission de la construction du Québec specified that if employees chose to receive partial pension benefits after they became eligible, certain monthly benefits could be lost — Employees unsuccessfully claimed retroactive payment of unpaid benefits — Employees brought motion before Tribunal administratif du travail challenging that decision — Motion granted — As administrator of pension plan, Commission had no discretionary power and had to apply s. 10 of Regulation — Commission had to act with diligence and in best interest of pension plan members — Nothing in s. 10 indicated that partial pension benefits were only available at date referred to in s. 126.1 of Regulation — Until 2014, there was only one retirement date for each pension plan member — Since 2014, full pension and partial pension were available on different dates — Specification made by Commission did not appear in Regulation — Commission failed to inform employees in appropriate manner — Commission’s interpretation of Regulation was unreasonable — Therefore, Commission’s decisions were set aside. Cases considered by Alder, juge administrative: Desjardins c. General Motors du Canada ltée (2009), EYB 2009-156568, 2009 QCCS 1200, 2009 CarswellQue 2650, D.T.E. 2009T-277, 74 C.C.P.B. 107 (C.S. Que.) — considered Kowalewski c. Québec (Commission de la construction) (2012), EYB 2012- 209594, 2012 QCCRT 0335, 2012 CarswellQue 7961 (C.R.T.Q.) — considered Lemieux c. Québec (Commission de la construction) (2015), EYB 2015-261506, 2015 QCCRT 676, 2015 CarswellQue 13067, 24 C.C.P.B. (2nd) 154 (C.R.T.Q.) — considered Pelletier c. Québec (Commission de la construction) (2014), EYB 2014-238676, 2014 QCCRT 0247, 2014 CarswellQue 5961 (C.R.T.Q.) — considered Statutes considered: Code civil du Québec, L.Q. 1991, c. 64 art. 1309 — considered Relations du travail, la formation professionnelle et la gestion de la main- d’oeuvre dans l’industrie de la construction, Loi sur les, RLRQ, c. R-20 art. 4 al. 6 — considered art. 92 al. 1 — considered art. 93 — considered 306 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

Regulations considered: Relations du travail, la formation professionnelle et la gestion de la main- d’oeuvre dans l’industrie de la construction, Loi sur les, RLRQ, c. R-20 Délivrance des certificats de compétence, Règlement sur la, RLRQ, c. R-20, r. 5 en général — referred to Régimes complémentaires d’avantages sociaux dans l’industrie de la construction, Règlement sur les, RLRQ, 1981, c. R-20, r. 10 en général — referred to Chapitre III — referred to Chapitre III, Section III — referred to Chapitre III, Section VIII — referred to art. 104 — considered art. 108 — referred to art. 109 — referred to art. 126 — considered art. 126.1 — considered art. 127 — considered art. 131 — considered art. 154 — considered art. 154.1 — considered

REQUETEˆ déposée par des employés contestant la décision de la Commission de la construction du Québec selon laquelle certaines prestations mensuelles ser- aient perdues s’ils tardaient a` demander le paiement de prestations de retraite partielle.

Dino De Bonis, Richard Gauthier, parties demanderesses, personnellement Me Gilles Côté, pour la partie défenderesse

Alder, juge administrative:

1 Les 9 et 13 mai 2016, Richard Gauthier et Dino De Bonis (collective- ment désignés les plaignants) déposent respectivement une demande au Tribunal administratif du travail en vertu de l’article 93 de la Loi sur les relations du travail, la formation professionnelle et la gestion de la main-d’œuvre dans l’industrie de la construction1 (la Loi R-20). 2 Les plaignants contestent deux décisions rendues par la Commission de la construction du Québec (la CCQ) les 18 mars et 20 avril 2016,

1 RLRQ, c. R-20. De Bonis c. Qu´ebec (Commission de la construction) Alder, juge admin. 307

concernant leur demande respective de recevoir des prestations de retraite selon le Règlement sur les régimes complémentaires d’avantages sociaux dans l’industrie de la construction2 (le Règlement 10). Ils s’estiment lésés par ces décisions qui les privent de prestations de retraite auxquelles ils prétendent avoir droit. 3 Le Tribunal a réuni les demandes de messieurs Gauthier (CM-2016- 3166) et De Bonis (CM-2016-3121) pour enquête et audition, toutes deux portant sur la même question en litige, a` savoir : la CCQ etait-elle´ fondée a` maintenir, en réexamen, ses décisions refusant aux plaignants le paiement rétroactif de la rente de retraite partielle prévue au Règlement 10? 4 La CCQ plaide qu’elle a appliqué les dispositions du Règlement 10 correctement. Elle ajoute que même si elle avait commis une erreur, le Tribunal ne pourrait intervenir, car elle a exercé son pouvoir administratif de manière raisonnable. 5 Par ailleurs, la CCQ estime avoir respecté toutes ses obligations, incluant son devoir d’information. Au surplus, elle est d’avis que si le Tri- bunal conclut qu’elle n’a pas respecté ce devoir, il ne peut que constater ce manquement et n’a pas compétence pour y remédier. 6 Les parties indiquent ne pas etreˆ préparées a` plaider sur la question de la compétence du Tribunal advenant qu’il conclue que la CCQ a manqué a` son devoir d’information. Après discussions, il est convenu que le Tri- bunal réserve sa compétence, le cas ech´´ eant, sur les montants qui pourraient etreˆ dus aux plaignants advenant le bien-fondé de leur recours.

LA PREUVE 7 Richard Gauthier a 56 ans. Il travaille comme frigoriste depuis 37 ans. Il prévoit prendre sa retraite dans quelques années, quand ses enfants auront terminé leurs etudes.´ 8 Dino De Bonis a travaillé comme electricien´ plusieurs années. En ar- rêt de travail pour invalidité depuis un certain temps, il re¸coit des prestations d’assurance salaire jusqu’en juillet 2015, mois où il célèbre son 55e anniversaire.

2 RLRQ, R-20, r. 10. 308 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

LE REGIME´ SUPPLEMENTAIRE´ DE RENTES POUR LES EMPLOYES´ DE L’INDUSTRIE DE LA CONSTRUCTION DU QUEBEC´ 9 A` titre de travailleurs dans le domaine de la construction, les plaignants participent au Régime supplémentaire de rentes pour les em- ployés de l’industrie de la construction du Québec (le régime de retraite). Tel que le prévoit la Loi R-20, le contenu de ce régime a et´´ e etabli´ par le Comité sur les avantages sociaux de l’industrie de la construction, un comité paritaire réunissant des membres des parties patronales et syndicales, de même que des représentants de la CCQ. Cette dernière administre le régime. 10 Le régime de retraite comprend deux comptes distincts : un compte général, où sont accumulées les cotisations effectuées pour les heures travaillées avant le 26 décembre 2004, ainsi qu’un compte complé- mentaire où sont déposées les cotisations liées au travail effectué depuis cette date. Au compte général correspond une rente a` prestations déterminées, tandis qu’au compte complémentaire, une rente a` cotisations déterminées3. 11 Caroline Piché est actuaire principale a` la CCQ. Elle explique que la coexistence des deux volets dans le régime de retraite découle d’une importante modification apportée au régime de retraite en 2005 : de régime a` prestations déterminées jusqu’alors, il est devenu, pour le futur, un ré- gime a` cotisations déterminées. Les crédits de rentes accumulés par les participants jusqu’à ce changement ont et´´ e gelés dans le compte général et toutes les cotisations futures, versées dans le compte complémentaire pour le nouveau régime mis en place. 12 A` titre d’administratrice du régime, la CCQ envoie a` tous les participants, incluant aux plaignants, des relevés annuels de retraite. Les deux volets du régime de retraite sont présentés dans ces relevés.

LA MODIFICATION AU REGIME´ DE RETRAITE EN JUILLET 2014 13 Jusqu’au 1er juillet 2014, les deux rentes devaient etreˆ réclamées au même moment par un participant. Il n’y avait qu’une seule date de retraite possible.

3 Voir les articles 108 et 109 du R`eglement 10. De Bonis c. Qu´ebec (Commission de la construction) Alder, juge admin. 309

14 A` cette date, le régime de retraite est a` nouveau modifié : il devient possible, a` certaines conditions, de prendre une « retraite partielle ». En fait, il ne s’agit pas d’une retraite a` proprement parler, mais plutôt de la possibilité, pour les participants « admissibles », de recevoir leur rente du compte général a` une date différente de celle de la rente du compte com- plémentaire. Ils peuvent continuer a` travailler et cotiser au compte com- plémentaire, et ce, en prévision d’une retraite future. Une section a` cet effet est donc ajoutée au Règlement 10. 15 Valérie Belzile est chef de section, retraite et assurance-vie, a` la CCQ. Elle décrit le plan de communication etabli´ par la CCQ pour pub- liciser cette modification. Il consiste essentiellement en la publication d’un dépliant destiné aux participants, la formation du personnel de la CCQ dédiés aux dossiers de retraite, ainsi que diverses communications aux associations de salariés actives dans l’industrie de la construction. 16 Ainsi, le 28 avril 2014, un dépliant est posté a` 13 998 participants ciblés par la CCQ pour leur eligibilit´´ e prochaine a` la retraite partielle. Ce dépliant est déposé a` l’audience. Il est en couleur et compte 8 pages, de format de 23 X 10 centimètres. 17 Deux photos ornent la page couverture de ce dépliant. La première, dans le haut, montre le bas du corps d’un golfeur sur une pelouse verte et porte la mention « Prendre votre retraite. . . ». Sur celle du bas, on voit le corps d’un travailleur en train de mesurer une planche, sur laquelle sont superposés les mots : « Vous y pensez? ». En dessous des photos, au bas de cette page couverture, on lit ceci : « La retraite partielle : un nouveau choix en vigueur le 1er juillet 2014 ». Les mots « un nouveau choix en vigueur » sont en vert pâle sur un fond vert foncé. Enfin, la mention « Régime de retraite de l’industrie de la construction du Qué- bec » apparaˆıt en ton sur ton, de couleur verte, sur le côté de la page. Elle est disposée sur la verticale, si bien qu’il faut retourner le dépliant de 90 degrés pour pouvoir la lire, si tant est que l’on remarque cette inscrip- tion fort discrète. 18 Une copie de cette page couverture est annexée a` la présente décision. 19 Il convient de reproduire la deuxième page du dépliant, laquelle contient des informations importantes sur le changement apporté au régime de retraite : Nouveau choix de retraite a` compter du 1er juillet 2014 Vous recevez ce dépliant parce qu’à compter du 1er juillet 2014, vous pourriez etreˆ admissible1 a` une retraite partielle. Vous pourriez ainsi bénéficier d’une première rente de retraite, tout en continuant 310 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

d’accumuler vos cotisations en vue de votre retraite complète. Cette nouvelle option pourrait etreˆ plus avantageuse pour vous. Ce dépliant vous aidera a` prendre une décision eclair´´ ee. Vous songez a` prendre votre retraite d’ici le 30 juin 2014? Si vous décidez de prendre votre retraite d’ici le 30 juin 2014, vous n’aurez pas l’option de choisir une retraite partielle. Une rente com- plète vous sera versée pendant toute votre vie. Vous songez a` prendre votre retraite a` compter du 1er juillet 2014? Si vous décidez de prendre votre retraite a` compter du 1er juillet 2014, vous aurez le choix de prendre une retraite partielle ou une retraite complète. Si vous choisissez de prendre une retraite partielle, vous recevrez une première rente. Cette rente vous sera versée pendant toute votre vie. Vous pourrez par la suite et a` n’importe quel moment, prendre votre retraite complète. A` partir de ce moment, vous recevrez une deuxième rente qui vous sera aussi versée pendant toute votre vie. 1. Pour etreˆ admissible a` la retraite partielle, vous devez avoir travaillé dans l’industrie de la construction avant 2005, avoir cotisé au régime de retraite durant cette période et avoir accumulé 21 000 heures travaillées au moment où vous faites votre demande de retraite. D’autres critères d’admissibilité pourraient s’appliquer. Pour en savoir plus, consulter le ccq.org. 20 S’ensuivent, aux pages 3 a` 7, des explications sur les deux comptes du régime de retraite, sur le calcul de la rente provenant du compte com- plémentaire, sur la retraite partielle et la couverture d’assurances et sur l’admissibilité a` la retraite partielle ou complète. Puis, la page 7 contient les paragraphes suivants : IMPORTANT Si vous décidez de retarder votre retraite pour bénéficier de l’option de la retraite partielle, vous devez tenir compte du fait qu’un certain nombre de versements ne vous seront pas payés. Par exemple, si vous etesˆ admissible a` une retraite a` compter du 1er mai 2014 mais que vous choisissez d’attendre jusqu’au 1er août, les versements des mois de mai, juin et juillet ne vous seront pas payés. 21 Cette page se termine avec la mention qu’il est possible de communiquer avec une equipe´ de professionnels dédiés aux dossiers de retraite a` la CCQ. A` la page 8, 12 logos d’organisations œuvrant dans l’industrie de la construction sont reproduits, dont celui de la CCQ. S’y trouvent aussi les numéros de téléphone du service a` la clientèle de cette dernière, De Bonis c. Québec (Commission de la construction) Alder, juge admin. 311

l’adresse de son site Internet, de même que la mention : « English copy available on request ». 22 En réponse a` une question du Tribunal, madame Belzile précise qu’aucune lettre n’accompagnait le dépliant lorsqu’il a et´´ e posté aux participants identifiés. Elle ajoute que la CCQ s’est cependant assuré que les adresses postales soient valides pour ne pas avoir de retour de courrier. Elle confirme que le dépliant a et´´ e envoyé aux plaignants. Elle dépose des extraits d’un fichier Excel préparé pour cet envoi, qui comprend effectivement les noms et les bonnes adresses des plaignants. Ce fichier fut transmis au service de préparation postale de la CCQ qui a effectué l’envoi. 23 Par ailleurs, la CCQ con¸coit et envoie aux travailleurs de l’industrie de la construction le bulletin « L’Outil », deux fois par année. Ce bulletin est aussi publié sur son site Internet. Madame Belzile dépose une copie de l’édition de l’hiver 2015, qui annonce le nouveau choix de la retraite partielle offert aux travailleurs depuis le 1er juillet 2014. On invite les participants a` consulter le site Internet de la CCQ ou a` communiquer avec son service a` la clientèle pour en savoir davantage. 24 Questionnée sur le nombre de participants qui ont demandé leur rente de retraite partielle depuis le 1er juillet 2014, madame Belzile répond qu’il y en a environ 600. Les 13 398 autres n’ont pas et´´ e relancés par la CCQ. 25 Enfin, Andrée Généreux, une spécialiste de l’information sur la retraite a` la CCQ, témoigne que le relevé annuel envoyé aux participants du régime de retraite a et´´ e modifié pour tenir compte du changement. On y trouve maintenant une section « Option retraite partielle » a` la page 3 de 8. Cette modification apparaˆıt pour la première fois au relevé des droits accumulés au 31 décembre 2014, lequel est posté a` l’automne 2015.

LA DEMANDE DE RETRAITE DE MONSIEUR GAUTHIER 26 A` l’automne 2015, monsieur Gauthier confirme qu’il re¸coit son relevé annuel de retraite faisant etat´ de sa participation au régime. Il a de la difficulté a` le comprendre. Plus précisément, il s’interroge sur le fait que malgré le fait qu’il soit ecrit´ que sa date normale de retraite est le 1er janvier 2025, le document semble indiquer qu’il est aussi admissible a` une rente sans réduction depuis le 1er janvier 2015. Il ne comprend pas non plus ce que signifie l’expression « retraite partielle ». 312 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

27 Le 5 octobre 2015, il communique avec un représentant de la CCQ pour obtenir des explications. A` sa grande surprise, une employée lui confirme qu’il peut effectivement recevoir sa rente provenant du compte général, et ce, même s’il ne prend pas encore sa retraite. Il apprend aussi que le montant de cette rente sera le même peu importe qu’il retarde la date de sa retraite de cinq ou dix ans. Il affirme s’être alors exclamé « Alors, je suis ben mieux de la prendre tout suite! », ce a` quoi l’employée lui a répondu « Ben oui ». 28 Toujours le 5 octobre, la CCQ envoie a` monsieur Gauthier le formulaire de demande de prestation de retraite, accompagné de divers documents et d’une lettre précisant ceci : Selon nos calculs, vous etesˆ admissible a` une retraite complète et a` une retraite partielle. Une retraite complète signifie que vous utilisez vos droits accumulés au compte général et au compte complé- mentaire afin de vous constituer une rente. Vous ne pourrez plus accumuler de droits a` votre régime de retraite après la mise en service de votre rente. Une retraite partielle signifie que vous utilisez seulement vos droits accumulés au compte général afin de vous constituer une rente. Si vous continuez a` travailler, vous accumulez des droits dans votre compte complémentaire. Notez toutefois que l’accumulation de nouveaux droits cesse a` compter de votre date de retraite normale. Au moment que vous jugerez opportun, vous pourrez demander la mise en service de votre deuxième rente, constituée de vos droits ac- cumulés provenant de votre compte complémentaire. Vous serez alors considéré en retraite complète. 29 Parmi les documents annexés, se trouve un relevé des droits de retraite de monsieur Gauthier en date du 1er novembre 2015. Il s’agit d’un document de 10 pages présentant l’information sur les deux comptes de même que différents choix d’option. Il est mentionné que la rente mensuelle provenant du compte général se chiffre a` 1 346,15 $ et que le premier versement est le 1er novembre 2015. 30 Monsieur Gauthier remplit le formulaire, mais demande que sa rente lui soit versée rétroactivement au 1er janvier 2015, puisque c’est a` cette date qu’il répond aux critères d’admissibilité a` la retraite partielle de l’aveu même de la CCQ. Il se plaint ne pas avoir re¸cu l’information en temps utile. Le 19 octobre 2015, la CCQ lui répond, par lettre, qu’elle ne peut donner suite a` cette demande. Elle ecrit,´ entre autres, ceci : Or, selon l’article 126 du Règlement sur les régimes complémentaires d’avantages sociaux dans l’industrie de la construction [. . .], dis- De Bonis c. Québec (Commission de la construction) Alder, juge admin. 313

ponible sur notre site WEB, un participant prend sa retraite lorsqu’il confirme a` la CCQ, au moyen du formulaire qu’elle prescrit, sa déci- sion de recevoir sa prestation de retraite. Selon nos dossiers, vous avez communiqué a` la CCQ pour la pre- mière fois le 5 octobre 2015, votre intention de prendre votre retraite. Il est a` noter que vous avez re¸cu a` chaque année, depuis que vous déclarez des heures a` la CCQ, un relevé annuel sur lequel etait´ in- diqué l’âge auquel vous seriez admissible a` une rente sans réduction du compte général. A` titre d’exemple, nous joignons celui de 2013 (voir section 7 surlignée). Par ailleurs, en ce qui a trait a` l’introduction de la retraite partielle, nous avons effectivement envoyé en juillet 2014, a` un groupe de participants concernés, et dont vous faisiez partie, le dépliant intitulé : « Prendre votre retraite. . . Vous y pensez? La retraite partielle, un nouveau choix en vigueur le 1er juillet 2014 ». Nous joignons une copie du dépliant. Cette communication présentait, entre autres, toutes les informations requises pour connaˆıtre les impacts de faire ou de ne pas faire votre demande de prestation de rente. Voir les el´´ ements soulignés en jaune dans le dépliant joint. [...] Ainsi, après analyse de votre dossier, nous considérons que la CCQ a effectué les démarches raisonnables pour vous informer de vos droits et des possibilités s’offrant a` vous. (soulignement ajouté) 31 Lorsqu’il re¸coit cette lettre, monsieur Gauthier téléphone a` nouveau au bureau des plaintes de la CCQ. Il estime qu’on lui doit 11 mois de rente et trouve que cette décision n’a pas d’allure. 32 Le 17 décembre 2015, madame Gadoua, chef du bureau des plaintes, lui ecrit´ que s’il se croit lésé par cette décision, il peut déposer une demande de réexamen a` la CCQ. 33 Le 7 janvier 2016, monsieur Gauthier dépose sa demande de réex- amen. Il réitère avoir appris seulement le 5 octobre 2015 qu’il avait droit « d’encaisser une partie de [son] fonds de pension ». En référence au dépliant envoyé par la CCQ, il ecrit´ : En toute objectivité, je vous invite a` lire ce document avec l’intérêt et les yeux d’une personne qui ne songe nullement a` prendre sa retraite, ce qui etait´ mon cas [. . .]. 314 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

Je l’ai parcouru distraitement, car aucune mention particulière de nous interpellait a` etreˆ attentif ou qu’il y avait de l’information importante concernant l’encaissement de notre fonds de pension. Je suis bien tombé dans ce piège a` con. N’ayant pas lu attentivement le document jusqu’à la dernière page, je suis sérieusement pénalisé. Cette négligence me coûte 15 272.84 $. [...] Je ne comprends pas votre approche, vos méthodes. Je n’y vois qu’un système nébuleux visant a` vous accaparer une somme d’argent qui devrait m’être versée. Ce sont les cotisations des travailleurs de la construction qui paient vos salaires afin que vous vous occupiez de la gestion de notre fonds de pension. Si une somme d’argent m’est due, pourquoi ne pas tout simplement me faire parvenir un chèque plutôt que de dif- fuser l’avis de fa¸con détournée via un dépliant a` connotation promotionnelle. (reproduit tel quel, a` l’exception du caractère gras ajouté) 34 Le 18 mars 2016, la CCQ ecrit´ a` monsieur Gauthier qu’elle maintient sa décision du 19 octobre 2015. Elle ajoute que s’il souhaite contester cette décision rendue en réexamen, il doit s’adresser au Tribunal. Ce qu’il fait en date du 9 mai 2016. 35 A` l’audience, madame Généreux précise que, selon les dossiers de la CCQ, monsieur Gauthier avait déjà exprimé son désir de prendre sa retraite et demandé de l’information en mars 2012. Il n’y avait cependant pas donné suite. Elle confirme qu’à cette epoque,´ la retraite partielle n’était effectivement pas possible. 36 Monsieur Gauthier, pour sa part, affirme qu’il ignorait tout de l’option de la retraite partielle avant le 5 octobre 2015. Il convient avoir re¸cu ses relevés annuels, le bulletin « L’Outil » et le dépliant « Prendre votre retraite. . . Vous y pensez? ». Cela dit, il estime que le texte contenu dans ses relevés, tout comme celui utilisé dans le site Internet de la CCQ, est loin d’être clair et difficile a` comprendre. Quant au dépliant, il ressemble davantage a` un prospectus publicitaire et cela l’a induit en erreur. Comme il ne pensait pas prendre sa retraite a` cette epoque,´ il n’en prend pas connaissance.

LA DEMANDE DE RETRAITE DE MONSIEUR DE BONIS 37 Les 11 février et 15 mai 2015, monsieur De Bonis communique avec la CCQ pour obtenir des renseignements advenant qu’il décide de pren- De Bonis c. Québec (Commission de la construction) Alder, juge admin. 315

dre sa retraite. A` chaque reprise, la CCQ lui envoie une lettre semblable a` celle qu’elle a envoyée a` monsieur Gauthier le 5 octobre 2015, avec les mêmes annexes. Monsieur De Bonis n’y donne pas suite. 38 Puis, le 27 octobre 2015, monsieur De Bonis téléphone a` nouveau a` la CCQ pour demander des renseignements concernant sa retraite. Il affirme que ce n’est qu’à ce moment qu’on lui apprend l’existence de la retraite partielle et qu’il comprend qu’il y est admissible sans pénalité, même s’il ne prend pas sa vraie retraite. Il la demande. 39 La CCQ lui envoie encore une fois la même lettre et les annexes, etablissant´ cette fois la prestation qui pourrait lui etreˆ versée a` compter du 1er novembre 2015. Selon cet envoi, monsieur De Bonis a droit a` une rente mensuelle de 1 262,68 $ pour sa retraite partielle. Il est indiqué que le premier versement de cette rente sera le 1er novembre 2015. 40 Le 16 novembre 2015, monsieur De Bonis demande a` la CCQ de lui verser ses prestations de retraite partielle rétroactivement au 20 juillet 2015, date a` laquelle il est devenu admissible a` la retraite partielle. Le 19 novembre 2015, la CCQ répond par la négative, en lui envoyant la même lettre qu’elle a envoyée a` monsieur Gauthier le 19 octobre 2015 et dont un large extrait est reproduit ci-dessus. Monsieur De Bonis s’estime lésé par cette décision et en demande le réexamen. 41 Le 20 avril 2016, la CCQ lui ecrit´ qu’à la suite de son réexamen, elle maintient sa décision du 19 novembre 2015. Elle ajoute que s’il souhaite contester cette décision rendue en réexamen, il doit s’adresser au Tribu- nal. Ce qu’il fait en date du 13 mai 2016. 42 A` l’audience, madame Généreux relate que la CCQ a posté une copie du dépliant « Prendre votre retraite. . . Vous y pensez » a` monsieur De Bonis. Celui-ci ne se souvient toutefois pas de ce dépliant. Il convient néanmoins avoir re¸cu différents relevés annuels. Il indique s’attarder aux chiffres plutôt qu’au texte de ces documents. Il ajoute qu’il n’avait pas compris de ces relevés, pouvoir demander sa rente du compte général avant de prendre sa véritable retraite.

LES PRETENTIONS´ DE LA CCQ 43 Dans les présentes affaires, la CCQ plaide que le Règlement 10 ne lui permet pas de verser aux plaignants une rente de retraite partielle rétroac- tive a` leur date d’admissibilité. Elle plaide avoir respecté toutes ses obligations, incluant son devoir d’information. Elle a envoyé toute l’information pertinente aux plaignants. Si ces derniers n’ont pas fait l’effort de la lire, ils ne peuvent s’en prendre qu’à eux-mêmes. Ce lax- 316 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

isme ne saurait etreˆ générateur de droits, comme le confirme une abondante jurisprudence.4 44 La CCQ ajoute que même s’il y a erreur de sa part, elle n’a pas a` indemniser les plaignants, car elle a exercé son pouvoir administratif de manière raisonnable. Elle s’appuie sur la décision Venne c. Commission de la construction du Québec5. Dans cette affaire, la requérante contes- tait une décision de la CCQ refusant la délivrance d’un certificat de com- pétence-apprenti electricien.´ Après avoir conclu que le travailleur ne satisfaisait pas aux conditions prévues au Règlement sur la délivrance des certificats de compétence6 et qu’il avait et´´ e induit en erreur par la CCQ, la Commission des relations du travail déclare qu’elle ne peut y remédier parce que : « [. . .] d’une part, elle est aussi liée par les dispositions législatives et règlementaires appliquées par la CCQ et, d’autre part, elle ne peut modifier le statut d’un DEP [. . .], sous peine d’usurper le pouvoir administratif réservé a` la CCQ et de rendre une décision illégale. »

LES MOTIFS LE DROIT 45 L’article 93 de la Loi R-20 permet a` une personne qui se croit lésée par une décision de la CCQ, a` la suite d’une demande de réexamen reliée a` l’admissibilité a` un régime d’avantages sociaux ou au montant d’une prestation, de la contester devant le Tribunal. Il se lit comme suit : 93. Toute personne qui se croit lésée par une décision de la [CCQ] quant a` son admissibilité a` un régime d’avantages sociaux ou quant au montant d’une prestation peut, dans les 60 jours de sa réception, en demander le réexamen a` la [CCQ]. La [CCQ] rend sa décision en réexamen dans les 60 jours de la demande. La décision en réexamen peut, dans les 60 jours de sa récep-

4 Desjardins c. General Motors du Canada ltée, 2009 QCCS 1200 (C.S. Que.); Lemieux c. Québec (Commission de la construction), 2015 QCCRT 676 (C.R.T.Q.); Kowalewski c. Québec (Commission de la construction), 2012 QC- CRT 0335 (C.R.T.Q.); Lewis c. Commission de la construction du Québec, 2014 QCCRT 0324; Pelletier c. Québec (Commission de la construction), 2014 QC- CRT 0247 (C.R.T.Q.). 5 2009 QCCRT 0269. 6 L.R.Q. c. 20, r. 5. De Bonis c. Québec (Commission de la construction) Alder, juge admin. 317

tion, etreˆ contestée devant le Tribunal administratif du travail; la dé- cision de ce dernier est définitive. A` défaut d’une décision initiale quant a` son admissibilité ou quant au montant d’une prestation, ou d’une décision en réexamen dans les 90 jours de la demande visée, la personne concernée peut adresser sa demande au Tribunal administratif du travail, dans les 60 jours du délai prescrit. (soulignement ajouté) 46 Parmi les régimes complémentaires d’avantages sociaux dont il est question a` cet article, se trouve le régime de retraite prévu aux articles 104 et suivants du Règlement 10. Il s’agit du régime de retraite en cause dans les présentes affaires. 47 La Loi R-20 prévoit, au paragraphe 6° de son article 4 ainsi qu’au paragraphe 1 de son article 92, que la CCQ agit comme l’administratrice des régimes complémentaires d’avantages sociaux : 4. La [CCQ] a pour fonction d’administrer la présente loi et notamment : [...] 6° d’administrer des régimes complémentaires d’avantages sociaux conformément a` la présente loi; 92. 1. La [CCQ] administre les régimes complémentaires d’avantages sociaux. Elle continue la gestion de ces régimes qui demeurent en vigueur, même pour la période qui suit l’expiration d’une convention collective. [...] 48 Le chapitre 3 du Règlement 10 porte sur le régime de retraite. Il comprend une centaine d’articles répartis dans les 9 sections suivantes : Section 1 (articles 104 a` 117) : Dispositions générales Section 2 (articles 118 a` 125) : Capitalisation du régime de retraite Section 3 (articles 126 a` 130) : Admissibilité a` la retraite Section 4 (articles 131 a` 138) : Prestations de retraite Section 5 (articles 139 a` 140.2) : Prestations de départ Section 6 (articles 141 a` 146) : Prestations au décès Section 7 (articles 147 a` 153.1) : Partage et cession de droits entre conjoints Section 8 (articles 154 a` 157.5) : Retraite partielle Section 9 (articles 158 a` 167.1) : Administration du régime de retraite (caractère gras ajouté) 318 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

49 Les dispositions du Règlement 10 qui sont pertinentes aux présentes affaires sont les suivantes : 104. Dans le présent règlement, l’expression « régime de retraite » désigne le Régime supplémentaire de rentes pour les employés de l’industrie de la construction du Québec. Les dispositions pertinentes du présent règlement constituent le texte de ce régime. Ce régime est contributif; il est obligatoire pour les salariés et les employeurs assujettis a` la Loi. 126. Prise de la retraite. Un participant qui désire prendre sa retraite doit communiquer avec la Commission pour obtenir le formulaire qu’elle prescrit. Pour l’application du présent règlement, on entend: 1° qu’un participant « a pris sa retraite » lorsqu’il a confirmé a` la Commission sa décision de recevoir une prestation de retraite, en lui transmettant le formulaire qu’elle prescrit dans les 60 jours de la date a` laquelle il a communiqué avec la Commis- sion pour obtenir ce formulaire; 2° qu’un « retraité » est un participant qui a pris sa retraite. 126.1. Date de retraite. Lorsqu’un participant prend sa retraite, la date de sa retraite correspond au premier jour du mois qui suit celui au cours duquel il a communiqué avec la Commission pour demander le formulaire qu’elle prescrit. Malgré le premier alinéa, lorsqu’un participant communique avec la Commission pour obtenir le formulaire qu’elle prescrit le 1er décem- bre de l’année au cours de laquelle il atteint l’âge de 71 ans ou après cette date, la date de sa retraite correspond au 1er décembre de l’année au cours de laquelle il atteint l’âge de 71 ans. 127. Retraite normale. Un participant atteint l’âge normal de la retraite le premier jour du mois qui suit celui au cours duquel il atteint l’âge de 65 ans. Pour l’application du présent chapitre, ce jour correspond a` la date de la retraite normale. Un participant dont la date de retraite correspond a` la date de la retraite normale re¸coit la rente normale de retraite. 131. Rente normale. La rente normale de retraite se compose: 1° de la rente relative au compte général pour service antérieur au 26 décembre 2004, le cas ech´´ eant, calculée en fonction des heures travaillées ajustées et selon les taux de l’annexe II en vigueur a` la date de retraite, a` laquelle s’ajoute un supplément de 12,5%; De Bonis c. Québec (Commission de la construction) Alder, juge admin. 319

2° de la rente relative au compte complémentaire, calculée en fonction des facteurs actuariels en vigueur a` la date du premier versement dû de cette rente, majorés par le pourcentage que représente la réserve pour indexations futures déterminée selon l’article 121 lors de la dernière evaluation´ du régime, compte tenu, le cas ech´´ eant, de l’indexation des rentes appli- quée suite a` cette evaluation.´ La date du premier versement dû de la rente relative au compte com- plémentaire du participant correspond a` sa date de retraite. 154. Retraite partielle. Est admissible a` la retraite partielle, le participant qui satisfait aux conditions suivantes: 1° il a accumulé au moins 21 000 heures travaillées au régime de retraite; 2° il est admissible a` une rente selon un des articles 127 a` 130; 3° sa rente relative au compte général pour service antérieur au 26 décembre 2004, calculée en fonction des heures travaillées ajustées et selon les taux de l’annexe II en vigueur a` la date de retraite, et réduite, le cas ech´´ eant, par la rente négative et-´ ablie lors d’un partage de droits entre conjoints ou d’une saisie, est egale´ ou supérieure a` 1 800 $ par année, excluant le supplément de 12,5% et tout ajustement requis en application des articles 132 a` 134; 4° la valeur de son compte complémentaire a` la date de la retraite est supérieure a` 0 $. 154.1. Un participant qui prend une retraite partielle re¸coit une pre- mière rente egale´ a` sa rente relative au compte général pour service antérieur au 26 décembre 2004, calculée selon les modalités applicables des articles 131 a` 134.3. 50 De plus, a` titre d’administratrice du régime de retraite, la CCQ doit agir avec prudence et diligence, dans le meilleur intérêt des participants. Cette obligation existe pour toute personne qui administre le bien d’autrui, comme le prévoit, entre autres, l’article 1309 du Code civil du Québec7 :

APPLICATION DU DROIT AUX CAS A` L’ETUDE´ 51 Lorsqu’elle agit comme administratrice du r´egime de retraite des travailleurs de la construction, la CCQ n’exerce aucun pouvoir discr´e-

7 Chapitre CCQ-1991. 320 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

tionnaire. Elle est liée par les dispositions du Règlement 10 qui résultent de négociations tenues entre les associations syndicales et patronales. 52 Dans le présent dossier, la CCQ prétend avoir correctement appliqué ce règlement, puisque celui-ci ne comprend aucune disposition lui permettant de verser aux plaignants leur rente de retraite partielle rétroac- tivement a` leur date d’admissibilité. Elle estime ainsi que l’article 126.1, enon¸´ cant que la date de la retraite correspond au premier jour du mois qui suit celui au cours duquel le participant a communiqué avec elle pour demander sa retraite, s’applique a` la demande de retraite partielle. Elle en infère que la première rente de retraite partielle n’est due qu’à la date de la retraite au sens de cet article 126.1. 53 Avec respect pour l’opinion contraire, l’analyse de l’ensemble du Règlement 10 résiste bien mal avec cette interprétation. Rappelons que l’article 126.1 existait avant les ajouts de 2014 permettant aux participants de réclamer une rente de retraite partielle a` une date différente de celle de leur véritable retraite. La retraite partielle fait d’ailleurs l’objet de dispositions spécifiques contenues a` la section 8 du Règlement 10. Or, cette section n’indique en rien que la rente de retraite partielle ne serait due qu’à compter de la « date de la retraite » telle que définie par l’article 126.1. 54 Cette section 8 comprend plutôt l’article 154.1 qui prévoit que : « un participant qui prend une retraite partielle re¸coit une première rente egale´ a` sa rente relative au compte général pour service antérieur au 26 décembre 2004, calculée selon les modalités applicables des articles 131 a` 134.3 » (soulignement ajouté). Premièrement, cette disposition indique comment se calcule la première rente, celle relative au compte général, et non pas a` partir de quel moment elle devient due a` un participant. Quant aux modalités applicables dont il est question ici, aucune n’indique le moment où devient due la rente de retraite partielle introduite le 1er juillet 2014. Effectivement, l’article 131 ne prévoit que la date a` laquelle est due la rente relative au compte complémentaire. Cela ne comprend pas la rente de retraite partielle, qui elle, provient du compte général. 55 Qui plus est, l’article 126.1 invoqué par la CCQ se trouve dans la section 3 « Admissibilité a` la retraite » du Règlement 10. Or, l’article 154 du même règlement, qui enum`´ ere les conditions d’admissibilité a` la retraite partielle, ne renvoie qu’aux articles 127 a` 130 qui sont dans cette section. Il n’est nullement fait mention de l’article 126.1. 56 Bref, il n’existe aucune disposition dans le Règlement 10 permettant de soutenir raisonnablement que les participants qui tardent a` demander De Bonis c. Québec (Commission de la construction) Alder, juge admin. 321

leur rente partielle perdront les versements de la rente afférente compris entre la date de leur admissibilité et celle de leur demande a` la CCQ. 57 Les seules mentions a` cet effet sont celles contenues au dépliant « Prendre votre retraite. . . Vous y pensez » et au bulletin de l’hiver 2015 « L’Outil », produits par la CCQ. Ces documents ne lient aucunement les participants et ils ne sauraient ajouter des conditions a` celles prévues au Règlement 10. 58 Rappelons qu’en administrant le régime de retraite des travailleurs de la construction, la CCQ administre le bien d’autrui. A` ce titre, elle doit agir avec prudence et diligence, dans le meilleur intérêt des participants. Le Tribunal estime que l’adoption d’une interprétation arbitraire du Règlement 10, qui ne s’appuie pas sur une disposition claire, ne satisfait pas a` cette obligation. Ce seul motif suffit a` accueillir les présents recours. 59 Cela etant,´ il y a plus. La prétention de la CCQ selon laquelle elle s’est acquittée de son obligation d’informer adéquatement les participants de la modification apportée au régime de retraite le 1er juillet 2014, n’apparaˆıt pas fondée en l’espèce. 60 La modification dont il est question ici est majeure et concerne l’argent qui appartient aux participants admissibles et qui est déposé dans un compte de banque spécifiquement dédié. Cette modification affecte plusieurs participants et nécessite de ceux-ci qu’ils prennent d’importantes décisions. La CCQ le reconnaˆıt d’ailleurs, puisqu’elle prend la peine d’identifier 13 998 participants dans sa base de données pour leur envoyer le dépliant « Prendre votre retraite. . . Vous y pensez ». 61 Or, ce dépliant est posté sans etreˆ accompagné d’une lettre personnal- isée. Il ressemble bien plus a` une publicité de résidences a` temps partagé sous les tropiques qu’à un document communiquant une modification importante. Une image valant mille mots, une copie de sa page couverture est annexée a` la présente décision. Les informations importantes qu’il contient y sont enfouies aux pages 2 et 7. Il est aisé de croire les plaignants, lorsqu’ils affirment ne pas s’être imaginé devoir en prendre connaissance. Surtout que le titre du dépliant est trompeur, parlant de prendre une retraite, alors que la modification introduit plutôt le droit de recevoir une rente tout en continuant a` travailler. 62 Des commentaires similaires s’imposent pour la mention contenue au bulletin « L’Outil ». Qui plus est, non seulement ce bulletin s’adresse a` l’ensemble des travailleurs de l’industrie de la construction, mais la pub- 322 CANADIAN CASES ON PENSIONS & BENEFITS 31 C.C.P.B. (2nd)

lication mentionnant l’ajout de la retraite partielle survient plusieurs mois après l’entrée en vigueur de cette modification. 63 Bref, la campagne de communication entreprise par la CCQ pour communiquer son interprétation de l’importante modification apportée au régime de retraite ne satisfait pas son obligation d’information qu’elle assume a` titre d’administratrice de ce régime. Encore ici, ce rôle lui impose le devoir d’agir avec prudence et diligence, dans le meilleur intérêt des participants. 64 Par ailleurs, le relevé annuel modifié qu’envoie la CCQ aux participants depuis 2014 peut-il lui permettre de soutenir qu’elle s’acquitte de son devoir d’information? Avec respect pour l’opinion contraire, il est permis d’en douter. Ce long et dense document contient beaucoup d’information difficile a` comprendre. Bien sûr, c’est en partie propre a` la nature de ce type de document. Cependant, vu le caractère majeur de la modification apportée au régime de retraite le 1er juillet 2014, la CCQ devait etreˆ particulièrement prudente dans la présentation de l’information a` son sujet. 65 En conclusion, l’interprétation déraisonnable du Règlement 10 par la CCQ suffit a` accueillir les recours entrepris par les plaignants. Cela etant,´ la preuve indique aussi que la CCQ a manqué a` son obligation d’information. Comme convenu a` l’audience, le Tribunal réserve sa com- pétence concernant les montants des prestations dues a` Richard Gauthier et Dino De Bonis.

PAR CES MOTIFS, LE TRIBUNAL ADMINISTRATIF DU TRAVAIL : ACCUEILLE les recours; ANNULE la décision du 18 mars 2016 rendue par la Commission de la construction du Québec concernant la demande de rente pour la retraite partielle de Richard Gauthier; ANNULE la décision du 20 avril 2016 rendue par la Commission de la construction du Québec concernant la demande de rente pour la retraite partielle de Dino De Bonis; RESERVE´ sa compétence pour déterminer les montants des prestations dues a` Richard Gauthier et Dino De Bonis. Requête accordée.