Andrew J. Hatnay

The appellants appealed from the Court of Appeal's reversal of the CCAA court's decision regarding the priority of pension plan wind-up deficiency claims over court-ordered DIP financing charges.

The majority held that wind-up deficiencies under s. 75(1)(b) of the Pension Benefits Act were subject to a statutory deemed trust under s. 57(4), but that the deemed trust was superseded by the DIP charge by virtue of the doctrine of federal paramountcy.

The majority further held that while the employer-administrator breached its fiduciary duty by failing to ensure the pension plan beneficiaries had adequate notice and representation in the CCAA proceedings, a constructive trust was not an appropriate remedy because the breach did not result in an identifiable asset that it would be unjust for the wrongdoer to retain.

Following dismissal of an application seeking a declaration that retention bonuses constituted pensionable earnings under a pension plan, the court determined the issue of costs.

The unsuccessful applicant sought to have his costs paid from the pension trust fund.

Applying the pension trust approach discussed in appellate authorities, the court held that costs may be payable from a pension fund where proceedings ensure proper administration of the trust or benefit all beneficiaries.

Because the claim sought increased benefits for the applicant alone and was adverse to other beneficiaries, costs could not be ordered from the trust fund.

Despite the applicant’s loss, the court exercised discretion to order no costs given the ambiguity of the plan terms, the novelty of the issue, and the applicant’s good faith.

The applicant sought a declaration that retention bonuses payable under an amended employment agreement constituted pensionable earnings under a multi-employer pension plan for purposes of calculating pension benefits.

The court considered the plan definition of “pensionable earnings,” which included wages, salary, and other amounts forming a regular and integral part of a member’s remuneration.

The applicant argued the bonuses were regular compensation tied to continued employment, while the plan administrator argued they were ad hoc payments replacing a severance-trigger provision.

The court held that although the payments occurred on fixed dates, they were not a regular and integral component of remuneration within the meaning of the plan.

The application was dismissed and the bonuses were found not to be pensionable earnings.