COURT OF APPEAL FOR ONTARIO
CARTHY, CHARRON AND SHARPE JJ.A.
B E T W E E N
PETER CHRISTOPHER BURKE, RICHARD FALLIS and A. DOUGLAS ROSS, personally and in a representative capacity
(Plaintiffs/Respondents)
- and -
THE GOVERNOR AND COMPANY OF ADVENTURERS OF ENGLAND AND TRADING INTO HUDSON’S BAY and INVESTORS GROUP TRUST COMPANY LTD.
(Defendants/Appellants)
Brett Ledger and Joseph Starkman for Hudson Bay Company
David Moore for the respondents
Heard: May 29, 2003
On appeal from the order of Justice Susan Greer of the Superior Court of Justice dated June 6, 2002.
BY THE COURT:
1This is a representative action involving claims made on behalf of certain former members of the Hudson Bay Company (“the Bay”) pension plan (“the Plan”). The plaintiffs left the Plan when the Bay sold the division in which they worked. Their pension rights were transferred to their new employer. The Plan continued for the Bay’s remaining employees. The plaintiffs assert a claim to a pro-rata share of the actuarial surplus that existed in the Plan at the time of the sale. The plaintiffs also contend that the actuarial surplus would have been larger but for certain impugned practices adopted by the Bay prior to the sale.
1The Bay sought the determination of the following questions under Rule 21.01(1)(a) and the motions judge gave the following answers:
(a) Surplus Entitlement
(i) whether, assuming no full or partial termination of the Plan occurred at the time of the sale of the Northern Stores Division in 1987, the plaintiffs have a current entitlement to a transfer of, or any other legal or equitable right or interest in, any portion of Plan assets, including actuarial surplus existing in the ongoing Plan pursuant to the terms of the Plan, the Trust Agreements, the Pension Agreement and the Pensions Benefits Act, R.S.O. 1980, c. 373, as amended, or the Pensions Benefit Act, 1987, S.O. 1987, c. 35, whichever is applicable;
Answer: This question cannot be answered on a Rule 21 motion and must proceed to trial.
(ii) whether, assuming (without admitting) that a partial termination of the Plan did occur upon the sale of the Northern Stores Division in 1987, the plaintiffs have a current entitlement to a transfer of any portion of Plan assets, including actuarial surplus existing in the ongoing Plan, pursuant to the terms of the Plan, the Trust Agreements, the Pension Agreement and the Pensions Benefits Act, R.S.O. 1980, c. 373, as amended, or the Pensions Benefit Act, 1987, S.O. 1987, c. 35, whichever is applicable;
Answer: This question cannot be answered on a Rule 21 motion and must proceed to trial.
(iii) whether statements made in the Booklets are capable in law of giving rise to any legal or equitable right or interest of the plaintiffs in any portion of Plan assets, including actuarial surplus existing in the ongoing Plan, if no such right or interest otherwise exists pursuant to the terms of the Plan, the Trust Agreements, the Pension Agreement and the Pensions Benefits Act, R.S.O. 1980, c. 373, as amended, or the Pensions Benefit Act, 1987, S.O. 1987, c. 35, whichever is applicable;
Answer: This question cannot be answered on a Rule 21 motion and must proceed to trial.
(b) Contribution Holiday
(i) whether the terms of the Plan, on or before May 25, 1987, authorized the Bay to take contribution holidays when the Plan contained an actuarial surplus;
Answer: The Plan neither provides nor prohibits contribution holidays.
(ii) whether amendments made to the Plan relating to contribution holidays, on or before May 25, 1987, were consistent with the power of amendment provided for in the Plan;
Answer: There is no need to answer this question.
(iii) whether statements made in the Booklets or any provision of the Trust Agreements were capable in law of precluding the Bay from having taken contribution holidays on or before May 25, 1987, which were otherwise authorized by the Plan;
Answer: This issue will have to go to trial.
(c) Administrative Costs and Expenses
(i) whether the terms of the Plan and the Trust Agreements in effect between July 1, 1982, and May 25, 1987, required the Bay to pay the costs and expenses of administering the plan and the trusts;
Answer: Yes
(ii) whether amendments to the Plan and the Trust Agreement relating to the payment of the costs and expenses of administering the Plan and the trusts that were in effect between July 1, 1982, and May 25, 1987, were consistent with the powers of amendment provided for in the Plan and the Trust Agreements;
Answer: No
(iii) whether statements made in the Booklets were capable in law of precluding such amendments to the Plan and the Trust Agreements;
Answer: Yes
(d ) Pension Source
(i) whether the terms of the Plan obligate the Bay to pay at least one half of the cost of pensions benefits to which Plan members may become entitled pursuant to the terms of the Plan;
Answer: There is no express term in the Plan itself
(ii) whether statements made in the Booklets are capable in law of giving rise to an obligation that the Bay pay at least one half of the cost of pension benefits to which Plan members may become entitled pursuant to the terms of the Plan
Answer: The issue will have to go to trial
2This appeal concerns only the answers to question 2 (c) concerning administrative costs and expenses.
3These questions must be considered in light of the fact that they concern one relatively narrow aspect of a complex case that is proceeding to trial. It is also important to understand the three questions in relation to each other. It is common ground that the motions judge’s affirmative answer to question 2 (c)(i) was determined by her negative answer to question 2 (c)(ii). She appears not to have considered the effect of the impugned amendments relating to the payment of the costs and expenses of administering the Plan and the trusts, but rather based her affirmative answer to question 2 (c)(i) on her conclusion under question 2 (c)(ii) that the amendments were not valid. Moreover, the plaintiffs contend that, even if the booklets were not capable in law of precluding the amendments, they still affect the proper interpretation of the amendment power and the answer to question 2 (c)(ii).
4To determine the effect, if any, of the booklets, they must be assessed in light of the circumstances in which the statements were made; their effect, if any, is bound up with