CITATION: Hunte v. Superintendent of Financial Services and The Canada Life Assurance Company, 2014 ONSC 1270
DIVISIONAL COURT FILE NO.: 484/13
DATE: 20140226
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
KITELEY, NORDHEIMER AND HARVISON YOUNG JJ.
BETWEEN:
CARL HUNTE
Appellant
– and –
SUPERINTENDENT OF FINANCIAL SERVICES and THE CANADA LIFE ASSURANCE COMPANY
Respondents
Maxim Kaploun, for the Appellant
Deborah McPhail and Mark Bailey, for the Respondent, Superintendent of Financial Services
Jeff Galway and Max Shapiro, for the Respondent, The Canada Life Assurance Company
HEARD at Toronto: February 26, 2014
HARVISON YOUNG J. (orally)
[1] Carl Hunte appeals the decision of the Financial Services Tribunal dated September 26, 2013. The Tribunal dismissed the appellant’s claim to entitlement to a pension from his employment with The Canada Life Assurance Company.
[2] The appellant submits that the Tribunal’s decision was unreasonable and requests that this Court order that he is entitled to the pension, direct the Superintendent of Financial Services to order that the appellant has a valid claim to the pension and to direct the Superintendent to assess the quantum of the entitlement.
[3] The appellant is 68 years old. He was employed with Crown Life Insurance Company from 1970 to 1982 with a two to three month hiatus in 1975, during which he worked at a different insurance company. Crown Life was purchased by Canada Life.
[4] The appellant claims that he is entitled to a pension pursuant to the Pension Plan because, when his employment with Crown Life terminated in 1982, he was provided with a cheque by his employer and told that it was for the return of his Additional Voluntary Contributions (“AVCs”). The Tribunal held however, that based on the evidence given at the hearing, the cheque was a cash refund for the appellant’s basic benefit contribution.
[5] The appellant argued that even if this was the case, he was still entitled to the pension plan because he had been locked in by its term. Section VIII(a) of the Pension Plan provides as follows and its interpretation is at the root of this appeal:
Locking-In Legislation
Notwithstanding anything to the contrary contained in the foregoing Section VIII, the vesting rights of a member employed in Nova Scotia, Quebec, Ontario or Alberta shall be subject to the provisions of any provincial or federal government legislation as set out below:
In the event that the member has attained 45 years of age and has completed a continuous period of 10 years in the service of the Employer or has been a member of this plan and the previous plan for 10 years, whichever event shall first occur, all retirement benefits accredited to the member in accordance with the plans shall be fully vested in respect of any such service and the contributions the member has been required to make in accordance with the terms of the plans may not be withdrawn by such member.
[6] The appellant raises two main grounds of appeal: first, whether the Tribunal’s interpretation of the Plan was reasonable; and second, whether the Tribunal was correct or reasonable in its consideration of the contra proferentum principle. The parties agree that the standard of review for decisions interpreting pension plans is reasonableness, while the standard of review for decisions interpreting the Act, is correctness: see Ontario Pension Plan v. Ratansi. We agree.
Interpretation of s. VIII (a) of the Pension Plan
[7] The appellant submits that the Pension Plan’s words are clear and unambiguous and clearly provided that the twelve year period of the appellant’s membership in the plan was sufficient to have his pension locked in. He further submits that the purpose of pension legislation generally is to set minimum standards and that Crown Life, while it might have drafted a more restrictive plan, failed to do so. We disagree.
[8] To begin with, we do not agree with the starting premise that s. VIII (a) was clear on its face. The absence of punctuation in s. VIII (a) creates ambiguity in relation to the application of the age requirement. The Tribunal therefore appropriately considered its interpretation. It found that the locking-in provision of the plan required a plan member to have either ten years continuous service with the employer or ten years membership in the Plan, whichever occurs first and have attained 45 years of age at the date of his/her termination of employment is reasonable. [emphasis added]
[9] It carefully considered the appellant’s submissions on this point. It reasoned that it is evident from the context that the intent of s. VIII (a) was to enshrine the vesting requirements of pension legislation then in effect. As the Tribunal noted, the heading of the section is “Locking-in Legislation” and the section concludes by listing the dates on which locking-in legislation came into effect in each of the provinces. The Tribunal concluded that this provision clearly links member rights to list the legislation prevailing in those jurisdictions. It was clear from the Ontario legislation then in effect that the locking-in was triggered by the service and age which was known as the “45 Plus 10 Rule”.
[10] The Tribunal also noted that there is “no logical reason why the company would wish to deviate from the legislative requirement by imposing a vesting condition on those with ten years service which it did not impose on those with ten years Plan membership, particularly since under the Plan and the practice, those two groups would almost completely overlap.” (Tribunal’s Reasons, para. 83).
[11] In our view, the Tribunal’s reading of s. VIII (a) was reasonable in light of the ambiguity of the provision. It carefully considered s. VIII (a) doing so within the legislative context and in light of the appellant’s submissions.
Contra Proferentum Argument
[12] The appellant also submits that the Tribunal erred in its application of the contra proferentum principle such that “where the contract is ambiguous, the application of the contra proferentum rules ensures that the least favourable to the author of the document prevails”; see G.H.L. Fridman, Law of Contract, 3rd ed. 1994 at pages 470-471. He argues that here, both the appellant and respondent, Canada Life, have reasonable interpretations of this ambiguous provision and that the principle therefore should apply.
[13] The Tribunal refused to apply the doctrine for two reasons. First, it found that the interpretation advanced by the appellant was not reasonable and thus it was not being asked to choose between two reasonable interpretations. Second, it was not persuaded that the appellant’s reading of the language at issue was unequivocally more favourable to Crown Life staff plan members since it not only vested benefits but also locked in employee contributions. In the appellant’s case, this meant he would have had to wait almost three decades to collect: see Tribunal’s Reasons, paras. 84-85. Again, the Tribunal carefully considered the appellant’s submissions in this regard and assuming that the standard of review is that of correctness, we are not persuaded that it made any error of law or principle that would warrant this Court’s intervention with respect to the contra proferentum argument.
[14] The appeal is therefore dismissed.
KITELEY J.
[15] I have endorsed the back of the Appeal Book, “This appeal is dismissed. Appellant shall pay costs of the respondent Canada Life fixed in the amount of $7,500 all inclusive.”
HARVISON YOUNG J.
KITELEY J.
NORDHEIMER J.
Date of Reasons for Judgment: February 26, 2014
Date of Release: March 3, 2014
CITATION: Hunte v. Superintendent of Financial Services and The Canada Life Assurance Company, 2014 ONSC 1270
DIVISIONAL COURT FILE NO.: 484/13
DATE: 20140226
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
KITELEY, NORDHEIMER AND
HARVISON YOUNG JJ.
BETWEEN:
CARL HUNTE
Appellant
– and –
SUPERINTENDENT OF FINANCIAL SERVICES and THE CANADA LIFE ASSURANCE COMPANY
Respondents
ORAL REASONS FOR JUDGMENT
HARVISON YOUNG J.
Date of Reasons for Judgment: February 26, 2014
Date of Release: March 3, 2014