Court of Appeal for Ontario

Citation: Shaw v. Healthcare of Ontario Pension Plan, 2013 ONCA 102

Date: 2013-02-15

Docket: C55834

Before: Blair, MacFarland and Rouleau JJ.A.

Between:

Gregory Shaw Applicant (Appellant)

and

Healthcare of Ontario Pension Plan (“HOOPP”), Helen Fetterly, Dan Anderson, Adrian Foster, R. Wayne Gladstone, Marlene Puffer, Patty Rout, Deepak Shukla, Joyce Bailey, Ronald Meredith-Jones, Lesley Bell, Jon Clark, Julie Giraldi, Martin Parker, Louis Rodrigues, James Sanders, Bryce Walker, Kevin Smith, Marlene Izzard in their capacity as Trustees of the Healthcare of Ontario Pension Plan, and Ontario Hospital Association Respondents (Respondents)

Counsel:

Andrew Hatnay and Demetrios Yokaris, for the appellant

Peter H. Griffin and Emily Graham, for the respondents

Heard: February 15, 2013

On appeal from the judgment of Justice Frank J.C. Newbould of the Superior Court of Justice, dated July 2, 2012.

Appeal Book Endorsement

[1] Mr. Shaw appeals the decision of Newbould J. dismissing his application for a declaration that what the parties referred to as three “retention bonuses” in his amended employment contract with the Ontario Hospital Association (OHA) constitute “pensionable earnings” under s. 2.18 of the Healthcare of Ontario Pension Plan (HOOPP). The provisions in his original employment contract were considered by OHA to be very favourable to Mr. Shaw if he elected to terminate the contract early – “an incentive to leave” as the OHA put it. Mr. Shaw and OHA agree to an amendment that would provide for three extra payments to Mr. Shaw designed to provide him with “an incentive to stay.” They were (1) a payment of $100,000 on November 1, 2009; (2) a payment of $150,000 on October 31, 2010; and (3) a payment of $225,000 on October 21, 2011 – a total of $475,000. He and OHA apparently viewed these payments as “pensionable” which, if correct, would amount to an increase in Mr. Shaw’s pension in an amount with a present value of $1,275,000.

[2] The amended control was for a term that expired in October 2011, but provided for automatic 1-year renewable terms unless one of the parties terminated.

[3] HOOPP ultimately took the position that the retention bonuses were not “pensionable earnings”.

[4] Mr Shaw argues that the motion judge erred in concluding that they were not, because the payments did not form a “regular” part of the members’ remuneration. He submits as well that the motion judge erred in considering “equity” issues such as the potential impact of the interpretation on other beneficiaries of the plan, in doing so, and, in addition that he failed to consider and apply the contra proferentum rule of interpretation in Mr. Shaw’s favour.

[5] We do not accept these submissions. The motion judge considered the plain meaning and dictionary definitions of the word “regular” and concluded in the context of the Plan and the factual matrix in which it operates, that the three payments did not form a “regular” part of Mr. Shaw’s remuneration because they were not “paid as a rule or usual or customary”. They were payable over three years only. They did not continue during the automatic renewal terms of the contract. There were potential negative implications for the beneficiaries and the Plan if payments of that nature were recognized as pensionable earnings.

[6] We see no error on the part of the motion judge in arriving at such a conclusion. It was not necessary for him to resort to the contra proferentum rule because other tools of contractual interpretation enabled him to reach his conclusion, notwithstanding any ambiguity that might exist in the wording of the Plan. Finally, the absence of the word “bonuses” in the exclusions under s. 2.18 of the Plan is of no moment in our view. The issue was whether the retention bonuses were a “regular” part of the member’s remuneration, and the motion judge concluded they were not.

[7] Mr. Shaw also appeals the motion judge’s refusal to award him costs out of the Plan in spite of his loss. We would not give effect to this argument.

[8] Costs may be awarded to an unsuccessful litigant out of a pension plan, but such an award is discretionary. The motion judge applied the principles laid down by this Court and the Supreme Court of Canada in Nolan v. Kerry, 2007 ONCA 605 (C.A.); 2009 SCC 39, [2009] 2 S.C.R. 678 considering whether the proceedings were brought (1) to ensure the due administration of the pension plan, and (2) for the benefit of all beneficiaries. He concluded that Mr. Saw’s claim did not meet those requirements. We see no error in the exercise of his discretion in that regard.

[9] Accordingly, the appeal regarding the issue of pensionable earnings is dismissed. Leave to appeal costs is granted, but the appeal as to costs is dismissed.

[10] The motion judge fairly decided not to grant costs to HOOPP in the proceeding below. The appeal is a separate step, however, taken in light of the decision below. We see no reason why HOOPP should not have its costs of the appeal. Mr. Hatnay concedes the amount claimed is not unreasonable. Costs of the appeal are therefore fixed in favour of HOOPP in the amount of $18,979.27 inclusive of disbursements and HST, on a partial indemnity basis.