ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: FS-10-1062
DATE: 2012-01-06

B E T W E E N:

HELEN MAUREEN KERSHAW

John Illingworth as agent for Epstein Cole , for the Applicant

Applicant

• and -

WILLIAM LESLIE KERSHAW

Bradley A. Smith , for the Respondents

Respondent

HEARD: December 15, 2011, at Thunder Bay, Ontario

Mr. Justice D. C. Shaw

Decision On Motion

Introduction

[ 1 ] The applicant, Ms. Kershaw, brings a motion to require the respondent, Mr. Kershaw, to comply with certain terms of a consent order granted by Warkentin J. on July 23, 2010. The parties disagree on the meaning of the terms and ask for an interpretation. The terms of the order which are in dispute deal with Mr. Kershaw’s pension benefits.

Background

[ 2 ] Mr. Kershaw and Ms. Kershaw separated in 2006, after 31 years of marriage. Mr. Kershaw is presently 59 years of age. Ms. Kershaw is 58.

[ 3 ] Mr. Kershaw is a long time employee of the Ministry of Natural Resources. He is a member of the Ontario Public Service Employees Union Pension Plan. The Plan is administered by OPTrust.

[ 4 ] In 2010, Ms. Kershaw brought an application for a divorce and for corollary relief. She was represented by counsel, Mr. William Shanks. Mr. Kershaw did not file an answer or financial statement. He was not represented. The parties, and Mr. Shanks, attended a case conference on July 23, 2010 before Warkentin J. At the conference, the parties settled the case by way of a consent Divorce Order which was granted that day. Paragraph 6 of the Divorce Order reads as follows:

“6. The Respondent shall instruct his pension plan to divide the monies in the pension plan such that the Applicant is entitled, as a member of the plan, forty (40%) per cent of his current plan benefit.”

[ 5 ] On August 23, 2010, Mr. Shanks sent a copy of the Divorce Order to the Administrator of OPTrust. Ms. Kershaw deposes that in the Spring of 2011 she contacted OPTrust, “to obtain a copy of her pension file.” OPTrust advised that it had sent a letter dated September 7, 2010 to Mr. Shanks, with a copy to Mr. Kershaw, requesting clarification of the meaning of paragraph 6 of the Divorce Order. OPTrust further advised that it had received no response to its letter.

[ 6 ] Ms. Kershaw contacted Mr. Shanks who told her that he had not received the letter of September 7, 2010 from OP Trust.

[ 7 ] Mr. Kershaw, however, had received the September 7, 2010 letter. He did not reply to OPTrust.

[ 8 ] On April 1, 2011, Mr. Shanks received a letter dated March 29, 2011 from OPTrust, copied to Mr. Kershaw and Ms. Kershaw. This letter contained a copy of the September 7, 2010 letter. The September 7, 2010 letter from OPTrust stated:

“We are in receipt of the Divorce Order dated July 23, 2010. We require clarification on the wording of Section 6. Please confirm if the pension should be split on a linked or delinked basis. The definitions are provided below.

De-Linked Marriage Breakdown Policy

If you chose the delinked pension option, OPTrust will set up two separate and independent pensions (De-linked marriage breakdown policy), the pension payable to the former spouse will be for life. She will receive a pension as indicated in the court order (subject to 50% maximum for benefits accrued during their spousal relationship), actuarially adjusted to reflect her age. The former spouse’s pension will be integrated with the Canada Pension Plan when she turns 65. If the member predeceases the former spouse, the former spouse’s pension continues to be paid.

With the de-linked marriage breakdown policy, the division of the pension is permanent and the death of either spouse will have no impact on the pension of the other. If the former spouse predeceases the member, his pension will not revert back to full pension. The former spouse’s pension is payable for life and ceases on her death. A residual balance, if any, will be calculated and payable to the former spouse’s estate.

Linked Marriage Breakdown Policy

In the linked pension method, the former spouse’s share of the pension.(sic) It is subject to the 50% PBA maximum but it is not actuarially adjusted to reflect the former spouse’s age. It will however, be contingent upon the life of the member. If the member predeceases the former spouse, the former spouse’s pension will cease. If the former spouse dies first, the member’s pension will revert back to the full amount. The former spouse’s pension will be integrated with the Canada Pension Plan when the member turns 65…

Please ensure that this clarification is provided to (sic) as soon as possible. A signed document with both the member and former member’s signature will suffice.

Alternatively you may forward an amended Divorce Order. Please ensure that OPTrust is directed to pay from source. Please note that payment to the former spouse will only occur when the member terminates from employment or retires.”

[ 9 ] On August 8, 2011 Mr. Shanks wrote to OPTrust. He stated that the Divorce Order “clearly indicates a De-Linked Marriage Policy.”

[ 10 ] On April 20, 2011, Mr. Shanks received a letter from OPTrust, asking him to provide a signed confirmation “…with both the member and former member’s signature” or in the alternative, an amended Divorce Order.

[ 11 ] On April 21, 2011 Mr. Shanks received a letter from a Mr. Jerome Gardner, a lawyer who had been consulted by Mr. Kershaw. Mr. Gardner advised that Mr. Kershaw would not provide a signed confirmation to OPTrust “…as the Divorce Order did not indicate a delinked marriage breakdown approach to the pension division.”

[ 12 ] It is agreed that prior to the order of July 23, 2010, the parties had both turned their minds to the differences between a “linked” pension and a “delinked” pension.

[ 13 ] In 2004, Mr. Kershaw provided Ms. Kershaw with a copy of a document from OPTrust, entitled “Fact Sheet”, which described what would happen if a pension was to be divided between a member and a former spouse in a situation where the pension payable to the former spouse did not remain “linked” to the member’s pension benefit. On June 3, 2010, Mr. Kershaw sent an e-mail to Ms. Kershaw which stated that he had explained to OPTrust that he was seeking answers to questions that he and she had concerning the details of a divorce. He stated to Ms. Kershaw:

“I forwarded the questions you and I agreed to to confirm verbal answers (red) I had concerning three areas:

a) partitioning the retirement income in the divorce agreement – yes, a percentage will be described flowing to the divorcee as de-linked and they will not be linked to the OPS pensioner. The amount so described will go directly to the divorcee;

b) assurance that the partitioned retirement payments will continue at the time of my death – yes, if they are described as de-linked;

c) continuance of the partitioned retirement payments if there is a change in the pensioner’s marital status – yes, if they are described as de-linked;”

[ 14 ] Both parties have filed extensive affidavit material about events pre-dating and post-dating the Divorce Order, relating to what each party says was his or her intention when agreeing to the Divorce Order. This evidence is contradictory. To resolve the differences would require findings of credibility. Credibility is more properly determined at trial rather than on competing affidavits. Counsel for the parties agree that if credibility findings are necessary to determine the issue of what is meant by paragraph 6 of the Divorce Order, there should be a trial of the issue. However, they also agree that if I can determine the issue without having to embark on an inquiry into credibility, they want me to do so, on the affidavit material, without a trial of the issue.

[ 15 ] Both counsel submit that paragraph 6 of the Divorce Order can be interpreted without considering what the parties say about their respective intentions. Ms. Kershaw’s counsel submits that the language is clear that Mr. Kershaw’s pension is to be “delinked”. Mr. Kershaw’s counsel counters that the language is clear that Mr. Kershaw’s pension is to be “linked”. Mr. Kershaw’s counsel submits, further, that even if I conclude that the language of the Divorce Order means that the pension benefits are to be delinked, the court does not have authority to divide the pension prior to Mr. Kershaw’s retirement because to do so would be contrary to the Pension Benefits Act, R.S.O. 1990, c. P.8., and contrary to the case law concerning the Act.

[ 16 ] The differences between a delinked pension and a linked pension are significant. If the pension is delinked, OPTrust will set up two separate and independent pensions for Mr. Kershaw and Ms. Kershaw. The division of the pension will be permanent. The death of one party will not have an impact on the pension of the other. On Ms. Kershaw’s death, any residual balance in her share of the pension will go to her estate. On the other hand, if the pension is linked and Ms. Kershaw predeceases Mr. Kershaw, his benefits will revert to the full amount that was payable to him before the pension was divided. If the pension is linked, and Mr. Kershaw dies before Ms. Kershaw, her entitlement to payments will end.

Submissions

[17] … (content continues exactly as in the original text) …

The Hon. Mr. Justice D. C. Shaw

Released: January 6, 2012

COURT FILE NO.: FS-10-1062
DATE: 2012-01-06

ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: HELEN MAUREEN KERSHAW Applicant - and – WILLIAM LESLIE KERSHAW Respondent DECISION ON MOTION Shaw J.

Released: January 6, 2012

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