COURT FILE NO.: CV-10-40251500CP
DATE: 20121222
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: O’Neill v. General Motors of Canada Limited
BEFORE: Master Glustein
COUNSEL: L. Sokolov and C. Davies for the plaintiff
J. Brett Ledger and Eric Morgan for the defendant
HEARD: December 20, 2012
REASONS FOR DECISION
Nature of motions and overview
[1] The plaintiff Joseph Michael O’Neill (“O’Neill”) brings a motion for production against the defendant General Motors of Canada Limited (“GMCL”). O’Neill asks the court to order GMCL to produce “historical benefits plans documents to the plaintiff, including corporate minutes and resolutions concerning the creation of the benefits plans at issue in the action”.
[2] GMCL brings a motion to strike the following evidence from O’Neill’s affidavit sworn August 24, 2012 (the “August 2012 Affidavit”) in support of O’Neill’s motion for partial summary judgment on common issues regarding breach of contract and negligent misrepresentation to be heard on May 27 and 28, 2013:[^1]
(i) certain documents obtained from a motion record in another action (Dimartile et al. v. GMCL) in which four individual executive retirees brought a claim against GMCL concerning the retirees’ post-retirement benefits (the “DiMartile documents”),
(ii) copies of two of GMCL’s annual company financial statements (the “Financial Statements”),
(iii) copies of two PowerPoint presentations; and
(iv) the affidavit sworn by O’Neill on September 28, 2010 in support of a motion for certification (the “September 2010 Affidavit”).
[3] At the hearing, O’Neill’s counsel confirmed that O’Neill was not relying on the September 2010 Affidavit for the motion for partial summary judgment. On this basis, GMCL’s counsel did not object to the September 2010 Affidavit remaining in O’Neill’s motion record.
[4] Further, in his responding motion record to GMCL’s motion to strike evidence, O’Neill included earlier correspondence in which O’Neill’s counsel agreed to strike the PowerPoint presentations from the August 2012 Affidavit.
[5] Counsel made no oral submissions as to the Financial Statements. Both counsel advised the court that the only issue before the court was production of the corporate minutes and resolutions concerning the creation of the benefits plans at issue in the action and the DiMartile documents. Consequently, I make no finding as to the admissibility of the Financial Statements. If there is not agreement between the parties on the issue, counsel will so advise my assistant trial coordinator and I will consider whether the Financial Statements are admissible by brief written submissions of no more than two pages delivered by January 7, 2013.[^2]
[6] Consequently, the only issues before me on this motion arise from O’Neill’s motion for production and GMCL’s motion to strike the DiMartile documents.
[7] Prior to the certification motion, the parties entered into a “Settlement Agreement of the parties dated October 15, 2011 re: Certification Motion” (the “Settlement Agreement”). Under paragraph 9 of the Settlement Agreement (“Paragraph 9”), the parties agreed that:
Following certification, the parties will engage in limited discoveries which will focus solely on determining whether there are additional common documents, i.e. historical benefits plan documents and documents widely distributed to Class Members respecting post-retirement benefits, to those described in Schedule “A”, in accordance with the timetable below.
[8] Consequently, the issue before me is whether the “corporate minutes and resolutions concerning the creation of the benefits plans at issue in the action” are “historical benefits plan documents” as defined in Paragraph 9. If so, GMCL must produce such documents and the DiMartile documents are relevant and should not be struck. If not, GMCL is not required to produce such documents and the DiMartile documents are irrelevant and should be struck.
[9] For the reasons set out below, I order the production sought by O’Neill and dismiss the GMCL motion to strike the DiMartile documents from the August 2012 Affidavit.
[10] Based on the language of the other paragraphs of the Settlement Agreement, case law concerning the determination of post-retirement benefits, the relevant pleadings on common issues before the court, and the wording of Paragraph 9, I find that the “corporate minutes and resolutions concerning the creation of the benefits plans at issue in the action” are “historical benefits plan documents”.
Evidence
(a) Nature of the claim
[11] This action arises out of a claim by O’Neill that GMCL unlawfully reduced and eliminated the post-retirement benefits and executive post-retirement benefits of salaried retirees, executives, as well as their surviving spouses and dependent children.
[12] On October 25, 2011, Justice Strathy certified this action on consent and appointed O’Neill as the representative plaintiff. The class is defined at paragraph 1 of Justice Strathy’s certification order (the “Certification Order”).
[13] On or about December 5, 2011, GMCL filed a Statement of Defence to the Common Issues (the “GMCL Defence”), in which it took the position that it had a right to modify post-retirement benefits. GMCL pleaded that it “voluntarily established the post-retirement benefit programs at issue”, and “at all times …had the right to modify or terminate the post-retirement benefits” (GMCL Defence, at paras. 8 and 9).
[14] Consequently, a significant common issue is whether any alleged post-retirement benefit rights vested in the class members at some point prior to GMCL making the impugned modifications (as is submitted by O’Neill on behalf of the class members) or whether GMCL always had and maintained the right to modify or terminate such benefits.
[15] At this motion, the principal evidence relied upon by both parties is the Settlement Agreement. O’Neill also relies on the GMCL Defence and the DiMartile documents concerning retirement benefits. I address each aspect of this evidence below.
(b) The Settlement Agreement
[16] The Settlement Agreement provided that “the trial of the common issues and this proceeding shall be conducted in accordance with the terms of the Settlement Agreement”, which was attached as Appendix “1” to the Certification Order.
[17] Under the Settlement Agreement, the parties consented to an order certifying the proceeding as a class proceeding. Pursuant to paragraph 1, the parties agreed that the common issues with respect to breach of contract were[^3] (quoted verbatim, emphasis in original agreement):
A. Breach of Contract
(a) Did GMCL in the documents listed in Schedule “A” of the Settlement Agreement attached as Appendix “1” attached
(i) contract to provide employees with post-retirement benefits which vest, and if so,
(A) at what time do the post-retirement benefits vest, in whole or in part?
(B) did improvements to any post-retirement benefits vest in whole or in part, and if so at what time?
(b) In reducing or eliminating the post-retirement benefits, did GMCL breach its contracts with the Class Members?
[18] The parties then addressed the issue of the scope of evidence that could be led to determine the existence of a contract and its terms. At paragraph 2 of the Settlement Agreement, the parties agreed that the court’s determination of the terms of the contract between GMCL and class members would be based on the documents in Schedule A, including any additional documents produced under Paragraph 9:
Subject to other documents that may be produced/discovered following certification in accordance with paragraph 9, the trial of the common issues and for the remainder of this proceeding will proceed on the basis that the terms of the contract between Class Members and GMCL regarding the provision of post-retirement benefits are set out in the documents listed at Schedule A attached, and no evidence inconsistent with this proposition will be led by the parties or, subsequently, by any class member.
[19] The documents which were to be the basis for any common issue contract claim were listed in Schedule A as items 1 to 20. Documents 1 to 19 were existing documents, consisting of brochures and booklets, memoranda from GMCL to its employees about retirement benefits, and letters sent from GMCL to employees about retirement benefits.
[20] Item 20 on the list at Schedule A provided for the possibility that there might be other productions relevant to the common issue contract claim. Item 20 provided for production (and consideration by the court at a common issues trial) of:
Any other documents that may be produced/discovered following certification in accordance with paragraph 9.
[21] Paragraph 9 set out the scope of any additional documents to be produced after certification. While I set out the provision in my overview above, I repeat it here for ease of reference:
Following certification, the parties will engage in limited discoveries which will focus solely on determining whether there are additional common documents, i.e. historical benefits plan documents and documents widely distributed to Class Members respecting post-retirement benefits, to those described in Schedule “A”, in accordance with the timetable below.
[22] Paragraph 3 of the Settlement Agreement made it clear that the common issues trial on the breach of contract claim would be limited to the objective meaning of the Schedule A documents including additional documents produced under Paragraph 9:
For greater certainty with respect to the breach of contract claim, the common issues trial shall be limited to the determination of the objective meaning of the Schedule A documents and documents that may be produced/discovered following certification in accordance with paragraph 9, and not individual questions such as what a member read or didn’t read, was told, or understood.
[23] Finally, the parties agreed pursuant to paragraph 5 of the Settlement Agreement that no evidence of oral representations could be led at a common issues or damages trial, regarding either post-retirement benefits or any additional documents:
Subject to paragraph 9, the plaintiff/class will not pursue in documentary production or oral discovery or lead evidence at trial of the common issues or in any trial regarding damages of any oral statement or representation made regarding post-retirement benefits, or any additional documents, or written statements or representations.
[24] Consequently, the result of the Certification Order and Settlement Agreement was that: (i) the common contractual issue was defined; (ii) the evidence at a common issues trial would be limited to a known set of documents to be increased through a limited discovery to add any “historical plan benefit documents and documents widely-distributed to Class Members respecting post-retirement benefits” (collectively, the “Schedule A documents”); and (iii) the common issue on the breach of contract claim would be determined based on the objective meaning of the Schedule A documents.
(c) The GMCL Defence
[25] Following certification, GMCL filed the GMCL Defence. GMCL pleaded its conduct and intention at the time that it set up the benefits plans. GMCL relied on the documents distributed to class members as demonstrating that the post-retirement benefits could be modified or terminated at any time. However, GMCL also pleaded that at no time did GMCL intend for post-retirement benefits to vest. In particular, GMCL pleaded:
GMCL denies that the Class has or had any right, vested or otherwise, to receive from GMCL in perpetuity post-retirement benefits at any specific levels, or at all. The Class members’ claims to the contrary are inconsistent with the intentions of the parties, the Class-wide communications and conduct between them, and the terms and conditions of the post-retirement benefit programs (para. 13 of the GMCL Defence);
In providing post-retirement benefits, GMCL did not intend for these benefits to vest at any time, including during the employee’s active employment and at retirement (para. 24 of the GMCL Defence); and
Furthermore, GMCL did not intend improvements to the benefits made after retirement to vest as they were provided. The assertions otherwise at paragraphs 12 and 13 of the Fresh as Amended Statement of Claim are specifically denied (para. 27 of the GMCL Defence). [Emphasis added.]
[26] Consequently, while GMCL relied on their communications with class members as a basis to demonstrate an intention that any post-retirement benefits were voluntary and could be terminated at any time, the pleading extended beyond the documents to make the broader allegation that at no time did GMCL have a contrary intention.
(d) The DiMartile documents
[27] O’Neill obtained copies of documents filed with the court in another action (Dimartile et al. v. GMCL) commenced by four individual executive retirees concerning their post-retirement benefits (previously defined as the “Dimartile documents”). Those documents refer to internal General Motors meetings about the creation of the retirement benefits plans.
[28] By way of example, one such document refers to minutes of a meeting about the creation of the proposed executive post-retirement benefits plan, with the minutes stating that “[t]he proposed CSERP is necessary to improve retirement benefits for Canadian executives to a more competitive level and enhance the opportunities available to such executives”.
Analysis
(a) The nature of the issue between the parties on this motion
[29] There is no question that the parties contemplated the production of additional common documents to be part of Schedule A to be considered by the court if relevant to the common issues contract claim. At the common issues trial for the breach of contract claim, the court will be required to determine the objective meaning of the Schedule A documents.
[30] There is no question that the scope of additional documentary production is restricted to additional common documents, being “historical benefits plan documents and documents widely distributed to Class Members respecting post-retirement benefits”. There is no dispute that the latter category does not apply as the corporate minutes and resolutions sought to be produced were not widely distributed to class members.[^4]
[31] The issue that arises on this motion focuses on the term “historical benefits plan documents”. O’Neill submits that the term includes the corporate minutes and resolutions sought to be produced (and the DiMartile documents) because they are common documents relevant to an objective assessment by the court when determining the common issue of breach of contract. Consequently, O’Neill reads Paragraph 9 as mandating the production of the additional documents.
[32] GMCL submits that the term does not include the corporate minutes and resolutions sought to be produced (and the DiMartile documents) because they are not documents which comprehensively set out terms of the alleged benefit plans but are rather documents which at best reflect GMCL’s intention when it created the plans which are not the same type of documents as otherwise listed at Schedule A and were not intended to be caught by Paragraph 9.
[33] In short, the court must determine whether the “corporate minutes and resolutions concerning the creation of the benefits plans at issue in the action” (and the DiMartile documents) are “additional common documents” which are “historical benefits plan documents” as defined in Paragraph 9. This issue requires a review of the Settlement Agreement and the applicable law.
(b) Review of the applicable evidence and law
[34] Paragraph 2 of the Settlement Agreement limited the common issues trial “on the terms of the contract between Class Members and GMCL regarding the provision of post-retirement benefits” to a list of documents to be put before the court as “set out in the documents listed at Schedule A”.
[35] However, the Settlement Agreement contemplated that other documents might exist which were not known or available at the time of the certification hearing and which could be relevant to the certification motion. Schedule A expressly included the catch-all item “any other documents that may be produced/discovered following certification in accordance with paragraph 9”, language sought and obtained by O’Neill through the negotiation process.
[36] Paragraph 3 of the Settlement Agreement provided that the common issues trial on the breach of contract claim “shall be limited to the determination of the objective meaning of the Schedule A documents and documents that may be produced/discovered following certification in accordance with paragraph 9”, again language sought and obtained by O’Neill through the negotiation process.
[37] GMCL relies on the above two paragraphs to submit that corporate minutes or internal documents concerning the creation of the plans could not have been part of Paragraph 9. GMCL cites case law in which the court relied on the written documents between the parties as the basis for contractual interpretation. For example, in Ventas, Inc. v. Sunrise Senior Living Real Estate Investment Trust, 2007 CanLII 8934 (ONSC) at paras. 29-32, Pepall J. (as she then was) interpreted a purchase agreement and relied upon “the “cardinal rule of contract interpretation” that “the court should give effect to the intention of the parties as expressed in their written agreement”.
[38] However, the issue before the court on this motion is not whether the motions judge will choose to rely only on written brochures, booklets, and letters distributed to class members. That is an issue for the motions judge considering the summary judgment motions.
[39] Rather, the issue for this court is how to read paragraphs 2 and 3 of the Settlement Agreement in conjunction with Paragraph 9 given the law that a court can consider internal documents as to the intent or terms of the retirement benefit plans when determining the content of such plans.
[40] In Lacey v. Weyerhaeuser Co., 2012 BCSC 353, [2012] B.C.J. No. 481 (S.C.) (“Lacey”), Saunders J. allowed an action by retired employees on the basis that the retirement health benefits were to be a form of deferred compensation. Saunders J. considered not only the terms of a handbook, and communications to employees, but also correspondence between the corporation and the Department of National Revenue (Lacey, at paras. 19-24), internal corporate documents (Lacey, at paras. 62-77) and “plan development internal memoranda” (Lacey, at paras. 11-18).
[41] By way of example, in some of the correspondence to the Department of National Revenue, the defendant corporation took the position that “”Our program exists by virtue of Management Policy and could be changed or withdrawn at anytime without legal recourse by a former employee” and “our program is not legally enforceable by the employee” [underlining in text of judgment] (Lacey, at para. 23).
[42] Saunders J. reviewed all of the documents as part of an “objective view” of the existence of a contract, just as the court on the present common issues trial or summary judgment motion must determine (under paragraph 3 of the Settlement Agreement) “the objective meaning of the Schedule A documents and documents that may be produced/discovered following certification in accordance with paragraph 9”. Saunders J. held (Lacey, at para. 10):
the question of whether lifetime fully-funded retirement health benefits were provided as part of the salaried employees’ compensation packages, must therefore be determined from an objective view of the parties’ conduct, including communications which passed between MB and its salaried employees.
[43] GMCL notes that the court in Lacey discounted the importance of internal documents since they were not widely distributed to employees (Lacey, at para. 98). However, this evidentiary conclusion by the court came after its review of all internal documents relevant to the breach of contract issue. Justice Saunders’ conclusion as to the weight to attach to internal documents does not detract from the proposition that the court can consider internal documents in assessing, on an objective basis, the terms of a contract.
[44] Consequently, in interpreting paragraphs 2 and 3 of the Settlement Agreement, including Schedule A, I do not accept GMCL’s submission that those paragraphs preclude production of internal documents regarding the creation of the retirement benefits plan. Such documents could be relevant to the common issue of determining the terms of the contract regarding post-retirement benefits and can be considered as part of the “objective meaning” of all documents under Schedule A, particularly as Schedule A expressly provided for the possibility that other documents might be relevant to the objective interpretation of contractual terms.
[45] To the contrary, I find that O’Neill’s position is more consistent with paragraphs 2 and 3 of the Settlement Agreement, and Schedule A, when read in light of the applicable case law.
[46] GMCL relies on Paragraph 9 to submit that the documents sought concerning the creation of the plans (and the DiMartile documents) are not “historical benefits plan documents”. GMCL submits that “historical benefits plan documents” are those documents that comprehensively set out terms of retirement benefits plans rather than intentions of the parties. However, the case law relied upon by GMCL did not support that legal submission.
[47] In Burke v. Hudson’s Bay Co., 2010 SCC 34 (“Burke”), the court referred to “pension plan documentation” as including “the pension plan text and the fund management agreement” (Burke, at para. 6). In Schmidt v. Air Products of Canada Ltd., 1994 CanLII 104 (SCC), [1994] 2 S.C.R. 611 (“Schmidt”), the court held that the pension plan would “most often be revealed by the wording of the pension plan itself” but also held that a brochure could form part of the plan (Schmidt, at paras. 55, 133-40).
[48] However, the courts in Burke nor Schmidt did not attempt to define the term “historical benefits plan documents”,[^5] rather they describe what documents may be relevant in the pension context. As I discuss above, in Lacey, which arises in the context of retirement benefits, the court did consider internal corporate documents reflecting the intention of the company creating the retirement benefits as part of the objective determination of contractual terms.[^6]
[49] Consequently, I do not find that under the case law the term “historical benefits plan documents” is limited to, as submitted by GMCL, documents that comprehensively set out terms of retirement benefits plans rather than intentions of the parties.
[50] Further, GMCL raises the issue of its intent in creating post-retirement benefits as an integral part of its defence to the common issues. At the hearing, GMCL’s counsel submitted that GMCL made such allegations on the belief that its intentions would be considered only on the basis of the specific Schedule A documents (items 1-19) and any other documents which met GMCL’s understanding that the additional production requirement applied only to other documents that comprehensively set out terms of retirement benefits plans.
[51] However, GMCL’s pleading is broader than a document-based intent. GMCL pleads that “GMCL did not intend for these benefits to vest at any time” (para. 23 of the GMCL Defence). GMCL asks the court, under the heading in its defence entitled “GMCL’s Right to Modify or Terminate Post-Retirement Benefits”, to consider their intentions as part of the objective matrix to determine the agreement between the parties. Consequently, this forms part of the common issues consideration.
[52] In Axiom Plastics Inc. v. E.I. DuPont Canada Co., 2011 ONSC 4510, [2011] O.J. No. 3465 (S.C.J.) (“Axiom”), Perell J. relied on the decision of Master MacLeod in 1176560 Ontario Ltd. v. Great Atlantic & Pacific Co. of Canada, [2003] O.J. No. 5703 (Mast.) (“A&P”) (Axiom, at para. 38):
the pleadings inform interpretation of the common issues and set out the facts to be relied upon but a question is only a proper question in this phase of the action if it relates to the common issues and not the individual claims. It is therefore the certification order as informed by the pleadings and not the pleadings at large that define relevance for the first phase of the trial.
[53] Consequently, while GMCL submits at this motion that it only pleaded intention to be considered from Schedule A documents, its defence is broader, and raises relevant issues of objective interpretation as considered by the court in Lacey. If GMCL takes the position that it did not intend benefits to vest “at any time”, as a basis to defend a common issue breach of contract claim, then internal documents relevant to that intent at the creation of the plans (as those are the documents sought by O’Neill) are relevant and ought to be produced
[54] It is not disputed that the certification motion “limits the scope of inquiry” (as Justice Perell adopts the later passage of Master MacLeod in A&P at Axiom, at para. 38). However, in the present case, the GMCL Defence is only to the common issues[^7], the pleading relates to the interpretation of the rights of the parties, and the court is asked to consider that intention (which could be set out in documents) as part of the objective matrix, just as took place in Lahey.
[55] For the above reason, I find that the GMCL Defence further supports an interpretation of “historical benefits plan documents” that includes internal documents concerning the creation of the plans.
[56] Finally, I find that the words “historical benefits plan documents” are sufficiently broad to include internal documents related to the creation of the plans (and the DiMartile documents already produced).
[57] First, the documents sought are “common” documents, in that they affect the class members as a whole and not individually. They are also “common” documents in the sense that they address the common contractual issue agreed to by the parties, i.e. whether the benefits vested with the retired employees.
[58] Second, the documents sought are “historical” in that they seek relevant evidence of intention at the time the plans were created.
[59] Third, the internal documents are “benefits plan” documents, since they relate to the retirement benefits for the class members. GMCL’s submission that the term “benefits plan” documents should be limited only to documents which set out a detailed list of the benefits is not supported by the language of Paragraph 9. A document which refers to GMCL’s intentions on creation of the benefits plan can be considered by the motions judge who will then decide what weight if any to give to the document. The documents sought relate to a critical “benefits plan” issue, i.e. GMCL submits that it only operated a voluntary plan that it could modify or revoke at any time while the class members take the position that the rights under the benefits plan vested.
[60] Fourth, the negotiation history also supports the linguistic interpretation. While GMCL proposed no additional documents and then later additional common documents limited to “documents widely circulated to Class Members respecting post-retirement benefits”, O’Neill sought and obtained the additional language to produce “historical benefits plan documents” to provide O’Neill with the ability to obtain relevant documents to the objective determination, regardless of whether the documents were widely circulated.
[61] I do not attribute any bad faith to either side in their respective interpretations of the Settlement Agreement. GMCL may well have believed when it signed the Settlement Agreement that the term “historical benefits plan documents” was limited to production of other documents which set out all or most of benefits plan terms, while O’Neill believed that the term “historical benefits plan documents” permitted production of documents relevant to the creation of the plans because they could affect the common issue of determining contractual rights. Both counsel ardently submitted that their respective clients each understood the Settlement Agreement to have a different meaning with respect to future production.
[62] However, I find that O’Neill’s position is more consistent with (i) the case law that considers internal documents, (ii) the pleadings that raise the issue of intent, (iii) the language of the other paragraphs in the Settlement Agreement (which require the court to consider all documents relevant to an objective analysis of determining contractual terms), and (iv) the ordinary meaning of the terms used.
Order and costs
[63] For those reasons, I find in favour of O’Neill and order GMCL to produce corporate minutes and resolutions concerning the creation of the benefits plans at issue in the action. Similarly, I dismiss GMCL’s motion to strike the DiMartile documents.
[64] With respect to costs, counsel submitted that the court should permit the parties 30 days to attempt to resolve the issue after the release of my reasons. Consequently, I allow the parties 30 days to advise the court if they have agreed to a disposition on costs, failing which the parties shall schedule, by a telephone conference to be conducted no later than January 31, 2013, a date for reattendance for brief submissions on costs.
[65] The quality of written and oral submissions by all counsel was superb. I thank counsel for their great assistance to the court.
Master Benjamin Glustein
DATE: December 22, 2012
[^1]: O’Neill’s motion for partial summary judgment will be heard concurrently with GMCL’s cross-motion for summary judgment on common issues regarding the breach of contract claim relating to two sub-classes of retirees.
[^2]: If the court must determine the Financial Statement issue, counsel may also advise they will rely on their existing submissions in their factums. As noted above, while counsel addressed the Financial Statement issue in their factums, they advised the court that the only issue was as described above and made no submissions with respect to the Financial Statements.
[^3]: Footnotes from the Settlement Agreement are omitted.
[^4]: There was some confusion arising from the initial written submissions as O’Neill submitted that the words “widely distributed to Class Members” was only intended to apply to “documents” and that the term “historical benefits plan documents” was not attached to the distribution requirement. However, GMCL acknowledged that it agreed with O’Neill that there was no distribution requirement attached to the obligation to produce historical benefits plan documents.
[^5]: (and not in the context of retirement benefit plans which are not statutorily controlled and regulated and not in the context of a full Settlement Agreement providing for additional production)
[^6]: As I discuss at paragraph 41 above, in Lacey it was the company who relied on such internal documents and correspondence internal to tax authorities since it demonstrated their intention that the benefits could be revoked at any time (Lacey, at para. 23).
[^7]: In fact, the GMCL Defence is expressly limited to common issues (para. 6 of the Statement of Defence).