CITATION: Frank McCann and David Guffie v. Canada Mortgage and Housing Corporation and Marc Rochon, Claude Poirier-Defoy, Jim Millar, Karen Kinsley, Gerald Norbraten, Jean-Guy Tanguay, David Metzak and Brian Knight, being the Trustees of the Canada Mortgage and Housing Corporation Pension Fund, 2015 ONSC 496
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Frank McCann and David Guffie
Plaintiffs
and –
Canada Mortgage and Housing Corporation and Marc Rochon, Claude Poirier-Defoy, Jim Millar, Karen Kinsley, Gerald Norbraten, Jean-Guy Tanguay, David Metzak and Brian Knight, being the Trustees of the Canada Mortgage and Housing Corporation Pension Fund,
Defendants
Paull N. Leamen and Tara Sweeney, counsel for the Plaintiffs
J. Brett Ledger, Lauren Tomasich, Lia Bruschetta, counsel for the Defendants
HEARD: December 8, 9 and 10, 2014
REASONS FOR JUDGMENT
CHARBONNEAU, M.Z.
1The plaintiffs bring a motion certifying this action as a class proceeding. More particularly the motion asks for the following orders:
(a) An Order certifying the following class:
(i) All former employees of CMHC who were pension plan members on
the 1st of January, 1995, who subsequently took their commuted value, along
with a work force adjustment package, and left the plan after October 24, 1998,
without receiving their alleged share of the pension surplus, which has
been partially paid by what the Defendants have characterized as “benefit enhancement” funded from surplus and which the Plaintiffs allege was a
distribution of surplus.
(b) An Order certifying the following common issues:
(i) Do members of the proposed class have an equitable and/or beneficial
interest in the pension fund surplus, which entitled them to an equitable
share of what CMHC has characterized as “benefit enhancements” funded
out of surplus?
(ii) Did the failure of CMHC to include members of the class, to the
extent of their equitable share in the Second Benefits Enhancement Decision
funded from surplus, amount to a breach of trust or fiduciary duty?
(iii) If the answer to (ii) is yes, are the proposed class members entitled to any
remedy and, if so, on what basis?
(iv) Are the proposed class members entitled to exemplary and/or punitive
damages and, if so, in what amount?
(v) Was CMHC in a conflict of interest within the meaning of Section 8(10)
of the PBSA, when it failed to advise the proposed class members at the
beginning of the WFA, or any time thereafter, that they had, or may have
had, a beneficial interest in the pension fund surplus, prior to those proposed
class members electing to take their commuted value and leaving the plan?
(vi) Was CMHC in a conflict of interest, within the meaning of Section 8(10)
of the PBSA when, by word and/or conduct, it took the position that it
owned the surplus to the exclusion of plan members, including the proposed class members?
(vii) Was CMHC in a conflict of interest, within the meaning of Section 8(10) of the PBSA, when it made, then implemented, its surplus sharing decisions
on the 1st of January, 2001, without including the proposed class members
as beneficiaries of those decisions?
(viii) If the answer to any of (vii), (viii) or (ix) is yes, what is the appropriate remedy
for the class members, pursuant to Section 8 (11) of the PBSA?
2This is a companion action to action No. 99-CV-10194 (“the Lacroix action”). The plaintiffs are in effect asking to have certified issues very similar to common issues certified in the Lacroix action by consent order in 2000 and additional common issues which I have just recently agreed to certify in the Lacroix action. These reasons must be read in conjunction with my reasons being simultaneously released in the Lacroix action.
3The plaintiffs claim in this action is an attempt to obtain a pro-rata share of benefit enhancements paid to pension plan members who were still members of the plan as of the January 1, 2001. Unlike the plaintiffs in the Lacroix action, they are not claiming a pro-rata share of the first benefits enhancement awarded on January 1999 as they were still plan members at that time and therefore received a pro-rata share of those benefits. The motions by the Lacroix group and the McCann group motion were heard together.
4The defendants are not objecting to the certification in the McCann action of the common issues already certified in 2000 in the Lacroix action as long as they are identical. The defendants however submit that the plaintiffs must deliver a revised statement of claim setting out the same allegations as the allegations found in the Lacroix action. I disagree. My review of the amended statement of claim convinces me that it is sufficient as a basis for the common issues already certified in the Lacroix action. I agree with the defendants that the common issues relating to the benefit enhancements must be identical to the same issues in the Lacroix action.
5During the hearing of the motions, there were some discussions as to whether the McCann plaintiffs were also claiming their pro-rata share of CMHC’s share of the surplus paid out at the time benefit enhancements were paid to plan members. This was clarified and Mr. Leaman confirmed they were claiming only a pro-rata share of the amount that was distributed to plan members on the second distribution on the same basis that the Lacroix plaintiffs were claiming for loss of the benefits for both distributions.
6I have come to the conclusion that for the reasons I gave in the Lacroix action that the proposed conflict of interest common issues v, vi, vii, and viii should also be certified in this action.
7I disagree with the defendants’ submission that the proposed class is irrationally both over-inclusive and under-inclusive. The defendants base their submission on the fact that the class members are required to have been plan members on January 1, 1995. In the context of this action only class members who were affected by the WFA have a claim. To require that the class only include individuals who were plan members at the outset of the WFA and who were terminated as a result thereof is rational.
8For the same reasons, I gave in the Lacroix action, I am of the view the above class definition meets with the criteria required for a proper class definition: it identifies who have a potential claim against the defendants; defines the parameters of the lawsuit so as to identify those persons bound by its results; and describes who is entitled to notice of the action.
9Finally, for the reasons set out in my reasons for judgment certifying the Lacroix additional issues, I am satisfied that a class action is the preferable procedure to decide the common issues and that Mr. McCann and Mr. Guffie are proper representatives.
10The plaintiffs are required to deliver a revised and updated litigation plan to take into account the present certification order.
Conclusion
12The present action is certified as a class proceeding subject to the modifications of the proposed benefit enhancements in order to make them identical to the benefit enhancements issues in the Lacroix action subject to referencing only the second benefit enhancements pay out.
13The plaintiffs are required to deliver an updated litigation plan.
14The two actions are ordered to be tried together subject only to the trial judge’s discretion to order otherwise.
15If counsel cannot agree on costs the plaintiffs may provide me with brief written submissions within 30 days and then 20 days for answer and 10 days for reply if need be.
Charbonneau, Judge
Released: January 23, 2015
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Frank McCann and David Guffie
-and-
Canada Mortgage and Housing Corporation and Marc Rochon, Claude Poirier-Defoy, Jim Millar, Karen Kinsley, Gerald Norbraten, Jean-Guy Tanguay, David Metzak and Brian Knight, being the Trustees of the Canada Mortgage and Housing Corporation Pension Fund
REASONS FOR JUDGMENT
Charbonneau, Judge
Released: January 23, 2015