Court File and Parties
COURT FILE NO.: FS-18-18742 DATE: 2019-10-22 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: MICHAEL MELOCHE, Applicant AND: ADRIANNA COSTA MELOCHE, Respondent
BEFORE: Munroe J.
COUNSEL: Luigi DiPierdomenico, Counsel, for the Applicant Ashley Harmon, Counsel, for the Respondent
HEARD: October 16, 2019
REASONS ON MOTION
1This is a motion brought by the applicant, Michael Meloche (“the applicant” or “husband” or “Mr. Meloche”), pursuant to Rule 16(12) of the Family Law Rules, O. Reg 114/99, as amended. The issue concerns the treatment of a pension within the property division scheme upon a marriage breakdown. The facts are agreed.
2Both parties are 59 years of age. After a lengthy marriage of over 30 years, the parties separated on July 13, 2017. The respondent, Adrianna Costa Meloche (“the respondent” or “wife” or “Ms. Costa-Meloche”), was a teacher who retired on June 30, 2015, about two years before the separation. On retirement, the respondent elected a joint pension with a 60 percent survivor benefit administered by the Ontario Teachers’ Pension Plan (“pension”). Shortly thereafter the respondent began receiving and continues to receive her monthly pension payments.
3Mr. Meloche is unable to work. He suffers from Amyotrophic Lateral Sclerosis (“ALS”), a degenerative disease. Currently he receives full time care and resides at Huron Lodge, a local assisted living facility. Given the nature of this disease, his life expectancy is reduced.
4The parties agree that this court should order that the pension pay to the applicant 48.99 percent of each of the respondent’s monthly pension payments, commencing retroactively from the separation or valuation date of July 13, 2017, and payable every month thereafter during the life of the applicant.
5The parties disagree on the legal issue now to be decided:
Whether this court can and/or should make an order directing the Ontario Teachers’ Pension Plan to pay to the estate of Mr. Meloche his portion of his wife’s monthly pension benefit for the life of his wife if Mr. Meloche predeceases his wife?
POSITIONS OF THE PARTIES
Applicant
6Counsel for Mr. Meloche argues that this court should interpret the provisions of the Family Law Act, R.S.O. 1990, c. F.3 (“FLA”) and the Pension Benefits Act, R.S.O. 1990, c. P.8 (“PBA”) and its regulations in a manner which accomplishes the purpose of equalization, generally a 50/50 split of the after-marriage assets. The applicant urges me to read the applicable statutes in a manner which enables the court to enter the order requested, that on the death of Mr. Meloche, the monthly pension payments should be paid to his estate for the life of the respondent.
Respondent
7Counsel for the respondent argues that the PBA specifically forecloses the relief sought by Mr. Meloche. The relief sought is contrary to law and thus the relief sought should be denied.
LEGAL PRINCIPLES
8The PBA provides, in pertinent part:
1(1) Definitions
“joint and survivor pension” means a pension payable during the joint lives of the person entitled to the pension and his or her spouse and thereafter during the life of the survivor of them
Joint and survivor pension benefits
44 (1) Every pension paid under a pension plan to a retired member who has a spouse on the date that the payment of the first instalment of the pension is due shall be a joint and survivor pension.
Amount of survivor benefit
(3) Upon the death of the retired member, the pension payable to his or her surviving spouse shall not be less than 60 per cent of the pension paid to the retired member during their joint lives.
Same
(3.1) If the spouse of the retired member dies before the retired member, the pension payable to the retired member after the spouse’s death shall not be less than 60 per cent of the pension paid to the retired member during their joint lives.
Void transactions
65 (1) Every transaction that purports to assign, charge, anticipate or give as security money payable under a pension plan is void.
Division of a pension for certain family law purposes
Eligibility
67.4 (1) A spouse of a retired member of a pension plan is eligible to apply under this section for the division of the retired member’s pension if all of the following circumstances exist:
The spouses are separated and there is no reasonable prospect that they will resume cohabitation.
Payment of the first instalment of the retired member’s pension was due on or before the family law valuation date.
A statement of the imputed value, for family law purposes, of the retired member’s pension has been obtained from the administrator under section 67.2.
The division of the pension is provided for by an order made under Part I (Family Property) of the Family Law Act or is authorized under a family arbitration award or domestic contract.
In the order, family arbitration award or domestic contract, the amount of each pension instalment to be paid to the spouse is expressed,
i. as a specified amount, or
ii. as a proportion of the instalment otherwise payable to the retired member.
Application for division and payment
(2) The eligible spouse may apply, in accordance with the prescribed requirements, to the administrator of the plan for division of the retired member’s pension and for payment of the eligible spouse’s share to him or her.
Restrictions
(3) The division and payment of the pension is subject to the restrictions set out in this section and to such other restrictions as may be prescribed.
Duties of administrator
(4) Once the application is complete, the administrator shall revalue the retired member’s pension in the prescribed manner and begin the payments to the eligible spouse within the prescribed period.
Restriction on other ways of dividing pension benefits, etc.
67.5 (1) An order made under Part I (Family Property) of the Family Law Act, a family arbitration award or a domestic contract is not effective to the extent that it purports to require the administrator of a pension plan to divide the pension benefits, deferred pension or pension, as the case may be, of a member, former member or retired member of the plan otherwise than as provided under section 67.3 or 67.4.
PRINCIPLES APPLIED
9I decline to follow the reasoning and conclusion of the applicant. The major flaw in his position is foundational. Pensions simply are not like other assets; they are unique. Pensions have their own separation regime found in the PBA. This deciding difference was made clear in the Court of Appeal decision of Trick v. Trick, 2006 CanLII 22926 (ON CA), 83 O.R. (3d) 55, leave to appeal dismissed, [2006] S.C.C.A. No. 388. There the Court of Appeal, at para. 16, in declining an equity‑based effort to enforce a support order by a vesting order for more than 50 percent of pension benefits, stated, “the exigibility of pensions is fraught with social and political policy issues, issues that are better-suited for the legislature than the courts.” Thus, in my view, the PBA addresses the issue before the court and forecloses the relief sought by the applicant.
10The Family Law Act provides for the division of property following a marriage breakdown. Section 10.1(7) of the FLA states, “If the Pension Benefits Act applies to the pension plan, the restrictions under section[] … 67.4 of that Act apply with respect to the division of the spouse’s interest in the plan ….”1 Under s. 67.4, the pension administrator splits the monthly pension payment directing the appropriate portion of the pension to the spouse of the pension holder. Nothing in s. 67.4 suggests that this monthly split is an asset that can be gifted or bequeathed, nor does it authorize the payment of a portion of a pension to the estate of the spouse on his or her death. Rather, said section refers to payments to the “eligible spouse”. Moreover, s. 67.5(1) provides, “An order made under Part I (Family Property) of the Family Law Act, … is not effective to the extent that it purports to require the administrator of a pension plan to divide the pension benefits … otherwise than as provided under section[] … 67.4.” In sum, s. 67.4 directs divided pension payments only to the eligible spouse and s. 67.5 prohibits any other divided pension payments.
11Furthermore, pursuant to PBA s. 44(1), the pension before me is a “survivor and joint pension” because the first installment of the pension was paid before separation. This construction provides protection to the spouse - a subsequent marriage breakdown cannot eliminate the spouse’s interest in the pension. Moreover, as subsections 44(3) and (3.1) make clear, upon the death of either the pension holder or the spouse, the remaining pension reverts back to the survivor. This scheme guarantees continued pension payments to the spouse on the death of the pension holder. It also ends any pension payments to the spouse on his or her death. Again, the reference is to payments to the “surviving spouse” without any mention or suggestion that these payments are to be paid to the estate of the surviving spouse. In addition, the construction advocated by the applicant – on the death of the spouse, the monthly pension benefits shall continue to be paid to the spouse’s estate until the death of the pension holder – contravenes s. 44(3.1) which directs:
If the spouse of the retired member dies before the retired member, the pension payable to the retired member after the spouse’s death shall not be less than 60 percent of the pension paid to the retired member during their joint lives. [Emphasis added.]
12Here, the monthly pension payments to the applicant, the spouse of the retired member, the respondent, is 48.99 percent. This leaves the amount paid to the respondent at 51.01 percent. Under the applicant’s argument, these same payments of 48.99 percent /51.01 percent would continue to be paid after his death to his estate. Thus, after his death, the respondent would continue to be paid 51.01 percent which obviously is less than 60 percent, the minimum required by s. 44(3.1).
13Finally, s. 65(1) of the PBA specifically prohibits the type of assignment or bequest advocated by the applicant: “Every transaction that purports to assign, charge, anticipate or give as security money payable under a pension plan is void.” The exemptions to this prohibition, for family law purposes, include only divisions pursuant to ss. 67.3 and 67.4. Thus, again, the avenue advanced by the applicant is contrary to the PBA.
CONCLUSION
14For the foregoing reasons, an order shall go that the Ontario Teachers’ Pension Plan pay to the applicant 48.99 percent of each of the respondent’s monthly pension payments, commencing retroactively from the separation or valuation date of July 13, 2017. The duration of these payments shall be subject to the scheme as set out in the PBA. In all other respects, the applicant’s motion is dismissed.
COSTS
15As the successful party, the respondent is presumptively entitled to costs pursuant to r. 24(1).
16The respondent seeks costs, on a full indemnity basis, of $11,247.00
17During submissions, counsel for the applicant contested the elevated scale but did not quibble with the time expended. I, too, find elevated costs inappropriate.
18I am aware of and apply the overriding principles of reasonableness and proportionality. Accordingly, I award the total costs of $6,500.00 that the applicant shall pay to the respondent. This sum is inclusive of fees, costs and taxes. It is due forthwith.
Original Signed by Justice K. Munroe
_____________________________
Kirk W. Munroe
Justice
Released: October 22, 2019
Footnotes
- Section 67.3 of the PBA does not apply here because it concerns a valuation date which pre-dates retirement.