COURT FILE NO.: 18-00002276-00OT DATE: 20191120
SUPERIOR COURT OF JUSTICE – ONTARIO
Court File No.: 18-00002276-00OT Belleville Small Claims Court File No.: 0469/18
RE: PETER GAMBLE, Plaintiff/Respondent
AND:
HER MAJESTY THE QUEEN in right of ONTARIO as represented by MINISTRY OF FINANCE and ONTARIO PENSION, Defendants/Moving Party
AND BETWEEN:
Court File No.: CV-18-000022776-00OT Oshawa Small Claims Court File No.: 1876/18
SUPERIOR COURT OF JUSTICE – ONTARIO
ALLAN CORNER, Plaintiff/Respondent
AND:
HER MAJESTY THE QUEEN in right of ONTARIO as represented by MINISTRY OF FINANCE, Defendants/Moving Party
AND BETWEEN:
Court File No.: CV-18-000022776-00OT Oshawa Small Claims Court File No.: 1877/18
SUPERIOR COURT OF JUSTICE – ONTARIO
GORDON THOW, Plaintiff/Respondent
AND:
HER MAJESTY THE QUEEN in right of ONTARIO as represented by MINISTRY OF FINANCE, Defendants/Moving Party
AND BETWEEN:
Court File No.: CV-18-000022776-00OT Oshawa Small Claims Court File No.: 2276/18
SUPERIOR COURT OF JUSTICE – ONTARIO
JOSEF KREPPNER, Plaintiff/Respondent
AND:
HER MAJESTY THE QUEEN in right of ONTARIO as represented by MINISTRY OF FINANCE, MUNICIPAL PROPERTY ASSESSMENT CORPORATION, ONTARIO PENSION BOARD and ONTARIO MUNICIPAL EMPLOYEES RETIREMENT SYSTEM, Defendants/Moving Party
BEFORE: Cavanagh J.
COUNSEL: Dona Salmon, for the Defendant/Moving Party, Her Majesty the Queen Mitchell R. Smith, for the Defendant, Municipal Property Assessment Corporation Josef Kreppner, Plaintiff, acting in person Peter Gamble, Plaintiff, acting in person Allan Corner, Plaintiff, acting in person Gordon Thow, Plaintiff, acting in person
HEARD: November 14, 2019
ENDORSEMENT
Introduction
[1] The moving parties are Her Majesty the Queen in Right of Ontario represented by the Ministry of Finance (the “Crown”) and the Municipal Property Assessment Corporation (“MPAC”). The Crown is a defendant in four actions pending in the Small Claims Court (three in Oshawa and one in Belleville). MPAC is a defendant in the action brought by the responding party, Josef Kreppner, but not in the other three actions.
[2] Each of the responding parties is a plaintiff in one of the four actions commenced in the Small Claims Court.
[3] The Crown moves for an order to transfer these four actions to the Superior Court of Justice at Toronto and to have them consolidated or, alternatively, heard one after the other or as the trial judge directs. The Municipal Property Assessment Corporation (“MPAC”) supports the Crown’s motions and brings its own motion for an order that the Kreppner action be transferred to the Superior Court of Justice.
[4] The four actions raise common factual and legal issues pertaining to the divestment in 1998 by the Ministry of Finance of the Municipal Property Assessment Program (“MPAP”) to the Ontario Property Assessment Corporation (“OPAC”) (later named Municipal Property Assessment Corporation). As a result of the Crown’s divestment, all four plaintiffs ceased to be active members of the Ontario Public Service Pension Plan (“PSPP”) administered by the Ontario Pension Board (“OPB”) and became active members of the Ontario Municipal Employees Retirement System Pension Plan administered by the Ontario Municipal Employees Retirement System Administration Corporation (“OMERS”).
[5] In their actions, each plaintiff pleads that because his credited service and associated pension assets were not transferred from the PSPP to the OMERS Pension Plan, the aggregate amount of the pensions he is now receiving from the PSPP and OMERS pension plans is less than the amount he would have received had all of his service been credited in one pension plan. In their actions, the plaintiffs seek compensation for their financial losses.
[6] The plaintiffs are self-represented. They oppose the motions. Mr. Kreppner made submissions on these motions and the other three plaintiffs adopted these submissions.
[7] For the following reasons, these motions are dismissed.
Background
Small Claims Court Actions
[8] Each of the plaintiffs is a former employee of the Ministry of Finance and of OPAC (now MPAC).
[9] Peter Gamble commenced his action against the Crown in the Small Claims Court in Belleville on July 31, 2018. Allan Corner commenced his action against the Crown in Small Claims Court in Oshawa on August 16, 2018. Gordon Thow commenced his action against the Crown in Small Claims Court in Oshawa on August 16, 2018. Josef Kreppner commenced his action against the Crown, MPAC, OPB and OMERS in Small Claims Court in Oshawa on October 1, 2018.
Effect of divestment on plaintiffs’ pensions
[10] MPAC, formerly OPAC, is an independent body established by the Ontario Property Assessment Corporation Act, 1997 which provides Ontario municipalities with property assessment services.
[11] Effective December 30, 1998, responsibility for property assessment was transferred from the Ministry of Finance to OPAC. On December 15, 1998, as part of the transfer, OPAC made job offers to employees of the Ministry of Finance’s Assessment Division, including the plaintiffs. The offers were accepted by the plaintiffs and, effective December 31, 1998, they became employees of MPAC.
[12] At the time of the divestment, the Pension Benefits Act, R.S.O. 1990, c. P.8 (“PBA”) included provisions dealing with the treatment of pension benefits on a divestment.
[13] As of the date of transfer, employees who accepted job offers from OPAC ceased accruing pension benefits in the PSPP and start accruing pension benefits in the OMERS Pension Plan until either their retirement or the termination of employment with OPAC. OPAC did not assume responsibility for any of the accrued pension benefits earned in the PSPP prior to the date of transfer. The Crown continued to be responsible for payment of pensions that remained in the PSPP. On retirement, the transferred employees receive two separate pensions: one from the PSPP and one from the OMERS Pension Plan. These two pensions are described as “split pensions” - a frozen pension from the PSPP based on earnings up to and including December 30, 1998, and another pension from OMERS based on earnings from December 31, 1998 onwards.
[14] Since both the PSPP and OMERS Pension Plan are final average earnings defined-benefit plans, the aggregate amount of the pension that the transferred employees are receiving or will receive on retirement from both pension plans will be less than what they would have received had they continued service in one plan. This is because a transferred employee’s pension remaining in the PSPP is “frozen” as at the date of the divestment and the pension is calculated based on the employee’s final salary at the date of divestment with inflationary indexing increases thereafter. In the OMERS Pension Plan, however, the pension is calculated by reference to the employee’s salary at the date of termination of employment or retirement.
[15] For several years after the December 30, 1998 divestment, MPAC and a group of interested MPAC employees, including the plaintiffs, sought legislative changes that would allow for frozen PSPP pensions to be transferred to OMERS. In November 2006, the Government of Ontario established the Ontario Expert Commission on Pensions (OECP) to examine several pension issues.
Legislative Changes
[16] In 2008, the OECP issued a report containing a number of recommended amendments to the PBA, including one recommendation specifically addressing the split pension issue. The Ontario government responded by passing the Pension Benefits Amendment Act, 2010, which added section 80.1 to the PBA in order to facilitate asset transfers by employees affected by past divestments. The amendments, effective May 18, 2010, required that pension transfer agreements be in place an order for employees with split pensions to have the opportunity to consolidate their pensions and a successor pension plan. Section 80.1 of the PBA was not proclaimed in force and did not become effective until July 1, 2014. Further enabling regulations were required to allow the various pension plan administrators to enter into pension transfer agreements.
[17] Under the amendments to the PBA effective January 1, 2014, no transfer options could be made available to MPAC employees until the PSPP and OMERS had successfully negotiated such transfer agreement. OPB subsequently entered into such an agreement with OMERS and the plaintiffs were given the opportunity to make an election to consolidate the value of their accrued pension benefits in the PSPP with the OMERS Pension Plan in one of three ways: (i) without purchasing any “credited service shortfall”; (ii) by purchasing only a portion of the “credited service shortfall”, or (iii) purchasing all of the “credited service shortfall”. If an employee failed to elect one of these options and return the transfer election form by a specified date, that employee would continue to maintain split pensions in the PSPP and OMERS Pension Plan. The plaintiffs did not elect one of these options.
MPAC’s motion to transfer the Kreppner action to the SCJ
[18] On January 21, 2019, MPAC brought a motion to transfer Mr. Kreppner’s action to the Superior Court of Justice in Toronto. The Crown supported this motion. At the hearing of this motion, I was informed that there were three other Small Claims Court actions in which the same factual and legal issues arose. I raised with counsel that the plaintiffs in the other actions had not been given notice of MPAC’s motion and that their interests may be affected by any order made on MPAC’s motion in the Kreppner action. The Crown requested an adjournment in order to permit it to give notice to the persons who would be affected by MPAC’s motion or to bring separate motions in the other three actions. This adjournment was granted, and the Crown brought its own motion in each of the four actions.
Analysis
[19] The issues on these motions are (i) whether I should exercise my inherent jurisdiction to transfer the four Small Claims Court actions to the Superior Court of Justice; (ii) if the actions are transferred, whether they should they be transferred to Toronto; and (iii) if the actions are transferred, whether they should they be consolidated.
Should the four Small Claims Court actions be transferred to the Superior Court of Justice?
[20] I first set out the legal principles that apply on these motions.
[21] In Vigna v. Toronto Stock Exchange, [1998] O.J. No. 4924 (Div. Ct.) the Divisional Court heard an appeal from the decision of the application judge on an application by the defendant for the transfer of an action from the Small Claims Court to the Superior Court. A transfer of the action under s. 107(1)(d) of the Courts of Justice Act could not be made because s. 107(2) provides that a proceeding in the Small Claims Court shall not be transferred to the Superior Court without the consent of the plaintiff in the proceeding in the Small Claims Court and the plaintiff did not consent. The Divisional Court held that a judge has the necessary jurisdiction to transfer an action from the Small Claims Court to the Superior Court, without the plaintiff’s consent, under the judge’s inherent power as a Superior Court judge to control the process of the Courts. The Divisional Court provided guidance concerning the circumstances under which this jurisdiction should be exercised:
We do not mean it to be taken that a transfer should be made in every case where it is requested. It is important for the court to scrutinize the issues raised where such a request is made to determine whether those issues are capable of being justly and fairly resolved by the procedures available in Small Claims Court. In many if not most cases the Small Claims Court procedures will suffice. This particular case is, in our view, one of the exceptions where the issues raised are of such a nature and complexity that the available procedures are insufficient for their just and fair determination on the merits.
The Divisional Court held that in the circumstances[^1], this was one of the rare cases where an order transferring an action from the Small Claims Court to the Superior Court should be made.
[22] In Farlow v. Hospital for Sick Children, [2009] O.J. No. 4847, T. P. Herman J. held that the decision as to whether the court should transfer an action from the Small Claims Court to the Superior Court involves the balancing of various factors including (i) the complexity of the issues; (ii) the importance of expert evidence to a determination of the case; (iii) the need for discovery; (iv) whether the case involves issues of general importance; and (v) the desire for a just and fair determination. Justice Herman held that balanced against these factors is the principle that a court should rarely exercise its discretion to transfer a case and he observed at para. 21:
In general, if a litigant chooses to pursue a case in Small Claims Court, that choice should be respected. Of particular concern in this case is the potential that the transfer to a higher court may increase the costs for the litigants and have a negative impact on access to justice [citation omitted].
[23] I next address the factors identified in Farlow.
Complexity of issues
[24] The Crown, supported by MPAC, submits that the plaintiffs’ actions raise a host of complex factual and legal issues which cannot be properly adjudicated in the Small Claims Court. The Crown contends that there are significant issues of liability among the defendants in the Kreppner action and, if liability is found against more than one defendant, apportionment of liability is a potential issue. The Crown also argues that the Court will need to consider the legislative history and purposes of the PBA including the provisions applicable to divestment and the amendments made to these provisions.
[25] The Crown relies on the affidavit of Jason Eatock, a pension consultant at the Treasury Board Secretariat, in support of its motion. In his affidavit, Mr. Eatock states that based on his review of the files and his experience, the pension issues are complex. He relies upon the fact that the events giving rise to the plaintiffs’ claims occurred approximately two decades ago and he states that the determination of the issues will require documentary evidence of the communications between the plaintiffs and the defendants with respect to each plaintiff’s accrued pension benefits, both prior to and following the divestment. He also states that in order to properly plead a limitations defence, a full evidentiary record is required.
[26] The responding parties dispute that there are contentious factual issues that cannot be properly adjudicated in the Small Claims Court. They submit that there is substantial agreement on the facts.
[27] It seems to me that the chronology of relevant events, the communications between the parties, and the relevant legislative context, are largely a matter of record. The moving parties have not identified any specific complex and contentious facts with respect to the claim of any of the four plaintiffs other than, generally, when they discovered their claims. On the record before me, I am not able to conclude that the four Small Claims Court actions involve contentious factual issues that have such significant complexity that it would be unjust for the defendants to have the plaintiffs’ claims adjudicated in the Small Claims Court.
[28] The court adjudicating the plaintiffs’ claims will need to consider the applicable legislative framework, but this would be the same for any claim brought in the Small Claims Court that involves a statutory context.
Need for expert evidence
[29] The moving parties submit that where expert evidence is central to the determination of a claim, the claim is more appropriately dealt with in the Superior Court of Justice. In support of this submission, they rely on the decision in Crane Canada Co. v. Montis Sorgic Associates Inc., [2005] O.J. No. 6247, aff’d [2006] O.J. No. 1999 (C.A.) where the application judge concluded based upon information provided by both the applicant’s and the respondent’s experts that expert evidence would be critical in resolving the claims and this evidence was likely to be complex. In the Court of Appeal, the panel expressed that they were alert to the access to justice concerns raised as a result of the transfer to the Superior Court of Justice but concluded that the “balancing of the pros and cons is tipped by the fact that all the claims are subrogated claims brought by one insurer”. The Court of Appeal held that the order of the application judge was a proper exercise of discretion and one that should be rarely exercised.
[30] The Crown relies upon evidence from Mr. Eatock that he believes that expert evidence will be required. The Crown submits that expert actuarial evidence will be needed to address the amount of the damages that the plaintiffs claim.
[31] The Crown cites Cassidy v. Cassidy, 2011 ONSC 791 in support of its submission that the issues in the four actions are complex and will require the attendance of an actuary to give expert evidence. The decision in Cassidy was a costs endorsement in a divorce proceeding in which the valuation of the husband’s pension was an issue. The court considered that, in that case, the valuation of the husband’s pension raised complex issues which required expert actuarial evidence. I do not regard this decision as articulating a principle that applies generally, or that applies to the circumstances of these motions.
[32] The responding parties submit that they rely on the pension computations made by the Crown and MPAC, which they do not challenge, for their claim for damages. They submit that it is unlikely that there will be disagreement concerning the computation of their damages.
[33] Actuarial evidence is not necessary to resolve the issues of liability. In this respect, the motions before me differ from the situation in Crane. The plaintiffs do not expect that they will need expert evidence with respect to quantification of their damages. If the defendants decide that they need to rely upon actuarial evidence, Rule 18.02 of the Rules of the Small Claims Court provides that the written report of an expert shall be received in evidence.
[34] I am not satisfied that expert evidence will be central to the determination of the plaintiffs’ claims or that the application of the procedural framework that exists under the Rules of the Small Claims Court for expert evidence would result in injustice to the moving parties.
Need for Discovery
[35] The moving parties submit that the issues raised in the four actions are such that they require oral and documentary discovery. They point out that the divestment took place nearly two decades ago and submit that they require documentary evidence of the communications between the plaintiffs and the defendants with respect to their accrued pensions, both prior to and following the divestment. The moving parties also submit that they rely upon a limitation period defence which turns on the each of the plaintiff’s knowledge and discovery of the alleged adverse effect of receiving two separate pensions upon retirement. The moving parties submit that examinations for discovery are not provided for in the Rules of the Small Claims Court whereas the Rules of Civil Procedure contain detailed rules for discovery of documents and examinations for discovery which are needed for these actions.
[36] The responding parties submit that there is substantial agreement on the facts and that fulsome discovery as provided for in an action in the Superior Court of Justice is not needed. The responding parties point out that Rule 13.03(1)(e) of the Rules of the Small Claims Court provides that one of the purposes of a settlement conference (which shall be held in every defended action) is to provide “full disclosure between the parties of the relevant facts and evidence.”
[37] In the evidence before me on this motion, the moving parties have not identified any communications between the plaintiffs and the defendants that would not already be in their possession. I do not accept that simply because a defendant in an action commenced in the Small Claims Court relies upon a limitation period defence which may raise a question concerning discoverability, the defendant should be able to have the action transferred to the Superior Court of Justice in order to allow for oral and documentary discovery on this issue. I am not satisfied that the moving parties’ have shown that they need discovery in accordance with the Rules of Civil Procedure in order to defend the plaintiffs’ claims through a fair and just process.
Issues of importance
[38] The moving parties submit that there are issues of general importance raised in the plaintiffs’ claims. They submit that these issues arise in the context of interpreting provisions of the PBA that are applicable to the divestment or purchase and sale of a business, such as those relating to the rights of transferred employees, the duties or responsibilities of pension plan administrators, and the duties or responsibilities of the original employer and the successor employer. The moving parties submit that if the plaintiffs’ claims are successful, other MPAC employees affected by the 1998 divestment may commence legal proceedings against the Crown and MPAC. They also submit that the outcomes of these actions could have precedential value and implications for future divestments in both the private and public sectors.
[39] I accept that the adjudications of the plaintiffs’ claims may result in a decision which may have importance beyond its importance to the parties. Mr. Kreppner noted in his submissions that s. 80.1 of the PBA was repealed on July 1, 2017 and is no longer in effect. I was advised that there are no pending proceedings in other courts in Ontario in which the same issues arise. On the evidence before me, the extent to which the plaintiffs’ claims may result in a decision which may have importance beyond its importance to the parties is unclear.
[40] I take this factor into consideration in the balancing exercise that is required on these motions.
Desire for a fair and just determination
[41] The moving parties submit that the procedural limitations in the Small Claims Court will significantly prejudice them. They contend that in addition to the lack of rules and procedures in relation to expert evidence and discovery, a summary judgment motion cannot be brought in the Small Claims Court. The moving parties cite Van de Vrande v. Butkowsky, 2010 ONCA 230 at para. 2 as authority for this proposition.
[42] Rule 1.03(1) of the Rules of the Small Claims Court provides that the rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every proceeding on its merits in accordance with section 25 of the Courts of Justice Act. Rule 1.03(2) provides that if the rules do not cover a matter adequately, a court may give directions and make any order that is just, and the practice shall be decided by analogy to the Rules of the Small Claims Court, by reference to the Courts of Justice Act and the Act governing the action and, if the court considers it appropriate, by reference to the Rules of Civil Procedure. Under this rule, the moving parties are at liberty to seek directions from the court to address matters that are not adequately covered by the Rules of the Small Claims Court and the court may make any order that is just.
[43] I do not accept that a defendant’s desire to move for summary judgment is a significant factor that should tip the balance and influence a judge to exercise jurisdiction to transfer an action from the Small Claims Court to the Superior Court of Justice. I was not provided with authority to support this proposition. I do not agree that the moving parties would be deprived of a fair and just process for the adjudication of the plaintiffs’ claims if they are unable to move for summary judgment.
Access to justice
[44] In Farlow, the court was clear that factors that may favour a transfer of an action from the Small Claims Court to the Superior Court of Justice must be balanced against the principle that, in general, if a litigant chooses to pursue a case in the Small Claims Court, that choice should be respected. A particular concern is that the transfer to a higher court may increase costs for the litigants and have a negative impact on access to justice. In the Court of Appeal decision in Crane, the panel was alert to concerns relating to access to justice and held that the exercise of a judge’s discretionary jurisdiction to transfer a case from the Small Claims Court to the Superior Court of Justice should rarely be exercised.
[45] The fact that the plaintiffs are self-represented litigants is a factor that informs the access to justice concerns that arise on these motions. Mr. Kreppner’s claim, and those of the other plaintiffs, are for amounts that are within the monetary jurisdiction of the Small Claims Court. Mr. Kreppner submits that he made the decision to file his claim in the Small Claims Court in Oshawa after careful and due consideration of his alternatives in order to secure a just, expeditious and the least expensive determination of his claim on its merits. Mr. Kreppner contends that as a self-represented litigant with limited resources, he will encounter significant challenges in pursuing his claim through the ordinary procedures which apply to actions in the Superior Court of Justice because of the added costs and complexity of these procedures in comparison with those under the Rules of the Small Claims Court. Mr. Kreppner submits that these challenges may affect his ability to pursue his claim.
[46] The responding parties submit that the plaintiffs have shown through their responses to these motions that they are sophisticated litigants who are well able to pursue their claims in the Superior Court of Justice. They submit that the convenience to the plaintiffs from the more simplified procedures of the Small Claims Court is significantly outweighed by the prejudice that the moving parties will suffer if these actions are not transferred to the Superior Court of Justice.
[47] I have considered the factors identified in Farlow and I am not satisfied that the moving parties have shown that they will not be able to secure a just and fair determination of the plaintiffs’ claims through the procedures set out in the Rules of the Small Claims Court. When I balance the reasons given by the moving parties to support their request that the four actions be transferred to the Superior Court of Justice against the access to justice concerns of the responding parties, I conclude that the four actions are not rare and exceptional cases where the plaintiffs’ choices to bring their claims in the Small Claims Court should not be respected.
[48] As a result of my decision on the first issue raised on these motions, it is not necessary for me to decide whether the actions should be transferred to Toronto or whether they should be consolidated.
[49] In my endorsement on January 21, 2019, I expressed concern about multiplicity of proceedings because the four actions in the Small Claims Court involve common issues of fact and law. This is something that should be addressed in the Small Claims Court, if appropriate.
Disposition
[50] For the foregoing reasons, the motions by the Crown and by MPAC are dismissed.
[51] If the parties are unable to agree on costs of these motions, the responding parties may make written submissions within 20 days. The moving parties may make responding submissions within 10 days thereafter. The responding parties may make reply submissions within 10 days thereafter.
Cavanagh J.
Date: November 20, 2019
[^1]: The action was by an investor who owned shares in a company which owned shares in Bre-X. The plaintiff conceded that his action was a test case in which he hoped to have the procedures followed by the Toronto Stock Exchange before a stock is listed held to judicial scrutiny. There were six other actions arising out of the Bre-X situation pending in the superior court. The issues were complex and would necessarily involve additional parties. The issues were of immense importance to the TSE and to stock exchanges across Canada. Both parties agreed that expert evidence would be necessary. The Divisional Court concluded that to deal fairly and fully with the issues would require viva voce and documentary discovery.