COURT FILE NO.: CV-03-244195CP

DATE: 2020/04/14

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

MARSHA MARTIN AND FERN CAMIRAND Plaintiffs

• and -

MORNEAU SHEPELL LTD., IN ITS CAPACITY AS THE ADMINISTRATOR OF THE PARTICIPATING CO-OPERATIVES OF ONTARIO TRUSTEED REVISED PENSION PLAN, AND NOT IN ITS PERSONAL CAPACITY Plan Administrator

• and –

MICHAEL BARRETT, JOHN REBRY, LLOYD CRAWFORD, WILLIAM DEMERLING, CLAUDE GAUTHIER, CLARE HA YES, JIM MADILL, MICHAEL STEVENS, BRIAN ASHFORD, JOHN BLACK, JOHN HILL, CHARLES MACDAID, JOSEPH MARTIN, JUNE MCFARLANE, LARRY MELNYK, JOHN STAFFORD, AS TRUSTEES OF THE PARTICIPATING COOPERATIVES OF ONTARIO TRUSTEED PENSION PLAN (FSCO REG. NO. 345736), THE CANADA TRUST COMPANY, CIBC MELLON TRUST COMPANY, CIBC MELLON GLOBAL SECURITIES SERVICES COMPANY, CANADIAN IMPERIAL BANK OF COMMERCE, MARK EDWARD, WHITTACATT CARRYING ON BUSINESS AS WHITTACATT CONSULTING ASSOCIATES, WHITTACATT HOLDINGS LTD., TURNBULL AND TURNBULL LTD., THE ESTATE OF JOHN A. TURNBULL, DECEASED, LOUIS ELLEMENT, ANTHONY F. COOPER AND ANTHONY F. COOPER ACTUARIAL SERVICES LTD AND TORYS LLP Defendants

Charles Hatt for the Plaintiffs

Marcel Theroux for the Plan Administrator

Proceeding under the Class Proceedings Act, 1992

HEARD: April 14, 2020

PERELL, J.

REASONS FOR DECISION

1Pursuant to the Class Proceedings Act, 1992,¹ this is a motion by Marsha Martin and Fern Camirand, two beneficiaries of the Participating Co-Operatives of Ontario Trusteed Revised Pension Plan, Registration No. 0345726 and by Morneau Shepell Ltd. in its capacity as the Administrator of the Pension Plan. The Pension Plan was established on October 1, 1959 for employees and former employees of participating agricultural co-operatives in Ontario. The Pension Plan has been winding down since 2003, and the wind-up is almost complete.

2The moving parties seek orders that: (a) Class Counsel pay monies from its trust account to the Plan Administrator; (b) the Plan Administrator take steps to locate unlocated Plan participants and pay them their entitlements; (c) the Plan Administrator pay any remaining monies into Court; and, (d) the Plan Administrator be discharged from its administration of the Pension Plan and of this class action.

3On February 19, 2003, Ms. Martin and Ms. Camirand commenced this class action. The Plaintiffs sought to represent a class of current and deferred vested members, pensioners, and beneficiaries of the Pension Plan.

4The Plaintiffs’ claims arose as a consequence of a serious under-funding of the Pension Plan that occurred after June 1, 1994. The Plaintiffs claimed, among other things, restitution, or alternatively damages, for significant investment losses to the Pension Plan allegedly caused by the negligence, breach of trust and breach of fiduciary duty of the current and former trustees, current and former Pension Plan custodians, actuaries, former legal counsel, and a former investment consultant and asset manager of the Pension Plan. The Plaintiffs claimed that the acts, errors and omissions of the Defendants caused the Pension Plan's financial position to decrease by $29.4 million on a going concern basis and by $30.4 million on a solvency basis between September 1997 and September 2001.

5On February 10, 2005, Justice Winkler, as he then was, certified the action as a class proceeding.

6On April 17, 2008, Justice Cullity approved a multi-million dollar settlement that had been reached with all the Defendants with the exception of the Defendant Mark Edward Workman and a company controlled by Mr. Workman. At that time, Mr. Workman was residing in the Cayman Islands and he had no assets in Canada.

7On May 26, 2008, Morneau Sobeco Inc., a predecessor to Morneau Shepell Ltd., the current Plan Administrator, was appointed as Administrator of the Pension Plan.

8In the class proceedings, the Workman Defendants were noted in default, and on May 20, 2010, a default judgment was ordered. Through enforcement proceedings in the Cayman Islands, the Class eventually obtained $97,933.20. Class Counsel holds these funds in trust.

9On November 2, 2010, the Plan Administrator filed a Revised Wind Up Report with the Superintendent. On November 8, 2010 the Superintendent approved the Revised Report.

10To wind up the Pension Plan, the Plan Administrator must distribute the assets of the plan to persons entitled to benefits. The majority of the 2,421 members listed in the Revised Wind Up Report were settled with either an annuity purchase or a termination transfer payment in January 2012.

11Since January 2012, the Plan Administrator has attempted to locate all the remaining members. Between May 31, 2015 and December 31, 2020, it located 130 previously unlocated members, and they were paid a total of $550,946 in termination transfer payments.

12As at January 31, 2020, a total of 106 unlocated members remain in the Pension Plan with a total of $454,207 owing. At this time, there is approximately $39,000 in Plan funds, beyond the value of benefits owing, remaining available to complete the winding up of the Pension Plan.

13Of the 106 unlocated members, there are only 51 persons with individual entitlements valued at $2,000 or more.

14The Plan Administrator has attempted using various methods to locate the 106 unlocated members. The only remaining method to locate these members is the use of a private investigation agency. The cost of searching for all 106 unlocated members, processing the payment for those members who are found, and finalizing the distribution of assets from the Plan would be approximately $212,000. In contrast, it is estimated that that the comparative cost of searching for the 51 persons with individual entitlements of more than $2,000 and completing a distribution would be approximately $129,000 to $142,000.

15The expenditure of the $212,000 for the search of all unlocated members would substantially deplete the assets of the Plan available for distribution to participants, and the Plan Administrator seeks court approval for a different approach.

16The Administrator proposes to conduct in two phases a search for participants in the Pension Plan whose individual entitlements are the greatest in value. The wind-up plan would involve the following steps:

a. The Plan Administrator would apply for an Order pursuant to rule 16.04 of the Rules of Civil Procedure,² dispensing with service of this motion on the Defendants because they no longer have any interest in the motion or underlying proceeding and service would be unnecessary, burdensome, and would delay the motion.

b. The Plan Administrator would apply for an Order directing payment of the $97,933.20 from Class Counsel's trust account to the Plan Administrator for the purposes of paying for the search.

c. The Plan Administrator would apply for an Order directing the Plan Administrator to use the $97,933.20 to pay for the expenses of a search for unlocated members of the Pension Plan. The Plan Administrator proposes to structure the search or searches in such a manner as not to use the Pension Plan’s funds before exhausting the other funds available to conduct the search or searches. Using the $97,933.20 from Class Counsel's trust account would provide the necessary funding to carry out the searches and continue the necessary administration of the Plan until the Plan Administrator has been discharged, without touching those funds necessary to pay the entitlements of the unlocated members.

d. The first phase of the search would focus on for the 51 persons with individual entitlements valued at $2,000 and the second phase of the search would focus on persons with the next greatest entitlements, to the extent that funds remain in the Plan.

e. The Plan Administrator would apply for an Order directing the Plan Administrator to pay into Court any remaining monies representing Plan participant entitlements to the credit of the persons identified by the Plan Administrator, after withholding therefrom the income taxes exigible and reporting the amount credited to each person, including the tax withheld, to the tax authorities. The payment into court would be made as soon as practicable after any necessary approval by the Financial Services Regulatory Authority ("FSRA"), the Ontario pension regulator.

f. In respect of the payment into Court, the Plan Administrator would provide the Court with all relevant information respecting the unlocated participants that the Plan Administrator has in its possession to support the Court making payment in respect of a claim in the event that a claimant comes forward in the future.

g. The Plan Administrator would apply for an Order releasing the Plan Administrator in respect of the entitlement that any Plan participant may have to such monies once the monies are paid into Court. The Plan Administrator would also apply for an Order releasing the Plan Administrator in respect of its obligations under the Pension Benefits Act³ for the payment of benefits under the Plan.

h. After the payment into Court has been made, the Plan Administrator would apply to the FSRA to be discharged of its duties and to FSRA and the Registered Plans Divisions of the Canada Revenue Agency for the Plan to be deregistered.

17The Representative Plaintiffs believe that the Plan Administrator’s approach best serves the interests of the class. Distributing the funds equally among all 2,314 of the known and located Pension Plan participants would be administratively burdensome and would provide each member on average only $39. In contrast, the proposed use of the $97,933.20 plus the small surplus in the fund would ensure that many of the unlocated members would receive their entitlements.

18The court has the requisite jurisdiction to make the Order transferring and distributing the $97,933.20 recovered by Class Counsel for the purposes of locating Class Members so that they might take up the recovery of a judgment and the settlement pursuant to sections 12 and * of the Class Proceedings Act, 1992. The court has the requisite jurisdiction to Order the payment into court of any unclaimed pension fund entitlements pursuant to the law of trusts.

19Justice Wilton-Siegel dealt with the problem now before the court in Hawker Siddeley Canada Inc. (Re),⁴ where he stated at paragraph 2:

2. The Pension Benefits Standards Act does not address this situation. In particular, it does not address the issue of treatment of distribution in respect of members for whom there is no reliable address. Nor does it address the procedures to be applied by a plan administrator in respect of the distribution of funds owing after completion of a plan wind-up. Where the Pension Benefits Standards Act is silent, it is appropriate to apply the general principles of trust law in respect of the trust arrangements pertaining to the plan: Schmidt v. Air Products of Canada Ltd., 1994 CanLII 104 (SCC), [1994] 2 S.C.R. 611 (S.C.C.). In this case, the applicable principles can be found in the Trustee Act. Section 36(1) of the Trustee Act provides that a trustee may apply for an order for payment into court and section 36(4) provides for such an order in respect of trust property belonging to a person whose address is unknown in connection with the passing of accounts. In substance, the issue before me is a passing of accounts inasmuch as the court must address the same issues in the context of a winding-up of a pension plan as are required in respect of a proceeding brought under section 36(4) of the Trustee Act.

20The plan to complete the winding up of the Pension Plan and to complete the administration of the class action is eminently sensible and fair, and I, therefore, grant the motion as requested.

21In the circumstances of the Covid-19 emergency, these Reasons for Decision are deemed to be an Order of the court that is operative and enforceable without any need for a signed or entered, formal, typed order. The form of the formal Order is attached as Schedule A to these Reasons for Decision.

22The Plaintiff may submit a formal order for signing and entry once the court resumes operations; however, these Reasons for Decision are an effective and binding Order from the time of release.

Perell, J.

Released: April 14, 2020

Schedule “A”

Court File No.: 03-CV-244195CP

ONTARIO SUPERIOR COURT OF JUSTICE

THE HONOURABLE JUSTICE PERELL

________, THE _____ DAY OF _________, 2020

BETWEEN:

Marsha Martin and Fern Camirand Moving Parties / Plaintiffs

• and -

Morneau Shepell Ltd. in its capacity as the Administrator of the Participating Co-Operatives of Ontario Trusteed Revised Pension Plan, and not in its personal capacity Moving Party / Plan Administrator

• and -

Michael Barrett, John Rebry, Lloyd Crawford, William Demerling, Claude Gauthier, Clare Hayes, Jim Madill, Michael Stevens, Brian Ashford, John Black, John Hill, Charles Macdaid, Joseph Martin, June McFarlane, Larry Melnyk, John Stafford, as trustees of the Participating Co-operatives of Ontario Trusteed Pension Plan (FSCO Reg. No. 345736), The Canada Trust Company, CIBC Mellon Trust Company, CIBC Mellon Global Securities Services Company, Canadian Imperial Bank of Commerce, Mark Edward Whittacatt carrying on business as Whittacatt Consulting Associates, Whittacatt Holdings Ltd., Turnbull and Turnbull Ltd., the Estate of John A. Turnbull, deceased, Louis Ellement, Anthony F. Cooper and Anthony F. Cooper Actuarial Serviecs Ltd and Torys LLP Respondents / Defendants

ORDER

THIS MOTION, by the moving parties for orders that Class Counsel pay monies from its trust account to Morneau Shepell Ltd. in its capacity as the Administrator of the Participating Co-Operatives of Ontario Trusteed Revised Pension Plan ("Plan Administrator"); that the Plan Administrator take prescribed steps over six months to locate unlocated Plan participants and pay them their entitlements; and thereafter that the Plan Administrator pay any remaining monies respecting these entitlements into court and be released in respect of any Plan participant's entitlement to such monies, was made without notice to the Respondents/Defendants and heard this day, at Osgoode Hall, Toronto.

ON READING the joint motion record of the moving parties, and on hearing the submissions of Class Counsel and counsel for the Plan Administrator;

AND WHEREAS, the Respondents/Defendants no longer have any interest in the motion or underlying proceeding and service would be unnecessary, burdensome, and would delay the motion;

1. THIS COURT ORDERS that Class Counsel pay funds totalling $97,933.20 from Class Counsel's trust account as the Plan Administrator shall direct;

2. THIS COURT ORDERS that the Plan Administrator use the funds totalling $97,933.20 to carry out the steps listed as 1 through 4 of Appendix 2 to the Notice of Motion;

3. THIS COURT ORDERS that the Plan Administrator, after carrying out the steps listed as 1 through 4 of Appendix 2 to the Notice of Motion, pay into Court an amount equal to any remaining monies representing Plan participant entitlements in the Plan ("Aggregate Amount"), less applicable taxes and the Plan Administrator’s fees;

4. THIS COURT ORDERS that the Plan Administrator pay such Aggregate Amount, less taxes and fees, to the credit of the participants listed in a Schedule to be filed with the Court upon payment of the Aggregate Amount, indicating in the Schedule the amount standing to the credit of each participant, and such other relevant information about each participant as the Plan Administrator may possess, including where available the participant’s date of birth and social insurance number, and report to the tax authorities the amount so credited to each participant and the tax withheld on such amount;

5. THIS COURT ORDERS that upon paying into Court such Aggregate Amount, less taxes and fees, the Plan Administrator is released and discharged of its obligations under the Pension Benefits Act, R.S.O. 1990, c. P.8 with respect to the pension benefit entitlement of any such Plan participant;

6. THIS COURT ORDERS that the requirement for service on the Respondents/Defendants is dispensed pursuant to rule 16.04.

COURT FILE NO.: CV-03-244195CP DATE: 2020/04/14

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

MARSHA MARTIN AND FERN CAMIRAND Plaintiffs

• and –

MORNEAU SHEPELL LTD., IN ITS CAPACITY AS THE ADMINISTRATOR OF THE PARTICIPATING CO-OPERATIVES OF ONTARIO TRUSTEED REVISED PENSION PLAN, AND NOT IN ITS PERSONAL CAPACITY Plan Administrator

• and -

MICHAEL BARRETT, JOHN REBRY, LLOYD CRAWFORD, WILLIAM DEMERLING, CLAUDE GAUTHIER, CLARE HA YES, JIM MADILL, MICHAEL STEVENS, BRIAN ASHFORD, JOHN BLACK, JOHN HILL, CHARLES MACDAID, JOSEPH MARTIN, JUNE MCFARLANE, LARRY MELNYK, JOHN STAFFORD, AS TRUSTEES OF THE PARTICIPATING COOPERATIVES OF ONTARIO TRUSTEED PENSION PLAN (FSCO REG. NO. 345736), THE CANADA TRUST COMPANY, CIBC MELLON TRUST COMPANY, CIBC MELLON GLOBAL SECURITIES SERVICES COMPANY, CANADIAN IMPERIAL BANK OF COMMERCE, MARK EDWARD, WHITTACATT CARRYING ON BUSINESS AS WHITTACATT CONSULTING ASSOCIATES, WHITTACATT HOLDINGS LTD., TURNBULL AND TURNBULL LTD., THE ESTATE OF JOHN A. TURNBULL, DECEASED, LOUIS ELLEMENT, ANTHONY F. COOPER AND ANTHONY F. COOPER ACTUARIAL SERVICES LTD AND TORYS LLP Defendants

REASONS FOR DECISION

PERELL J.

Footnotes

1. 1S.O. 1992, c. 6.
2. 2R.R.O. 1990, Reg. 194.
3. 3R.S.O. 1990, c. P.8.
4. 4[2009] O.J. No. 5795 (S.C.J.).