THE LAWYERS WEEKLY "Have you seen your file storage bill lately?" CONTACT US AND START SAVING 1-888-781-9083 Vol. 27, No. 08 www.thelawyersweekly.ca June 22, 2007 www.docudavit.com Pension fund administrators get clear direction on appeal By John Jaffey Canadian Doughnut Company Toronto Limited’s establishment of a In a landmark pension law defined benefit pension plan in decision, the Ontario Court of 1954. (The company later became Appeal outlined when it is accept- DCA Canada Inc., then Kerry able for plan expenses to be paid (Canada) Inc., now the appellant.) from pension funds, when an Ronald Walker of Fasken Mar- employer may use surplus assets tineau Dumoulin LLP was lead to pay current service costs and counsel for Kerry. He told The when the costs of a tribunal Lawyers Weekly, “We’re delighted hearing may be paid from the that the Court of Appeal has seen fund. fit to provide some clarity and Augmenting “the much needed guidance both with respect to the guidance in this new and emerging amendments to plans to deal with area of law” provided by the expenses, and with respect to the Supreme Court of Canada over the use of surplus in plans where there last decade, Justice Eileen Gillese is both a defined benefit and overruled a decision by the Divi- defined contribution part of the sional Court and restored rulings plan. Alan Gold; Photo by Paul Lawrence by Ontario’s Financial Services Tribunal in a case dealing with the see PENSION p. 7 Charter does not apply to foreign seizures By Cristin Schmitz Louis LeBel, Marie Deschamps, for future cases to flesh out,” Gold Medical teams no more likely Ottawa A deeply divided Supreme Morris Fish and Louise Charron adopted a very restrictive view of observed. If the court is saying that the only relevant issue around the to get sued, researchers report Court has ruled that the Charter the Charter’s application to the application of the Charter abroad does not apply to foreign searches conduct of Canadian officials is the effect of the impugned con- By donalee Moulton They recognize that collabora- and seizures by Canadian police, overseas, while the minority com- duct on trial fairness, “then if there Halifax tive arrangements are often used in although tainted evidence may be plained that their colleagues were is no trial, all the Charter remedies The common belief among patient care and that a team excluded from trials here if it is effectively overruling Cook which are no longer available,” he health-care professionals that those approach is desirable. Courts have obtained abroad in violation of the left the door open to extraterrito- pointed out. who work in groups are more always assessed liability against Charter’s fair trial and funda- rial application of the Charter. This would pose problems for likely to get sued has been individuals, even in cases mental justice standards. Reasoned the majority, “as the those seeking Charter remedies debunked by new research from involving health professionals Counsel say R. v. Hape, a 9-0 supreme law of Canada the outside a criminal trial, the The Conference Board of Canada. working as a team. Therefore, it is decision June 7, raises as many Charter is subject to the same minority also noted. For example, The board found that although likely that they will continue to questions as it answers about when jurisdictional limits as the human rights activists in Canada legal liability is widely perceived assess the standard of care and how the Charter applies to country’s other laws or rules. are suing the federal government to be a barrier to delivering health expected of a health professional, Canadian officials operating in Simply put, Canadian law, whether to extend Charter protections to services in collaborative teams, the given their qualifications and foreign jurisdictions, a vexed issue statutory or constitutional, cannot suspected insurgents detained by perception is not grounded in experience, on an individual basis. at least since the court splintered in be enforced in another state’s terri- Canadian Forces operating in reality. “Health professionals are R. v. Cook,  2 S.C.R. 597. tory without the other state’s con- Afghanistan. “Although there are liability Although the Supreme Court sent. Since extraterritorial enforce- But Justice LeBel reasoned that concerns, they are not significant see HEALTH p. 6 agreed unanimously in Hape to ment [of Canadian law] is not “the power to invade the private enough to deter collaboration,” reject the s. 24(2) Charter bid of possible, and enforcement is nec- sphere of persons and property, Gabriela Prada, one of the study’s CONTENTS p. 2 an Ontario man accused of money essary for the Charter to apply, and seize personal items and infor- authors and a principal research laundering who sought to exclude extraterritorial application of the mation is paradigmatic of state associate with The Conference from evidence documents seized Charter is impossible.” sovereignty. These actions can be Board, told The Lawyers Weekly. by the RCMP in a raid on his busi- Counsel for Hape, Alan Gold of authorized only by the territorial The study, “Liability Risks in FOCUS ON LABOUR AND EMPLOYMENT FOCUS ON CORPORATE COMMERCIAL ness in the Turks and Caicos Toronto, said the majority’s judg- state. From a theoretical stand- Interdisciplinary Care: Thinking PUBLICATIONS MAIL AGREEMENT NO. 40065517 Islands, the judges split 5-4-1 on ment and discussion of interna- point the Charter cannot be Outside the Box”, found that why they were rejecting his tional law goes “far beyond” the applied, because its application Canadian courts seem to have kept FOCUS ON FAMILY LAW appeal. submissions of the parties to the would necessarily entail an exer- pace with the times. “The courts in COMING JULY 13, 2007 COMING JULY 6, 2007 COMING NEXT ISSUE In the majority, Chief Justice case. “This very lengthy discus- Canada are reasonable,” said Beverley McLachlin and Justices sion will clearly provide material see SEIZURE p. 3 Prada. NICE BACKYARD. Too bad their neighbours have as much right to it as they do. Protect your clients. Recommend TitlePLUS® title insurance.* TitlePLUS title insurance and you, together we make real estate real simple. Visit titleplus.ca or call 1-800-410-1013 for more information *Underwritten by Lawyers’ Professional Indemnity Company (LAWPRO®). Contact LAWPRO for brokers in Manitoba, Saskatchewan and Alberta. ®Registered trademark of Lawyers’ Professional Indemnity Company. THE LAWYERS WEEKLY June 22, 2007 7 No provisions relevant to expense payments Gillese pointed out that the tri- bunal unanimously declined to make any order as to costs. PENSION were required to participate in the She then noted that the tribunal The Divisional Court had –continued from p. 1– defined contribution component. had relied on clauses in both the ordered costs against Kerry not When the amendments were trust agreement and the plan docu- only at the Divisional Court but “There was a great deal of con- introduced, the Committee asked ments that authorized money to be also retroactively with respect to fusion for plan administrators the superintendent of Financial paid for the exclusive benefit of the second tribunal hearing. given the Divisional Court deci- Services to investigate alleged the employees. Furthermore, Justice Gillese restored the “no sion. The Court of Appeal decision irregularities in the administration expert evidence at the hearing costs” award at the tribunal level. has clearly provided guidance to of the plan, including the payment equated “exclusive benefit of Plan She held that it was a proper exer- plan administrators and the profes- of plan expenses from the Fund members” with “routine expenses cise of the tribunal’s discretion to sions dealing with pension plans. and the employer’s contribution essential to the continued opera- decide on costs and that there was Throughout, our client has been holidays. tion of the Plan.” Following a thor- nothing in that decision that war- trying to administer the plan in After investigating, the Super- ough analysis of the legal obliga- Ronald Walker ranted interference by the Divi- good faith and feels vindicated by intendent required Kerry (the sional Court. “When the Divi- the decision.” employer) to reimburse the Fund sional Court makes a costs award Walker’s co-counsel was Chris- for expenses not incurred for the in respect of a tribunal hearing,” tine Tabbert, also of Fasken Mar- exclusive benefit of plan members she wrote, “it is standing in the tineau. dating back to 1985. However, the “The company has the right to use the shoes of the tribunal. Accordingly, The company’s original pension Superintendent did not order actuarial surplus to fund its contributions the Divisional Court is obliged to plan text specified that funding for Kerry to pay into the Fund the while the Plan is ongoing.” consider and apply the rules gov- the pension was through company amount represented by its contri- erning costs under which the tri- and employee contributions to a bution holidays. bunal operates.” pension fund (the “Fund”) consti- Kerry sought a hearing before Justices John Laskin and Paul tuted as a trust. A simple trust the tribunal with respect to plan tion for payment of plan expense, the plan is ongoing. It is signifi- Rouleau agreed. agreement was entered into at that expenses. The Committee sought a she concluded that the tribunal’s cant to note that Schmidt estab- Ari Kaplan and Clio Godke- time, and subsequent trust agree- hearing with respect to the contri- decision was reasonable and ought lishes that right even where, as witsch of Koskie Minsky LLP ments were signed from time to bution holidays. to be restored. here, the trust agreement provides acted for the plan members. time beginning in 1958. Kerry was successful on both As to contribution holidays, that the fund is to be used exclu- Kaplan told The Lawyers Weekly There are about 80 members of matters at the tribunal hearings. Justice Gillese noted there was no sively for the benefit of plan mem- his clients are reviewing the deci- the plan. The respondents are (The tribunal did, however, order prohibition against them in the bers.” sion and considering their options. former employees and members of Kerry to repay $5,455 spent to original plan and trust documents. Further, she held that cross-sub- They have until the beginning of the Retirement Committee (the obtain advice about the addition of She relied on Schmidt v. Air Prod- sidization is not prohibited by the September to decide whether to Committee), which administers the defined contribution option, ucts of Canada Ltd.,  2 trust agreement. “What is prohib- seek leave to appeal. the plan. but ruled that all other plan S.C.R. 611 as authority for the ited,” she wrote, “is the use of the The Fund has been in a surplus expenses were incurred for the principle “that the company has Fund for other than the exclusive Reasons: Nolan v. Ontario (Superinten- position for many years, and plan “primary benefit” of the plan ben- the right to use the actuarial sur- benefit of fund beneficiaries.” dent of Financial Services),  O.J. members have always received eficiaries.) plus to fund its contributions while Finally, regarding costs, Justice No. 2176. their full pension benefits. The Committee appealed suc- Amendments to the original cessfully to the Divisional Court, plan text in 1975, 1987 and 2000 which not only overturned the tri- purported, among other things, to bunal’s decisions, but ordered give the employer the power to pay Kerry to pay the Committee’s costs plan expenses from the Fund. of the appeals and of the second From the inception of the plan tribunal hearing. to the end of 1984, the employer This time it was Kerry’s turn to paid all plan expenses. Beginning appeal. As well, the Committee in 1985, however, it paid third- cross-appealed to the Ontario party plan expenses (such as actu- Court of Appeal on the issues of arial, investment management and whether Kerry must remit contri- audit services) from the Fund. butions in respect of the defined Don’t miss The Canadian Bar Association’s Canadian Legal Between 1985 and 2002, some benefit component of the plan and Conference and Expo 2007 in Calgary from August 12 to 14. $850,000 of these expenses were whether the tribunal has the power Everybody will be there. * paid from the Fund. to order costs payable from a pen- Also beginning in 1985, the sion fund. employer took contribution holi- On the issue of plan expenses, days in respect of its funding Justice Gillese (who is widely pub- Elie Wiesel obligations. By 2001, the amount lished in the field of trusts and totalled $1.5 million. pensions, and who is a former In 2000, the plan text was chair of the Pension Commission amended to introduce a defined of Ontario (1994-96), the Finan- contribution component. Existing cial Services Commission of Preston plan members were given the Ontario (1998-99) and the Finan- Manning option of remaining in the defined cial Services Tribunal of Ontario) benefit component of the plan or noted there are no provisions in the converting to the defined contribu- Pension Benefits Act relevant to the tion component. New employees payment of expenses. The Hon. Peter Lougheed Yippie became a stockbroker MILLER especially if it meant giving up the –continued from p. 5– pleasures of the flesh. Jann Arden national Party (Yippies) and a Jeffrey Miller is a writer, trans- defendant in the Chicago Seven lator, and lawyer. 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