Dalhousie University v. Moger

Dalhousie University v. Moger Court Supreme Court Date 2003-03-12 Citation 2003 NSSC 52 Docket SH 191430, SH 192046, SH 192760 Judge/Registrar/Adjudicator McDougall, Glen G. (Honourable Justice) Document Type Decision Relations Library Sheet - Dalhousie University v. Moger - 2003 NSSC 52 - 2003-03-12 - Library Sheet Decision Content IN THE SUPREME COURT OF NOVA SCOTIA Citation: Dalhousie University v. Moger, 2003 NSSC 052 Date: 20030312 Docket: S.H. 191430 : S.H. 192046 : S.H. 192760 Registry: Halifax IN THE MATTER OF: The Pension Benefits Act, R.S.N.S., 1989, c. 340 and IN THE MATTER OF: Dalhousie University Staff Pension Plan - William Henry Moger and Peter James Dolphin and IN THE MATTER OF: An appeal from a decision of the Superintendent of Pensions for the Province of Nova Scotia dated January 7, 2003 Between: Dalhousie University, as administrator of the Dalhousie University Staff Pension Plan Appellant v. Ruth Ann Moger, and The Public Trustee as Administrator with Will annexed of the Estate of Peter James Dolphin, and the Superintendent of Pensions for the Province of Nova Scotia, and Fiona Stewart and Michael Dolphin Respondents Judge: The Honourable Justice Glen G. McDougall Heard: February 4, 2003, in Halifax, Nova Scotia Counsel: Peter Bryson and David Demirkan, for the Public Trustee Hugh Wright and Carol Crooks, Articled Clerk, for Dalhousie University Michael Pugsley, for the Superintendent of Pensions Edward Gores, for the Attorney General of Nova Scotia Kenneth MacLean for Larry Graham, Q.C., for beneficiaries of Dolphin Estate Ruth Ann Moger, self-represented (accompanied by Tim Chesnutt, Agent for Ruth Ann Moger) By the Court: [1] This is an application for an order to set aside the decision of the Superintendent of Pensions (the Superintendent) issued and dated the 7th day of January, 2003, a copy of which is attached hereto and marked Exhibit “A”. [2] The grounds of appeal as contained in the originating notice (application inter partes) are: (a) The Superintendent of Pensions lacked jurisdiction to grant the Order under the Act or otherwise; (reference to the Act means the Pension Benefits Act) (b) The Order is contrary to provisions of the Act and in particular s. 56(4) thereof; (c) The Order is ultra vires the Act; (d) Such other grounds as may appear. [3] In addition to this application which was commenced on behalf of the Public Trustee, acting in the capacity of administrator with will annexed of the estate of Peter James Dolphin, an appeal was commenced by Dalhousie University, as administrator of the Dalhousie University Staff Pension Plan. The Notice of Appeal was filed on January 21, 2003. It too appealed the decision of the Superintendent as it related to both the estate of Peter James Dolphin and William Henry Moger and was done to comply with an earlier direction given by The Honourable Justice M. Heather Robertson of this Court in Chambers on January 8, 2003. Justice Robertson suggested that the appeal of both matters should be heard by the judge presiding in Chambers on February 4, 2003. The grounds for appeal in the second filing by Dalhousie University were identical to those set out in the application brought on behalf of the Public Trustee. [4] To better understand the process that led to the hearing of both matters together, it is necessary to provide some historical context. Dalhousie University (Dal), as administrator of the Dalhousie University Staff Pension Plan (the Plan), in a letter to Mrs. Ruth Ann Moger’s financial advisor, indicated that it was obligated by s. 56(4) of the Pension Benefits Act to pay pension benefits to the estate of the late Dr. William Henry Moger (Moger) instead of directly to his designated beneficiary, Mrs. Ruth Ann Moger (Mrs. Moger), his wife and sole heir-at-law. Dal took this position despite s. 19 of the Plan which reads as follows: 19. Benefits on Death Before Retirement Date - Active members (a) Minimum Spousal Entitlement The surviving Spouse of a deceased member is entitled under Section 56 of the Act to a payment not less than sixty percent of the Commuted Value of the deferred pension benefit accrued after 31 December 1987 to which the Member would have been entitled if the member’s employment had been terminated immediately before the Member’s death; provided that the payments described above in this sub-rule 19(1) may be reduced to the extent that the Spouse has received group life insurance benefits resulting from the death of the Member or former Member that can be considered to have been paid by Employer premiums. (b) Death Benefit Before Retirement Should an active member die before retirement (or an active Member on long-term disability die before deemed retirement under sub-rule 16(e)), the Member’s beneficiary will be entitled to receive the following benefit: an amount equal to the Sum of Contributions Compounded of the Member up to the date of death, plus the Member’s AVC Accumulated Value, if any, less any payment to the deceased Member’s Spouse pursuant to sub-rule 19(a) and less the appropriate income tax deduction. Notwithstanding the foregoing, benefits shall not be less than that required under Section 56 of the Act. (c) Payment Options for a Spousal Beneficiary As an alternative to receiving a lump sum cash payment, a Member’s Spouse may elect to transfer all or part of the lump sum amount to which the Spouse is entitled to a Registered Plan, to an insurance company licensed to do business in Canada for the purchase of an immediate life annuity or a deferred life annuity with payments starting before the Spouse attains age 65, or to the Retirees’ Trust Fund to provide a life annuity in accordance with sub-rule 19(d) below. (d) Payment of Spousal Annuity Through the Retirees’ Trust Fund In the event that the Member’s Spouse elects to have such payments made by the Retirees’ Trust Fund, the death benefit otherwise payable shall be transferred into the Retirees’ Trust Fund as of the date upon which election is made. Mutatis mutandis, sub-rules 12(b), 12(d), 12(e) and 12(f) shall apply respectively to the investment income credited, the commencement of pension to the Member’s Spouse subject to the requirement that it commence before age 65 rather than the Latest Retirement Date, the amount of pension, and the disposition of the balance payable to the beneficiary of the Member’s Spouse in the event of death prior to commencement of pension payments. Any such annuity shall not have a guarantee period in excess of the lesser of: (i) fifteen years, and (ii) the period from the date of death of the Member to the day before the date on which the 86th birthday of the Member’s Spouse would occur. The office of the Superintendent was notified of this intended action by Mrs. Moger’s financial advisor. A pension analyst in the Superintendent’s office wrote to Mrs. Moger’s financial advisor and provided an opinion: ... that the Pension Benefits Act does not prevent Dalhousie University from administering the above noted plan in accordance with Section 19(6) of the Plan Text. Specifically, the Act does not prevent Dalhousie University from paying the amount described in Section 19(6) of the Plan Text to Dr. Moger’s named beneficiary Mrs. Ruth Moger. There followed a series of other correspondence back and forth between the various parties concerned. Dal’s lawyer notified the Superintendent’s lawyer at the Nova Scotia Department of Justice that the same issue affected the benefit payable in respect of Peter Dolphin although in this case there were competing claims. (i.e. the Public Trustee on behalf of the estate and the two named beneficiaries - Mr. Dolphin’s children. He had no spouse or common-law partner.) In this letter Dal’s lawyer stated that it was his client’s intention to make application to court to resolve the issue. [5] The Superintendent’s lawyer in reply requested that she be provided with sufficient notice of the proposed application. She also requested some additional information. [6] On July 30, 2002 Dal started two separate applications by way of interpleader under Civil Procedure Rule 50. In one it named Mrs. Moger as defendant, and in the other the Public Trustee (as administrator with will annexed of the estate of Peter James Dolphin) and Fiona Stewart and Michael Dolphin as defendants. [7] These applications were also made under s. 46 of the Trustee Act, R.S.N.S., 1989, c. 479 and sought to pay the pension benefits into court to be dealt with according to the orders of the court. [8] Both applications were scheduled to be heard on October 23, 2002. On October 17, 2002, the Attorney General filed documents seeking to be joined as an intervenor on behalf of the Superintendent. In addition, the application sought an adjournment in both matters. In support of this interlocutory application an affidavit of the Superintendent was filed. In it she indicated that pursuant to certain statutory powers given to her by ss. 87 and 89 of the Pension Benefits Act she intended to issue, “ ... proposals ... with respect to the Moger and Dolphin matters.” [9] A second affidavit of the Superintendent was also filed at this time. In it she described to the court her experience with respect to pensions. She also indicated that in January 2003 amendments to the Pension Benefits Act would come into effect that would change the wording of s-s. 56(4). She also provided an opinion, based on her expertise in dealing with pensions for 23 years, on her interpretation of s. 56(4) which was last amended on the first day of January, 1988 (see s-s. 56(5) of the Pension Benefits Act). Paragraph 20 of the affidavit states: 20. That I believe a drafting error occurred with s. 56(4), and that the result of the plain meaning is not intended. She went on to state at para. 21: 21. That regulation 53(6) came into effect at the time the existing version of s. 56(4) of the Pension Benefits Act was proclaimed (January, 1988), and the regulation was an attempt to clarify and rectify the drafting error in the Pension Benefits Act (s. 56(4). [10] At the hearing before me, counsel agreed that the regulation could not over-ride the legislation and consequently this argument was not pursued. [11] There are several other significant paragraphs contained in the Superintendent’s affidavit which contain the following: 12. That in my opinion subsection 56(4) means that as a minimum a return of the (deceased) member’s pension contributions must be repaid with interest to a beneficiary or to the estate. 13. That my explanation for this is that the previous legislation provided for payment to a named beneficiary or to the estate and that subsequently the Beneficiaries Designation Act, R.S.N.S. 1989, c. 36, came into effect. 14. That the Beneficiaries Designation Act in my opinion gave legal recognition to the naming of beneficiaries under a pension plan. I will not get into a discussion about whether or not opinion evidence should be contained in an affidavit. It is included here to simply present the Superintendent’s position and her rationale for arriving at it. [12] The applications were successful, and both matters were then adjourned to December 19, 2002. In the meantime the Superintendent, by letter dated November 14, 2002, gave notice to all interested parties that she proposed to order that: Ruth Ann Moger is entitled to payment of the pre-retirement death benefit payable to a beneficiary under the pension plan in respect of William Henry Moger. [13] She went on to state: I propose to order that Michael Dolphin and Fiona Dolphin are entitled to payment of the pre-retirement death benefit payable to a beneficiary under the pension plan in respect of Peter James Dolphin. [14] Attached to this correspondence was a copy of the “Notice of Proposed Order” along with a copy of “Proposed Orders and Reasons” bearing the same date as the letter. This notice prompted the Public Trustee, as administrator with will annexed of the estate of Peter James Dolphin to file an application against the Superintendent seeking an order prohibiting and restraining her from taking any steps pursuant to the Pension Benefits Act and in particular from issuing a form of order as set forth in a proposed order and reasons issued by her on November 14, 2002. This originating notice (application inter partes) was filed on December 6, 2002. [15] On the morning of December 19, 2002 the parties appeared in Chambers before the Honourable Justice Hilroy S. Nathanson who granted an order consolidating all three applications into one proceeding under a new heading and given a new file number, S.H. No. 191430. [16] The consolidated matter was then transferred to the Honourable Justice M. Heather Robertson who first heard from counsel for the parties and Mrs. Moger’s financial advisor in the afternoon of December 19, 2002. [17] It was then decided that the best course of action was to formally request a reconsideration of the Superintendent’s proposed order under s. 89(6) of the Pension Benefits Act . By letter dated December 20, 2002 the Superintendent advised that: a reconsideration hearing in respect of my proposed order will be held on December 23, 2002 at 9:00 a.m. It should be noted that the reference in this notice stated: Re: Reconsideration Hearing - Dalhousie University Staff Pension Plan - William Henry Moger and Peter James Dolphin [emphasis added] [18] There was an argument advanced at the hearing held before me that the subsequent appeal launched by Dal on January 21, 2003 in the Moger matter should not be included in any decision I give. I do not agree with this submission by counsel for the Attorney General. It was clear throughout that both matters were to be dealt with together. The notice of reconsideration provided by the Superintendent dealt with both the Dolphin and Moger matters. The decision by Dal to launch the appeal was prudent to ensure that both matters would be dealt with together. [19] The order of the Superintendent given on January 7, 2003 confirming her earlier order came back before Justice Robertson on the previously scheduled date of January 8, 2003. Counsel for the Public Trustee, as previously indicated, filed an originating notice (application inter partes) the morning of the hearing. Justice Robertson then arranged to have it heard before me on February 4, 2003. Although Dal has no interest in the funds other then to seek the court’s directions on how to properly distribute them, it felt obligated to file the appeal to ensure the court dealt with both the Moger matter and the Dolphin matter together. I am of the opinion that both matters are properly before me and my decision will apply to both. ISSUES: [20] There are really only two issues to be decided. They are: (a) Did the Superintendent have jurisdiction to grant the order under the Act? (b) If the Superintendent has jurisdiction to make such an order, is the order contrary to the provisions of the Act and in particular s. 56(4) thereof? The third issue stated in the application to set aside the Superintendent’s decision by the Public Trustee as well as the appeal by Dal was not argued. Initially there was some indication that the Superintendent would rely upon regulations passed under the Pension Benefits Act to ignore the express language in s. 56(4) of the Act. Since her decision did not rely on the regulations possibly over-riding the Act itself, this ground of appeal was abandoned. I think it is clear that regulations can be used to carry out the purpose and intent of the parent legislation, however, it cannot be used to over-ride the statute which creates it. ANALYSIS: [21] I will therefore focus on the first two grounds of appeal as stated. The appropriate standard of review must first be decided. [22] Counsel for the Public Trustee referred to the Supreme Court of Canada decision in Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982 where at para 29 Bastarache J., writing for the Court stated: ... To this extent, it is still appropriate and helpful to speak of "jurisdictional questions" which must be answered correctly by the tribunal in order to be acting intra vires. But it should be understood that a question which "goes to jurisdiction" is simply descriptive of a provision for which the proper standard of review is correctness, based upon the outcome of the pragmatic and functional analysis. In other words, "jurisdictional error" is simply an error on an issue with respect to which, according to the outcome of the pragmatic and functional analysis, the tribunal must make a correct interpretation and to which no deference will be shown. [23] Based on the “pragmatic and functional analysis” approach first described in the Supreme Court of Canada decision in U.E.S., Local 298 v. Bibeault, [1988] 2 S.C.R. 1048, Beetz J. directed courts to consider the following: (a) the wording of the enactment conferring jurisdiction on the tribunal; (b) the purpose of the statute in creating the tribunal; (c) the reason for the tribunal’s existence; (d) the area of expertise of the tribunal’s members; and (e) the nature of the problem before the tribunal. One must also consider that there is no privative clause in the Pension Benefits Act. When considering all of these factors, it is clear that the appropriate standard of review, in determining whether or not the Superintendent had jurisdiction to issue the orders she did, is one of correctness. [24] When this standard of review is applied, there can be little doubt that the Superintendent had the authority under s. 87 of the Pension Benefits Act to issue the orders that she did. Furthermore, under s. 89 of the Act, if a reconsideration is requested within the time frame stipulated (see ss. 89(6) ), she must comply with the request. [25] The second issue, now that I have decided that the Superintendent had jurisdiction to issue the orders, is whether or not the order is contrary to s. 56, s-s. (4)of the Pension Benefits Act . [26] Relying on the decision of the Nova Scotia Court of Appeal in the case of Central Guaranty Trust Co. (Liquidation of) v. Spectrum Pension Plan (5) (Administrator of), [1997] N.S.J. No. 324, the correct standard of review in this case is one of correctness. [27] The Superintendent makes it quite clear that in her opinion a drafting error occurred when s. 56(4) was created by the Legislature. (See paragraph 20 of the affidavit filed in support of the application by the Attorney General dated October 17, 2002, supra). Although one must respect the expertise of the Superintendent and also her efforts to correct what she thought was wrong with the legislation, she does not have authority to over-ride the plain meaning of the statute that was passed by the legislature. She was clearly wrong in doing so, regardless of the standard of review one uses and regardless of her motives. [28] The Legislature, in its wisdom, enacted certain amendments to the Pension Benefits Act including s. 56(4) which came into effect on January 1, 1988. This provision remained in effect until recent amendments in January of 2003 which provided the option to either refund the person’s contributions with interest to the estate or to the named beneficiary(ies). It was not made retroactive. [29] Based on the historical context and policy reasons for the amendments made to the Pension Benefits Act in January, 1988 and considering the most recent amendments, the Legislature in my opinion drafted the statute in such a way as to give a clear and understandable interpretation. As such, it is ordered that all contributions made by the member, along with interest on those contributions after January 1, 1988 be paid to the estate in accordance with the Pension Benefits Act. Since both Mr. Moger and Mr. Dolphin died prior to the January, 2003 amendments and since the amendments do not have retroactivity, the option afforded by the amended legislation cannot be exercised. [30] I should also make mention of the argument advanced by counsel for the named beneficiaries in the Dolphin estate. I was urged to give priority to the Beneficiaries Designation Act over the Pension Benefits Act . It was argued that the Beneficiaries Designation Act was passed subsequent to the Pension Benefits Act, and when compared to the Pension Benefits Act , it was specific legislation whereas the Pension Benefits Act was general legislation. I do not accept this argument. The Pension Benefits Act is the specific legislation. [31] Based on the rules of Statutory interpretation, according to Sullivan and Driedger on the Construction of Statutes, Fourth Edition (2002) at 273: [w]hen two provisions are in conflict and one of them deals specifically with the matter in question while the other is of more general application the conflict may be avoided by applying the specific provision to the exclusion of the more general one. The specific prevails over the general; it does not matter which was enacted first. In this instance, the Beneficiaries Designation Act provisions to not over-ride s. 56(4) of the Pension Benefits Act . For this reason and the reasons already stated, the contributions made by the member, along with interest but not contributions by the employer (or interest on these amounts), should be paid to the estate of the deceased member. [32] I order costs paid to the Public Trustee as administrator with will annexed of the estate of Peter James Dolphin and to Fiona Stewart and Michael Dolphin as beneficiaries of the late Mr. Dolphin and to Ruth Ann Moger as beneficiary of the late William Henry Moger. All costs are to be paid by the Attorney General. Dalhousie University shall bear its own costs out of the plan. If the parties are unable to agree on the appropriate amount for costs of this application and those that preceded it, I am willing to hear from them. J.