Meloche v. Meloche

Meloche v. Meloche Collection Decisions of the Court of Appeal Date 2021-09-22 Neutral citation 2021 ONCA 640 Docket numbers C67648 Judges Fairburn, J. Michal; van Rensburg, Katherine; Huscroft, Grant Subject Family Decision Content COURT OF APPEAL FOR ONTARIO CITATION: Meloche v. Meloche, 2021 ONCA 640 DATE: 20210922 DOCKET: C67648 Fairburn A.C.J.O., van Rensburg and Huscroft JJ.A. BETWEEN Michael Meloche Applicant (Appellant) and Adrianna Costa Meloche Respondent (Respondent) Aaron Franks and Michael Zalev, for the appellant Marcela Aroca and Ashley Harmon, for the respondent Heard: March 26, 2021 by video conference On appeal from the order of Justice Kirk W. Munroe of the Superior Court of Justice, dated October 22, 2019, with reasons reported at 2019 ONSC 6143. Fairburn A.C.J.O.: A. Overview [1] This appeal concerns the division of pension payments for family law purposes. The central issue on appeal is this: Where a retired member spouse’s pension payments are divided at source for family law purposes, can the parties agree (or can a court order or can an arbitrator award) that payment sharing continue to the non-member spouse’s estate for the balance of the retired member spouse’s life? [2] On a motion to decide a question of law under Rule 16(12)(a) of the Family Law Rules, O. Reg. 114/99 (“FLR”), the motion judge answered this question in the negative.[1] He concluded that the Pension Benefits Act, R.S.O. 1990, c. P.8 (“PBA”) specifically precludes a deceased non-member spouse’s share of a retired member’s pension payments from continuing to the non-member’s estate after the non-member’s death. In other words, the motion judge concluded that the death of the non-member spouse necessarily results in their share of the pension payment reverting back to the member spouse. [3] Respectfully, I disagree. There is nothing in the PBA, the Family Law Act, R.S.O. 1990, c. F.3 (“FLA”), or the Family Law Matters, O. Reg. 287/11 (“Regulation”) (one of the regulations under the PBA) that precludes the parties from agreeing to, a court from ordering, or an arbitrator from awarding a continuation of shared pension payments to the deceased non-member’s estate for the balance of the member spouse’s life. Indeed, when these provisions are read together as a cohesive unit, they leave open the possibility of proceeding in exactly this way. B. Background [4] The parties were married for just over 33 years. [5] During their marriage, Adrianna was a teacher. Over the course of her career, Adrianna paid into the Ontario Teachers’ Pension Plan (“OTPP”). Upon her retirement on June 30, 2015, Adrianna elected a joint pension with a 60 percent survivor benefit. The pension payments to Adrianna then began. Once the payments started, the pension became what I will refer to as an “in-pay” pension. What I mean by this term is that “[p]ayment of the first instalment of the retired member’s pension was due on or before the family law valuation date”: PBA, s. 67.4(1)2. [6] Combined with additional bridging benefits that would end when Adrianna turned 65 years of age, she started receiving just under $5,000 per month in 2015. [7] Michael held various jobs over the years. Sadly, in April of 2016, shortly after Adrianna’s retirement, Michael fell seriously ill with Amyotrophic Lateral Sclerosis (“ALS”). At the time that he fell ill, he was working as a custodian with a school board. That work had to end when his illness set in. Michael’s motion record suggests that he soon began receiving “Ontario disability as his only source of income”, just under $1,000 per month. [8] Just over a year later, on July 13, 2017, the parties separated. This was the agreed-upon “valuation date” for purposes of the FLA. At the time that he brought the motion, Michael acknowledged that Adrianna was also “voluntarily” giving him $300 per month. [9] In her responding materials on the motion, Adrianna suggested that Michael was also receiving income from “charity donations from the community and from GoFundMe.com.” She maintained that she had assisted him in raising those funds. At the time of the motion, it appears that Michael was living in the matrimonial home and Adrianna was living elsewhere. [10] In April 2018, Michael applied to the court for a divorce, equalization of net family properties, spousal support, and exclusive possession of the matrimonial home, among other relief. Then, on May 24, 2019, he brought a motion to decide a question of law relating specifically to the division of Adrianna’s pension payments. [11] Separating spouses are strongly encouraged to resolve their family law disputes either entirely outside of court or with limited resort to the courts. Rule 16(12)(a) of the FLR permits the court, on motion, to “decide a question of law before trial, if the decision may dispose of all or part of the case, substantially shorten the trial or save substantial costs”. [12] As the Supreme Court of Canada recently emphasized in Colucci v. Colucci, 2021 SCC 24, at para. 69, “There is a trend in family law away from an adversarial culture of litigation to a culture of negotiation” (citations omitted). Recent amendments to both the Divorce Act, R.S.C., 1985, c. 3 (2nd Supp.) and the FLA require parties, to the extent that it is appropriate to do so, to try to resolve family law disputes outside the court structure through an alternative dispute resolution process, such as negotiation, mediation, or collaborative law: see Divorce Act, ss. 7.3, 7.7(2)(a), and 16.1(6); FLA, ss. 47.2(1), 47.3(2)(a). [13] Rule 16(12)(a) of the FLR is a useful tool in this context. At the time of the motion, Adrianna’s pension had been valued for family law purposes. Following the procedures outlined in s. 67.2 of the PBA, which include actuarial assessments of each party’s life expectancy,[2] the pension administrator determined that the imputed value of Adrianna’s pension for family law purposes was $1,281,826.54. Likewise, the pension administrator determined that the imputed value of Michael’s survivor benefit for family law purposes was $103,952.15. [14] The pension administrator also determined that, if the parties agreed to divide the pension at source for family law purposes, Michael was entitled to receive 48.99 percent of Adrianna’s monthly pension payments. This meant that Michael’s share of Adrianna’s pension, divided at source, would be $2,094.02 per month, with bridging benefits of an additional $294.36, which would continue until Adrianna turned 65 years of age. [15] There was significant common ground between the parties. They were well-placed to settle most, if not all, of the issues arising from the breakdown of their marriage without a trial. There was, and still is, no dispute about the imputed pension values for family law purposes. There was, and still is, no dispute about the pension administrator’s calculation as it pertained to Michael’s share of Adrianna’s pension. There was, and still is, no dispute that the most valuable asset owned by the couple on the valuation date was Adrianna’s defined benefit pension with the OTPP.[3] There also was, and still is, no dispute that almost all of Adrianna’s pension was accumulated during the marriage, such that it would be included in Adrianna’s “net family property” as defined in s. 4(1) of the FLA. [16] Consequently, had Michael’s equalization claim proceeded to trial, it appears that he would have been entitled to a substantial equalization payment pursuant to ss. 5(1) and 7(1) of the FLA. I will return to this concept shortly. [17] Instead, Michael’s notice of motion suggests that he wanted to divide Adrianna’s pension payments at source. Notably, this is an available option under s. 10.1(5) (order for division of pension payments), s. 56.1(3) (division of pension payments under a domestic contract), and s. 59.4.1(3) (division of pension payments pursuant to a family arbitration award) of the FLA, all of which explicitly provide for the division of pension payments where the pension is, as in this case, already in pay. [18] However, the parties differed on what should happen to Michael’s share of the divided pension payments following his death – which appeared to be imminent. Michael took the position that, if the pension payments were divided at source for family law purposes, then, after his death, his share of the pension could and should continue to his estate for the remainder of Adrianna’s lifetime. According to an affidavit filed in support of his motion, Michael took the position that any other approach would result in an “absurd” outcome, as it would fail to adequately respond to the “exercise” of attempting to equalize the “net family property in substance as well as form.”[4] [19] Adrianna took the position that, if Michael predeceased her, the PBA precluded Michael’s share of the pension payments from continuing to his estate. Instead, Adrianna argued that, following Michael’s death, his share must revert back to her. [20] Given Michael’s very short life expectancy at the time that these discussions were taking place, Adrianna’s position meant that dividing the pension payments at source would almost certainly result in Michael receiving far less than he would have otherwise received if he had proceeded to trial for a determination of his entitlement to equalization under s. 5(1) of the FLA. I say this for the following reason. [21] Section 5(1) of the FLA reads in part: “the spouse whose net family property is the lesser of the two net family properties is entitled to one-half the difference between them.” An application for entitlement under s. 5(1) is brought under s. 7(1) of the FLA. Orders arising from s. 7(1) applications are made pursuant to s. 9(1) of the FLA. Pursuant to that provision, the court may order: (a) that one spouse pay to the other spouse the amount to which the court finds that spouse to be entitled under this Part; (b) that security, including a charge on property, be given for the performance of an obligation imposed by the order; [and] (c) that, if necessary to avoid hardship, an amount referred to in clause (a) be paid in instalments during a period not exceeding ten years or that payment of all or part of the amount be delayed for a period not exceeding ten years[.][5] [22] Therefore, to place this issue in its proper context, assuming that there were no other significant assets beyond Adrianna’s pension and Michael’s survivor benefit in either party’s net family property, Adrianna would have owed Michael an equalization payment of around $590,000. I say this because, based on the pension administrator’s assigned values, the difference between the parties’ net family properties would be $1,177,874.39. Of course, Adrianna would owe half that amount to Michael if such an order had been made in accordance with the criteria set out in s. 9(1) of the FLA. [23] To be very clear, I am not suggesting that the amount of $590,000 reflects with any precision the actual amount of equalization that Adrianna would have owed Michael following a s. 7(1) FLA application. We simply do not have enough information on appeal to know with precision what that amount would have been. [24] What we do know, however, is that Adrianna does not dispute that her pension would have been the most valuable asset to be factored into the equalization assessment, and that there were few other assets that would have played a role in arriving at the ultimate determination of how much she owed Michael. [25] Therefore, had Michael simply sought an equalization payment by way of a s. 7(1) application under the FLA, it would have come at a very high cost to Adrianna. Even on Adrianna’s own position, it seems clear that she would have owed Michael a large sum of money. [26] Under s. 9(1)(a) of the FLA, the court may order one spouse to pay the other the full amount required to equalize their net family properties. Section 9(1)(c) permits the court to order that the amount or any part of the amount be paid in instalments, but only “if necessary to avoid hardship” and only over a maximum of 10 years. Therefore, where one party owes another an equalization payment of, say, $500,000, the court may order instalment payments under s. 9(1)(c), which could result in a payment exceeding $4,000 per month for 10 years. [27] Contrast that scenario with the potential pension division scenario for these parties where, based on the pension administrator’s undisputed calculations, Michael would have received a total monthly payment of just less than $2,400 per month (and less than that after Adrianna turned 65 years of age and the bridging benefits ended). Based upon this calculation, over the same 10-year period, well less than $300,000 would be paid. Of course, as will be further explained, if the pension division at source could continue to Michael’s estate, it would continue until the end of Adrianna’s life. On Michael’s calculations, if Adrianna lived for another 27 years, which would put her at 86 years of age when she died, the amount paid through pension division at source would exceed $770,000, adjusted for increases on account of cost of living. [28] Michael saw the exercise of splitting the pension at source and having it continue to his estate as being based, as he put it in his motion materials, upon “the delivery of an equalization payment.” The difficulty for Michael was that the OTPP, in correspondence sent to his lawyer, took the position that the payments could only continue to his estate if there was a settlement instrument directing the OTPP to do so: Please note that unless the settlement instrument which provides for the pension division specifically requires that the split continue to the former spouse’s Estate should he predecease the member, on his death the portion being paid to him reverts to the member. [29] Therefore, Michael had to move quickly to resolve this matter. The OTPP was prepared to have the split continue to his estate, but Michael needed a “settlement instrument” directing the OTPP accordingly. Contrary to Michael and the OTPP, Adrianna took the position that the PBA precluded what Michael contemplated would be a means of achieving some form of equalization. Accordingly, Michael brought a Rule 16(12)(a) motion under the FLR. [30] As part of the disposition of what he described as a “question of law before trial in accordance with Rule 16(12) of the Family Law Rules”, Michael sought an order directing the OTPP administrators to pay his proportionate share of Adrianna’s monthly pension benefit directly to him, and for those monthly payments to continue to his estate until Adrianna’s death. He also asked for an order “declaring [that] such remedy equalizes [Adrianna’s] pension in accordance with the meaning of the term ‘equalization’ in the Family Law Act” (emphasis in original). [31] Michael died two days after the motion judge’s ruling was released. This appeal is brought by the sole Estate Trustee of the Estate of Michael Meloche. C. The Motion Judge’s Ruling [32] The motion judge framed the legal issue before him as follows: 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. [33] The motion judge answered this question in the negative on the basis that the PBA foreclosed the relief sought by Michael. [34] The motion judge began by pointing to s. 10.1(7) of the FLA to suggest that, if the PBA applies to the pension plan, which it does in this case, then the restrictions under s. 67.4 of the PBA “apply with respect to the division of the spouse’s interest in the plan” by an order under s. 9 of the FLA. This was the only reference that the motion judge made to the FLA. [35] The motion judge referred to s. 67.5(1) of the PBA, which specifically says that 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” in relation to an in-pay pension, other than in accordance with s. 67.4. [36] The motion judge also addressed s. 67.4 of the PBA in his reasons. He correctly observed that s. 67.4(1)2. pertains to those situations where the pension is in pay “before the family law valuation date.” As before, the pension payments in this case started after Adrianna’s retirement on June 30, 2015, and the family law valuation date was not until July 13, 2017. As correctly observed by the motion judge, this brought the pension payments in question squarely under s. 67.4 of the PBA. [37] Focusing upon s. 67.4, the motion judge noted that, in his view, nothing in the provision allows for the payment of a pension divided at source to continue to a non-member spouse’s estate where the non-member spouse dies first. Rather, the motion judge emphasized that s. 67.4 directs that the proportion of the retired member spouse’s pension is to be paid to the “eligible spouse”, not the deceased eligible spouse’s estate. [38] The motion judge also relied on ss. 44(1), (3), and (3.1) of the PBA. [39] Section 44(1) mandates that a pension which goes into pay while a retired member still has a spouse within the meaning of s. 1(1) of the PBA “shall be a joint and survivor pension.” As before, Adrianna and Michael were still married and living together when her pension went into pay. As such, it was a joint and survivor pension. [40] Next, the motion judge turned his mind to ss. 44(3) and 44(3.1) of the PBA, concluding that they made clear that, “upon the death of either the pension holder or the spouse, the remaining pension reverts back to the survivor.” Those provisions read: 44(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. 44(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. [41] The motion judge interpreted these sections to mean that the non-member spouse would be guaranteed “continued pension payments … on the death of the pension holder” (per s. 44(3)) but that “any pension payments to the [non-member] spouse” would “end … on his or her death” (per s. 44(3.1)). This latter interpretation was based upon a finding that the statutory reference was to a “surviving spouse” and not to the estate of the surviving spouse: “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.” [42] In addition, the motion judge concluded that continuing payments to a non-member spouse’s estate “until the death of the pension holder” (the situation for which Michael was advocating) would contravene s. 44(3.1) because it would cause Adrianna to receive a pension payment of less than 60 percent of the total monthly payment. The motion judge reasoned that Michael’s request for the pension sharing to continue to his estate had to be denied because, if his estate continued to receive 48.99 percent of the monthly payment owed under the pension, then Adrianna would only be receiving 51.01 percent after his death, which is clearly less than the minimum “60 per cent” that the motion judge saw as required pursuant to s. 44(3.1) of the PBA. [43] Finally, the motion judge pointed out that there is no statutory means by which the former spouse could bequeath or share their portion of the monthly payments of the pension. Indeed, as the motion judge noted, this is specifically prohibited under s. 65(1) of the PBA: “Every transaction that purports to assign, charge, anticipate or give as security money payable under a pension plan is void.” [44] For these reasons, the motion judge concluded that Michael’s request for his share of the pension payments to continue to his estate after his death for the remainder of Adrianna’s lifetime was contrary to the PBA. [45] He then ordered that the OTPP pay Michael 48.99 percent of each of Adrianna’s monthly pension payments, commencing retroactively from the valuation date. As he put it: “In all other respects, the applicant’s motion is dismissed.” D. Issues [46] The appellant raises two issues on appeal. [47] First, the appellant argues that the motion judge erred by concluding that the pension payments could not continue to be shared after Michael’s death, with Michael’s portion being paid to his estate for the remainder of Adrianna’s lifetime. [48] Second, and in the alternative, the appellant argues that the motion judge erred by ordering retroactive sharing of the monthly pension amounts. The appellant maintains that Michael did not ask for this on the motion. Instead, if he was unsuccessful on issue one, it was his intent to proceed to a s. 7(1) FLA application, seeking an equalization payment from Adrianna. Pursuant to s. 7(2)(a) of the FLA, an equalization application commenced before death can be continued by the estate. Michael’s application was commenced before death. [49] On the first issue, the respondent argues that the motion judge was right to conclude that the PBA precludes pension sharing to the estate of a deceased spouse. On the second issue, the respondent disputes the appellant’s version of events. She maintains that Michael’s counsel, during oral submissions at the motion, asked for the remedy ultimately granted by the motion judge as an alternative to his main request for relief. [50] For the reasons that follow, I would resolve this matter on the basis of the first issue. In my view, there is nothing in the PBA that precludes pension payments divided at source from continuing to the estate of a non-member spouse during the life of the member spouse, in the event that the non-member spouse predeceases the member spouse. Having resolved the narrow legal question that was properly before the motion judge, I would decline to address the second issue, and instead turn the matter back to the parties to determine how to proceed from here: either through pension division at source to Michael’s estate or through an equalization payment. (1) Where a Non-Member Spouse Dies Before a Member Spouse, Does the PBA Preclude the Continued Sharing of a Pension Payment at Source to the Non-Member Spouse’s Estate for the Balance of the Retired Member Spouse’s Life? (a) The Parties’ Positions [51] The appellant argues that the motion judge erred by specifically concluding that the pension payments payable to Michael must cease upon his death rather than continue to his estate. [52] First, the appellant argues that the motion judge erred by failing to advert to s. 39(2) of the Regulation, which is said to provide a full answer on appeal. That provision reads: The eligible spouse’s share of the retired member’s pension, … is payable as of the payment date that falls on or immediately after the date on which the retired member’s pension is divided under subsection 67.4(4) of the Pension Benefits Act, and is payable for the life of the retired member or until the end of the period for which the pension instalment under paragraph 1 of subsection (1) is guaranteed, whichever is longer. [Emphasis added.] [53] Second, the appellant argues that the motion judge’s conclusion leads to an absurd result which, effectively, frustrates the legislative purpose of the statutory scheme. [54] Third, the appellant argues that the motion judge considered statutory provisions that were wholly irrelevant to the issue at hand. In particular, the motion judge is said to have erred by looking to s. 44(3.1) of the PBA when determining whether a non-member spouse’s share of the pension payments could be paid into their estate after death. The appellant argues that this provision does nothing more than create minimum standards for pension plans that are irrelevant to the question of how pension payments can be divided for family law purposes, either through a domestic contract, family arbitration award, or court order. [55] Finally, the appellant points out that s. 65(3)5. of the PBA specifically precluded the motion judge from relying on s. 65(1) of the PBA, which does not “apply to prevent the assignment, by an order under the Family Law Act … of an interest in money payable under a pension plan” where s. 67.4 is operative. [56] For her part, Adrianna argues that the motion judge was correct in his analysis and that the PBA specifically forecloses the relief sought by the appellant. [57] Like the motion judge, Adrianna emphasizes that the “not … less than 60 per cent” requirement in s. 44(3.1) of the PBA precludes the appellant’s requested relief. While parties can waive the joint and survivorship provisions of the pension pursuant to s. 46(1) of the PBA, Michael and Adrianna took no steps to do so. As a result, since s. 44 of the PBA sets out the parameters for joint and survivor pensions, Michael’s estate is precluded from continuing to receive the 48.99 percent of Adrianna’s pension after his death because it would force her payments below the statutory minimum of 60 percent. [58] Adrianna also argues that s. 39(2) of the Regulation does not assist the appellant because it does not specifically authorize a share of the payments of a retired member spouse’s pension to be made to the estate of the non-member deceased spouse. Read in context, Adrianna argues that the use of the term “eligible spouse” in s. 39(2) of the Regulation confers rights only on a living person and not on an estate. [59] Adrianna further points out that s. 67.3(5) of the PBA, which applies to the division of pensions that are not yet in pay, allows for a lump sum to be payable to an “eligible spouse’s estate or as otherwise prescribed.” Had the legislature intended for payment sharing in relation to in-pay pensions to potentially continue to an estate under s. 67.4, the legislature would have included a similar provision. The silence of s. 67.4 on this point is said to be compelling. [60] As for s. 65(3)5., Adrianna argues that the motion judge was right. While the provision allows a portion of her pension to be directly shared, it does not allow Michael to re-assign his share of the pension payment to a third party, specifically his estate. (b) Analysis (i) Overview [61] The parties agree that the issue to be decided on appeal involves a clear question of law. The standard of review is therefore correctness: Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at para. 8; Harvey v. Talon International Inc., 2017 ONCA 267, 137 O.R. (3d) 184, at para. 32. [62] Respectfully, applying this standard of review, I conclude that the decision appealed from is incorrect. [63] While the PBA is undoubtedly important to the resolution of the issue lying at the heart of this matter, unlike the motion judge, I do not see the PBA as the singular guiding force in answering the central question on appeal. For questions involving the sharing of pension payments at source in family law matters, it is necessary to look to both the PBA and the FLA, as well as the Regulation. [64] The answer to this appeal lies at the intersection of these two statutes and the Regulation. Reading the PBA, the FLA, and the Regulation as a cohesive whole, it becomes clear that the legislature has not precluded the possibility that pension payments which are divided at source for family law purposes may continue to the non-member spouse’s estate for the balance of the member spouse’s life in the event that the non-member spouse predeceases the member spouse. Said differently, parties can agree, a court can order, or an arbitrator can award that the sharing of pension payments at source shall continue to the non-member spouse’s estate after that spouse’s death. (ii) Interpreting the PBA Alongside the Regulation [65] The modern principles of statutory interpretation require that the words of a statute be read “in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament”: Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559, at para. 26. When interpreting any statutory provision, a “textual, contextual and purposive analysis” must be applied to find a meaning that is harmonious with the entire Act: Canada Trustco Mortgage Co. v. Canada, 2005 SCC 54, [2005] 2 S.C.R. 601, at para. 10. When considering regulations, they must be read concurrently with, and in the context of, the enabling legislation: Hickman Motors Ltd. v. Canada, [1997] 2 S.C.R. 336, 148 D.L.R. (4th) 1, at para. 37; State Farm Mutual Automobile Insurance Company v. Old Republic Insurance Company of Canada, 2015 ONCA 699, 127 O.R. (3d) 465, at para. 68. As noted by this court, regulations “will generally be interpreted using the same rules and techniques as statute law, albeit never losing sight of the context of the enabling provisions that give rise to the regulations that complete and implement the statutory scheme”: S.H. v. D.H., 2019 ONCA 454, 146 O.R. (3d) 625, at para. 31; see also Ruth Sullivan, Sullivan on the Construction of Statutes, 6th ed. (Markham: LexisNexis, 2014) at § 13.18. [66] Applying these principles to the interpretation of the operative legislation and regulation here admits of only one answer: that the pension payment sharing could continue to Michael’s estate. I say this for the following reasons. (iii) “Family Law Matters” Under the PBA [67] I start with the observation that only ss. 67.1 to 67.9 of the PBA are devoted to “Family Law Matters”, as the heading plainly states in the statute. While the other provisions of the PBA clearly govern general pension matters, including the structure of pensions, it is only ss. 67.1 to 67.9 of the PBA that specifically address pension issues as they pertain to “Family Law Matters”. [68] This observation is supported by s. 10.1 of the FLA, which governs the interest in a pension plan for family law purposes, including the imputed value of a pension for those purposes. Section 10.1(7) establishes certain restrictions: If the Pension Benefits Act applies to the pension plan, the restrictions under sections 67.3 and 67.4 of that Act … apply with respect to the division of the spouse’s interest in the plan by an order under section 9 or 10.[6] [Emphasis added.] Here, the PBA clearly applies to the pension plan, and therefore the restrictions under ss. 67.3 and 67.4 apply as well. [69] The focus of ss. 67.1 to 67.9 of the PBA on family law matters is reinforced, not simply by the name given to that section of the PBA and by s. 10.1(7) of the FLA, but also by virtue of a special definition given to the term “spouse” for the specific purpose of those provisions. Immediately under the heading “Family Law Matters”, s. 67.1(2) of the PBA offers the following definition: A reference in this section and in sections 67.2 to 67.9 to the spouse of a member, former member or retired member of a pension plan is, where circumstances require, a reference to him or her as the former spouse of the member, former member or retired member. [Emphasis added.] [70] The expansive definition given to the term “spouse” only for the purpose of ss. 67.1 to 67.9 (Family Law Matters) can be contrasted with the much more limited definition offered to the term “spouse” in s. 1 of the PBA. Section 1 contains definitions that are applicable to “this Act” more generally. Notably, the definition of “spouse” in s. 1 of the PBA does not include former spouses of retired members. [71] Therefore, the more expansive definition offered to the term “spouse” in s. 67.1(2) of the PBA, including as it does a reference to “the former spouse of the member”, reinforces the fact that ss. 67.1 to 67.9 of the PBA are directly relevant to “Family Law Matters”. It also reinforces that the sections of the PBA outside the section devoted to “Family Law Matters”, such as s. 44(3.1) of the PBA, do not apply to former spouses, which is what Michael was at the time that a continuing payment to his estate was being contemplated. (iv) Contrast Between Sections 67.3 and 67.4 of the PBA [72] I am not persuaded by Adrianna’s argument that the silence about payments to an estate in s. 67.4, when contrasted with the explicit reference to payments to an estate in s. 67.3, demonstrates that payments cannot continue to an estate when the payment is governed by s. 67.4. [73] Section 67.3 of the PBA governs those pensions that are not yet in pay prior to the family law valuation date, contrary to s. 67.4, which governs pensions that are in pay as of that date. Section 67.3(1) permits a former spouse to apply for an “immediate transfer of a lump sum from the plan” if various criteria are met, the second of which states that “[n]o payment of an instalment of the member’s or former member’s pension was due on or before the family law valuation date.” [74] Where the criteria in s. 67.3(1) are met, s. 67.3(2) permits the transfer of a lump sum for family law purposes directly from one spouse’s pension to another specified location involving enforced savings requirements: to another pension plan, to a prescribed retirement savings arrangement, or to another prescribed arrangement, or by leaving it in the pension plan to the credit of the eligible spouse. In this way, s. 67.3(2) places specific limits on the structure of lump sum transfers from pensions that were not in pay before the family law valuation date. [75] It is against that context that ss. 67.3(4) and (5) combine to allow a lump sum which is destined for one of the specified locations to be redirected to an estate, should the non-member spouse die before the transfer takes place. Sections 67.3(4) and (5) read: (4) Once the application is complete, the administrator shall make the transfer within the prescribed period. (5) If the lump sum is not transferred under subsection (4) before the death of the eligible spouse, the lump sum is payable instead to the eligible spouse’s estate or as otherwise prescribed. [76] Therefore, s. 67.3(5) spells out that, if a lump sum made payable under s. 67.3(2) has not been transferred “before the death of the eligible spouse”, then that sum will instead be made payable to the eligible spouse’s estate. Considering the statutory constraints placed upon where the lump sum amount can be directed pursuant to s. 67.3(2), it makes sense that the statute specifically addresses what happens to that amount should the death of the non-member spouse intervene. [77] In contrast, s. 67.4 does not involve lump sum payments directed to enforced savings accounts. Section 67.4(2) of the PBA, governing in-pay pensions, operates in a much simpler manner: the eligible spouse may apply “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.” [78] The absence of any reference to payments to the “estate” in s. 67.4 does not force the conclusion that divided pension payments cannot continue to an estate under s. 67.4. In my view, the contrast between ss. 67.3(5) and 67.4 on this point makes sense given that, unlike s. 67.3(2), s. 67.4 does not require that the divided pension payments be directed into forced savings plans. [79] Therefore, the silence of s. 67.4 on this point does not preclude the parties from agreeing to, a court from ordering, or an arbitrator from awarding exactly this approach. [80] To avoid uncertainty, where the division of pension payments under s. 67.4 is engaged, settlement agreements, court orders, and arbitration awards should always specify whether, in the event of the recipient spouse’s death, the intent is for those pension payments to continue to the recipient spouse’s estate or to revert back to the member spouse. (v) Section 44(3.1) of the PBA Does Not Preclude Payment to an Estate [81] Based upon the above, it follows therefore that it was an error to rely upon s. 44(3.1) of the PBA to answer the question posed at the motion. Quite simply, s. 44(3.1) does not fall within the section of the PBA dealing with “Family Law Matters”. [82] In any event, I would pause to note that s. 44(3.1) does not stand for the proposition the motion judge appears to have accepted. [83] Recall that this section provides: “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” (emphasis added). [84] The motion judge interpreted this section to preclude a monthly payment of 48.99 percent of Adrianna’s pension from continuing to Michael’s estate, given that the motion judge determined this would necessarily mean that Adrianna was receiving less than 60 percent of the full pension amount (as 51.01 is less than 60). But that is not the effect of this section. Instead, s. 44(3.1) regulates the benefits that must be provided under pension plans. It requires that the survivor under a pension that has become joint and survivor will not, upon the death of their spouse, receive a pension payment that is less than 60% of the payment they were receiving during the life of their spouse. That is, it requires “the pension payable to the retired member after the spouse’s death” not to be less than 60 percent “of the pension paid to the retired member during their joint lives” (emphasis added). Therefore, even if Michael’s share continued to be paid to his estate, Adrianna’s share would not necessarily be reduced from what she was receiving during their joint lives. (vi) Section 65(1) of the PBA Does Not Apply [85] The motion judge also found that there was no statutory means by which the former member spouse could bequeath or share their portion of the monthly payments of the pension to an estate. In fact, he concluded that s. 65(1) of the PBA specifically precluded this approach because it prevents any “transaction that purports to assign, charge, anticipate or give as security money payable under a pension fund.” [86] Respectfully, this provision has no bearing on the question to be decided in this appeal. Aside from being outside of those provisions dealing specifically with family law matters, if that section precluded Michael’s share of his pension from continuing to be paid to his estate, it would also preclude Adrianna’s pension division, which is expressly permitted in the “Family Law Matters” portion of the PBA from ss. 67.1 to 67.9. Read as the respondent suggests, the PBA and the Regulation would produce an inconsistent result. Only a further limitation on the pension division in those sections dealing with “Family Law Matters” could have the effect that the motion judge assigned to s. 65(1). [87] Moreover, as the appellant points out, s. 65(3)5. of the PBA specifically precludes the operation of s. 65(1) in this context. That provision reads as follows: “Subsections (1) and (2) do not apply to prevent the assignment, by an order under the Family Law Act, a family arbitration award or a domestic contract, of an interest in money payable under a pension plan … under … [s]ection 67.4 (division of a pension for certain family law purposes).” (vii) The Application of Section 39(2) of the Regulation [88] I turn next to the Regulation that is in force by virtue of s. 115 of the PBA. The Regulation relates to the family law matters governed by ss. 67.1 to 67.9 of the PBA. While Michael argued the relevance of the Regulation at the motion, the motion judge did not advert to it in his reasons. [89] Section 1 of the Regulation reads: “This Regulation relates to the family law matters governed by sections 67.1 to 67.9 of the Act.” Therefore, the Regulation applies to divided pensions and the amounts payable pursuant to s. 67.4 of the PBA and addresses the intersection between the FLA and PBA. [90] As already mentioned, s. 39(2) of the Regulation provides that an in-pay divided pension is payable for the life of the member spouse. For ease of reference, I will set out that provision of the Regulation again here: The eligible spouse’s share of the retired member’s pension, … is payable as of the payment date that falls on or immediately after the date on which the retired member’s pension is divided under subsection 67.4(4) of the Pension Benefits Act, and is payable for the life of the retired member or until the end of the period for which the pension instalment under paragraph 1 of subsection (1) is guaranteed, whichever is longer. [Emphasis added.] [91] This provision specifically refers to payments of an eligible spouse’s share of an in-pay divided pension – precisely the type of payments at the heart of this dispute – as “payable for the life of the retired member”, in this case, Adrianna. Therefore, the plain language of the Regulation specifically states that the eligible spouse’s “share of the retired member’s pension” is “payable for the life of the retired member” or until some other guaranteed time, whichever is longer. While the Regulation alone does not provide a complete answer to this appeal, in the sense that it proactively states that divided pension payments can continue to an estate, there is nothing in the Regulation that precludes that outcome from occurring. Importantly, the only restriction introduced by the Regulation pertains to the member’s life: namely, that the pension payments cannot continue after that life has ended. [92] Therefore, the plain wording of this section in no way precludes what Michael requested in his Rule 16(12)(a) motion under the FLR. (viii) The Financial Services Commission of Ontario (“FSCO”) and the Pension Administrator Agree this is Possible [93] It is interesting to note that the regulator of pensions governed by the PBA at the time of the original dispute, FSCO,[7] acknowledges the possibility of payments continuing to the former spouse’s estate during the retired member’s lifetime in Family Law related FAQs - Pension Payable Upon Death (2012), online: Financial Services Commission of Ontario: Q902. The former spouse of a retired member is receiving a share of the retired member’s pension. What happens to the former spouse’s share, if he/she dies before the retired member? A902. The Ontario Pension Benefits Act (PBA) does not address this issue. In the absence of a PBA requirement to continue paying the former spouse’s share to the former spouse’s estate, it is FSCO’s view that the former spouse’s share of the retired member’s pension reverts back to the retired member unless the Settlement Instrument (court order, family arbitration award or domestic contract) that was filed with the Application to Divide a Retired Member’s Pension (FSCO Family Law Form 6) requires payment to continue to the former spouse’s estate during the retired member’s lifetime. [Bold in original; underlining added.] [94] Similarly, I note that the interpretation of the PBA offered in these reasons is also consistent with a letter from Ann Volpe, Senior Law Clerk, Pension Law & Policy, Ontario Teachers’ Pension Plan, dated January 18, 2019, sent to Michael’s counsel in the court below. Indeed, it is that letter that caused Michael to bring his motion in the first place. [95] As noted earlier in these reasons, the pension administrator wrote a letter to Michael’s lawyer, stating that pension division could only continue to his estate if a settlement instrument provided for it. The letter reads in part as follows: Our member commenced her pension prior to the Family Law Valuation Date. Accordingly, the only option for division with her former spouse is a pension split, assuming that the parties wish to utilize the pension to satisfy equalization or support obligations. The amount that is to be paid to the former spouse will be a deduction to the member’s pension. The member will lose that portion of her pension for so long as the split is required to be paid. Please note that unless the settlement instrument which provides for the pension division specifically requires that the split continue to the former spouse’s Estate should he predecease the member, on his death the portion being paid to him reverts to the member. Of course, if the member predeceases her former spouse, the pension ceases and accordingly the pension split ceases as well. [Emphasis added.] [96] The FSCO guidance and the letter from the OTPP align. Both suggest that, while the retired member spouse is alive, the estate of the former spouse of the retired member is not precluded from receiving a share of the retired member’s pension for the balance of the retired member’s life. While not determinative, it is still noteworthy that neither FSCO nor the OTPP indicate that payments continuing to the estate for family law purposes are precluded by legislation or regulation. [97] In many instances, including in the circumstances of this case, continuing the payment sharing to the estate might be the only way to make this a viable alternative to a single substantial payment under s. 9(1)(a) of the FLA. [98] This takes me to the more general context of the intersection between the PBA and the FLA, which must inform the analysis. [99] I will now show that the PBA and the Regulation, read cohesively with the objectives of the FLA, accord with FSCO and the OTPP’s articulation: that is, where pension payments are divided at source for family law purposes, nothing precludes those payments from continuing to the non-member’s estate for the balance of the retired member’s lifetime, as long as that is provided for by an agreement, court order, or arbitrator award. (ix) The Intersection of the PBA and the FLA [100] The purpose of the PBA was commented upon in Monsanto Canada Inc. v. Ontario (Superintendent of Financial Services), 2004 SCC 54, [2004] 3 S.C.R. 152, at para. 38, as being of vital importance to long-term income security: The Act is public policy legislation that recognizes the vital importance of long-term income security. As a legislative intervention in the administration of voluntary pension plans, its purpose is to establish minimum standards and regulatory supervision in order to protect and safeguard the pension benefits and rights of members, former members and others entitled to receive benefits under private pension plans[.] [101] Adrianna points to this “long-term income security” purpose of the PBA as antithetical to the appellant’s position. After all, once someone has died, there is no longer a need for income security. The difficulty with this approach – with this singular emphasis on the purpose of the PBA – is that it ignores the equally important legislative context of the FLA. The answer to this appeal lies at the intersection of these two pieces of legislation. [102] The equalization provisions within the FLA serve a very different purpose from the PBA, as reflected in the preamble to the FLA: Whereas it is desirable to encourage and strengthen the role of the family; and whereas for that purpose it is necessary to recognize the equal position of spouses as individuals within marriage and to recognize marriage as a form of partnership; and whereas in support of such recognition it is necessary to provide in law for the orderly and equitable settlement of the affairs of the spouses upon the breakdown of the partnership, and to provide for other mutual obligations in family relationships, including the equitable sharing by parents of responsibility for their children[.] [Emphasis added.] [103] If the sharing of in-pay pension payments cannot continue to an estate, in many cases, dividing pension payments at source would lose force as a proxy for what would otherwise be entitlement to equalization of net family property under ss. 5(1), 7(1), and 9(1) of the FLA. This would be particularly true in situations like this one where, from an actuarial perspective, the retired member spouse’s life is likely to be long, but the non-member former spouse’s life is predicted to be short. [104] As before, s. 5(1) of the FLA provides that, when spouses separate and there is no reasonable prospect of resuming cohabitation, “the spouse whose net family property is the lesser of the two net family properties is entitled to one-half the difference between them.” Section 9(1)(a) of the FLA allows the court to order one spouse to pay the other the amount to which that spouse is entitled under the equalization regime. The idea here is that the value of property accumulated during the marriage partnership, in which spouses are assumed to have been equal partners, should be shared equally when that marriage ends. This includes the accumulation of a pension over the course of a marriage. [105] It is true that pensions have been referred to as “sometimes elusive assets for equalization purposes, being in reality a right to a future stream of income, rather than a current and exigible fund”: Kendra D.M.G. Coats et al., Ontario Family Law Practice 2020, Volume 2 (Toronto: LexisNexis Canada, 2019), at p. 537. It is because of the elusive nature of the pension that a new regime was introduced in 2009 to address these difficult issues. At the same time, the FLA was amended so that the family law value of an Ontario-regulated pension would be determined by the pension administrator pursuant to a formula set out in the regulations to the PBA: see FLA, ss. 4(1)(c), 10.1; PBA, s. 67.2. Section 67.2(1) reads: The preliminary value of a member’s pension benefits, a former member’s deferred pension or a retired member’s pension under a pension plan, before apportionment for family law purposes, is determined by the administrator in accordance with the regulations and as of the family law valuation date of the member, former member or retired member and his or her spouse. [106] Adrianna’s argument on appeal relies heavily on the sense that a pension payment, by its very nature, does not continue after death. This is of course true. Adrianna’s pension payments would and could continue only for her lifetime. [107] But what is at issue on this appeal was never the duration of the pension payments to Adrianna. They will certainly stop upon her death. Instead, what is at issue on appeal is whether, given Michael’s entitlement under s. 5(1) of the FLA to one half the difference between his and Adrianna’s net family properties, the division of pension payments at source for family law purposes could instead continue to Michael’s estate for the balance of Adrianna’s life. [108] Of course, as with all actuarial calculations, there is an element of risk. To divide an in-pay pension at source could ultimately be either more or less lucrative than a single payment pursuant to s. 9(1)(a) of the FLA. If the pension member spouse lived a long life, theoretically, the total value of the payments to the estate may exceed what would have been received through an equalization payment under the FLA. But, if the pension member spouse experiences an untimely passing, the value of the divided pension payments to the estate may result in a total value far less than what would have been received through equalization under the FLA. [109] As part of the policy to encourage out-of-court settlement of family law disputes, it is important that the option for pension sharing to continue to the estate – acknowledged by the OTPP and FSCO – remains available. There are many scenarios where such an option would clearly financially benefit both sides, thereby facilitating resolution. Viewed as a means by which to avoid placing a pension-holder in the difficult position of owing money to which they do not at the time have access, the sharing of pension payments at source for the continuation of the retired member’s life, which in no way is precluded by the relevant statutes or regulation, makes both conceptual and practical sense. [110] In my view, contrary to the decision appealed from, nothing in the PBA or the Regulation prohibits division of pension payments for family law purposes from continuing to a former spouse’s estate for the life of the pension member spouse. E. Conclusion [111] I would allow the appeal. The appellant’s motion was brought pursuant to Rule 16(12)(a) of the FLR, permitting a judge to decide a question of law before trial if the answer to the question will dispose of all or part of a case or substantially shorten the trial or save costs. This question has now been answered. There is nothing that precludes the parties from agreeing, a court from ordering, or an arbitrator from awarding that pension payments may continue to a non-member spouse’s estate after that individual’s death. [112] The answer to this question having been given, the parties should now be provided with the opportunity to settle the litigation to their mutual benefit. [113] On consent, costs will be paid to the appellant in the amount of $20,000, all inclusive. In light of the disposition of the appeal, the motion judge’s costs order in favour of the respondent will be varied to provide that the respondent pay the appellant $6,500 in costs for the motion. Released: “September 22, 2021 JMF” “Fairburn A.C.J.O.” “I agree. K. van Rensburg J.A.” “I agree Grant Huscroft J.A.” [1] As set out below, while the question of law put to the motion judge was framed somewhat differently, he answered the question framed on appeal in the negative. [2] The Regulation refers to making a preliminary valuation based upon the “methods and actuarial assumptions that are consistent with section 3500 of the Standards of Practice”: Regulation, s. 3(2); see also s. 38(3). Section 2(3) of the Regulation defines the Standards of Practice as follows: “Standards of Practice of the Actuarial Standards Board, published by the Canadian Institute of Actuaries, as amended from time to time.” See Standards of Practice (2005, revised 2020), online: Canadian Institute of Actuaries <www.cia-ica.ca/publications/standards-of-practice>. [3] The appellant suggests the parties’ only material asset, beyond Adrianna’s pension, was their jointly owned home, holding a fair market value of between $400,000 and $520,000. While the respondent suggests that Michael also had a pension with the Ford Motor Company of Canada, it was not in-pay at the time of the motion, nor does it appear that the parties endeavoured to have that pension valued for family law purposes. Even so, a February 14, 2019 letter from the Ford Motor Company suggests that at the “normal retirement date of May 1, 2025”, Michael would be entitled to monthly pension payments of $184.92. Therefore, that pension does not seem to have held much value. In any event, the question of law at issue in this case does not turn on the precise valuations of these parties’ other minimal assets. [4] Michael still had cognitive capacity as the litigation under Rule 16(12) of the FLR was nearing, but he had lost his ability to write. Michael’s cousin took on signing authority for purposes of this affidavit, by virtue of his role as Michael’s power of attorney for property (general) and personal care. [5] See also: FLA, s. 9(4). [6] See also: FLA, ss. 56.1 and 59.4.1. [7] Effective June 8, 2019, FSCO’s regulatory functions were assumed by the Financial Services Regulatory Authority (“FSRA”). The FSCO website states: “FSRA is actively reviewing all FSCO regulatory direction, including but not limited to forms, guidelines and FAQs. Until FSRA issues new regulatory direction, all existing regulatory direction remains in force” (emphasis added): Family Law related FAQs - Pension Payable Upon Death (2012), online: Financial Services Commission of Ontario <www.fsco.gov.on.ca>.