Gaming and Liquor Commission (Alta.) v. Davies et al., 2003 ABQB 789

• Judge: Read, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: Thursday June 26, 2003
• Citations: 2003 ABQB 789;(2003), 353 A.R. 35 (QB)

Gaming and Liquor Comm. v. Davies (2003), 353 A.R. 35 (QB)

MLB headnote and full text

Temp. Cite: [2003] A.R. TBEd. OC.123

Alberta Gaming and Liquor Commission (applicant) v. Don Davies and all other persons who were employees of Alberta Lotteries who may be claiming entitlement to surplus funds in the Pension Plan for the employees of the Western Canada Lottery Corporation and Associated Companies and Western Canada Lottery Corporation and Co-operators Life Insurance Company (respondents)

(Action No. 0003-16126; 2003 ABQB 789)

Indexed As: Gaming and Liquor Commission (Alta.) v. Davies et al.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Read, J.

September 17, 2003.

Summary:

At issue was the entitlement, as between the employees and the employer, to $2 million in pension funds from a defined benefits pension plan which had been declared surplus after a partial termination of the pension plan.

The Alberta Court of Queen's Bench held that the employer was entitled to the surplus funds.

Conflict of Laws - Topic 7243

Contracts - Choice of law - Pension plans -The parties sought a declaration as to the entitlement, as between the employees and the employer, to the surplus in a pension plan - The pension plan text did not contain a choice of law or jurisdiction clause -However, a trust agreement provided that the trust agreement was to be "administered, construed, and enforced according to the laws of the Province of Manitoba" - The Alberta Court of Queen's Bench concluded that it was clear from the text of the pension plan and its amendments that the parties, themselves, intended that the pension plan would be administered in accordance with the laws of the province in which an employee was resident in respect of employees resident in that province notwithstanding that Manitoba law applied to the construction and administration of the trust agreement - See paragraphs 9 to 14.

Master and Servant - Topic 1959

Remuneration - Pension benefits - Distribution of surplus funds - At issue was the entitlement, as between the employees and the employer, to funds from a defined benefits pension plan which had been declared surplus after a partial termination of the pension plan - Section 1 of the trust agreement provided, inter alia, that "All such money and all investments made therewith and proceeds thereof and all earnings and profits thereon, less all payments and deductions which shall have been made by the Trustee, and authorized herein, shall from time to time constitute the Fund ... Other than funds not required to pay all benefits under the terms and conditions of the Plan, no part of the corpus or income of the Fund shall be used for or diverted to purposes other than for the exclusive benefit of the members, terminated members ..." - The Alberta Court of Queen's Bench concluded that this section effectively permitted diversion of a portion of the trust property in certain circumstances and indicated that the trust funds were not to be held for the exclusive benefit of the employees and could be diverted if they were "not required to pay all benefits under the terms and conditions of the Plan" - The court concluded that the provisions of the pension plan text relating to amendment and termination of the pension plan had been validly amended to revoke the trust insofar as the surplus funds were concerned - Therefore, the surplus funds were the property of the employer - See paragraphs 20 to 48.

Trusts - Topic 2565

The settlor - Rights of settlor - Right to surplus funds in trust - [See Master and Servant - Topic 1959].

Cases Noticed:

Morguard Investments Ltd. et al. v. De Savoye, [1990] 3 S.C.R. 1077; 122 N.R. 81; [1991] 2 W.W.R. 217; 76, refd to. [para. 18].

Stearns Catalytic Pension Plans, Re, [1994] 2 S.C.R. 611; 168 N.R. 81; 155 A.R. 81; 73 W.A.C. 81, refd to. [para. 20].

Schmidt v. Air Products of Canada Ltd. - see Stearns Catalytic Pension Plans, Re.

Buschau et al. v. Rogers Cablesystems Inc. et al., (2001), 148 B.C.A.C. 263; 243 W.A.C. 263; 26 C.C.P.B. 47 (C.A.), dist. [para. 46].

LaHave Equipment Ltd. v. Superintendent of Pensions (N.S.) et al. (1994), 137 N.S.R.(2d) 11; 391 A.P.R. 11; 5 C.C.P.B. 107 (C.A.), dist. [para. 47].

Sadler v. Watson, Wyatt & Co. (2001), 27 C.C.P.B. 291 (B.C.S.C.), dist. [para. 48].

Counsel:

Denis R. Noel (Reynolds Mirth Richards & Farmer), for the Alberta Gaming & Lottery Corp.;

Kenneth P. Reh and Thomas H. Ferguson, Q.C. (McCarthy Tetrault LLP), for Don Davies et al.;

Gordon MacKenzie (Bishop & MacKenzie), for the Western Canada Lottery Corp.

This matter was heard on June 26, 2003, before Read, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who released the following memorandum of decision on September 17, 2003.