Professional Institute of the Public Service of Canada et al. v. Canada (Attorney General), (2012) 438 N.R. 1 (SCC)

• Judge: McLachlin, C.J.C., LeBel, Deschamps, Fish, Abella, Rothstein, Cromwell, Moldaver and Karakatsanis, JJ.
• Court: Supreme Court (Canada)
• Case Date: February 09, 2012
• Jurisdiction: Canada (Federal)
• Citations: (2012), 438 N.R. 1 (SCC);2012 SCC 71

Prof. Institute v. Can. (A.G.) (2012), 438 N.R. 1 (SCC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2012] N.R. TBEd. DE.019

Professional Institute of the Public Service of Canada, Canadian Merchant Service Guild, Federal Government Dockyard Trades and Labour Council (East), International Brotherhood of Electrical Workers, Federal Government Dockyard Chargehands Association, Research Council Employees' Association, Association of Public Service Financial Administrators, Professional Association of Foreign Service Officers, Federal Government Dockyard Trades and Labour Council (West), Canadian Association of Professional Radio Operators, Canadian Air Traffic Control Association, Canadian Military Colleges Faculty Association and Federal Superannuates National Association (appellants) v. Attorney General of Canada (respondent)

Public Service Alliance of Canada (appellant) v. Attorney General of Canada (respondent)

Armed Forces Pensioners'/Annuitants' Association of Canada, Association des Membres de la Police Montée du Québec, British Columbia Mounted Police Professional Association, Mounted Police Association of Ontario and Canadian Association of Professional Employees (appellants) v. Attorney General of Canada (respondent) and Attorney General of British Columbia (intervenor)

(33968; 2012 SCC 71; 2012 CSC 71)

Indexed As: Professional Institute of the Public Service of Canada et al. v. Canada (Attorney General)

Supreme Court of Canada

McLachlin, C.J.C., LeBel, Deschamps, Fish, Abella, Rothstein, Cromwell, Moldaver and Karakatsanis, JJ.

December 19, 2012.

Summary:

Unions and associations representing federal government employees, the RCMP and Canadian Forces personnel sued the Government for the return of over $28 billion to their pension plans. The plaintiffs alleged that the money had been improperly taken by way of contribution holidays and/or withdrawal of surplus.

The Ontario Superior Court, in a decision reported at [2007] O.T.C. Uned. O53, dismissed the action. The plaintiffs appealed.

The Ontario Court of Appeal in a decision reported at 275 O.A.C. 40, dismissed the appeal. The plaintiffs appealed.

The Supreme Court of Canada dismissed the appeal.

Equity - Topic 3606

Fiduciary or confidential relationships - General principles - What constitutes a fiduciary relationship - [See first and second Government Programs - Topic 3823 ].

Equity - Topic 3611

Fiduciary or confidential relationships - General principles - Crown - [See first and second Government Programs - Topic 3823 ].

Government Programs - Topic 3823

Pensions for government employees or R.C.M.P. - Entitlement - Actuarial surplus - Federal government employee contributions to their respective government pension plan (the plans) were deposited into the Consolidated Revenue Fund (CRF) and marked as a credit in the appropriate statutory Superannuation Account - The Superannuation Accounts tracked the amounts received and paid under the plans but it was the CRF that actually received and disbursed the money - An actuarial surplus arose - For the period ending on March 31, 2000, the government "amortized" the surplus and used part of the funds to reduce its annual pension expense - For the period beginning April 1, 2000, the government relied on new statutory provisions (Bill C-78) and removed over $28 billion in surplus from the Superannuation Accounts - Unions and associations representing government employees sued the government for the return of the $28 billion - The action was dismissed - The decision was upheld on appeal - In this appeal, the plaintiffs asserted that the Superannuation Accounts contained assets, and that the government was under an equitable (fiduciary) obligation in respect of its management of them - The plaintiffs argued that the government breached its fiduciary duty by amortizing the surplus, and that this gave rise to a constructive trust over the assets in the Superannuation Accounts, in favour of the plan members - The Supreme Court of Canada dismissed the appeal - The Superannuation Accounts did not hold assets - The Superannuation Acts created the Superannuation Accounts to track plan-related CRF transactions and to estimate the government's pension liabilities to plan members - They were accounting records, not funded and segregated pools of assets - Therefore, there was no property in respect of which plan members could have a legal or equitable interest - Even if the Superannuation Accounts did contain assets, the plaintiffs had not established that plan members had a proprietary interest in either their contributions made or in the government credits under the Superannuation Acts - See paragraphs 55 to 112.

Government Programs - Topic 3823

Pensions for government employees or R.C.M.P. - Entitlement - Actuarial surplus - Federal government employee contributions to their respective government pension plan (the plans) were deposited into the Consolidated Revenue Fund (CRF) and marked as a credit in the appropriate statutory Superannuation Account - The Superannuation Accounts tracked the amounts received and paid under the plans but it was the CRF that actually received and disbursed the money - An actuarial surplus arose - For the period ending on March 31, 2000, the government "amortized" the surplus and used part of the funds to reduce its annual pension expense - For the period beginning April 1, 2000, the government relied on new statutory provisions (Bill C-78) and removed over $28 billion in surplus from the Superannuation Accounts - Unions and associations representing government employees sued the government for the return of the $28 billion - The action was dismissed - The decision was upheld on appeal - In this appeal, the plaintiffs asserted that the government owed a fiduciary duty to the plan members - The Supreme Court of Canada dismissed the appeal - There was no ad hoc fiduciary relationship between the government and the plan members with respect to the actuarial surplus reflected in the Superannuation Accounts - Most importantly, the government did not undertake, either expressly or impliedly, to act in the best interests of the plan members with respect to the actuarial surplus - Without such an undertaking of loyalty, the government's duty was to act in the best interests of society as a whole - This was inconsistent with the existence of a fiduciary duty - Moreover, while the government exercised discretion in its accounting treatment of the surpluses in the Superannuation Accounts, the plan members were not vulnerable to that discretion, nor did they have any legal or practical interest at stake - The effect of the amortization was to disclose more accurately Canada's actual pension obligations, not to affect plan members' statutory entitlements under the plans - See paragraphs 113 to 142.

Government Programs - Topic 3823

Pensions for government employees or R.C.M.P. - Entitlement - Actuarial surplus - Federal government employee contributions to their respective government pension plan (the plans) were deposited into the Consolidated Revenue Fund (CRF) and marked as a credit in the appropriate statutory Superannuation Account - The Superannuation Accounts tracked the amounts received and paid under the plans but it was the CRF that actually received and disbursed the money - An actuarial surplus arose - For the period ending on March 31, 2000, the government "amortized" the surplus and used part of the funds to reduce its annual pension expense - For the period beginning April 1, 2000, the government relied on new statutory provisions (Bill C-78) and removed over $28 billion in surplus from the Superannuation Accounts - Unions and associations representing government employees sued the government for the return of the $28 billion - The action was dismissed - The decision was upheld on appeal - In this appeal, the plaintiffs asserted that a constructive trust should be imposed over the balances in the Superannuation Accounts on the basis of unjust enrichment - The Supreme Court of Canada dismissed the appeal - There was no enrichment and corresponding deprivation and the plaintiffs had not established a prima facie case of unjust enrichment - See paragraphs 143 to 158.

Government Programs - Topic 3823

Pensions for government employees or R.C.M.P. - Entitlement - Actuarial surplus - Federal government employee contributions to their respective government pension plan (the plans) were deposited into the Consolidated Revenue Fund (CRF) and marked as a credit in the appropriate statutory Superannuation Account - The Superannuation Accounts tracked the amounts received and paid under the plans but it was the CRF that actually received and disbursed the money - An actuarial surplus arose - For the period ending on March 31, 2000, the government "amortized" the surplus and used part of the funds to reduce its annual pension expense - For the period beginning April 1, 2000, the government relied on new statutory provisions (Bill C-78) and removed over $28 billion in surplus from the Superannuation Accounts - Unions and associations representing government employees sued the government for the return of the $28 billion - The action was dismissed - The decision was upheld on appeal - At issue in this appeal was whether Bill C-78 authorized the government to debit actuarial surpluses in the Superannuation Accounts - The Supreme Court of Canada dismissed the appeal - Any interest plan members had in the balances and surpluses in the Superannuation Accounts was extinguished by Bill C-78 - See paragraphs 159 to 163.

Restitution - Topic 65

Unjust enrichment - General - What constitutes enrichment - [See third Government Programs - Topic 3823] .

Trusts - Topic 902

Trust property - General - Requirement of property as subject of trust - [See first Government Programs - Topic 3823 ].

Cases Noticed:

Stearns Catalytic Pension Plan, Re, [1994] 2 S.C.R. 611; 168 N.R. 81; 155 A.R. 81; 73 W.A.C. 81, consd. [para. 56].

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

Burke et al. v. Hudson's Bay Co. et al., [2010] 2 S.C.R. 273; 406 N.R. 109; 268 O.A.C. 1; 2010 SCC 34, dist. [para. 57].

Nolan et al. v. Superintendent of Financial Services (Ont.) et al., [2009] 2 S.C.R. 678; 391 N.R. 234; 253 O.A.C. 256; 2009 SCC 39, refd to. [para. 57].

Nolan v. Kerry (Canada) Inc. - see Nolan et al. v. Superintendent of Financial Services (Ont.) et al.

Monsanto Canada Inc. v. Superintendent of Financial Services (Ont.) et al., [2004] 3 S.C.R. 152; 324 N.R. 259; 189 O.A.C. 201; 2004 SCC 54, refd to. [para. 57].

Ermineskin Indian Band and Samson Indian Band v. Canada (Minister of Indian Affairs and Northern Development) et al., [2009] 1 S.C.R. 222; 384 N.R. 203; 2009 SCC 9, dist. [para. 82].

Bell ExpressVu Limited Partnership v. Rex et al., [2002] 2 S.C.R. 559; 287 N.R. 248; 166 B.C.A.C. 1; 271 W.A.C. 1; 2002 SCC 42, refd to. [para. 95].

CanadianOxy Chemicals Ltd. et al. v. Canada (Attorney General) et al., [1999] 1 S.C.R. 743; 237 N.R. 373; 122 B.C.A.C. 1; 200 W.A.C. 1, refd to. [para. 95].

Perez v. Galambos et al., [2009] 3 S.C.R. 247; 394 N.R. 209; 276 B.C.A.C. 272; 468 W.A.C. 272; 2009 SCC 48, refd to. [para. 113].

Elder Advocates of Alberta Society et al. v. Alberta et al., [2011] 2 S.C.R. 261; 416 N.R. 198; 499 A.R. 345; 514 W.A.C. 345; 2011 SCC 24, refd to. [para. 115].

Wewayakum Indian Band v. Canada and Wewayakai Indian Band, [2002] 4 S.C.R. 245; 297 N.R. 1; 2002 SCC 79, refd to. [para. 119].

Frame v. Smith and Smith, [1987] 2 S.C.R. 99; 78 N.R. 40; 23 O.A.C. 84, refd to. [para. 120].

Hodgkinson v. Simms et al., [1994] 3 S.C.R. 377; 171 N.R. 245; 49 B.C.A.C. 1; 80 W.A.C. 1, refd to. [para. 121].

Gladstone v. Canada (Attorney General), [2005] 1 S.C.R. 325; 332 N.R. 182; 210 B.C.A.C. 1; 348 W.A.C. 1; 2005 SCC 21, refd to. [para. 130].

Soulos v. Korkontzilas et al., [1997] 2 S.C.R. 217; 212 N.R. 1; 100 O.A.C. 241, refd to. [para. 144].

Pacific National Investments Ltd. v. Victoria (City) et al., [2004] 3 S.C.R. 575; 327 N.R. 100; 206 B.C.A.C. 99; 338 W.A.C. 99; 2004 SCC 75, refd to. [para. 149].

Peter v. Beblow, [1993] 1 S.C.R. 980; 150 N.R. 1; 23 B.C.A.C. 81; 39 W.A.C. 81, refd to. [para. 149].

Sorochan v. Sorochan, [1986] 2 S.C.R. 38; 69 N.R. 81; 74 A.R. 67, refd to. [para. 151].

Pacific National Investments Ltd. v. Victoria (City) et al., [2000] 2 S.C.R. 919; 263 N.R. 1; 144 B.C.A.C. 203; 236 W.A.C. 203; 2000 SCC 64, refd to. [para. 160].

Authors and Works Noticed:

Hansard - see Canada, Hansard, House of Commons Debates.

Canada, Hansard, House of Commons Debates, vol. VI, 3rd Sess. 34th Parliament (February 24, 1992), p. 7486 [para. 100].

Canada, Receiver General for Canada, Public Accounts of Canada 1996, vol. I, Summary Report and Financial Statements, Ottawa: Treasury Board (1996), vol. I, I.24, p. 1.27 [para. 105].

Canada, Receiver General for Canada, Public Accounts of Canada 1997, vol. I, Summary Report and Financial Statements, Ottawa: Treasury Board, 1997, vol. I, 1.25, p. 1.28 [para. 105].

Canada, Report of the Auditor General of Canada (1991), generally [paras. 78, 80].

Canada, Report of the Public Service Pension Review: The Macroeconomic Impacts of Investing in A Diversified Portfolio of Market Assets (1994), generally [para. 79].

Canada, Report of the Return Expectations for the Public Service Superannuation Fund (1993), A.R., vol. V, p. 145 [para. 106].

Sullivan, Ruth, Sullivan on the Construction of Statutes (5th Ed. 2008), pp. 478 to 482 [para. 159].

Counsel:

Paul J.J. Cavalluzzo, Hugh O'Reilly and Amanda Darrach, for the appellants, the Professional Institute of the Public Service of Canada et al.;

James Cameron, Andrew Raven and Andrew Astritis, for the appellants, the Public Service Alliance of Canada, the Armed Forces Pensioners'/Annuitants' Association of Canada et al.;

Peter Southey, Dale Yurka and Christine Mohr, for the respondent.

Solicitors of Record:

Cavalluzzo Hayes Shilton McIntyre & Cornish, Toronto, Ontario, for the appellants, the Professional Institute of the Public Service of Canada et al.;

Raven, Cameron, Ballantyne & Yazbeck, Ottawa, Ontario, for the appellants, the Public Service Alliance of Canada, the Armed Forces Pensioners'/Annuitants' Association of Canada et al.;

Attorney General of Canada, Toronto, Ontario, for the respondent;

Attorney General of British Columbia, Victoria, British Columbia, for the intervener.

This appeal was heard on February 9, 2012, by McLachlin, C.J.C., LeBel, Deschamps, Fish, Abella, Rothstein, Cromwell, Moldaver and Karakatsanis, JJ., of the Supreme Court of Canada. The following judgment of the Supreme Court was delivered in both official languages by Rothstein, J., on December 19, 2012.