Smith v. Michelin North America (Canada) Inc., (2008) 265 N.S.R.(2d) 358 (CA)

• Judge: Cromwell, J.A.
• Court: Court of Appeal of Nova Scotia (Canada)
• Case Date: June 05, 2008
• Jurisdiction: Nova Scotia
• Citations: (2008), 265 N.S.R.(2d) 358 (CA);2008 NSCA 52

Smith v. Michelin North Am. Inc. (2008), 265 N.S.R.(2d) 358 (CA);

    848 A.P.R. 358

MLB headnote and full text

Temp. Cite: [2008] N.S.R.(2d) TBEd. JN.023

Everett Smith (appellant) v. Michelin North America (Canada) Inc. (respondent)

(CA290297; 2008 NSCA 52)

Indexed As: Smith v. Michelin North America (Canada) Inc.

Nova Scotia Court of Appeal

Cromwell, J.A.

June 9, 2008.

Summary:

At issue on Smith's application was whether Michelin's defined benefits pension plan entitled it to take over $268 Million in contribution holidays in recognition of actuarial surpluses in the plan.

The Nova Scotia Supreme Court, in a judgment reported (2007), 259 N.S.R.(2d) 109; 828 A.P.R. 109, interpreted the plan and determined that Michelin was entitled to the contribution holidays taken. The issue of costs was deferred.

The Nova Scotia Supreme Court, in a judgment reported (2008), 262 N.S.R.(2d) 337; 839 A.P.R. 337, held that only Michelin, as the successful party, was entitled to costs. The court awarded $500,000 in costs plus disbursements, 50% of which was payable out of the pension fund and 50% payable personally by Smith. The order for costs and disbursements against Smith was $299,688.97. Smith appealed both the trial decision and the costs order and applied to stay execution of the costs order pending the appeal. Michelin applied for Smith to post security for costs of the appeal.

The Nova Scotia Court of Appeal, per Cromwell, J.A., declined to stay the costs order. Michelin undertook not to enforce the costs order against Smith's home or horses. Smith would suffer no irreparable harm and there were no exceptional circumstances warranting a stay. The court ordered that Smith provide $50,000 security for costs of the appeal. Smith represented 600 people interested in the litigation, who would each be required to contribute less than $100.

Practice - Topic 8209

Costs - Security for costs - Security for costs of an appeal - Grounds for - Special circumstances - In 1972, Michelin established a defined benefits pension plan for manufacturing employees - The plan was in French, with an unofficial English translation - The 1972 plan was silent on contribution holidays, but permitted amendments as long as they did not affect employees' "vested rights" - The plan was amended in 1982, 1987 and 1990 - At issue was whether the 1972 plan permitted contribution holidays and, if not, whether the subsequent amendments (which provided for contribution holidays) were valid - The trial judge held that contribution holidays, which were permitted by Nova Scotia legislation, were permitted under the 1972 plan and the amendments, which were valid - An insolvent employee, representing 600 other interested persons, appealed - Michelin applied for an order for security for costs of the appeal - The Nova Scotia Court of Appeal, per Cromwell, J.A., ordered that the employee provide $50,000 security for costs, which required a contribution of less than $100 per person from the group of 600 - Special circumstances warranted security - Michelin had spent almost $1,000,000 successfully defending the claim and was unlikely to recover its trial costs and disbursements (almost $600,000) or any costs on appeal unless security was ordered - Trial costs were payable 50% from the pension fund surplus (Michelin's own money) and 50% from the employee (uncollectible) - No effort was made to have the group fund payment of the trial costs or any security for costs that might be ordered on the appeal - If the group could not raise the funds, it would be due to waning interest in the appeal, not an inability to raise the funds - See paragraphs 32 to 57.

Practice - Topic 8304

Costs - Appeals - Appeals from order granting or denying costs - Stay of execution - At issue on Smith's application was whether Michelin's defined benefits pension plan entitled it to take over $268 Million in contribution holidays in recognition of actuarial surpluses in the plan - Smith was acting as representative for 600 persons having an interest in the plan - The court interpreted the plan and determined that Michelin was entitled to the contribution holidays taken - Michelin, as the successful party, was awarded costs where this was an adversarial proceeding, not one where the real issue was the interpretation or administration of the pension fund - The court awarded $500,000 costs plus disbursements, 50% payable out of the pension fund and 50% payable personally by Smith - Smith appealed the trial decision and the costs order - He applied to stay execution of the costs order against him pending the appeal - The Nova Scotia Court of Appeal, per Cromwell, J.A., declined to stay the costs order - Where Michelin undertook not to execute against the home or horses pending the outcome of the appeal, Smith would not suffer irreparable harm if a stay were not granted - Further, there existed no exceptional circumstances warranting a stay notwithstanding that the primary test was not met - See paragraphs 10 to 29.

Cases Noticed:

Fulton Insurance Agencies Ltd. v. Purdy (1990), 100 N.S.R.(2d) 341; 272 A.P.R. 341 (C.A.), refd to. [para. 12].

Whebby (W.E.) Ltd. v. Boehner (D.) Trucking & Excavating Ltd. et al. (2006), 249 N.S.R.(2d) 326; 792 A.P.R. 326; 2006 NSCA 129, refd to. [para. 19].

Coughlan et al. v. Westminer Canada Ltd. et al. (1993), 125 N.S.R.(2d) 171; 349 A.P.R. 171 (C.A.), refd to. [para. 19].

Leddicote v. Nova Scotia (Attorney General) et al. (2001), 198 N.S.R.(2d) 101; 621 A.P.R. 101; 2001 NSCA 152, refd to. [para. 33].

J. and P. Reid Developments Ltd. v. Branch Tree Nursery and Landscaping Ltd. (2006), 250 N.S.R.(2d) 35; 796 A.P.R. 35; 2006 NSCA 131, refd to. [para. 33].

Williams Lake Conservation Co. v. Chebucto Community Council of Halifax (Regional Municipality) et al. (2005), 231 N.S.R.(2d) 320; 733 A.P.R. 320; 2005 NSCA 44, refd to. [para. 33].

Frost v. Herman (1976), 18 N.S.R.(2d) 167; 20 A.P.R. 167 (C.A.), refd to. [para. 33].

Arnoldin Construction & Forms Ltd. v. Alta Surety Co. (1994), 134 N.S.R.(2d) 318; 383 A.P.R. 318 (C.A.), refd to. [para. 33].

2301072 Nova Scotia Ltd. v. Lienaux et al. (2007), 252 N.S.R.(2d) 193; 804 A.P.R. 193; 2007 NSCA 28, refd to. [para. 34].

Royal Bank of Canada v. Woloszyn (1999), 175 N.S.R.(2d) 352; 534 A.P.R. 352 (C.A.), refd to. [para. 51].

Counsel:

Paul G. Vogel, Gordon Forsyth, Q.C., and John D. Goudy, for the appellant;

Peter McLellan, Q.C., Mark D. Tector, and George Sutherland, Q.C., for the respondent.

These applications were heard on June 5, 2008, at Halifax, N.S., in Chambers before Cromwell, J.A., of the Nova Scotia Court of Appeal, who delivered the following judgment on June 9, 2008.