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LACROIX
V. CMHC – CLASS ACTION UPDATED TO MARCH
2008
EXISTING
ACTION
This action which was started by way of Statement of
Claim issued on the 20th July 1999 and was certified on
consent as a national class action by the Order of Mr.
Justice Charbonneau dated the 4th of May
2000.
In the action as originally certified the representative
plaintiffs, Nicole Lacroix and Rosie Ladouceur,
and the class members were seeking in damages
their pro rata share of CMHC’s pension fund surplus that
was used by CMHC to provide what the Corporation
described as “benefit enhancements” to those who were
plan members on the 1st January 1999 and the 1st January
2001. Of the $253.2 million in surplus that the
plaintiffs say was distributed, approximately $140.7
million was allocated to CMHC while $112.5 million was
allocated only to those employees who were plan members
on those dates. Except to the extent that they had
a transfer restriction annuity, none of the class
members in the action as originally certified shared in
either distribution.
ATTEMPT TO
AMEND
The representative plaintiffs subsequently brought a
motion to amend the original Statement of Claim and
Consent certification order in order to make a
claim on behalf of all employees downsized by CMHC
pursuant to its Workforce Adjustment Program (WAP) for
their full pro rata share of the surplus that existed
during the WAP. This motion was brought as a
result of the Monsanto decision which required
the administrators of a pension plan to distribute
surplus on partial termination of a pension fund when
the surplus in the fund belongs to the employees.
David Guffie and Frank McCann (Guffie/McCann) were added
as plaintiffs in the amended claim to represent those
employees who in fact shared in the first distribution
of surplus on the basis that the share they did receive
would represent only a small percentage of their actual
entitlement.
On the 4th April 2003 Mr. Justice
Michel Charbonneau dismissed the plaintiffs’ motion to
amend the certification order based mainly on what he
found would be existing and real conflicts between the
proposed expanded class members on the proposed partial
termination common issues. A subsequent appeal to
the Divisional Court was dismissed with motions for
leave to appeal being dismissed by both the Ontario
Court of Appeal and Supreme Court of
Canada.
ADVICE AND DIRECTIONS
MOTION
The plaintiffs brought an “Advice and Directions” motion
before Justice Charbonneau which was heard on the 10th
and 11th of January 2007 in order to clarify the status
of the existing class action in light of various
procedural motions heard in the action to that
date.
The representative plaintiffs wanted to be in a position
to add a common issue in the existing action dealing
with partial termination of the CMHC pension fund
while CMHC opposed on the basis that the Court had
already decided that issue against the class with
appeals from that decision being dismissed. The
plaintiffs also wanted to sever the Guffie/McCann action
from the existing action which would allow them to
proceed with their own class action for employees
downsized between the 1st of January 2001 and the end of
December
2001.
CMHC opposed on the basis that Guffie/McCann should be
required to discontinue their action and commence a
separate action. This would have allowed CMHC to
seek the costs of the action to date against
Guffie/McCann and would have allowed it to raise
limitation defences against the proposed new
class. The judge found in favour of the plaintiffs
on both these
issues.
The effect of the Court’s decision on this “Advice and
Directions” motion was to allow the plaintiffs to bring
a motion to certify an additional common issue dealing
with partial termination of the CMHC pension fund within
the existing action, which, if certified, will give each
class member in the existing action a claim to their full
pro rata share of the surplus in the CMHC pension fund
which the plaintiffs allege stood at $432 million
during the WAP. The Guffie/McCann action will be
severed and they will be bringing a separate motion to
certify their action as a separate class proceeding.
PENDING PROCEEDINGS
The
representative plaintiffs have prepared their motion
material in order to certify the partial termination
common issue and have served it on CMHC. This motion, along with the Guffie/McCann
motion to certify their action, will be heard during the week of the 1st of October 2007, along with a motion dealing with document production.
RELEVANT
DOCUMENTS
The proposed amendments to the Statement of Claim and
common issues can be viewed by clicking on: propsed amended
claim, proposed common issues.
DECISIONS TO DATE
- The 15th January 2002 decision dealing
with the amendments to the Statement of Claim wherein
Guffie/McCann were added as representative plaintiffs: Lacroix v. Canada
Mortgage and Housing Corporation [2002] O.J. No.
5385.
- The 4th April 2003 decision wherein the
Court dismissed the plaintiffs’ motion to amend the
certification order: Lacroix v. Canada Mortgage and Housing
Corporation [2003] O.J. No. 2610.
- The appeal decisions dated 20Th October
2004, 11th February 2005 and 25th August 2005: Lacroix v. Canada Mortgage and Housing
Corporation [2004] O.J. No. 4348 (Ont. Div. Ct.);
Lacroix v. Canada Mortgage and
Housing Corporation [2005] O.J. No. 484
(OCA); Lacroix v. Canada Mortgage and
Housing Corporation [2005] S.C.C.A. No.
164.
- The Supreme Court of Canada’s 24th July
2004 decision in Monsanto, which held that it
is in the best interest of plan members that surplus
be distributed on partial termination and in which
Nicole Lacroix intervened on behalf of the class
members: Monsanto
Canada Inc. v. Ontario (Superintendent of Financial Institutions) [2004]
S.C.J. No. 51.
- The 6th July 2001decision that dealt
with the Defendants’ motion to de-certify the existing
class action:
Lacroix v. Canada Mortgage and Housing
Corporation [2001] O.J. No. 6251.
- The decision on the plaintiffs’ “Advice
and Directions” motion which was heard on the 10th and
11th of January 2007: Lacroix et al v. Canada Mortgage and
Housing Corporation et al, unreported decision of
Justice Charbonneau dated the 15th February
2007.
COMPLETED PROCEEDINGS TO 5th DECEMBER 2007
On the 24th May 2007 CMHC served a Jurisdiction Motion on the Plaintiffs wherein it sought an order staying or dismissing the Plaintiffs’ action as it related to the partial termination common issue. On this motion CMHC will be arguing that partial termination of a pension fund is a creature of statute that is solely within the jurisdiction of the Office of Superintendent of Financial Institutions (OSFI) and not the court. If CMHC were to be successful on this motion it would likely prevent the representative Plaintiffs from asserting a claim for the class members’ pro rata share of the entire surplus which stood at approximately $432 million dollars during the WAP.
Given the importance of this issue to the Plaintiffs claim, the Plaintiffs obtained further documentary discovery from CMHC relating to its dealings with OSFI on its surplus sharing proposals and OSFI’s subsequent approval of those proposals. In addition, the Plaintiffs served a summons on Nicolas Le Pan, the former Superintendent of Financial Institutions and Sharon Stafford, a senior analyst with OSFI who was involved in CMHC’s application for approval of its surplus sharing proposals. The Plaintiffs also served a summons on Richard MacDonald, the CMHC pension fund administrator, given the fact that Mr. MacDonald dealt directly with OSFI in relation to an audit that was conducted by OSFI on the CMHC pension plan during 1998 and was also present when OSFI officials considered and approved CMHC’s surplus sharing proposals.
OSFI, through senior counsel with the Department of Justice, objected to the summons that had been served on Mr. Le Pan and Ms. Stafford, with the result that Justice Charbonneau set aside the afternoon of the 17th of September 2007 to hear OSFI’s proposed motion to quash the summons. That proposed motion was subsequently settled on the 12th of September 2007 by OSFI agreeing to provide a series of Questions and Answers that the Plaintiffs could file as part of the evidence on the hearing of both CMHC’s jurisdiction motion and the Plaintiffs’ motion to certify new common issues.
For its part, CMHC refused to produce Richard MacDonald as a witness on these pending motions. The Plaintiffs then brought a motion to compel Mr. MacDonald to attend, which motion was argued before Justice Charbonneau on Friday, the 21st of September 2007.
In the meantime, the Plaintiffs in the class action and the Defendant as represented by James Millar were cross-examined on their affidavit material filed on both the jurisdiction and certification motions, which examinations took place on the 19th and 20th of September 2007. After Mr. Millar’s examination, the Plaintiffs then brought motions to require Mr. Millar to re-attend to answer questions that he refused to answer on his cross-examination.
Subsequent to Mr. Millar’s cross-examination, the Defendants brought a motion to strike from the Record certain exhibits that had been attached to the Affidavit of Nicole Lacroix that had been obtained through an Access to Information request from OSFI and to strike from the Record OSFI’s Questions and Answers.
These additional motions were heard by Justice Charbonneau on the 13th and 14th of November 2007. On the 30th of November 2007 Justice Charbonneau rendered his decisions on all of the motions whereby:
• Justice Charbonneau required Mr. MacDonald to attend for cross-examination by Plaintiffs’ counsel on or before the 21st of December 2007;
• He dismissed the Defendants’ motion to strike OSFI’s Questions and Answers and the impugned exhibits that had been attached to the Lacroix Affidavit obtained from OSFI;
• He dismissed the Plaintiffs’ motion to have Mr. Millar re-attend to answer certain questions he refused to answer on the basis that the questions posed went to the merits of the action and not to the procedural issues on the jurisdiction and certification motions.
DECISIONS FROM LAST UPDATE
• The 30th November 2007 decision dealing with Mr. MacDonald’s attendance for cross-examination: Lacroix et al v. CMHC et al, unreported decision of Justice Charbonneau dated 30th November 2007;
• The 30th November 2007 decision wherein the court dismissed the Defendants’ motion to strike certain parts of the Affidavit of Nicole Lacroix and OSFI’s Questions and Answers: Lacroix et al v. CMHC et al, unreported decision of Justice Charbonneau dated 30th November 2007;
• The 30th November 2007 decision wherein the Court dismissed the Plaintiffs’ motion to have Mr. Millar re-attend to answer certain questions: Lacroix et al v. CMHC et al, unreported decision of Justice Charbonneau dated the 30th November 2007.
PENDING PROCEEDINGS AS OF 5th DECEMBER 2007
The jurisdiction and certification motions will be argued together and will commence in Ottawa on the 2nd and 3rd of January 2008. The Plaintiffs are attempting to obtain a further date from the Court when those motions can be completed as they will take more than two days to argue. A tentative date had been obtained for the week of the 10th of March 2008 but this has yet to be confirmed by the Trial Co-Ordinator.
COMPLETED PROCEEDINGS TO 4th MARCH 2008
CMHC brought a motion for stay of the Plaintiffs action with regard to the partial termination common issue on the grounds that the Ontario Superior Court of Justice did not have jurisdiction to deal with that issue. By a decision released on the 4th of March, 2008, Justice Michel Charbonneau dismissed CMHC's motion. The certification motion is set to be argued the week of the 20th of May, 2008.
The decision in the jursidction motion has been posted
under Case Law.
PENDING PROCEEDINGS AS OF 17th APRIL 2008
In addition to the Certification Motion which is to be argued during the week of the 20th May 2008, CMHC has filed a motion seeking leave to appeal Justice Charbonneau’s decision on the Jurisdiction Motion to the Divisional Court of Ontario. This motion will be argued before a single judge of that Court on the 26th June 2008 in Ottawa.
The Plaintiffs, based on two recent Court of Appeal decisions, made submissions to the Court that the costs of the recent motions should be paid to the Plaintiffs out of the CMHC Pension Fund on a complete indemnity basis. In an Endorsement released on the 27th March 2008, Justice Charbonneau felt that the Plaintiffs’ action did not fit within the parameters of these Court of Appeal decisions and ruled that he would apply the principles usually applied when determining the costs of any motion. This simply means that the party losing the motion normally pays the costs. Given the importance of this issue to the ongoing action, the Plaintiffs have brought a motion seeking leave to appeal this costs decision to the Divisional Court of Ontario. That leave to appeal motion will be heard by a single judge of the Divisional Court on the 21st of August 2008 in Ottawa. Justice Charbonneau’s decision on this threshold cost motion has been posted under case law.
CMHC'S LEAVE TO APPEAL MOTION DISMISSED
CMHC's motion seeking leave to appeal Justice Charbonneau's decision on jurisdiction, which was rendered on the 4th March, 2008, was argued on the 26th June, 2008 and dismissed by order of Justice Robert L. Maranger by handwritten endorsement dated the 30th June, 2008. A typed copy of Justice Maranger's endorsement has been posted under Case Law.
COMPLETED PROCEEDINGS TO 2nd JULY 2008
The Plaintiffs certification motion was argued over a four day period, commending on the 20th May, 2008. The decision on that motion is currently under reserve.
COMPLETED PROCEEDINGS TO 4th MARCH 2009
On the 26th January, 2009 Justice Charbonneau issued his decision dismissing the Plaintiffs motion to amend the Statement of Claim and to certify new common issues. This decision has been posted under Case Law.
On
the 26th of February, 2009 the representative Plaintiffs
filed a Notice
of Appeal to the Divisional Court from that
decision. This appeal will likely not be heard for
several months.
COMPLETED PROCEEDINGS TO 25th NOVEMBER
2010
On the 16th June 2010, the Divisional Court dismissed
the Plaintiffs' appeal from the decision of Justice
Charbonneau who had refused to certify the partial
termination common issues. Relying on a Court of
Appeal decision which was decided after the appeal
was argued, the Divisional Court held that it had
no jurisdiction to deal with the partial termination
common issues as those issues were within the sole
jurisdiction of the Superintendent of Financial
Institutions.
The Plantiffs, who had successfully defended three
previous jurisdiction motion brought by CMHC, sought
leave to appeal the Divisional Court's decision
to the Court of Appeal for Ontario.
On the 25th November 2010, the Court of Appeal
for Ontario granted the Plaintiffs leave to appeal
to that Court. The Plaintiffs' appeal will likely
be heard in the spring of 2011.
The
Divisional Court's decision has been posted under
Case Law.
COURT OF APPEAL HEARING
The Court of Appeal has set aside a full day to
hear argument on this Appeal, which argument will
take place on Wednesday, the 13th July 2011 at Osgoode
Hall in Toronto commencing at 10:30 a.m.
The representative Plaintiffs, Nicole Lacroix,
Rosie Ladouceur, Frank McCann and David Guffie,
will be attending the Appeal. We urge any other
Class Member who is able to attend to go to Court
that day in order to support the representative
Plaintiffs.
The Court is located at the following address:
Osgoode Hall
130 Queen Street West
Toronto, Ontario
M5H 2N5
If you intend to go to Court, you should call in
advance just to make sure the Appeal is still listed
for the above-noted date. The Court’s general enquiry
number is: (416) 327-5020.
When the outcome of the Appeal is known, same will
be posted to the Website.
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