In Smith v. Casco Inc., the Ontario Court of Appeal considered whether, in the light of ss. 44 and 46 of the Pension Benefits Act, R.S.O. 1990, c. P.8 ("PBA"), a plaintiff is bound by a spousal waiver she signed in respect of her husband's pension. Writing for the court, Justice Gillese held that the Casco version of the spousal waiver departed in substance from the form prescribed by the Superintendent of the Financial Services Commission, and was invalid. Gillese J.A. referred to s. 28(d) of the Interpretation Act, R.S.O. 1990, c. I.11 (Int. Act) in arriving at her conclusion, noting that, while the Legislation Act, 2006, S.O. 2006, c. 21, Sch. F (Leg. Act) had since succeeded the Interpretation Act, the Interpretation Act was in force at the time the plaintiff signed the Casco waiver, and moreover nothing in the Legislation Act suggested it was intended to apply retroactively. The appeal was dismissed.
The plaintiff’s husband worked for Casco for 39 years, and was a member of the pension plan. In about February 2000, he was offered early retirement as part of an exit incentive program which would provide for a substantial bonus payment, as well as his full pension. The plaintiff had always been entirely dependant on her husband’s income, and the Casco pension was critical to the Smiths’ retirement plans. Mr. Smith was offered 14 plan options to choose from. The option he chose would pay him more as long as he was alive, but would ultimately leave his wife without a survivor’s pension, if he predeceased her: a spousal waiver was required. Mr. Smith brought the Casco-version waiver home with him one day at lunchtime, and told his wife she had to sign. Having given the form a cursory glance, the plaintiff signed. Two weeks later Mr. Smith retired, seemingly in good health. However, three and a half years later – in December 2003 – he died of cancer. Only then did the plaintiff learn that her husband’s pension was guaranteed for only five years – or, roughly, only another year and a half. After June 2005, the plaintiff would receive nothing more. She brought an action against Casco for negligent misrepresentation in respect of the information provided to her and her husband as to the pension plan options available at the time of her husband’s retirement. The trial judge found in the plaintiff’s favour. A majority of the Divisional Court upheld the trial judge’s decision. Casco appealed with leave to the Ont. CA.
Section 46.(1) of the Pension Benefits Act provides that “persons entitled to a joint and survivor pension benefit may waive [that] entitlement … by … written waiver in the form approved by the Superintendent…” The Casco version of the waiver was not in the approved form. Gillese J.A. assumed without deciding that waiver might nonetheless be effected using a form other than the Superintendent-approved version. The question became: was the Casco version effective? Casco relied on s. 28(d) of the Interpretation Act, which provided that “where a form is prescribed, deviations therefrom not affecting the substance ... do not vitiate it”. However, Gillese J.A. found five significant differences between the Casco version and the approved form. The critical substantial deviation was this: the Casco waiver did not meet the purpose for which it was required – to advise that, by signing the form, a person waives all of his or her entitlement to a joint and survivor pension. Casco argued further for application of the doctrine of non est factum. Gillese J.A. held that, where the legislature has provided a prescribed form, that doctrine does not apply. Given her decision that the Casco waiver was invalid, Gillese J.A. held further that the question as to the plaintiff’s failure to read the document was irrelevant, and, likewise, the question of contributory negligence did not arise.
April 20, 2011
Link to Decision
Leo Elias & Liam Oster
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