Appeal court overturns dismissal of pension class action
An Ontario court has ruled that pensioners’ interpretation of a cost-of-living clause should prevail
Ontario’s appeal court has overturned a lower court decision dismissing a proposed class action against Bell Canada by members of its pension plan.
The Court of Appeal for Ontario has ruled in favour of former Bell employees who sued the company over the interpretation of its pension plan’s cost of living adjustment. The lawsuit on behalf of 35,000 retirees sought $150 million in damages.
Last August, the Ontario Superior Court of Justice certified a proposed class action against the firm, but then dismissed the plaintiffs’ claim.
The case involves a disagreement over the how the company handled the rounding of its pension index increase in 2017.
The pensioners argued that the increase should be rounded up to 2%, whereas the company argued that it should have been rounded down to 1%.
“The difference to the class members between a 2% and a 1% increase in the 2017 pension is over $10 million for the first year and, over the long-term, over $100 million,” the appeal court noted.
The dispute turned in part on whether Bell must use Statistics Canada’s approach to rounding off its consumer inflation index, and on the placement of a comma in the plan’s provisions.
The lower court found that the comma in question made the wording of the plan awkward, but that it didn’t mean that StatsCan’s approach to rounding had to be used.
However, the appeal court concluded that the motions judge committed a “palpable and overriding error” in his ruling, and that even if the judge hadn’t made the error, any ambiguity in interpreting the pension plan should be decided in favour of the pensioners, since they didn’t have any say in drafting it.
“Accordingly, we allow the appeal, set aside the summary judgment dismissing the action and in its place award summary judgment in favour of the appellant,” the court said.