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SUPREME COURT OF CANADA
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Citation: Boucher v. Stelco Inc., [2005] 3 S.C.R. 279, 2005 SCC 64 |
Date: 20051110 Docket: 30299 |
Between:
Francine Bourdon, Lise Chamberland, Gudrun Deumié,
Yvon Laprade, Shirley Smith and Michel Tanguay
Appellants
and
Stelco Inc.
Respondent
‑ and ‑
Superintendent of Financial Services
Intervener
Official English Translation
Coram: McLachlin C.J. and Major, Bastarache, Binnie, LeBel, Deschamps, Fish, Abella and Charron JJ.
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Reasons for Judgment: (paras. 1 to 39)
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LeBel J. (McLachlin C.J. and Major, Bastarache, Binnie, Deschamps, Fish, Abella and Charron JJ. concurring) |
Appeal heard and judgment rendered: June 10, 2005
Reasons delivered: November 10, 2005
______________________________
Boucher v. Stelco Inc., [2005] 3 S.C.R. 279, 2005 SCC 64
Francine Bourdon, Lise Chamberland, Gudrun Deumié,
Yvon Laprade, Shirley Smith and Michel Tanguay Appellants
v.
Stelco Inc. Respondent
and
Superintendent of Financial Services Intervener
Indexed as: Boucher v. Stelco Inc.
Neutral citation: 2005 SCC 64.
File No.: 30299.
Hearing and Judgment: June 10, 2005.
Reasons delivered: November 10, 2005.
Present: McLachlin C.J. and Major, Bastarache, Binnie, LeBel, Deschamps, Fish, Abella and Charron JJ.
on appeal from the court of appeal for quebec
Pensions — Pension plans — Partial wind up of pension plan — Wind up report approved by Ontario’s Superintendent of Financial Services granting early retirement benefits to plan members employed in Ontario and deferred pensions to members employed in Quebec — Superintendent’s decision not contested in Ontario — Quebec members instead bringing action based on employment contract in Quebec to claim early retirement benefits — Whether Quebec Superior Court may rule on conclusions sought in action.
Civil procedure — Exception to dismiss action — Res judicata — Issue estoppel — Partial wind up of pension plan — Wind up report approved by Ontario’s Superintendent of Financial Services granting early retirement benefits to plan members employed in Ontario and deferred pensions to members employed in Quebec — Superintendent’s decision not contested in Ontario — Quebec members instead bringing action based on employment contract in Quebec to claim early retirement benefits — Whether action inadmissible in light of civil law principles relating to res judicata and common law principles relating to estoppel — Civil Code of Québec, S.Q. 1991, c. 64, art. 3137.
Private international law — Jurisdiction of Quebec courts — Doctrine of forum non conveniens — Partial wind up of pension plan — Wind up report approved by Ontario’s Superintendent of Financial Services granting early retirement benefits to plan members employed in Ontario and deferred pensions to members employed in Quebec — Superintendent’s decision not contested in Ontario — Quebec members instead bringing action based on employment contract in Quebec to claim early retirement benefits — Whether Superior Court had to decline jurisdiction based on doctrine of forum non conveniens — Civil Code of Québec, S.Q. 1991, c. 64, art. 3135.
The respondent, S, set up a single pension plan for all its employees in Canada, regardless of their place of work. The plan was governed by the laws of Ontario. In 1990, as part of a reorganization, S closed three plants in Quebec. Several of the laid-off employees, including the appellants, sought to obtain pension benefits. Ontario’s Superintendent of Pensions then ordered a partial wind up of the plan and approved the partial wind up report, which provided for early retirement benefits for plan members employed in Ontario only. For the appellants, all of whom were members employed in Quebec, the report applied Quebec law and the entire amount of the pension was accordingly deferred until the normal age of retirement. The appellants did not institute proceedings in Ontario to contest that decision but instead brought an action in Quebec that was based on contracts of employment. They claimed to be entitled to early retirement benefits on the basis that the plan was subject to Ontario law. The trial judge began by recognizing that the Superior Court had jurisdiction, but dismissed the appellants’ action on the merits, holding that early retirement benefits were limited to plan members employed in Ontario. The majority of the Court of Appeal affirmed the trial judge’s decision both on the issue of jurisdiction and on the merits.
Held: The appeal should be dismissed.
The appellants’ action is inadmissible. Under the interprovincial framework agreement on pension plans, which applied to S’s plan, Ontario’s Superintendent of Financial Services was expressly entitled to exercise all the powers conferred by the Ontario legislature and to make any necessary decisions for the administration and wind up of the plan, such as verifying and approving the benefits payable to each plan member, including those employed in Quebec. The Superintendent’s decision was not contested in Ontario and is final. In light of the civil law principles relating to res judicata and the common law principles relating to estoppel, the appellants cannot contest that decision indirectly by means of this action. [20] [26-28] [31]
At this stage of the proceedings, from the perspective of Quebec law, the conditions for applying the principle of res judicata have been met. The Superintendent had jurisdiction to make the decision, and the three necessary elements of identical cause, object and parties are present. If it were heard by a Quebec court, the main debate between the parties would concern a question that has already been settled by the Superintendent, and the court could not allow the action without varying or quashing his decision. [32]
Insofar as a decision of an administrative body created by the Ontario legislature is in issue, in a case within that body’s jurisdiction under Ontario law, applying the common law rules governing issue estoppel would lead to the same result. In short, the appellants’ failure to make use of the usual means of redress, together with the situation in which any other decision would place S, militates against the court’s exercise of its residual discretion to decline to apply estoppel. S could find itself in the strange position of having to comply with the Superintendent’s decision under Ontario law while at the same time being required to execute a Quebec judgment to the contrary. Such a result could call into question the benefit calculations for all the retirees and the measures taken to ensure the plan’s solvency. [33-34]
Finally, even if the Quebec courts had found that it was still legally possible to contest the Superintendent’s decision, a proper application of the doctrine of forum non conveniens would have justified them in declining jurisdiction in the circumstances. An Ontario court would naturally be in a better position to review the decision of the Ontario body that is responsible for administering the plan, if only to reduce the risk of conflicting decisions and to adhere to the principle of administration set out in the memorandum of reciprocal agreement, especially in that the challenge by the Quebec plan members could affect the plan as a whole and the rights of the other members. [36] [38]
Cases Cited
Distinguished: J.J. Newberry Canadian Ltd. v. Régie des rentes du Québec, [1986] R.J.Q. 1884; referred to: T.S.C.O. of Canada Ltd. v. Châteauneuf, [1995] R.J.Q. 637; Pierre Moreault Ltée v. Sauvé, [1997] R.J.Q. 44; Monsanto Canada Inc. v. Ontario (Superintendent of Financial Services), [2004] 3 S.C.R. 152, 2004 SCC 54; Weber v. Ontario Hydro, [1995] 2 S.C.R. 929; Nova Scotia (Workers’ Compensation Board) v. Martin, [2003] 2 S.C.R. 504, 2003 SCC 54; Vaughan v. Canada, [2005] 1 S.C.R. 146, 2005 SCC 11; Rocois Construction Inc. v. Québec Ready Mix Inc., [1990] 2 R.C.S. 440; Danyluk v. Ainsworth Technologies Inc., [2001] 2 S.C.R. 460, 2001 SCC 44; Toronto (City) v. C.U.P.E., Local 79, [2003] 3 S.C.R. 77, 2003 SCC 63; Quebec (Attorney General) v. Laroche, [2002] 3 S.C.R. 708, 2002 SCC 72; Spar Aerospace Ltd. v. American Mobile Satellite Corp., [2002] 4 S.C.R. 205, 2002 SCC 78; GreCon Dimter inc. v. J.R. Normand inc., [2005] 2 S.C.R. 401, 2005 SCC 46; Lexus Maritime inc. v. Oppenheim Forfait GmbH, [1998] Q.J. No. 2059 (QL).
Statutes and Regulations Cited
Civil Code of Québec, S.Q. 1991, c. 64, arts. 2848, 3135, 3137, 3149.
Pension Benefits Act, R.S.O. 1990, c. P.8, ss. 70(1), (2), (3), (4), 74, 109, 110.
Supplemental Pension Plans Act, R.S.Q., c. R-15.1, ss. 6, 249, 254.
Authors Cited
Goldstein, Gérald, et Ethel Groffier. Droit international privé, t. 1, Théorie générale. Cowansville, Qué.: Yvon Blais, 1998.
Mercer Pension Manual, vol. 1, by William M. Mercer Limited. Agincourt, Ont.: Carswell, 1988 (loose-leaf updated 2005, release 4).
Poirier, Johanne. “Les ententes intergouvernementales et la gouvernance fédérale: aux confins du droit et du non-droit”, in Jean-François Gaudreault-DesBiens and Fabien Gélinas, eds., The States and Moods of Federalism: Governance, Identity and Methodology. Cowansville, Qué.: Yvon Blais, 2005, 441.
Royer, Jean-Claude. La preuve civile, 3e éd. Cowansville, Qué.: Yvon Blais, 2003.
Talpis, Jeffrey A., with the collaboration of Shelley L. Kath. “If I am from Grand-Mère, Why Am I Being Sued in Texas?” Responding to Inappropriate Foreign Jurisdiction in Quebec-United States Crossborder Litigation. Montréal: Thémis, 2001.
APPEAL from a judgment of the Quebec Court of Appeal (Robert C.J.Q. and Nuss and Morin JJ.A.), [2004] R.J.Q. 807 (sub nom. Bourdon v. Stelco. Inc.), 241 D.L.R. (4th) 266, 39 C.C.P.B. 214, [2004] Q.J. No. 1842 (QL), affirming a judgment of Durocher J. (2000), 26 C.C.P.B. 20, [2000] Q.J. No. 6735 (QL), rejecting the appellants’ action. Appeal dismissed.
Claude Tardif, Gaétan Lévesque and Stéphane Forest, for the appellants.
Chantal Masse, Timothé R. Huot and Rachel Ravary, for the respondent.
Deborah McPhail, for the intervener.
English version of the judgment of the Court delivered by
LeBel J. —
I. Introduction
1 This appeal concerns an action that was brought against the respondent, Stelco Inc. (“Stelco”), by the appellants, who are laid-off employees, to claim early retirement benefits. The issue in the case at bar, which is more than a question of contract performance, relates to the exercise of jurisdiction by the Quebec Superior Court in respect of a 1997 decision in which Ontario’s Superintendent of Pensions approved the partial wind up of Stelco’s pension plan. At the hearing, I concurred in dismissing the appellants’ action, but for reasons that differ in part from those of the Quebec Court of Appeal. In my view, the Superior Court should have declined to rule on the conclusions sought in this action. Both the inadmissibility of the action — which is contrary to the civil law principle of res judicata and to the common law principle of issue estoppel — and the principles of forum non conveniens justify dismissing a proceeding that is likely to become an impermissible collateral attack on the Superintendent’s decision.
A. Origin of the Case
2 Stelco, a major manufacturing company, operated commercial and industrial establishments in several provinces of Canada, including Quebec. In 1940, it set up a single pension plan for all its employees in Canada, regardless of their place of work. At the time of the events that gave rise to the case at bar, s. 21 of the plan then in effect stipulated that the plan was governed by the laws of Ontario. The same section also provided that the termination or wind up of the plan would be carried out in accordance with Ontario’s Pension Benefits Act, R.S.O. 1990, c. P.8:
SECTION 21
Applicable Law
(a) This Plan shall be construed and interpreted in accordance with the laws of the Province of Ontario.
(b) In the event of the termination or windup of the Plan such windup will be carried out in accordance with the provisions of the Pension Benefits Act of Ontario.
3 After the pension plan came into effect, the provincial legislatures gradually enacted legislation on supplemental pension plans. These similarly constructed statutes establish a legal framework for such plans and set up mechanisms for overseeing their management, ensuring their solvency and, if need be, overseeing the wind up of a plan. To avoid subjecting interprovincial plans such as that of Stelco to multiple administrative controls, the provincial governments of Canada agreed on the importance of reciprocity in overseeing them. In substance, their memorandums of reciprocal agreement recognize as a majority “administrator” the regulatory authority of the province in which the majority of the employees participating in a supplemental pension plan work. A memorandum of reciprocal agreement entrusts the oversight of the plan, and decisions on the management and wind up of the plan, to this regulatory authority.
4 The memorandum of reciprocal agreement that is relevant to this appeal was signed in 1968 by the Quebec Pension Board (“Régie des rentes du Québec”), the Pension Commission of Ontario, and Alberta’s Superintendent of Pensions. Most of the provinces eventually signed it. The memorandum of agreement stipulates that the major authority exercises its own powers and the powers that the minor authorities delegate to it with respect to a plan. In the case of Stelco’s plan, the major authority within the meaning of the memorandum of reciprocal agreement was the Pension Commission of Ontario; the major authority is now the Superintendent of Financial Services, who for the last few years has been exercising the duties of the Superintendent of Pensions. This memorandum of agreement was still in effect when the problems that ultimately gave rise to this case began.
5 In 1990, as part of a reorganization of its operations, Stelco decided to close three plants in Quebec. The closures resulted in the elimination of jobs. Some of the laid-off employees sought to obtain pension benefits. Ontario’s Superintendent of Pensions then ordered a partial wind up of the company’s pension plan in order to determine and guarantee the pension benefits of the laid-off employees. Stelco contested the partial wind up of the plan and appealed to the Divisional Court of Ontario ((1994), 115 D.L.R. (4th) 437). After losing its case in that court and in the Ontario Court of Appeal ((1995), 126 D.L.R. (4th) 767), the employer was denied leave to appeal to this Court. Consequently, on March 28, 1996, the Superintendent ordered the partial wind up of the plan, on specified dates, with respect to certain classes of employees affected by plant closures. The fact that the appellants were members of the groups of employees affected by that decision is not in issue.
6 Further to that order, an actuarial firm prepared a wind up report, which the company submitted to the Superintendent of Pensions in January 1997. According to the appellants’ record, the employees concerned, including the appellants, each received a personalized statement indicating the pension benefits they would receive. On January 29, 1997, the Superintendent approved the partial wind up report, including the description and calculation of the benefits awarded to each employee.
7 That approval is at the heart of the case. To understand the nature of the problem, it will be necessary to briefly review the provisions of the Ontario and Quebec legislation on supplemental pension plans that apply to early retirement. The appellants, who were employed in facilities in Quebec when they were laid off, had not yet reached the normal age of retirement under the laws of either Ontario or Quebec.
8 At that time — and this is still the case today — the legislation of Quebec and Ontario treated employees pensioned off before the normal age of retirement quite differently. Under Quebec’s Supplemental Pension Plans Act, R.S.Q., c. R-15.1, such employees are entitled to benefits that they will not receive until they reach the normal age of retirement. Ontario’s legislation provides for the possibility of receiving early retirement benefits in such cases. Under s. 74 of the Pension Benefits Act, a plan member whose age plus total years of membership equals at least 55 has the right to receive early retirement benefits. In other words, when a pension plan to which the Quebec legislation applies is wound up in whole or in part, the employee’s benefits will be deferred. Under Ontario’s legislation, if a plan member meets the 55-year requirement, he or she will receive benefits immediately.
9 The partial wind up report provided for early retirement benefits for plan members employed in Ontario only. For members employed in Quebec, the report applied Quebec law and the entire amount of the pension was accordingly deferred until the normal age of retirement.
10 Although they were notified that they would only receive deferred pensions, the appellants did not institute proceedings to contest the Superintendent’s decision to approve the report. All that can be found in the appellants’ record are some copies of a few exchanges of correspondence with Stelco’s lawyers, in which these employees expressed their disagreement with the assessment of their entitlements to benefits. In their view, since Stelco’s plan provided that it was subject to Ontario law and was to be administered in that province, they should have received early retirement benefits. Despite these criticisms, Stelco applied the wind up report as approved by the Superintendent.
11 In October 1998, the appellants joined forces in an action against Stelco. In these proceedings, which took the form of an action based on contracts of employment, they claimed to be entitled to early retirement benefits on the basis that the plan was subject to Ontario law. Stelco maintained that only plan members employed in Ontario were entitled to early retirement benefits, and asked that the suit be dismissed.
B. Judicial History
1. Quebec Superior Court
12 The appellants first lost in the Superior Court: (2000), 26 C.C.P.B. 20. Durocher J. began by recognizing that the Quebec Superior Court had jurisdiction over the appellants’ action. He then decided that he had to rule on the merits, and dismissed their claims. In his view, even though the plan was subject to Ontario law, the appellants were not entitled to receive early retirement benefits. Only plan members employed in Ontario were so entitled. To his mind, Ontario’s Pension Benefits Act itself limited this benefit to pensioners who had been employed in Ontario. The appellants then appealed to the Quebec Court of Appeal.
2. Quebec Court of Appeal
13 The Quebec Court of Appeal was divided on the outcome of the appeal: (2004), 241 D.L.R. (4th) 266. Robert C.J.Q. would have allowed the appeal and the action. Morin and Nuss JJ.A. agreed, but for different reasons, that the appeal should be dismissed.
14 According to Robert C.J.Q., the Superior Court had jurisdiction to hear the appellants’ action. Although it was in fact an action based on contracts of employment, those contracts had, as is permitted under Quebec private international law, been made subject to Ontario law. Disagreeing with the Superior Court, the Chief Justice concluded that a proper interpretation of the Ontario legislation did not permit the advantage of early retirement benefits to be limited to plan members employed in Ontario. It was also his view that such a conclusion was not an impermissible collateral attack on the decision of Ontario’s Superintendent of Pensions. The Superintendent had granted the appellants the minimum benefits provided for under Quebec law; he had not decided that they could not receive fuller benefits under Ontario law. Moreover, Robert C.J.Q. was of the view that the Quebec Court of Appeal had held in a previous decision, J.J. Newberry Canadian Ltd. v. Régie des rentes du Québec, [1986] R.J.Q. 1884, that courts of original general jurisdiction have jurisdiction to interpret the provisions of a pension plan and a statute relating to the eligibility of pension plan members for benefits. He would therefore have found in favour of the appellants in their action.
15 Morin J.A. took a completely different approach to the legal issues in the appeal and to the consequences of resolving them. He concluded that the Quebec Superior Court lacked jurisdiction. In his view, the proceedings amounted to an application for judicial review of, or a disguised appeal from, the decision of Ontario’s Superintendent of Pensions on the payments owed following the partial wind up of Stelco’s pension plan. The action, as brought, could not be allowed without first reversing the Superintendent’s decision. The issues raised by the appellants should have been raised by way of administrative appeals to the Pension Commission and actions in the Divisional Court of Ontario. The applicability of Ontario law to the plan barred the Quebec courts from exercising jurisdiction. In the alternative, he recognized, as Durocher J. had, that the Ontario legislation limited early retirement benefits to plan members employed in Ontario. For these reasons, he concluded that the appeal should be dismissed. Although Nuss J.A. concurred with Robert C.J.Q. regarding the jurisdiction of the Superior Court, he nevertheless concluded that the appeal should be dismissed because he agreed with Morin J.A. that early retirement benefits were limited to plan members employed in Ontario. The case was then brought before this Court.
II. Analysis
A. Identification of the Issues
16 The outcome of this appeal depends on an accurate identification of the decisive legal issues in the case. The hearing before this Court was largely devoted to a debate on the definition and characterization of the issues in dispute. Far more than questions of contract law or private international law, the case raises, first and foremost, issues of procedure, administrative law, and judicial review. It should be noted here that the parties have not raised the question of the application of a collective agreement or the exercise of a concurrent arbitral jurisdiction in relation to the rights in issue and the individuals claiming them.
17 According to the appellants, the determinative issues in this appeal relate primarily to the law of contracts and to the application of the rules governing the conflict of laws. They submit that their action, which is based on contracts of employment and in which they claim a right to the benefits provided for in those contracts, is within the jurisdiction of the Quebec courts. The pension plan incorporated into the contracts of employment is subject to the laws of Ontario as the result of a choice which is valid under the rules of Quebec private international law. Under Ontario law, the appellants have the exact same benefits as plan members employed in Ontario. The appellants argue that the decision of Ontario’s Superintendent of Pensions regarding the benefits payable upon winding up the plan is not binding on the Quebec courts, which may themselves rule on the proper interpretation of Ontario law. On this issue, the appellants cite the reasons of Robert C.J.Q. and the decision in Newberry.
18 Stelco contests, first, the contention that the benefits claimed under the plan and under Ontario law are payable. It contends that there is nothing in the plan indicating an intention to grant identical benefits to all members without regard for their place of employment. It also submits that the relevant statutory provisions limit early retirement benefits to Ontario plan members. In addition, after discussing the powers of interpretation of the Régie des rentes du Québec and its counterpart administrative bodies in Ontario, Stelco contends that, at any rate, the Superior Court should have declined jurisdiction. The appellants are challenging final decisions regarding the administration and wind up of the pension plan that were made by the competent administrative authorities even though they have not availed themselves of the administrative appeals or legal proceedings that are available in such cases.
19 Despite all the attempts to sidestep it, the question of the nature and effect of the Superintendent’s decision remains the central issue in this appeal. It must be resolved before a ruling can be made on either the admissibility of the appellant’s action or the attitude the Quebec courts should adopt toward the exercise of their jurisdiction. A decision on this issue that is contrary to the appellants’ submissions would imply that the Quebec courts must decline jurisdiction. Indeed, the appellants’ action would become inadmissible. There is thus no need to consider the merits of the parties’ arguments concerning the interpretation of the Ontario legislation. I will therefore focus my analysis on this issues of admissibility and jurisdiction.
B. The Interprovincial Agreement on the Administration of Pension Plans
20 When analysing the issues raised by the appellants’ action, we must bear in mind the importance of the agreement entered into by most of the provinces regarding the administration of supplemental pension plans. The proceeding in the instant case relates to an important aspect of Canadian federalism, namely the intergovernmental agreements designed to ensure that the provinces cooperate with each other in exercising their legislative powers so as to permit people to move and trade to flow freely within the Canadian political space (see J. Poirier, “Les ententes intergouvernementales et la gouvernance fédérale: aux confins du droit et du non-droit”, in J.-F. Gaudreault-DesBiens and F. Gélinas, eds., The States and Moods of Federalism (2005), 441). The framework agreement on pension plans is one such agreement. Recognizing that the same companies maintain a presence in multiple provinces, this agreement organizes the exercise of provincial powers in this area by endorsing reciprocal delegations of administrative functions. The appellants’ action thus tends toward reducing the effectiveness of these administrative mechanisms and compromising their application. Under this framework agreement, the competent authorities in Ontario were given responsibility for overseeing the administration of Stelco’s pension plan. When confronted with the problem of partially winding up this plan, they made decisions that included a determination and calculation of plan members’ benefits. In conducting a legal analysis of the situation, these decisions cannot simply be disregarded. They are a reality. The appellants have never contested them in Ontario. Can they now do so indirectly by means of this action? Bearing in mind the importance of these decisions, I will now analyse the nature and legal framework of Stelco’s pension plan.
C. The Nature and Legislative Framework of Stelco’s Pension Plan
21 Quebec law treats pension plans such as Stelco’s as contracts. Section 6 of the Supplemental Pension Plans Act states this explicitly:
6. A pension plan is a contract under which retirement benefits are provided to the member, under given conditions and at a given age, the funding of which is ensured by contributions payable either by the employer only, or by both the employer and the member.
Every pension plan, with the exception of insured plans, shall have a pension fund into which, in particular, contributions and the income derived therefrom are paid. The pension fund shall constitute a trust patrimony appropriated mainly to the payment of the refunds and pension benefits to which the members and beneficiaries are entitled.
(See also T.S.C.O. of Canada Ltd. v. Châteauneuf, [1995] R.J.Q. 637 (C.A.), at pp. 675, 704 and 706; Pierre Moreault Ltée v. Sauvé, [1997] R.J.Q. 44 (C.A.), at pp. 46-47.)
22 Stelco’s pension plan is part of the contracts of employment between the company and its employees or of their employer-employee relationship. The appellants’ action must therefore be regarded as being based on a contract of employment within the meaning of art. 3149 of the Civil Code of Québec, S.Q. 1991, c. 64 (“C.C.Q.”). Since this question was not argued, I need not consider the validity of this characterization in the law of the other provinces or the scope of its application with regard to the plan as a whole.
23 As I mentioned above, this plan applied from its inception to employees working in a number of provinces. Like all plans of the same nature, Stelco’s plan gradually became subject to restrictive statutory and regulatory frameworks, such as those established by Quebec’s Supplemental Pension Plans Act and Ontario’s Pension Benefits Act (see Monsanto Canada Inc. v. Ontario (Superintendent of Financial Services), [2004] 3 S.C.R. 152, 2004 SCC 54, at paras. 13-14, per Deschamps J.; The Mercer Pension Manual (loose-leaf), vol. 1, at pp. 1-6 and 1-7).
24 In short, these statutory and regulatory schemes are intended primarily to ensure the continued solvency of the plans so that their members will receive the anticipated benefits when they retire. The schemes also ensure that special care is taken to review any amendments to a plan as well as the terms and conditions of the wind up of a plan. I need not discuss the complex reporting and approval mechanisms set up for this purpose or the scope of the powers of intervention — which can go as far as placing plans under trusteeship — of the public bodies responsible for overseeing supplemental pension plans. Using a variety of means, the administrative authorities responsible for overseeing supplemental pension plans exercise similar functions.
25 The similarity of these oversight mechanisms, like the need for effective oversight of supplemental pension plans, doubtlessly facilitated the signing by the provinces of Canada of the memorandum of reciprocal agreement in issue. The parties to the memorandum of agreement have agreed to give the “major” authority full powers of oversight over an interprovincial pension plan. Section 2 affirms the contracting parties’ intent to delegate extensive oversight and decision-making powers to the major authority:
The major authority for each plan shall exercise both its own statutory functions and powers and the statutory functions and powers of each minor authority for such plan.
D. The Scope of the Powers of Ontario’s Superintendent of Financial Services
26 The delegation mentioned above, which applied to Stelco’s pension plan, accordingly conferred on Ontario’s Superintendent of Financial Services the authority to make any necessary decisions for the administration and wind up of the plan. The memorandum of agreement expressly granted him the right to exercise all the powers conferred by the Ontario legislature. On this point, it should be noted that s. 249 of the Supplemental Pension Plans Act authorizes such agreements. Moreover, the validity of the delegations of authority resulting from the Memorandum of Reciprocal Agreement has never been contested. It is therefore necessary to refer to the Ontario legislation to determine the scope of the powers delegated to the Superintendent in the context of the partial wind up of Stelco’s plan.
27 In this regard, Ontario’s Pension Benefits Act is clear. It gives the Superintendent the authority to verify and approve the benefits payable to each plan member. On the one hand, s. 70(1) of the Act requires the plan administrator to submit to the Superintendent a wind up report that sets out, inter alia, the benefits payable to the plan members:
70.—(1) The administrator of a pension plan that is to be wound up in whole or in part shall file a wind up report that sets out,
(a) the assets and liabilities of the pension plan;
(b) the benefits to be provided under the pension plan to members, former members and other persons;
(c) the methods of allocating and distributing the assets of the pension plan and determining the priorities for payment of benefits; and
(d) such other information as is prescribed.
On the other hand, s. 70(2) prohibits any payment being made out of the pension fund before the Superintendent approves the wind up report, except for the continuation of pension benefit payments that commenced before the wind up:
(2) No payment shall be made out of the pension fund in respect of which notice of proposal to wind up has been given until the Superintendent has approved the wind up report.
(3) Subsection (2) does not apply to prevent continuation of payment of a pension or any other benefit the payment of which commenced before the giving of the notice of proposal to wind up the pension plan or to prevent any other payment that is prescribed or that is approved by the Superintendent.
The corollary to this rule can be found in s. 70(4), which prohibits the administrator of a pension plan from making payments that have not been authorized by the Superintendent:
(4) An administrator shall not make payment out of the pension fund except in accordance with the wind up report approved by the Superintendent.
Any plan administrator who makes a payment in violation of these provisions is liable to penal sanctions under ss. 109 and 110 of the Act.
28 The existence of these statutory rules applicable to the administration and wind up of the plan disposes of the arguments the appellants have drawn from the 1986 decision in Newberry. In that case, the Court of Appeal held that the Régie des rentes du Québec did not have the authority to intervene in the parties’ contractual relationship and that legal debate in this respect was a matter for the civil courts (p. 1894). Based on that decision, the appellants submit that the Superintendent could not rule on the application of s. 74 of Ontario’s Pension Benefits Act. With respect, the statutory provisions cited above expressly confer such authority, the exercise of which is binding on the pension plan administrator. By virtue of a delegation of authority that has never been contested or revoked, these provisions applied to plan members employed in Quebec.
29 It should also be noted that the decision in Newberry was based on a narrow view of the interpretative powers of administrative tribunals and bodies from which this Court has since clearly distanced itself. It will suffice to mention a few recent decisions, all of which recognize the need for an expansive and flexible interpretation of these interpretative and decision-making powers: Weber v. Ontario Hydro, [1995] 2 S.C.R. 929; Nova Scotia (Workers’ Compensation Board) v. Martin, [2003] 2 S.C.R. 504, 2003 SCC 54; Vaughan v. Canada, [2005] 1 S.C.R. 146, 2005 SCC 11. From this perspective, a consideration of the precedential value of Newberry requires some circumspection, if the decision does in fact continue to be relevant. I see no need to analyse this question any further. This appeal does not concern the review of a situation governed by Quebec law. Nor does it concern either the interpretation of the provisions setting out procedures for submitting administrative questions relating to the application of Quebec’s Supplemental Pension Plans Act (s. 254) to the civil courts or a review of the mechanics and scope of appeals against, or judicial review of, decisions relating to the application of that Act.
30 The instant case concerns a decision of the Superintendent of Pensions, who, pursuant to powers clearly delegated to him in the memorandum of reciprocal agreement, denied early retirement benefits to plan members employed in Quebec. As the Superintendent of Financial Services pointed out in his argument, it was necessary to consider the situations of all plan members when calculating the benefits owed to each one of them, and to assess the impact of paying those benefits on the financial stability of the plan and the protection of the benefits to be paid. The approval of the wind up report left the employer no choice. Under the Act, it could not even pay benefits other than in accordance with the Superintendent’s decision. Serious difficulties accordingly arose in relation to the effect of the decision on the legal proceedings instituted by the appellants in Quebec. These difficulties concerned, first, the very admissibility of the action in light of the principles relating to res judicata in civil law and issue estoppel at common law, and the principles of public law applicable to the role of the courts. The principles in question discourage collateral attacks on judicial or quasi-judicial decisions in order to preserve the finality of the decisions. In the alternative, a proper application of the principle of forum non conveniens, under art. 3135 C.C.Q., would at any rate have led the Quebec Superior Court to decline jurisdiction.
E. The Finality of the Decision of Ontario’s Superintendent of Pensions and the Admissibility of the Appellants’ Action
31 As I mentioned above, I do not question the Quebec Superior Court’s jurisdiction to hear an action in which benefits are claimed under a contract of employment in the absence of any debate regarding the existence and exercise of an arbitral jurisdiction under the relevant labour legislation. However, the action must be admissible in law. The right to retirement benefits claimed by the appellants exists only if the payment of early retirement benefits is authorized by the Superintendent. The action against Stelco has no legal basis except insofar as the employer is authorized and required to pay the benefits claimed. The employer may not pay them unless such payment is authorized by the Superintendent’s decision approving the wind up report. In the absence of such an authorization, the debt claimed from the employer does not exist. The early retirement benefits cannot be claimed if the Superintendent’s decision still applies. The problem cannot be circumvented by presuming that it does not exist. I repeat that no appeal or judicial review proceedings have been instituted in Ontario. In order to consider the merits of the appellants’ action, the Quebec courts would now have to treat the decision as if it were already non-existent or invalid, or quash it themselves.
32 At this stage of the proceedings, from the perspective of Quebec law, the problem is one of res judicata. The three necessary elements of identical cause, object and parties are present. The conditions for applying this principle pursuant to art. 2848 C.C.Q. and the case law have been met (see Rocois Construction Inc. v. Québec Ready Mix Inc., [1990] 2 S.C.R. 440). The Superintendent had jurisdiction to make the decision. The Quebec action implicitly requires a review of the question of the right to pension benefits, on which the Superintendent has already ruled. Moreover, the appellants were parties to the process before the Superintendent. The content of the wind up report and the benefit calculations were sent to them, and it was open to them to raise any objections they might have had. Lastly, the principle of res judicata applies not only to the decisions of courts, but also to the decisions of administrative tribunals and bodies (see J.-C. Royer, La preuve civile (3rd ed. 2003), at pp. 567-68). In the instant case, the main debate between the parties thus concerns a question that was already settled by the Superintendent, since the action cannot succeed unless his decision is varied or quashed. In this context, the principle of res judicata, which is in fact codified for the purposes of Quebec private international law in art. 3137 C.C.Q., bars the suit even if Quebec law applies to this aspect of the case.
33 Insofar as a decision of an administrative body created by the Ontario legislature is in issue, in a case within that body’s jurisdiction under Ontario law, the common law rules governing issue estoppel lead to the same result regarding the admissibility of the action. This Court recently considered the conditions for this type of estoppel in Danyluk v. Ainsworth Technologies Inc., [2001] 2 S.C.R. 460, 2001 SCC 44, and Toronto (City) v. C.U.P.E., Local 79, [2003] 3 S.C.R. 77, 2003 SCC 63. In City of Toronto, Arbour J., citing the reasons of Binnie J. in Danyluk, set out three preconditions for issue estoppel:
Issue estoppel is a branch of res judicata (the other branch being cause of action estoppel), which precludes the relitigation of issues previously decided in court in another proceeding. For issue estoppel to be successfully invoked, three preconditions must be met: (1) the issue must be the same as the one decided in the prior decision; (2) the prior judicial decision must have been final; and (3) the parties to both proceedings must be the same, or their privies (Danyluk v. Ainsworth Technologies Inc., [2001] 2 S.C.R. 460, 2001 SCC 44, at para. 25, per Binnie J.). [Emphasis in original; para. 23.]
34 These three preconditions are met in the case at bar. The issue, that is, the principal object of the case, is the same as the one decided by the Superintendent. The parties were also involved in the approval procedure for the partial wind up. And the decision that was rendered is final in nature. Also, in my view, the facts of the instant case would not justify the courts in exercising their residual discretion to decline to apply estoppel. Not only the appellants’ failure to make use of the usual means of redress — appeal or judicial review — but also the situation in which any other decision would place the respondent, militates against this. Stelco could find itself in the strange position of having to comply with the Superintendent’s decision under Ontario law while at the same time being required to execute a Quebec judgment to the contrary, at least with regard to former plan members from Quebec. As the intervener points out, such a result could call into question the benefit calculations for all the retirees and the measures taken to ensure the plan’s solvency.
35 The situation in which the respondent could find itself if the principles of res judicata or issue estoppel were not applied illustrates the danger of a collateral attack and of the failure to avail oneself in a timely manner of the recourses against decisions of administrative bodies or courts of law that are available in the Canadian legal system. The stability and finality of judgments are fundamental objectives and are requisite conditions for ensuring that judicial action is effective and that effect is given to the rights of interested parties. Modern adjective law and administrative law have gradually established various appeal mechanisms and sophisticated judicial review procedures, so as to reduce the chance of errors or injustice. Even so, the parties must avail themselves of those options properly and in a timely manner. Should they fail to do so, the case law does not in most situations allow collateral attacks on final decisions (City of Toronto, at paras. 33-34), which Arbour J. likened to a form of abuse of process (para. 34) (see also: Quebec (Attorney General) v. Laroche, [2002] 3 S.C.R. 708, 2002 SCC 72, at paras. 73-76). In the case at bar, the type of action brought by the appellants necessarily entailed an impermissible collateral attack on the Superintendent’s decision, as can be seen from the analysis regarding res judicata. Consequently, the action was inadmissible.
F. Forum Non Conveniens
36 In the alternative, if, in the circumstances of the instant case, the Quebec courts had found that it was still legally possible to contest the Superintendent’s decision, a proper application of the doctrine of forum non conveniens would have justified them in declining jurisdiction. As we know, after a period of uncertainty and debate, the civil law of Quebec recognized the existence and applicability of this doctrine in the implementation of its conflict of laws rules (G. Goldstein and E. Groffier, Droit international privé, vol. I, Théorie générale (1998), at pp. 308-12). Moreover, the Quebec legislature expressly accepted the doctrine by codifying it in art. 3135 C.C.Q.:
3135. Even though a Québec authority has jurisdiction to hear a dispute, it may exceptionally and on an application by a party, decline jurisdiction if it considers that the authorities of another country are in a better position to decide.
37 The doctrine of forum non conveniens confers on the court a supplementary power to decline to exercise a jurisdiction that is otherwise granted to it by one of the conflict of laws rules provided for in the C.C.Q. The law attaches an exceptional character to this power, although the exercise of the power is not regarded as unusual (Spar Aerospace Ltd. v. American Mobile Satellite Corp., [2002] 4 S.C.R. 205, 2002 SCC 78, at paras. 77 and 81; GreCon Dimter inc. v. J.R. Normand inc., [2005] 2 S.C.R. 401, 2005 SCC 46, at para. 33). Furthermore, the judge may exercise it only at the request of a party, and not on his or her own initiative. The application of this doctrine requires a review of various, and variable, criteria. On the basis of the Quebec Court of Appeal’s decision in Lexus Maritime inc. v. Oppenheim Forfait GmbH, [1998] Q.J. No. 2059 (QL), at para. 18, Professor J. A. Talpis enumerated the most important factors as follows:
The criteria most commonly used in the Quebec jurisprudence on forum non conveniens include: 1) the residence and domicile of the parties, 2) the location of the natural forum, 3) the location of the evidence, 4) the place of residence of the witnesses, 5) the location of the alleged conduct and transaction, including the place of formation and execution of the contract, 6) the existence of an action pending in another jurisdiction between the same parties (in an imperfect lis pendens situation) and the stage of such proceeding, 7) the law applicable to the dispute, 8) the ability to join all parties, 9) the need for enforcement in the alternative court, 10) the juridical advantages for the plaintiff, and 11) the interests of justice. As the Quebec Court of Appeal observes in Oppenheim Forfait G.M.B.H. v. Lexus Maritime inc., these and other less frequently used criteria, have evolved from the jurisprudence in Quebec as well as in the common law jurisdictions. [Footnotes omitted.]
(J. A. Talpis, “If I am from Grand-Mère, Why Am I Being Sued in Texas?” Responding to Inappropriate Foreign Jurisdiction in Quebec-United States Crossborder Litigation (2001), at pp. 44-45; see also Spar Aerospace, at para. 71.)
38 In this appeal, the application of the most relevant factors would have led a Quebec court to recognize that an Ontario court would be in a better position to hear the action. Indeed, the principal object of the case is the judicial review of the decision of an Ontario administrative body that has been delegated the authority to administer the pension plan even with regard to plan members in Quebec. The natural forum for reviewing this body’s decisions would appear to be an Ontario court, if only to reduce the risk of conflicting decisions and to adhere to the principle of administration set out in the memorandum of reciprocal agreement. This conclusion is all the more compelling in that the challenge by the Quebec plan members could affect the plan as a whole and the rights of the other members.
III. Conclusion
39 Since the action as brought is inadmissible, there is no need to consider the other issues raised by the parties. Consequently, for the reasons set out above, I concurred with my colleagues that the appeal should be dismissed with costs.
Appeal dismissed with costs.
Solicitors for the appellants: Rivest Schmidt, Montréal.
Solicitors for the respondent: McCarthy Tétrault, Montréal.
Solicitor for the intervener: Ministry of the Attorney General, Toronto.