Supreme Court Issues Pension Law Decision

On August 7, 2009, the Supreme Court of Canada released its decision in Nolan v. Kerry (Canada) Inc., 2009 SCC 39. In its ruling, the court dismissed the appeal of former employees of food maker Kerry (Canada) Inc. to overturn an Ontario Court of Appeal decision allowing the company's pension plan administrators to use the surplus in the defined benefit part of the employee pension plan for contributions to the defined contribution part.

The court also clarified when expenses may be paid appropriately from a pension fund.

The court also considered the standard of review applicable to the Financial Services Tribunal and determined that, apart from issues of pure statutory interpretation or wide-ranging jurisdictional issues, its decisions were to be reviewed on the basis of reasonableness due to the tribunal's expertise.

In addition, the court awarded costs against the appellants and provided guidance on when it would be appropriate for a court to order the costs of a party to the litigation to be payable out of the pension fund.

The case has been closely watched over the course of several tribunal and court decisions by both the pension Bar and the pension and benefits industry, and has wide implications for employers, pension plan administrators and employees of Canadian companies.

Koskie Minsky LLP represented the appellant employees with a team comprised of Ari Kaplan, Kirk Baert and David Rosenfeld.

Fasken Martineau DuMoulin LLP represented Kerry (Canada) Inc., the respondent, with a team comprised of Ronald Walker and Christine Tabbert (litigation), Peggy McCallum (pensions and benefits) and Scott Rollwagen (research).

Deborah McPhail of the Ministry of the Attorney General (Ontario) at the Financial Services Commission of Ontario represented the Superintendent of Financial Services, also a respondent.

Kathryn Bush and Jeff Galway of Blake, Cassels & Graydon LLP represented the Association of Canadian Pension Management and Steven Barrett at Sack Goldblatt Mitchell LLP represented the Canadian Labour Congress, both intervenors in the case.