BCCA Overturns Certification of a Pension Class Proceeding

In reasons for judgment dated January 11, 2007, the British Columbia Court of Appeal overturned the decision of Justice Jon Sigurdson of the British Columbia Supreme Court, which had certified as a class action a major pension dispute involving one of BC's largest public-sector pension plans. In Williams v. College Pension Board, 2007 BCCA 19, Justice John Hall, writing for a unanimous bench, ruled that the pleadings failed to disclose any valid cause of action that could result in an award of damages. As the plaintiff class had expressly chosen to limit their remedy to damages, he allowed the appeal.

The plaintiff class were retired members of the College Pension Plan, which is constituted under the Public Sector Pension Plans Act, S.B.C. 1999, c. 44. The applicable legislation required the trustees to make amendments to the plan if directed by the plan partners (the provincial government, the Post Secondary Employers' Association, the College Institute Educators' Association and the British Columbia Government and Service Employees' Union) and if the amendments were not otherwise contrary to their fiduciary obligations. The dispute in the case arose from amendments made as a result of a direction from the plan partners to amend the plan to allocate $120,000,000 of an actuarial surplus as of August 31, 2000.

At the direction of the plan partners, the trustees amended the plan to allocate the actuarial surplus with $75,000,000 retained to protect all plan members from adverse actuarial experience, $20,000,000 to insulate active members from contribution increases for five years, $20,000,000 to insulate the employers from contribution and rate increase for five years and $5,000,000 to retired members. The retired members alleged that the allocation of the actuarial surplus denied them an allocation of benefits proportionate to benefits granted to the active members and the employers. They alleged the trustees breached their fiduciary duty of even-handedness and sought general and punitive damages.

Justice Hall found that the plaintiff had failed to establish a cause of action, which is a prerequisite to certification under the Class Proceedings Act, R.S.B.C. 1996 c. 50. He found that if a court at trial were to find that the regulations amending the plan to implement the partners' agreement were invalid, then such amendments were void from their inception. As a result, the striking down of these regulations was an inescapable corollary of a successful allegation of breach of fiduciary duty by the trustees. Therefore, if the plaintiff class succeeded in proving their allegations, no action for damages was maintainable because the implementing regulations would be swept away.

The College Pension Board of Trustees was represented by Craig Ferris, Murray Campbell and Lisa Chamzuk of Lawson Lundell LLP.

One of the trustees, Jack Bradshaw, was separately represented by John Elwick and Gregory Pun of Alexander Holburn Beaudin & Lang LLP.

The plaintiff class was represented by David Klein of Klein Lyons and Mark Zigler of Koskie Minsky LLP.
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