Kerry (Canada) Inc. v. DCA Employees Pension Committee, 2007 ONCA 416 (CanLII)
Fasken Martineau, representing the defendant, Kerry Canada, against former company employees, in Kerry (Canada) Inc. v. DCA Employees Pension Committee, won an important ruling, overturning a Divisional Court decision.
At issue were pension plan administration expenses, contribution holidays and the conversion in 2000 of the employees' pension plan from a defined benefit plan to a defined contribution plan. The Court of Appeal found that the plan's documentation did not exclude Kerry from paying expenses from the fund as the payment of those expenses was not inconsistent with the language of the plan and trust documents, and therefore the earlier Divisional Court decision was reversed. In addition, the court ruled that it is permissible to use surplus funds from the defined benefit component of the plan to fund contributions in respect of the defined contribution component of the same plan. Contribution holidays taken with respect to the defined benefit component of the plan were therefore found to be valid.
This decision will have a significant impact on the actions of employers in managing employee pension plans and as a result has received extensive media exposure (particularly in the pensions and benefits area) as well as attention from the pension law bar.
Kerry Canada Inc. was represented in the Ontario Court of Appeal, the Divisional Court and before the Financial Services Tribunal by Ronald J. Walker and Christine P. Tabbert.
On January 31, 2008, the Supreme Court of Canada granted the DCA Employees Pension Committee leave to appeal from the Ontario Court of Appeal's unanimous decision in Kerry (Canada) Inc. v. DCA Employees Pension Committee (2007), 86 O.R. (3d) 1, 282 D.L.R. (4th) 227. Costs of the leave application were awarded to the employees in any event of the cause. The appeal is not yet scheduled, but will most likely be heard in late autumn 2008.
Ronald Walker and Christine Tabbert continue to represent Kerry with the assistance of Scott Rollwagen (research) and Peggy McCallum (pensions & benefits).