Date: 19991109
Docket: T-1296-97
| BETWEEN: |
SYDNEY JEAN SMITH
Applicant
and
THE ATTORNEY GENERAL OF CANADA,
THE PRESIDENT OF TREASURY BOARD AND
THE MINISTER OF NATIONAL DEFENCE
Respondents
REASONS FOR ORDER AND ORDER
BLAIS J.
[1] This is an application for judicial review of the decision of Lise Guevremont of the Department of National Defence, dated May 15, 1997 wherein the applicant's application for division of pension benefits was denied.
[2] The applicant, Sydney Jean Smith was married to Garnet William Smith, a member of the Canadian Military in 1963. In 1989, the applicant signed a property settlement wherein she gave up her entitlement to her husband's pension, his severance pay and any entitlement to support, for the sum of $14, 000.00.
[3] Mr. Smith died in 1993, without ever retiring or collecting pension. The minimum death benefits was paid out to his son Duane Smith.
[4] Due to her dire financial situation, the applicant brought an application for support under the Succession Law Reform Act to allow a division of pension.
[5] On March 19, 1996, the applicant's counsel wrote to Ms. Guevremont, Officer-in-charge at the Directorate of Pay Services, requesting that no further pension benefits be paid out pending the outcome of the applicant's application. The applicant learned that no further benefits were payable since they had already been paid out to Duane Smith in early 1996.
[6] The applicant received the application for division of pension on March 27, 1996 and sent it on April 2, 1996. According to the respondent, the application was incomplete. By letter dated July 26, 1996, from Ms. Guevremont, the applicant was informed that her application for a pension division could not be processed because she applied too late, the deadline was March 31, 1996.
[7] On October 3, 1996, Mr. Justice Sirois ordered the division of pension.
[8] On January 13, 1997, the applicant sent a letter to Ms. Guevremont asking her to reconsider her decision. By letter dated May 15, 1997, Ms. Guevremont refused the application.
THE APPLICANT'S SUBMISSIONS
[9] The applicant submits that the purpose of the Pension Benefits Division Act (PBDA) is to facilitate the division of the pension when ordered by the court or agreed upon for property settlement. She submits that section 6 of the Pension Benefits Division Regulations (PBDR) is in conflict with the provisions and purpose of the PBDA and is therefore invalid.
[10] She argues that there is no authority under the PBDA to refuse to divide the pension because the application was received after March 31, 1996.
THE RESPONDENTS SUBMISSIONS
[11] The respondents submit that paragraph 16(m) of the PBDA, authorizes the Governor in Council to prescribe the time limit under section 6 of the PBDR.
[12] They explain that at this point in time and at the time that the applicant applied for division, under the general valuation rule provided for under subsection 14(1) of the PBDR, there were and would be no pension benefits to value, and a division under the PBDA could not occur. The value of the pension benefits after payment for the children, was zero.
[13] However, subsection 14(3) of the PBDR creates an exception, it creates a value for the member's pension benefits when all of the pension benefits have been paid and there would ordinarily have been nothing left to value. This value represents an unfunded benefit and represents an additional liability to the pension plan.
[14] The respondent submit that the time limit provides some finality in determining pension payments payable in respect of deceased members, since a division of pension benefits affects the value and payment of other benefits under various pension plans. The imposition of a limitation period is not arbitrary. Rather, it is a reasonable and necessary feature of the legislation in question which essentially establishes administrative procedures.
[15] They raise the issue of the application being incomplete. It wasn't until a court order was provided, on April 15, 1997, one year after the 18 month period prescribed by the PBDR has expired, that the application was according to the PBDA.
ISSUE
[16] Is paragraph 6(1)b) of the PBDR ultra-virès?
ANALYSIS
[17] The applicant is a widow who was refused pension division after 26 years of marriage, due to a regulation adopted in 1994.
[18] In Steve Dart Co. v. Canada (Board of Arbitration), [1974] 2 F.C. 215, the Court held :
| That section grants the additional right to make regulations to carry out the purposes and provisions of the Act, but such purposes and provisions must be clearly expressed in or contained within or flow by necessary implication from other sections of the Act. It would permit the making of ejusdem generis Regulations as those authorized in the other sections of the Act providing for the issuing of Regulations. It would also permit a Regulation required to carry out effectively a clearly expressed provision of the Act not falling within one of the other sections authorizing the making of Regulations; it certainly does not provide the right to make Regulations covering a matter which is not even remotely referred to in the Act. |
[19] In order to determine whether the Regulations were adopted in conformity with the Act. It is imperative to examine the purpose of the Act.
[20] The purpose of the Act as set out in the Regulatory Impact Analysis Statement is to provide a mechanism for making payments out of the pension funds, not to fix the value of the pension as between spouses in property settlement made upon the breakdown of their relationship.
[21] Therefore, the Act's primary and only purpose is to act as a mechanism for pension division. Since the member makes pension contributions all his life, the act was set to facilitate the division of the pension as stipulated to the interested parties.
[22] In Dubé v. Canada (Superannuation Directorate), [1996] A.C.F. no 341, Justice Nadon held :
| In my view, the purpose of an application submitted under subsection 4(1) is not to ask the Minister to divide the pension benefits but to ask the Minister to approve the division ordered, in the case at bar, by the Superior Court of Quebec. |
[23] In the present case, the division of pension benefits was approved by Justice Sirois, but the Minister refused to approve it pursuant to the Regulations.
[24] The respondent raises the cases of CKYO Ltd. v. The Queen, [1979] 1 S.C.R. 2, and Re Westinghouse Electric and Duquesne Light Company et al (1977), 16 O.R. (2d) 273, to conclude that the regulation was made pursuant to the Act. However, these cases can be distinguished from the present case, since they were adopted according to the purpose and object of the Act, which was not the case here.
[25] It seems to me that paragraph 6(1)b) of the PBDR defeats the purpose of the Act, as it purports to act as a bar to the pension division stipulated in the Act.
[26] Furthermore, the Act provides for time limits such as the one found in subsection 5(3) in relation to the time the notice is deemed received. Another time limit is found in subsection 6(1), requiring a party who objects to the division to submit a notice within sixty days. These time limits do not act as an impediment to the right to divide the pension.
[27] Had the legislator intended to provide a time bar, he would have included it in the Act as he did in sections 5 and 6.
[28] In Canada (Attorney General) v. Canada (Public Service Staff Relations Board), [1977] 2 F.C. 663 (P.S.S.R.B.) Justice Le Dain held :
| In my opinion there must be explicit statutory authority for the imposition, by regulation, of a time limit within which a right conferred by statute may be exercised. |
[29] In Alvarez v. Minister of Manpower and Immigration, [1979] 1 F.C. 149, the Federal Court of Appeal held :
| Rule 19, ... purports to have been made in the exercise of this authority. It must be conceded that the Rule is broadly speaking one "governing the activities of the Board and the practice and procedure in relation to appeals", but in my opinion it is one that is inconsistent with section 7(3) in so far as it limits the time within which a request for reasons may be made, and as such is ultra vires. It abridges the right which is conferred in unqualified terms by section 7(3). Rule 19 suggests that a request for reasons may be made only after the disposition of an appeal. This in itself is clearly inconsistent with section 7(3), which implies no such limitation. Had Parliament intended that there be a time limit within which a request for reasons may be made it would presumably have expressly authorized the Board to fix such a limit as it did in section 19 of the Act with respect to notice of appeal. It may well be desirable, from a practical point of view, that there be such a time limit, but the power to fix one cannot in my opinion be found in the terms of section 8(1). |
[30] The respondents submit, firstly that the scope of the legislation is different in the P.S.S.R.B. and the Alvarez case, and that there is no consideration as to whether the statute is skeletal, that it was required to be filled in by the Governor in Council.
[31] I cannot accept this argument. The statute is not skeletal, it sets out specific details regarding the application for division, such as who can apply, the circumstances in which the application may be made, the calculation of period of separation, the form of the application etc... It provides specific details about the division, such as the approval of the division, the grounds upon which an application must be refused, the amount of the division, the adjustment, the determination of the period subject to division etc.
[32] It also sets out that the regulations are to prescribe the circumstances under which a person may apply or act on behalf of another, determine the terms and conditions for withdrawing an application, prescribe the qualified retirement savings vehicles and making the adaptations to the pension plans necessary because of a transfer.
[33] Secondly, the respondents submit that unlike the P.S.S.R.B and the Alvarez case, where a right created by a statute was being limited by the time set by Regulations, in the present case, the time set in the Regulations limits a right created by Regulations.
[34] In my view, the respondents fail to make a distinction between the right to a pension division as set out in sections 4, 7 and 8 of the Act and the value of the pension as set out in the Regulations. It is the right to a pension division that is being denied in this case, a right created by statute.
[35] Thirdly, the respondents submit that the provision found in paragraph 16m) in the present case is much broader than those found in P.S.S.R.B. and Alvarez. They argue that the words used in the present case, namely "as the General in Council may consider necessary" is broader than the wording used in section 19 of the P.S.S.R.B case or section 8 of the Alvarez case.
[36] The fact that one provision is broader than the other does not justify the fact that the regulation adopted pursuant to it, is contrary to the purpose of the Act.
[37] I find the paragraph 6(1)b) of the PBDR to be ultra-virès.
[38] For these reasons, the application for judicial review is granted and the matter is referred back for reconsideration.
Pierre Blais
Judge
OTTAWA, ONTARIO
November 9, 1999