T-1516-00
2003 FCT 577
William J. Eddie (Applicant)
v.
The Attorney General of Canada and Carmen Louise Eddie (Respondents)
Indexed as: Eddie v. Canada (Attorney General) (T.D.)
Trial Division, Layden-Stevenson J.--Toronto, April 29: Ottawa, May 12, 2003.
Pensions -- Judicial review of Adjudicator's decision denying RCMP officer's grievance of pension division under Pension Benefits Division Act (PBDA) following marriage break-up -- Separation agreement provided for 50/50 pension division -- PBDA report estimating wife to get $14,929 but she actually received $37,951.25 -- Reason: between separation and final benefit calculation applicant's pension vested on attaining 10 years' service so value greatly increased -- Application dismissed -- Correctness appropriate review standard -- Applicant had standing -- PBDA establishes distribution scheme for marital property different from that under provincial legislation -- Provides transfer mechanism, creates no substantive rights -- Actuarial valuation of pension under provincial law usually different from PBDA valuation -- PBDA valuation method serving government's own purposes -- Applicant's argument: separation agreement not providing for division of entitlements accruing after separation -- Valuation date different under PBDA than under substantive law -- While separation agreement made reference to PBDA estimate, did not specify transfer amount -- Applicant had lawyer when negotiated separation agreement, knew pension vesting in four months, no PBDA division until separated one year.
RCMP -- Force member grieving dollar value of pension benefits paid to wife, from whom separated, upon division under Pension Benefits Division Act (PBDA) -- Level I Adjudicator rejecting grievance for want of standing as impugned decision that of authorities outside Force -- Level ll Adjudicator dismissing appeal for lack of standing and on merits -- Correctness appropriate judicial review standard -- Applicant did have standing -- Under RCMPA, s. 31(1), any member aggrieved by decision may grieve -- Grievance process extends to members' terms, conditions of employment -- Pension plan within terms, conditions of employment -- Judicial review application dismissed on merits -- Applicant's pension vesting on 10 years' service between date of separation, PBDA valuation day -- Value of pension greatly increased -- PBDA correctly applied -- Adjudicator correctly found separation agreement provided pension benefits split in half.
This was an application for the judicial review of the decision of a level II Adjudicator under the Royal Canadian Mounted Police Act (RCMPA) upholding the level I decision denying applicant's grievance as one not grievable under the Act.
The applicant joined the RCMP in 1987, a year and one half after his marriage. The spouses separated in 1996. The separation agreement provided for an at-source division of applicant's pension on a "50/50 basis". Their mutual belief was that Ms. Eddie's share would amount to about $15,000 but when the distribution was effected, she received $37,951.25, which sum was transferred directly into a locked-in RRSP in her name. Applicant filed a grievance. Shortly after the separation, applicant had asked for a Pension Benefits Division Act (PBDA) report. It indicated that the transfer amount in Ms. Eddie's favour was $14,929.52 as of September 26, 1996. The applicant's pension had not yet vested, as his period of service was still under 10 years. The report did contain a warning that it was "only an estimate" but added that the actual value, at the date of formal division, would be "similar to" the estimate. The division of applicant's pension was covered in the separation agreement. It made reference to the PBDA estimate and stated that the pension would be divided on a 50/50 basis the wife's share transferred as a lump sum into a retirement savings vehicle of her choice. When the pension division was calculated, it was determined that Ms. Eddie was entitled to $37,951 and that amount was transferred to her financial institution for deposit to a locked-in financial vehicle.
Applicant's position was that his intention had been that she should get only the amount mentioned in the PBDA estimate. When an impasse was arrived at following extensive communications, applicant grieved but the level I Adjudicator rejected it for want of standing. Under the RCMPA, members could grieve a discretionary decision made in the administration of the affairs of the Force but not decisions made by authorities outside the Force in compliance with legislation. The matter complained of was governed by the PBDA, a federal statute over which the Force had no discretionary authority. This decision was affirmed upon appeal to the level ll Adjudicator.
Held, the application should be dismissed.
The issues were: (1) what was the appropriate standard of review; (2) whether the applicant had standing to initiate a grievance; (3) if he had standing, what was the appropriate PBDA provision applicable to the pension distribution?
There was here a partial privative clause and this being a level ll decision, the statutory review mechanism would suggest considerable deference. On the other hand, a low degree of deference should be accorded in that the decision-maker had no greater expertise than had the Court as to questions of standing and the statutory provision to be applied. The third factor, the purpose of the legislation, involved the interplay of two statutes with different purposes. The issues were not polycentric in nature. This militated in favour of a low level of deference. The problem for resolution could be characterized as a pure question of law or perhaps as one of mixed fact and law that was law-intensive. This suggested a very low level of deference. On balance, correctness was the appropriate review standard.
On the issue of standing, marital property law falls under provincial jurisdiction. Generally speaking, provincial legislation provides for an equal division of marital property upon marriage breakdown. The PBDA establishes a distribution scheme different from that envisaged by the provincial legislation. It creates no substantive rights, but merely provides a mechanism for transferring monies out of federal plans. An application for pension benefit division cannot be made in the absence of a separation agreement or court order. The maximum amount transferable to a non-member spouse is 50% of the value of the pension benefit which relates to the period of cohabitation. The actuarial valuation of a pension under provincial legislation will most often differ from a PBDA valuation. Indeed, it has been held in Ontario that PBDA "value" is totally unreliable for Family Law Act purposes. The PBDA valuation method is intended to serve the federal government's own specific purposes, which include maintaining the plan's integrity and to benefit members as a whole. Applicant's complaint did not relate to the substantive law but rather concerned the choice of the appropriate provision of the PBDA under which the benefits were distributed. Under subsection 31(1) of the RCMPA any member aggrieved by any decision may present a grievance and the grievance process extends to the terms and conditions of employment of members. Pension plans fall within terms and conditions of employment of members. The Minister's application of the PBDA does not fall within the jurisdiction under which substantive law issues are determined. The level ll Adjudicator erred in law in ruling that applicant lacked standing.
Applicant's argument was that the separation agreement did not provide for a division of entitlements accruing after the date of separation. The officials thus erred in interpreting the separation agreement as requiring an equal division of the vested value of his pension. The proper valuation date was the date of separation.
Under the substantive law, the valuation date is the date of separation but it is otherwise under the PBDA. Under that statute, "valuation day" is the day that the pension is valued for distribution, that is to say, the calculation day. On the PBDA valuation day, applicant's pension was vested and it was valued accordingly. His argument as to valuation date could not succeed.
The PBDA does contemplate that pension division can be achieved by other means and if a lump sum amount is specified in relation to a PBDA division, the Minister will transfer the amount specified so long as it is less than 50% of the benefit's value. "Lump sum amount" in PBDA subsection 8(4) means a specified amount. The separation agreement did not, however, contain a specified amount for transfer. It merely referred to the PBDA estimate report and did not specify that the estimated value contained in the report was to be used as a lump sum amount for pension transfer purposes. A separation agreement, although arising in a unique legal context, is nonetheless a contract and the Adjudicator did not err in concluding that the separation agreement was to the effect that pension benefits were to be split in half.
Applicant's misfortune resulted from the fact that his pension become vested and its value significantly enhanced between the separation date and the date of valuation. But the covering letter with the estimate report made it clear that the division value would be that at "the date of formal division following submission and approval" of a division application. Applicant had a lawyer when he negotiated the separation agreement and must be taken as having known both that, under the PBDA, he had to be separated for one year before a division application could be effected and that his pension would be vesting in just four months.
While the Adjudicator erred in the matter of standing, his decision on the merits was correct, so to remit the matter would be to elevate form over substance.
statutes and regulations judicially
considered
Constitution Act, 1867, 30 & 31 Vict., c. 3 (U.K.) (as am. by Canada Act 1982, 1982, c. 11 (U.K.), Schedule to the Constitution Act, 1982, Item 1) [R.S.C., 1985, Appendix II, No. 5], s. 92.
| Family Law Act, R.S.O. 1990, c. F.3. |
| Pension Benefits Division Act, S.C. 1992, c. 46, Sch. II, ss. 2, 3, 4, 7, 8. |
| Pension Benefits Division Regulations, SOR/94-612, ss. 2(1) "valuation day", 13, 14, 15, 16. |
| Royal Canadian Mounted Police Act, R.S.C., 1985, c. R-10, ss. 31 (as am. by R.S.C., 1985 (2nd Supp.), c. 8, s. 16), 32 (as am. idem; S.C. 1990, c. 8, s. 65). |
| Royal Canadian Mounted Police Superannuation Act, R.S.C., 1985, c. R-11. |
cases judicially considered
applied:
Owusu v. Canada (Minister of Citizenship and Immigration) (2003), 228 F.T.R. 19; 27 Imm. L.R. (3d) 114 (F.C.T.D.).
considered:
Roy v. Canada, [2002] 4 F.C. 451; (2002), 33 C.C.P.B. 118; 93 C.R.R. (2d) 296; 217 F.T.R. 249 (T.D.); Smith v. Canada (Attorney General) (1999), 22 C.C.P.B. 229; 179 F.T.R. 134 (F.C.T.D.); Shafer v. Shafer (1996), 25 R.F.L. (4th) 410 (Ont. Gen. Div.) affd (1998), 37 R.F.L. (4th) 104 (Ont. C.A.).
referred to:
Baker v. Baker (1998), 34 R.F.L. (4th) 364 (B.C.S.C.); Croitor v. Croitor (2001), 192 N.S.R. (2d) 26; 14 R.F.L. (5th) 13 (C.A.); Swan v. Canada (Attorney General) (1998), 167 D.L.R. (4th) 30; 234 N.R. 12; 47 R.F.L. (4th) 282 (F.C.A.); Cornect v. Poirier-Robichaud (2000), 230 N.B.R. (2d) 368; 13 R.F.L. (5th) 363 (C.A.); Parsons v. Parsons (1995), 17 R.F.L. (4th) 267 (Ont. Gen. Div.); Christian v. Christian (1995), 139 N.S.R. (2d) 246; 10 R.F.L. (4th) 302 (S.C.); Miglin v. Miglin, [2003] 1 S.C.R. 303; (2003), 224 D.L.R. (4th) 193; 302 N.R. 201; 171 O.A.C. 201; 34 R.F.L. (5th) 255.
APPLICATION for judicial review of the decision of a level ll Adjudicator under the RCMPA denying a grievance in relation to the division of a pension. Application dismissed.
appearances:
Martha A. Cook, for applicant.
Caroline E. M. Engmann, for respondent the Attorney General of Canada.
No one appearing for respondent Carmen Louise Eddie.
solicitors of record:
Blake, Cassels & Graydon LLP, Toronto, for applicant.
Deputy Attorney General of Canada for respondent the Attorney General of Canada.
The following are the reasons for order rendered in English by
[1]Layden-Stevenson J.: The applicant, William J. Eddie, joined the RCMP on January 30, 1987, approximately 1[frac12] years after his marriage to Carmen Louise Eddie. When Mr. Eddie and his wife separated in September 1996, they negotiated a separation agreement to effect a resolution of all issues arising out of their marriage, including a division of property. The property included, among other things, the applicant's RCMP pension. The separation agreement, dated October 26, 1996, executed by Mr. Eddie on November 6, 1996 and by Ms. Eddie on November 20, 1996, provided for an at-source division of the pension on a "50/50 basis". At that time, both Mr. Eddie and his wife believed that Ms. Eddie's share of the pension would be approximately $15,000. When the distribution was effected, her share amounted to $37,951.25 and it was the latter amount that was transferred directly into a locked-in RRSP in her name. Mr. Eddie disagreed with the amount of the distribution made to his former wife and filed a grievance. His grievance was denied at two levels and he now seeks judicial review of the level II Adjudicator's decision dated June 23, 2000.
INTRODUCTION
[2]The Pension Benefits Division Act, S.C. 1992, c. 46, Sch. II (the PBDA) provides a mechanism to divide at-source, between spouses or former spouses following marriage breakdown, pensions provided by a number of federal statutes enumerated in section 2, including the Royal Canadian Mounted Police Superannuation Act, R.S.C., 1985, c. R-11 (the RCMPSA). Since Mr. Eddie's pension is governed by the provisions of the RCMPSA, any at-source division in relation to his marriage breakdown falls within the purview of the PBDA.
FACTS
[3]Mr. Eddie began making contributions to his RCMP pension plan immediately upon joining the force in January 1987. In accordance with the provisions of the RCMPSA, his pension vested on January 30, 1997, upon completion of 10 years of service. Mr. Eddie and his wife separated on September 1, 1996. At that time, or shortly thereafter (the specific date was not provided), he submitted a request for a PBDA information report. He later received a PBDA estimate report along with a covering letter from the pay and benefits specialist of the Compensation Section. The PBDA estimate report contains a summary of Mr. Eddie's pension profile (contributions and annuity entitlement) and indicates a transfer amount (in favour of his spouse) of $14,929.52 as of September 26, 1996. The report specifies that, "the member is not vested at the date of division". The cover letter contains a brief summary of the report, refers to an enclosed "information document that describes the calculations that apply in determining the amount payable to the spouse/former spouse and explains the nature of the data that is being provided" (the information document was not included in the application record), and concludes with the following paragraphs:
The amount of the pension division shown on the attached report is only an estimate of the maximum amount that could be transferred from a specific date. It is based on the entitlements of the member, as defined by the RCMP Superannuation Act (RCMPSA), as those entitlements were at the time that the report was prepared; the value is calculated over the period of time indicated on the Statutory Declaration (or Court Order or Spousal Agreement) you provided.
An actual division value would be based on salary, service and contribution data as at the date of formal division following submission and approval of an application to divide the pension. The actual value would be similar to, but not the same as, the estimate shown in the attached report.
[4]Subsequently, the separation agreement referred to earlier was negotiated and finalized. Both Mr. Eddie and his wife were represented by counsel. Paragraph 14 of the separation agreement deals with the RCMP pension and provides as follows:
14. PRIVATE PENSIONS
(1) The husband warrants the accuracy of the Pension Benefits Division Act (PBDA) Information Report attached hereto as Schedule "C" which sets out the approximate value for a division of the husband's pension benefits under the Royal Canadian Mounted Police Superannuation Act (RCMPSA). The parties mutually agree to forthwith complete and submit whatever documentation may be required by the Minister in charge of administering the RCMPSA to promptly effect the division on a 50/50 basis of the husband's pension benefits between the husband, as a member of a federal public sector pension plan provided under the RCMPSA, and the wife, as his spouse. Once such division has been approved by the Min ister, the wife's share shall be transferred as a lump sum amount directly to a retirement savings vehicle chosen by the wife. In the event that the husband dies before such equal division can be effected by the Minister, the wife's right to such equal div ision shall be a first lien on the Estate of the husband.
[5]In the fall of 1996, Mr. Eddie signed the necessary documents to enable Ms. Eddie to apply for a division of the RCMP pension. The application was submitted to the RCMP Specialized Services Division of Public Works and Government Services Canada (Specialized Services) by way of registered mail on July 9, 1997. Specialized Services forwarded acknowledgements of receipt to both Mr. and Ms. Eddie on July 15, 1997. On September 6, 1997, Specialized Services forwarded the file to the RCMP National Compensation Policy Centre (NCPC) for interpretation and decision, i.e., review of the application, statutory declaration and supporting documents for compliance with the PBDA and the Pension Benefits Division Regulations, SOR/94-612 (the Regulations). On October 1, 1997, NCPC, by memo to Specialized Services, requested a certified copy of the marriage certificate. Specialized Services in turn, on December 6, 1997, asked the applicant to provide the certificate. By memo to Specialized Services dated February 17, 1998, NCPC approved the pension division. Specialized Services, in correspondence dated March 9, 1998, informed both Mr. and Ms. Eddie that the pension division had been approved, that either could challenge the approval on enumerated grounds (specified in the correspondence), and that the time period within which to challenge was 90 days. Specialized Services performed the pension division calculation on June 9, 1998 and determined that Ms. Eddie was entitled to a transfer of $37,951.25. By correspondence from the pension adviser, RCMP Services Section, dated July 3, 1998, both Mr. and Ms. Eddie were informed of the calculation of the pension division value and the transfer to Ms. Eddie. The transfer to the financial institution specified by Ms. Eddie, for deposit to a locked-in financial vehicle, was effected on July 8, 1998.
[6]Mr. Eddie's position is that it was always his intention that the $14,929.52 referred to in the PBDA estimate report would be transferred to his former wife. That, he says, was his understanding of the agreement. On August 4, 1998, he filed a grievance pursuant to section 31 [as am. by R.S.C., 1985 (2nd supp.), c. 8, s. 16] of the Royal Canadian Mounted Police Act, R.S.C. 1985, c. R-10 (the RCMPA) and requested the return of $23,021.73 to his pension plan (the difference between the amount transferred and the amount delineated in the PBDA estimate report). Over the next 15 months, there were extensive communications, to and from both Mr. Eddie and the IC Benefit Policy Unit of the National Compensation Policy Unit, all of which flowed through the reviewer/analyst of the Grievance Unit. When it became apparent that there was an impasse, Mr. Eddie requested that the matter be forwarded to the Grievance Advisory Board and to a level I Adjudicator.
[7]The decision of the level I Adjudicator, dated January 31, 2000, denied the grievance. After reviewing the file in its entirety, including the various correspondence and memoranda, the Adjudicator determined that the "grievance is denied on an issue of standing". The "Findings & Recommendations" portion of the decision states:
I have read all material submitted by both parties, and reviewed the relevant material. Section 31(1) of the RCMP Act provides members with the right to file a grievance against any decision, act or omission made in the administration of the affairs of the Force, for which no other form of redress is available. This right, however, is restricted to the exercise of discretionary authorities in rendering decisions made in the administration of the affairs of the Force, and does not provide for grievances against decisions made by authorities outside the Force for decisions made in compliance to existing legislation.
The decisions which Cst. Eddie is alleging (sic) were dictated by the provisions of the Pension Benefits Division Act, a federal statute, over which the RCMP has no discretionary authority. Therefore, as the decision was dictated by statute and not one made in the administration of the affairs of the Force, the decision is not grievable under the RCMP Act.
[8]Mr. Eddie sought a further review, under section 32 [as am. by R.S.C., 1985 (2nd Supp.), c. 8, s. 16; S.C. 1990, c. 8, s. 65] of the RCMPA, by a level II adjudicator. His grievance was denied by decision dated June 23, 2000. The level II Adjudicator determined, after a review of the separation agreement, that it was clear that the provision of the separation agreement dealing with the pension did not dictate that $14,929.52 was to be paid, but that the benefit was to be divided equally. He also concurred in the level I decision that there is no standing. The salient portions of the decision are reproduced here.
Specifically, under part 14 of the agreement the division of private pensions, the Grievor agreed to "forthwith complete and submit whatever documentation may be required by the Minister in charge of administering the RCMPSA to promptly effect the division on a 50/50 basis". Schedule "C" to the agreement was a copy of a document indicating that a non-vested payout of 50% would have been $14,929.52. It does not dictate that amount is to be paid as settlement to the agreement. I am placing the emphasis on this agreement, and it is the finding of this Level II Adjudicator that the agreement has the intention to split the benefits in half. . . . I agree with the Level I decision that there is no standing in this matter. The administrator followed not only the particulars of the law but the spirit and intent of the law. As well, there is no merit to the argument put forward by the Grievor.
[9]It is with respect to this decision that Mr. Eddie seeks judicial review. He requests an order that the decision be set aside, that his pension plan be credited with $23,021.73 wrongfully paid to Carmen Louise Eddie and costs.
THE RELEVANT STATUTORY PROVISIONS
Royal Canadian Mounted Police Act
31. (1) Subject to subsections (2) and (3), where any member is aggrieved by any decision, act or omission in the administration of the affairs of the Force in respect of which no other process for redress is provided by this Act, the regulations or the Commissioner's standing orders, the member is entitled to present the grievance in writing at each of the levels, up to and including the final level, in the grievance process provided for by this Part.
. . .
32. (1) The Commissioner constitutes the final level in the grievance process and the Commissioner's decision in respect of any grievance is final and binding and, except for judicial review under the Federal Court Act , is not subject to appeal to or review by any court.
Pension Benefits Division Act
4. (1) A member of a pension plan or a spouse or former spouse of a member may, in the circumstances described in subsection (2), apply to the Minister to divide the member's pension benefits between the member and the spouse or former spouse.
(2) The circumstances in which an application may be made are:
(a) where a court in Canada of competent jurisdiction, in proceedings in relation to divorce, annulment of marriage or separation, makes an order that provides for the pension benefits to be divided between the member and the spouse or former spouse; or
(b) where the member and the spouse or former spouse have lived separate and apart for a period of one year or more and, either before or after they commenced to live separate and apart,
(i) a court in Canada of competent jurisdiction makes an order that provides for the pension benefits to be divided between them, or
(ii) the member and the spouse or former spouse have entered into a written agreement that provides for the pension benefits to be divided between them.
(3) For the purposes of paragraph (2)(b),
(a) the member and the spouse or former spouse are deemed to have lived separate and apart for any period during which they lived apart and either of them had the intention to live separate and apart from the other; and
(b) a period during which the member and the spouse or former spouse have lived separate and apart shall not be considered to have been interrupted or terminated by reason only
(i) that the member or the spouse or former spouse has become incapable of forming or having an intention to continue to live separate and apart or of continuing to live separate and apart of the member's or the spouse's or former spouse's own volition, if it appears to the Minister that the separation would probably have continued if the member or the spouse or former spouse had not become so incapable, or
(ii) that the member and the spouse or former spouse have resumed cohabitation during a period of, or periods totalling, not more than ninety days with reconciliation as its primary purpose.
(4) An application must
(a) be made in writing and contain the prescribed information; and
(b) be accompanied by a certified true copy of the court order or spousal agreement and such other documents as are prescribed.
. . .
7. (1) Subject to subsections (2) and (3), the Minister shall, as soon as is practicable after the Minister is satisfied that an application meets the requirements of this Act, approve the division of the pension benefits for which the application is made.
(2) If an interested party submits a notice of objection to the Minister in accordance with section 6, the Minister shall
(a) where the grounds for objection are the grounds referred to in paragraph 6(2)(a) or (b), defer any decision on the application until such time as the Minister is able to ascertain to the Minister's satisfaction whether those grounds have been established; and
(b) where the grounds for objection are the grounds referred to in paragraph 6(2)(c), defer any decision on the application until the final disposition of the proceedings on which those grounds are based.
(3) The Minister shall refuse to approve the division of the pension benefits if
(a) the application is withdrawn in accordance with the regulations;
(b) where an interested party submits a notice of objection to the Minister in accordance with section 6 and the grounds for objection are the grounds referred to in paragraph 6(2)(a) or (b), the Minister is satisfied that those grounds have been established and that they provide sufficient reason to refuse the division;
(c) where an interested party submits a notice of objection to the Minister in accordance with section 6 and the grounds for objection are the grounds referred to in paragraph 6(2)(c), the court order or spousal agreement is of no force or effect as a result of the proceedings on which those grounds are based;
(d) the period subject to division cannot be determined under subsection 8(2) or (3); or
(e) the Minister is satisfied, based on evidence submitted to the Minister, that it would not be just to approve the division.
(4) Notwithstanding subsection (3), the Minister may approve the division of the pension benefits on the basis of an order of a court issued pursuant to any proceedings referred to in paragraph 6(2)(c).
(5) The Minister may approve the division of the pension benefits notwithstanding that the court order or spousal agreement on which the application is based was made or entered into before the day on which subsection 4(1) comes into force.
8. (1) A division of pension benefits shall be effected by
(a) subject to subsection (4), transferring an amount representing fifty per cent of the value of the pension benefits that have accrued to the member of the pension plan during the period subject to division, as determined in accordance with the regulations, to the spouse or former spouse, if that pension plan is a retirement compensation arrangement, or, in any other case, to
(i) a pension plan selected by the spouse or former spouse that is registered under the Income Tax Act, if that pension plan so permits,
(ii) a retirement savings plan or fund for the spouse or former spouse that is of the prescribed kind, or
(iii) a financial institution authorized to sell immediate or deferred life annuities of the prescribed kind, for the purchase from that financial institution of such an annuity for the spouse or former spouse; and
(b) adjusting, in accordance with the regulations, the pension benefits that have accrued to the member of the pension plan under that pension plan, notwithstanding the provisions of that pension plan or the Act under which it is established or by which it is provided.
(2) For the purposes of subsection (1) but subject to subsection (3), the period subject to division is
(a) the period specified by the court order or spousal agreement as the period during which the member of the pension plan and the spouse or former spouse cohabited; or
(b) where the court order or spousal agreement does not specify a period as described in paragraph (a), such period as may be determined by the Minister, on the basis of evidence submitted by either of the interested parties or by both, as being the period during which the member of the pension plan and the spouse or former spouse cohabited.
(3) For the purposes of subsection (1), where the application is based on a court order and the order provides that pension benefits that have accrued to the member of the pension plan during a period specified in the order are to be divided, the period specified in the order is the period subject to division.
(4) If the court order or spousal agreement provides, or the interested parties agree, that the terms of the court order or spousal agreement shall be satisfied by the payment of a lump sum amount and that lump sum amount, together with such interest as may be required by the regulations, is less than the amount that would otherwise be transferred in accordance with paragraph (1)(a), that lump sum amount, together with that interest, shall be transferred in accordance with that paragraph in lieu of the greater amount.
(5) An amount that cannot be transferred in accordance with paragraph (1)(a) by reason only of the death of the spouse or former spouse shall be paid to the estate of the spouse or former spouse.
(6) The adjustment of pension benefits required by paragraph (1)(b) shall be effective as of the date determined in accordance with the regulations, which date may be before the date on which the adjustment is actually made.
(7) The Minister shall send a notice of the division of the pension benefits in the prescribed manner to each interested party.
Pension Benefits Division Regulations
2. (1) In these Regulations,
. . .
"valuation day" means the day in respect of which the determination of the value of a member's pension benefits is made pursuant to these Regulations;
. . .
13. For the purposes of section 8 of the Act, the value of pension benefits that have accrued to a member during the period subject to division is equal to
(a) where the member is vested at valuation day, the actuarial present value on valuation day of the member's pension benefits accrued during the period subject to division, determined in accordance with sections 14 and 15; and
(b) where the member is not vested at valuation day, the amount determined under section 16.
THE POSITION OF THE PARTIES
[10]On the basis of the written submissions, the parties stand diametrically opposed regarding the question of the applicant's standing. During the hearing, the arguments and issues were refined to such an extent that the "standing" issue, while not eliminated, was considerably reduced in scope.
[11]The applicant maintains that the narrow issue for determination is whether his pension is to be distributed in accordance with the provisions of subsection 8(1) or subsection 8(4) of the PBDA. This, he argues, is the question that the Adjudicator had to determine. The grievance does not relate to a division of marital property. Rather, submits the applicant, it constitutes a challenge regarding the alternative chosen by the respondent for distribution of the pension monies pursuant to the PBDA and thus, is properly the subject-matter of a grievance. The applicant further states that success, on this application, stands to be decided by a determination of whether the Adjudicator properly interpreted the provision of the separation agreement dealing with the pension distribution. If the answer is yes, the applicant concedes that the distribution was properly effected in accordance with the Regulations. If the answer is no, he says that the decision must be set aside.
[12]The respondent submits that, to the extent that the grievance is a dispute with respect to the property entitlements between spouses, it does not fall within the purview of the grievance provisions of the RCMPA because it is not concerned with the "administration of the affairs of the force". Determination of property rights between spouses, including entitlement to pensions following separation, is a matter of provincial law and is dealt with in Part I of the Family Law Act, R.S.O. 1990, c. F.3. The grievance provisions of the RCMPA and its regulations deal with labour disputes or matters affecting the terms and conditions of members. While pension rights constitute an employment benefit and, to that extent, form part of the terms and conditions of employment, division of marital property does not. The respondent concedes that the applicant has standing with respect to the narrow question--does the distribution of the applicant's pension fall under subsection 8(1) or subsection 8(4) of the PBDA? That, however, is the extent of the concession. In relation to that question, the respondent maintains that the Adjudicator's interpretation of the "pension" paragraph of the separation agreement is correct and that the distribution was properly effected in accordance with the provisions of subsection 8(1) and the Regulations.
[13]Counsel for both parties submits that the issues of standing and determination of the appropriate PBDA subsection to be applied to distribution of the pension are questions of law and that decisions relative to those questions are to be reviewed on a standard of correctness.
ISSUES
[14]The issues to be addressed are:
(a) the appropriate standard of review applicable to the decision of the adjudicator;
(b) the standing of the applicant to initiate a grievance, under the provisions of the RCMPA, with respect to a pension distribution;
(c) if standing exists, the appropriate PBDA provision applicable to the distribution of the applicant's pension.
STANDARD OF REVIEW
[15]A pragmatic and functional analysis supports the position taken by counsel that, in the circumstances that exist here, the applicable standard of review is correctness.
[16]The first factor of the analysis focuses on the statutory mechanism of review. Subsection 32(1) of the RCMPA provides that the Commissioner's decision is "final and binding and, except for judicial review under the Federal Court Act, is not subject to appeal or review by any court". This constitutes a partial privative clause. It is also significant that the decision under review is a level II decision, the first level grievance having preceded it. The first factor suggests considerable deference.
[17]The second factor is that of expertise. Here, the decision-maker has expertise in relation to the grievance process, but no expertise with respect to the subject-matter of the grievance. The decision-maker possesses no greater expertise than that of the Court regarding questions of standing or the appropriate statutory provision to be applied in the circumstances. The second factor calls for a low degree of deference.
[18]The third factor, the purpose of the legislation, in this instance, involves the interplay of two pieces of legislation. The purpose of the grievance provisions of the RCMPA is to resolve labour disputes or matters affecting the terms and conditions of its members. The purpose of the provisions of the PBDA and the Regulations under consideration is to provide a mechanism for transferring pension monies out of federal plans. In the present circumstances, the issues deal with the individual rights of the applicant and cannot be said to be polycentric in nature. The third factor in this context, militates in favour of a low level of deference.
[19]The final factor involves the nature of the problem. The issues here are primarily issues of law. The matter of standing is a question of law. The question regarding which of two statutory provisions should apply, in this instance, necessitates interpretation of a provision of an agreement. At its highest, it is a pure question of law and at its lowest, it is a question of mixed fact and law that is law-intensive. This factor suggests a very low level of deference.
[20]Balancing these factors, I am satisfied that the appropriate standard of review, for this specific matter, is correctness. I do not suggest, nor should my conclusion be taken to imply, that correctness is the appropriate standard with respect to grievance matters generally.
STANDING OF THE APPLICANT TO INITIATE A GRIEVANCE, UNDER THE PROVISIONS OF THE RCMPA, WITH RESPECT TO A PENSION DISTRIBUTION
[21]The analysis of this issue, for purposes of clarity and completeness, requires a brief description of the nature of the law with respect to marital property as compared with the nature of the PBDA.
[22]Marital property law falls within provincial jurisdiction by virtue of the division of powers: Constitution Act, 1867 [30 & 31 Vict., c. 3 (U.K.) (as am. by Canada Act 1982, 1982, c. 11 (U.K.), Schedule to the Constitution Act, 1982, Item 1) [R.S.C., 1985, Appendix II, No. 5]], section 92 (property and civil rights). Each of the provinces has enacted marital property legislation and while variations exist from province to province, in general, the scheme and purpose of the legislation is to effect an equal division of marital property upon marriage breakdown. The adjudication of property divisions has generated a plethora of case law containing rulings and determinations on various issues that include, but are not limited to, which assets and liabilities are subject to division, the valuation of assets and liabilities, the establishment of valuation dates, the exclusion of certain assets from division, the circumstances, if any, when an unequal division may be warranted and so on. The law enunciated in the legislation, and the judicial interpretation of it, constitute the substantive law of marital property.
[23]The PBDA provides a different distribution scheme than that envisaged under provincial marital property legislation. The nature of the PBDA was described by McKeown J. in Roy v. Canada, [2002] 4 F.C. 451 (T.D.) (Roy) as follows [at paragraphs 43-44]:
The PBDA was enacted in 1992 and came into force in September 1994. The Act provides that, on the breakdown of a marriage or common-law partnership, where there is either a court order or separation agreement, part of a member's pension benefit under federal government pension plans, including the CFSA, can be paid out in a lump sum payment to the non-member spouse.
The Act does not create any substantive rights, but simply provides a mechanism for transferring monies out of federal plans. Under the Act, the division of the pension benefit is mandatory once a properly completed application is filed, provided there are no grounds for objection established. The application is contingent upon there being a court order or separation agreement dividing the pension. The decision to apply for a division under the Act is at the discretion of the parties. Therefore, if the parties use another method to satisfy the splitting of the value of the pension benefit, no application need be made under the Act. The maximum amount that can be transferred in respect of a non-member spouse is 50% of the value of the pension benefit which relates to the period of cohabitation (see paragraph 8(1)(a)). Once a transfer is made, there is a consequent reduction in the pension benefits payable to the plan member because part of the member's pension asset has been transferred (see paragraph 8(1)(b ) and the PBDR, sections 20 [as am. by SOR/97-420, s. 4] and 21 [as am. idem, s. 5]). The money transferred to the former or separated spouse is to be placed in a pension plan, registered savings plan, or with a financial institution, so that in effect that person now has their own pension.
[24]In Smith v. Canada (Attorney General) (1999), 179 F.T.R. 134 (F.C.T.D.), Blais J. also noted that the purpose of the PBDA is [at paragraph 20] "to provide a mechanism for making payments out of pension funds, not to fix the value of the pension as between spouses in property settlement [sic] made upon the breakdown of their relationship".
[25]In most instances, an actuarial valuation of a pension, in accordance with the provisions of the applicable provincial legislation, will vary considerably from a PBDA valuation. This discrepancy has been the subject of judicial comment: Baker v. Baker (1998), 34 R.F.L. (4th) 364 (B.C.S.C.). In Shafer v. Shafer (1996), 25 R.F.L. (4th) 410 (Ont. Gen. Div.), affirmed by (1998), 37 R.F.L. (4th) 104 (Ont. C.A.), Métivier J. stated [at paragraph 52]:
. . . the Pension Benefit Division Act "value" is one which is generally totally unreliable as an accurate valuation for specific individuals for purposes of the Family Law Act. Appealing though it may be to rely on a quick and easy solution to these difficulties of valuation, the Act remains merely a mechanism for transferring monies out of the plan. While the Pension Benefit Division Act provides for its own method of valuing pensions it does so for the federal government's own specific purposes. These include maintaining the integrity of the plan, benefiting the members as a whole, but again, only with a view to a mechanism for transferring out certain monies. These methods, however, have n othing to do with provincial laws relating to property rights and the disposition of those as between former spouses.
[26]Where an actuarial valuation under the substantive law results in an amount that is greater than a PBDA valuation and the court orders the pension divided equally, the Minister cannot pay out an amount greater than 50% of the value of the PBDA valuation. Section 3 of the PBDA mandates that the Act and the Regulations prevail if there are any inconsistencies with any other law.
[27]The jurisdiction of those judges determining a division of marital assets arises from the marital property legislation and it is under that legislation that an application for a division of pension benefits is made. In ordering a division of pension benefits of a member of a pension plan enumerated in section 2 of the PBDA, the judge does not exercise jurisdiction pursuant to the PBDA. The PBDA simply facilitates division at-source (the maximum available amount being based on PBDA valuation), once ordered, subject to application to the Minister: Croitor v. Croitor (2001), 192 N.S.R. (2d) 26 (C.A.).
[28]Mr. and Ms. Eddie, rather than a court order (PBDA pararaph 4(2)(a)), had a separation agreement (PBDA subparagraph 4(2)(b)(ii)) that provided for the division of the pension benefits. Mr. Eddie does not take issue with his former wife's entitlement and he confirms that the intention was to divide the pension benefits equally between them. He does not attack the validity of the separation agreement. His complaint is that the benefits were distributed under the wrong provision of the PBDA. Mr. Eddie's complaint, therefore, does not relate to the substantive law, it is with respect to the manner in which the Minister and those acting on his behalf (NCPC) effected the distribution and more particularly, the choice of the appropriate PBDA provision in this regard.
[29]The RCMPA provides that any member [subsection 31(1)] "aggrieved by any decision, act or omission in the administration of the affairs of the Force in respect of which no other process for redress is provided . . . is entitled to present the grievance in writing at each of the levels". The grievance process contemplates matters affecting the terms and conditions of members. In my view, pension plans fall under the rubric of the terms and conditions of members. While generally speaking, disputes relating to the division of pension monies between spouses and former spouses fall within the substantive law relating to marital property division, that is not the situation here because Mr. Eddie is not seeking a substantive law remedy. He claims to be aggrieved by the Minister's application of the provisions of the PBDA, a matter not falling within the jurisdiction under which substantive law issues are determined. In my view, given the nature of the specific issue raised by Mr. Eddie, the grievance process is broad enough to encompass his complaint. In this respect, I am in agreement with the position of counsel for both parties that Mr. Eddie does have standing to grieve the decision of the authorities acting on behalf of the Minister (NCPC) to process the distribution of his pension under subsection 8(1) rather than subsection 8(4) of the PBDA. Thus, the level II Adjudicator erred in law in determining that there is no standing.
THE APPROPRIATE PBDA PROVISION APPLICABLE TO THE DISTRIBUTION OF THE APPLICANT'S PENSION
[30]For ease of reference, the relevant portions of subsections 8(1) and 8(4) are again reproduced here.
8. (1) A division of pension benefits shall be effected by
(a) subject to subsection (4), transferring an amount representing fifty per cent of the value of the pension benefits that have accrued to the member of the pension plan during the period subject to division, as determined in accordance with the regulations, to the spouse or former spouse . . . .
. . .
(4) If the court order or spousal agreement provides, or the interested parties agree, that the terms of the court order or spousal agreement shall be satisfied by the payment of a lump sum amount and that lump sum amount, together with such interest as may be required by the regulations, is less than the amount that would otherwise be transferred in accordance with paragraph (1)(a), that lump sum amount, together with that interest, shall be transferred in accordance with that paragraph in lieu of the greater amount.
[31]Mr. Eddie's position is that the provision of the separation agreement dealing with the pension division requires the Minister to transfer one half of his unvested pension entitlement. Relying on subsection 8(4), he argues that the contractual provision specifically contemplates a lump sum transfer and identifies Schedule "C" (the PBDA estimate report dated September 26, 1996) as setting out the approximate value for division. Nothing in the separation agreement, says Mr. Eddie, suggests a division of entitlements accruing after the date of separation. Therefore, the Minister and the authorities acting on his behalf erred in interpreting the contract to require an equal division of the vested value of the pension and the Adjudicator similarly erred. Mr. Eddie submits that the valuation date is the date of separation and it is that date that ought to have been applied.
[32]The arguments advanced by Mr. Eddie involve two issues: the appropriate valuation date and the interpretation of the contractual provision of the separation agreement. I will deal first with the valuation date.
[33]Under the substantive law, the valuation date is the date of separation. That is not the case under the PBDA. Subsection 2(1) of the Regulations defines "valuation day" as "the day in respect of which the determination of the value of a member's pension benefits is made pursuant to these Regulations". Hence, under the PBDA, "valuation day" is the day upon which the pension is valued for purposes of distribution, in other words, the calculation day: Swan v. Canada (Attorney General) (1998),167 D.L.R. (4th) 30 (F.C.A.). Here, that date was June 9, 1998. The member's status (vested or non-vested) on the valuation day, by virtue of section 13 of the Regulations, determines whether the value is to be calculated in accordance with sections 14 and 15 or section 16 of the Regulations. Although the PBDA valuation date post-dates the date of separation, only that portion of the pension acquired during cohabitation is divided. On the PBDA valuation day, Mr. Eddie was vested and his pension was valued appropriately in accordance with the applicable regulations. His argument with respect to valuation date must fail. The date is prescribed and there is no provision that enables the Minister, a court, or a plan member to alter it. If Mr. Eddie is to succeed, he must establish that subsection 8(4) applies.
[34]The PBDA contemplates that pension division can be achieved by other means: Roy, supra; Cornect v. Poirier-Robichaud (2000), 230 N.B.R. (2d) 368 (C.A.); Parsons v. Parsons (1995), 17 R.F.L. (4th) 267 (Ont. Gen. Div.); Christian v. Christian (1995), 139 N.S.R. (2d) 246 (S.C.). Typically, provisions in separation agreements providing for lump sum amounts that differ from entitlement amounts for pension monies arise where there are off-setting assets or debts being transferred and the pension payment amount is adjusted accordingly. There is, however, nothing to preclude spouses from specifying a lump sum amount for another reason. Where a lump sum amount is specified in relation to a division under PBDA, the Minister will transfer the amount so specified provided that, as stated earlier, the amount is less than 50% of the value of the benefit. In my view, for Mr. Eddie to come within subsection 8(4), he had to specify the amount to be transferred. In short, "lump sum amount" means a sum certain, a specified amount. Paragraph 14 of the separation agreement does not contain a specified amount for transfer.
[35]Counsel urges me to interpret this provision of the separation agreement to mean that the specified amount is to be ascertained by the Minister by reference to Schedule "C". I am not so inclined and I note, in passing, that Schedule "C" was not annexed to the copy of the separation agreement that was submitted with the initial application. If I am wrong in this respect, I do not, in any event, find that paragraph 14 can be interpreted as a directive to the Minister. The first sentence of paragraph 14 references the PBDA estimate report. It does nothing more than reference it. It neither specifies nor signifies acceptance of the value contained in the report as being the value to be used as a lump sum amount for purposes of the transfer of pension monies to Ms. Eddie. It could have done so, but did not. There is no reference to the estimate report in the operative portion of the paragraph relating to the division of the benefit. In terms of division, the paragraph states:
The parties mutually agree to forthwith complete and submit whatever documentation may be required by the Minister in charge of administering the RCMPSA to promptly effect the division on a 50/50 basis of the husband's pension benefits between the husband, as a member of a federal public sect or pension plan provided under the RCMPSA, and the wife, as his spouse. Once such division has been approved by the Minister, the wife's share shall be transferred as a lump sum amount directly to a retirement savings vehicle chosen by the wife. In the eve nt that the husband dies before such equal division can be effected by the Minister, the wife's right to such equal division shall be a first lien on the Estate of the husband.
[36]In my view, this language, rather than suggesting an intention to transfer a lump sum amount, constitutes a statement that Ms. Eddie's entitlement and share of Mr. Eddie's pension benefit is to be 50%. In this respect, the provision is consistent with the entire agreement. If the intention was otherwise, it was incumbent on the parties to the agreement to so state. Separation agreements are contracts. Although they arise in a unique legal context and differ from commercial contracts, they are nonetheless contracts: Miglin v. Miglin, [2003] 1 S.C.R. 303. I conclude that the Adjudicator did not err when he determined that the provision in the separation agreement should be interpreted to mean that the pension benefits were to be split in half.
[37]This result may seem unduly harsh to Mr. Eddie whose pension valuation falls within a relatively small percentage of cases where, between the date of separation and the date of valuation, the pension vests and as a result, its value is significantly enhanced. However, Mr. Eddie must accept that the initial estimate report was precisely that--an estimate of the value of an unvested pension. The covering letter that accompanied it specifically stated that an "actuarial division value would be based on salary, service and contribution data as at the date of formal division following submission and approval of an application to divide the pension" (emphasis added). Mr. Eddie was represented by counsel during the negotiation and execution stages of the separation agreement and must be taken to have known that he had to be separated from his spouse for a period of one year before an application for division could be effected (PBDA, subparagraph 4(2)(b)(ii)). He was aware, or ought to have been aware (having served as a member of the Force for 9 years and 8 months) that the vesting of his pension was imminent. The correspondence regarding approval of the division stated that "the amount payable under the PBDA will be 50% of the actuarial present value, calculated in accordance with the Act, of the benefits that accrued during this period" (emphasis added).
[38]In the result, I conclude that the Adjudicator erred in law in his determination that "there is no standing". The Adjudicator was correct in his determination that "the agreement has the intention to split the benefits in half" and that "there is no merit to the argument put forth by the Grievor". Had the Adjudicator determined only the issue of standing, without consideration and determination regarding the merits, I would remit the matter back for redetermination. However, notwithstanding that there exists reviewable error, it is not appropriate to refer the matter back because the merits have been determined and determined correctly. To send the matter back would be to elevate form over substance. A discussion of the circumstances in which a court may refuse to provide relief in the face of reviewable error is provided in Owusu v. Canada (Minister of Citizenship and Immigration) (2003), 228 F.T.R. 19 (F.C.T.D.). I adopt the words used by my colleague Gibson J. when he stated [at paragraph 31], "Acknowledging that to refuse to provide relief in the face of reviewable error is truly exceptional and should not be applied broadly, I am satisfied that this is a case that justifies denying relief".
[39]The application for judicial review is dismissed and an order will so provide. The respondent did not seek costs and none are awarded.