The case previously made headlines for its analysis of commas in legal writing
Bell must pay former employees tens of millions of dollars more toward their pensions to keep up with rising prices, said the Court of Appeal for Ontario, overturning a lower court ruling.
The Feb. 21 class action decision, Austin v. Bell Canada, 2020 ONCA 142, focused on interpretation of a pension plan, particularly whether the rounding policy of Statistics Canada applied to the 1.49371 per cent Consumer Price Index adjustment.
Jonathan Ptak, a partner at Koskie Minsky LLP and one of the lawyers for the appellants, says the decision is an important reminder of the role that class actions play in access to justice.
“It took only two years from the date of commencement of the action to through judgment and an appeal to vindicate the rights of 35,000 pensioners,” he says.
“The amounts per pensioner aren't big enough to warrant commencing cases individually. This case could really only be done by way of a class proceeding …. the manner in which it was prosecuted — quickly and going to judgment at the same time as certification — really gave them an opportunity to access the courts.”
Part of the speed of the case stemmed from the decision for the plaintiff to ask for summary judgment at the outset, says Ptak. Although it’s a rare occurrence, Ptak says the language of the contract was clear enough in his view to move “aggressively.”
“It's very rare, in the class action context, that it's the plaintiffs that bring a summary judgment motion right at the outset of the case . . . . It's much more common for the defendant,” he says.
“People often think, for good reason, that class actions can be lengthy procedural vehicles. This is an example of one which is very efficiently prosecuted.”
The lower court had dismissed the motion, finding that Bell was entitled to its current practice, which was to round the pension index to two decimal points. But the appeal decision, written by Justice James MacPherson with Justices Robert Sharpe and Mahmud Jamal concurring, found that the wording in the plan requires Bell to follow Statistics Canada’s policy of rounding to only one decimal point.
“If the appellant is right, 1.5 per cent is rounded to two per cent. If Bell is right, 1.49 per cent is rounded to one per cent. The difference to the class members between a two per cent and a one per cent increase in the 2017 pension is over $10 million for the first year and, over the long-term, over $100 million,” wrote MacPherson.
The lower court judge, Edward Morgan, made headlines when his decision was released in August 2019, namely due to his interpretation of a comma used in the plan.
The plan defined pension index as “the annual percentage increase of the Consumer Price Index, as determined by Statistics Canada,” and said that retirement benefits shall be augmented by a percentage of the pension index, “limited to a maximum of two per cent and calculated on a compounded basis.” The plan also said that all percentage increases shall be rounded to two decimal points except the pension index, which is rounded to the nearest whole number.
“Ordinarily, if there is no comma, the ‘last antecedent rule’ states that the phrase at the end of the list will modify only the last item. If there is a comma, the ‘series qualifying rule’ states that the phrase will modify all items on the list,” the court of appeal judges recounted. “Here, there is not a list but there are two items: (1) the “annual percentage increase”, and (2) the ‘Consumer Price Index.’ Accordingly, the comma after ‘Consumer Price Index’ suggests that the phrase ‘as determined by Statistics Canada’ modifies both items. The motion judge appears to have accepted that interpretation but found that it was rebutted by the need to read the plan as a whole.”
Morgan found that it was unlikely that “the drafters of the Plan went to all of that trouble and detail only to have the entire exercise rendered meaningless by a deferral to Statistics Canada’s method of rounding.”
But the panel of appeal court judges found that the detail was not meaningless because “using the Statistics Canada one-decimal rounding policy will frequently produce a three-decimal figure in the calculation of the annual percentage increase for recently retired pensioners.” Further, while the panel of appeal judges did not find the pension plan ambiguous, they added that because Morgan did find the wording “awkward,” he should have applied the contra proferentem doctrine.
“The Plan was drafted by Bell without meaningful participation by the pensioners who are a vulnerable group in relation to Bell,” MacPherson wrote in the appeal decision. “Contra proferentem is regularly applied to resolve ambiguities in pension documents in favour of pensioners . . . . given the ambiguity, the interpretation favouring the pensioners should prevail.”
The appeal court granted representative plaintiff Leslie Austin costs of $22,500 inclusive of taxes and disbursements. Ptak says that while the comma interpretation has gotten a lot of attention in the press, the appeal didn’t rest on it.
“I think it reflects an affirmation of the effectiveness of class actions and pension matters to advance the collective rights of the pensioners in a streamlined way,” Ptak says of the decision. “Given it's a contract of adhesion, it could be very effectively prosecuted as a single-issue case, in a class action, which would bind the whole class.”