2011 NBCA 35, 2011 NBCA 35

COURT OF APPEAL OF NEW BRUNSWICK 1-11-CA THE PROVINCE OF NEW BRUNSWICK, asrepresented by the MINISTER OF HUMANRESOURCES APPELLANT LA PROVINCE DU NOUVEAU-BRUNSWICK,représentée par le MINISTRE DES RESSOURCESHUMAINES APPELANTE - and - - et - EDGAR QUINTON RESPONDENT EDGAR QUINTON INTIMÉ Province of New Brunswick, as represented by theMinister of Human Resources v. Quinton, 2011NBCA 35 Province du Nouveau-Brunswick, représentée par leMinistre des Ressources humaines c.

Quinton, 2011NBCA 35 CORAM: The Honourable Justice Robertson The Honourable Justice Quigg The Honourable Justice Green CORAM : L’honorable juge Robertson L’honorable juge Quigg L’honorable juge Green Appeal from a decision of the Court of Queen’sBench: October 7, 2010 Appel d’une décision de la Cour du Banc de la Reine: Le 7 octobre 2010 History of Case: Historique de la cause : Decision under appeal: 2010 NBQB 332 Décision frappée d’appel : 2010 NBQB 332 , 2010 NBBR 332 Preliminary or incidental proceedings: N/A Procédures préliminaires ou accessoires : s.o.

Appeal heard: March 8, 2011 Appel entendu : Le 8 mars 2011 Judgment rendered: April 21, 2011 Jugement rendu : Le 21 avril 2011

Reasons for judgment by: The Honourable Justice Robertson Motifs de jugement : L’honorable juge Robertson Concurred in by: The Honourable Justice Quigg The Honourable Justice Green Souscrivent aux motifs : L’honorable juge Quigg L’honorable juge Green Counsel at hearing: For the appellant: Richard A. Williams Edgar Quinton Appeared in person Avocats à l’audience : Pour l’appelante : Richard A. Williams Edgar Quinton A comparu en personne THE COURT The appeal is allowed, the order below set aside and the action dismissed. There is no order as to costs.

LA COUR Accueille l’appel, annule l’ordonnance dont appel est interjeté et rejette l’action. Aucune ordonnance de dépens n’est rendue. The judgment of the Court was delivered by ROBERTSON, J.A. I. Introduction [ 1 ] The narrow issue raised on this appeal is whether the motion judge erred in holding the respondent’s action against the appellant is not statute-barred under s. 9 of the Limitation of Actions Act , R.S.N.B. 1973, c. L-8. The more fundamental issue is whether there is any merit to the action.

Initially, the respondent brought an application challenging the decision of the appellant Minister denying the respondent’s request to purchase previously refunded pensionable service arising out his employment with the Council of Maritime Premiers. The appellant is presently employed with the Province and is approaching retirement age. On directions from the Court of Queen’s Bench, the application was reframed as an application for judicial review. Regrettably, the application for judicial review was converted subsequently to an action, and mistakenly so, at the suggestion of the appellant.

Only an originating process commenced by way of Notice of Application under Rule 38.09(

b) of the Rules of Court may be converted to an action, provided a substantial dispute of fact exists. No one has been able to isolate the substantial dispute of fact underscoring the present litigation. And no one has been able to identify a contractual, statutory or tortious obligation which the Province has breached. [ 2 ] I conclude there is no merit to the action or, for that matter, the judicial review application.

The only relief which the respondent seeks is a declaration and an order forcing the Minister to grant the respondent’s request to purchase previously refunded pensionable service with his former employer. There is no contractual obligation on the part of the Minister that supports the order being sought. Moreover, the Minister does not have the legislative authority to do what is being asked of him. In the circumstances, the task of identifying the date on which the limitation period began to run is tantamount to searching for a rational response to an irrational question. II. Factual Matrix

[ 3 ] From July 2, 1974, to March 31, 1989, the respondent, Edgar Quinton, was employed by the Council of Maritime Premiers, headquartered in Halifax, in its regional land registration office located in Fredericton. In the late 1980s the Council decided to exit the land registration and mapping business. Council employees were given the opportunity of accepting employment in their home provinces with their respective provincial governments, which had decided to take over the Council’s land registration and mapping functions.

In a Memorandum of Agreement, dated March 31, 1989, and entered into between the Council and the Province of New Brunswick, it was agreed that employees of the Council working in the regional offices in New Brunswick would be offered employment with the Province. Clause 8 of the Agreement stated the Province would recognize pensionable service established by the Council as pensionable service in the Province. The clause went on to state that the Council would transfer an amount equal to the calculated actuarial reserve in the Council pension plan. [ 4 ] On March 31, 1989, Mr.

Quinton also received a letter from the Council outlining the fact that the Province would be providing him with an offer of employment, guaranteeing present salary, continuous service dates and years of pensionable service. On the same date, Mr. Quinton received an offer of employment by the newly created New Brunswick Geographic Information Corporation, which is now part of Service New Brunswick.

The offer of employment contained the following provision: “Acceptance of this offer of employment with New Brunswick means you will voluntarily resign from the Council and carry your continuous service date for the calculation of your retirement allowance”. On one of the pages attached to the offer was typed: “Pensionable Service Date: 2 July 1974”. On another page is Mr. Quinton’s acceptance of the offer, dated April 20, 1989.

The acceptance acknowledges that his employment with the Province began on April 1, 1989. [ 5 ] The record discloses that the newly transferred employees were not pleased with the prospect of joining the Province’s pension scheme as it was not as generous or flexible as the Council’s plan. On June 12, 1991, Mr. Quinton received another letter from the Council. The letter commences with an expression of appreciation for Mr. Quinton’s patience with respect to the delay in addressing pension issues. The letter went on to set out three options for his consideration. Under the first option, Mr.

Quinton could elect to transfer his pensionable service with the Council to the Province of New Brunswick, in which case funds would be transferred from the Council plan to the Provincial plan. The letter explains that, in the past, former Council pension plan members had expressed concern with the Provincial plan when compared to the Council’s plan. The letter also explains that many of these concerns had been addressed by changes to the New Brunswick plan. The letter goes on to outline those changes. The second option allowed Mr. Quinton to leave his accrued pension in the Council plan.

The letter explains a number of matters related to this option. The third option permitted Mr. Quinton to transfer the value of his pension out of the Council plan and into a locked-in RRSP or, alternatively, to use the monies to purchase a deferred annuity contract. The letter expressly states that if this option is chosen, New Brunswick will not recognize the pensionable service under the Council’s pension plan “for any purpose”. The letter also advised Mr. Quinton that he might wish to seek independent advice if he were to consider option three. The June 12 th letter goes on to request Mr.

Quinton complete an attached form indicating the option chosen, once he has had time to consider the matter. [ 6 ] On October 28, 1991, the Council forwarded a memorandum to Mr. Quinton indicating it had yet to receive from him an indication as to which of the three pension options he wished to elect. A form outlining the three options was attached to the memo. Mr. Quinton returned the attached form with an indication that he had chosen option three: payment of accrued benefits into a locked-in RRSP. In a further memo from the Council to Mr. Quinton, dated November 22, 1991, the Council informed Mr.

Quinton that the “commuted value” to be transferred to a locked-in RRSP was $44,566.83. As a result of Mr. Quinton electing option three, the Council did not transfer any funds from its pension plan to the New Brunswick plan, with respect to accrued benefits covering his employment with the Council from 1974 to 1989. [ 7 ] On July 15, 2003, Mr. Quinton made a written request to the Province to purchase his previously refunded pensionable service with the Council, notwithstanding his 1991 decision to elect option three. The application was made pursuant to the Public Service Superannuation Act , R.S.N.B. 1973, c.

P-26. The request was denied on October 9, 2003, because the Act and the Regulations would not permit the purchase of such pensionable service with the Council. The Manager of Pension Benefits for the Province pointed out that s. 4(1)( b )(ii)(A.3) of the Public Service Superannuation Act restricted the right to purchase previously refunded pensionable service to those employers who were indentified in the applicable Regulation. As it should happen, Regulation 84-105 made no reference to the Council’s pension plan.

This omission is consistent with the June 12, 1991, letter, which outlined the three pension options available to Mr. Quinton and warned him that New Brunswick would not recognize his pensionable service with the Council “for any purpose” if he chose option three and placed the commuted value of his pension in an RRSP. The denial letter also emphasized that s. 20 of the Act did not support Mr. Quinton’s claimed right to purchase refunded pensionable service.

That provision simply authorizes the Minister to enter into a reciprocal agreement with an approved employer with respect to the transfer of pensionable service. The 1989 Agreement between the Council and the Province recognizes the right of an employee to transfer pensionable service and monies from the Council plan to the Province plan and vice versa, but the Agreement does not contain a continuing right to purchase previously refunded pensionable service.

The denial letter ends with an acknowledgement that “there is no service and money to be transferred as you elected to transfer the value of your pension to a Locked-in RRSP.” [ 8 ] On July 14, 2008, Mr. Quinton made a written request to the Province for the same relief which he had sought in 2003. In his request letter, Mr. Quinton refers to the same documents as those in his earlier request and to s. 30 of the Service New Brunswick Act , S.N.B. 1989, c. S-6.2.

That provision states: “Employees of the Council who become employees of the Corporation shall have the rights and benefits as stated in the Memorandum of Agreement […]”. The agreement being referred to is the 1989 Memorandum of Agreement between the Province and the Council. Mr. Quinton also provided a cost estimate, prepared by the

Province, of the monies needed to purchase the refunded pensionable service with the Council, based on his provincial salary as of June 1, 2008. The amount needed was $74,907.29. Once again, the Province denied the request. After discussing s. 4(1)( b )(ii)(A.3) of the Public Service Superannuation Act and s. 12.1 of Regulation 84-105, the denial letter states there is no legislative authority upon which to grant Mr. Quinton’s request. Finally, the letter points out there have been no changes to the Act that would allow him to purchase the previously refunded pensionable service. [ 9 ] On November 12, 2008, Mr.

Quinton filed a Notice of Application with respect to the denial letter of July 14, 2008. The file was placed before a judge of the Court of Queen’s Bench who, on November 17, 2008, noted that the proper procedure was to pursue an application for judicial review. Mr. Quinton did so and the matter was scheduled for hearing on May 21, 2009. Instead of deciding the matter, the judge converted the judicial review application into an action. In compliance with that order, Mr. Quinton filed a Statement of Claim on May 20, 2009. The Province filed its defence on June 4, 2009. In his Statement of Claim, Mr.

Quinton seeks a mandatory order and declaration that he is entitled to purchase his previously refunded pensionable service with his previous employer, the Council, covering July 2, 1974, to March 31, 1989. The Statement of Claim set out the following four bases for the claim. [ 10 ] First, Mr. Quinton claimed the right to purchase the refunded pensionable service based on the March 31, 1989, Memorandum of Agreement between the Council and the Province of New Brunswick and s. 30 of the Service New Brunswick Act . Second, Mr.

Quinton claimed the right to purchase pensionable service based on s. 4(1)( a )(iii) and 4(1)( b )(ii)(A.3) of the Public Service Superannuation Act . Section 4(1) ( a )(iii) speaks of pensionable service as any period of service that is deemed to be Public Service under s. 20 of the Act . As noted earlier, s. 20(2) authorizes the Minister responsible for the Act to enter into reciprocal agreements with approved employers (including the Council) to allow for the transfer of pensionable service upon transfer of the commuted value of the pensionable service as between pension plans.

Section 4(1)( b )(ii)(A.3) speaks of persons who had been employed full time with the Public Service, but who had not made contributions to the pension plan, and of their right to purchase pensionable service. Third, Mr. Quinton alleged his contract of employment with the Province, dated March 31, 1989, expressly identified his pensionable service date as July 2, 1974. Fourth, in seeking a mandatory order and declaration, Mr.

Quinton claimed he was entitled to purchase his refunded pensionable service with the Council as if it were “non-contributory service with the province” as provided for under the Public Service Superannuation Act . Finally, Mr. Quinton requested that the cost of purchasing the pensionable service be based on his annual salary as of July 15, 2003 and not June 1, 2008, as initially sought in his July 14, 2008 request. III. The Motion Request and Decision [ 11 ] On January 13, 2010, the Province brought a motion seeking relief under Rules 22, 23, and 27.

First, the Province sought leave to amend its Statement of Defence pursuant to Rule 27. Second, pursuant Rule 23.01(1)(

a) and (b), the Province posed three questions of law:

(1) Is the plaintiff’s action statute barred, pursuant to s. 9 of the Limitation of Actions Act ?;

(2) Is the plaintiff’s action statute barred because of a failure to comply with the three month time limit to seek judicial review as set out in Rule 69.03?; and

(3) Did the Court lose jurisdiction to hear a matter concerning terms of employment due to the fact that the plaintiff was a member of a union until 1996, and subject to various collective agreements, or should Mr. Quinton have pursued a grievance? If any one of those three questions were answered with a “yes”, the Province sought

summary judgment pursuant to Rule 22.04(3). [ 12 ] On October 7, 2010, the motion judge rendered her decision. She concluded Mr. Quinton’s claim was for breach of his employment contract with the Province, dated March 31, 1989, and that it was breached on October 9, 2003, when the Province denied his initial request to purchase the previously refunded pensionable service with the Council. Accordingly, the motion judge reasoned that as Mr. Quinton had six years from the date of the breach in which to commence his action, it was not barred pursuant to s. 9 of the Limitations of Action Act .

As the judicial review application was converted into an action, the date of the judicial review application was treated as the date on which the action was commenced. With respect to the three-month limitation period in regard to applications for judicial review, the motion judge noted no application for an extension of time was sought as provided for under Rule 69.03. The judge went on to hold that the limitation period expired three months after the initial request to purchase the pensionable service with the Council: October 9, 2003. With respect to the issue of the court’s jurisdiction and whether Mr.

Quinton should have pursued a grievance, the motion judge concluded she lacked sufficient information to make that determination. The motion decision is reported at 2010 NBQB 332 , 364 N.B.R. (2d) 299. IV. Issues-Analysis – Disposition [ 13 ] Once the essential facts are laid bare, there can be no doubt that neither the application for judicial review nor the action has merit. Mr. Quinton was given a choice as to what he wanted to do with his pensionable service with the Council and he freely elected to take the accumulated value of his pension and put it into an RRSP.

The transcript reveals that the stock market was not faring well when he elected this option (1991) and the market was only beginning to recover when he made his initial request to purchase his refunded pensionable service with the Council (2003). The fact that Mr. Quinton subsequently realized his RRSPs did not prosper as he might have hoped does not create a contractual or statutory right to purchase his previously refunded pensionable service.

[14] Leaving aside the issue tied to the Limitations of Actions Act, logic would force one to ask whether theappellant Minister was authorized to permit Mr. Quinton to purchase refunded pensionable service with the Council. The answer isclearly “no”. The provisions of the Public Service Superannuation Act and its Regulations leave no doubt that the Council is not one ofthe employers for which a present government employee is entitled to purchase previously refunded pensionable service.

In point of fact,the Act and Regulations embrace three types of employers for which it is permissible to purchase refunded pensionable service: (1) thefederal government; (2) the nine provincial governments; and (3) various teacher and university plans in the provinces. I hasten to pointout that the March 31, 1989, Memorandum of Agreement, entered into by the Province and the Council is in conformity with thestatutory framework outlined above. Recall that Clause 8 of that Agreement states the Province would recognize pensionable service asestablished by the Council as pensionable service in the Province.

However, the clause went on to state the Council would transfer anamount equal to the calculated actuarial reserve (commuted value) in the Council pension plan. One can reasonably and necessarily inferthat the Province expected that former Council employees would have their accrued pension benefits transferred to the New Brunswickplan. Moreover, there is nothing in the 1989 Memorandum of Agreement which bestows and preserves the right to purchase refundedpensionable service in cases where the former employees had rejected the option of transferring their pensionable service to their newemployer, the Province.

Please note, even if the Agreement had outlined a future right to purchase refunded pensionable service, Mr.Quinton would be faced with another legal hurdle. He was not a party to the Agreement and, normally, would be precluded from restinga cause of action based on that contract because of the doctrine of privity. In any event, the 1989 Agreement is entirely consistent withthe New Brunswick legislative framework. [15] Having dealt with the legal implications of the 1989 Memorandum of Agreement, attention must turn to the1989 contract of employment between the Province and Mr. Quinton.

The pivotal question is easily stated: Does the contract grantMr. Quinton the right to purchase previously refunded pensionable service, in the event he elected not to transfer his pensionable servicewith the Council to the Province? The answer to that question is clear. The right does not arise expressly or by implication. There areonly two references in the Province’s offer of employment which pertain to the pension issue. The first indicates that upon acceptingemployment with the Province, Mr.

Quinton would be entitled to carry his “continuous service date for the calculation of [his] retirementallowance.” Second, on one of the pages attached to the employment offer was typed: “Pensionable Service Date: 2 July 1974”. Whenread together and in context, it is clear that the Province was willing to recognize Mr. Quinton’s pensionable service with the Council.One can also reasonably infer that the Province would be prepared to recognize employment with the Council as pensionable servicewith the Province so long as the Council transferred to the Province the commuted value of Mr.

Quinton’s accrued pension benefits.Otherwise, the Council pension plan would be unjustly enriched and the New Brunswick plan unjustly impoverished. [16] In conclusion, the employment offer of March 31, 1989, neither expressly nor by implication supports Mr.Quinton’s contractual claim to a right to purchase his refunded pensionable service with the Council. The contract merely confirmsMr. Quinton’s right to transfer his pensionable service with the Council to the Province, a right consistent with the 1989 Memorandum ofAgreement, which provides for the transfer of pension funds from the Council to the Province.

The employment contract is alsoconsistent with the 1991 contract, as between the Council and Mr. Quinton, in which Mr. Quinton elects option three and directs that thecommuted value of his pension with the Council be transferred to an RRSP, rather than to the Province. [17] I hasten to point out, even if Mr. Quinton’s contract of employment with the Province provided for a futureright to purchase previously refunded pensionable service with the Council, the right would not be enforceable to the extent that it iscontrary to the statutory scheme.

That is to say, the contract could not have given rise to a mandatory or declaratory order forcing theProvince to do what the legislation says cannot be done (see The City of Saint John v. Saint John Firefighters’ Association, InternationalAssociation of Fire Fighters, Local 771, 2011 NBCA 31, [2011] N.B.J. No. 104 (QL), para. 48). [18] If we return to Mr. Quinton’s Statement of Claim, we see how difficult it is to pursue an analysis whichassumes that a right to purchase refunded pensionable service exists and has been breached in order to determine whether the action isstatute barred. I do so because the law of

summary judgment requires us to assume that the allegations contained in the Statement ofClaim are true. Without leave, affidavit evidence is not admissible when the relief being sought is under Rule 23.01(1)(

a) and (b) (seeCannon v. Lange et al. (1998), (NB CA), 203 N.B.R. (2d) 121, [1998] N.B.J. No. 313 (C.A.) (QL)). [19] The motion judge’s analysis proceeded on the basis that the 1989 employment contract contained the rightbeing asserted by Mr. Quinton. The motion judge went on to find that the right had been breached on October 9, 2003, the date on whichthe Province denied his initial request to purchase previously refunded pensionable service.

Since s. 9 of the Limitation of Actions Actprovides for a six-year limitation period, the motion judge ruled that time began to run from that date and as legal proceedings were firstcommenced on November 12, 2008, the action was not statute barred. In my respectful view, the motion judge’s ruling is correct so longas you accept Mr. Quinton had a continuing right to purchase previously refunded pensionable service with the Council under his 1989contract of employment with the Province. But such a right clearly does not exist. Equally important is the fact that no such right isasserted in the Statement of Claim.

Mr. Quinton merely asserts a contractual or statutory right to transfer pensionable service from theCouncil to the Province. It follows that if the right was breached, it was breached on October 28, 1991, the date Mr. Quinton elected notto transfer his pensionable service to the Province. That is the date on which Mr. Quinton was fully aware he would not be receiving aNew Brunswick pension with respect to pensionable service with the Council. If that is so then the limitation period begins to run fromOctober 28, 1991, and the action is therefore statute barred.

[ 20 ] The above analysis may appear somewhat contrived, but as stated at the outset it is difficult to provide a rational response to an irrational question. The truth of the matter is that the Province should have sought

summary judgment under Rule 22.01(3). There is no merit to the action or, for that matter, the judicial review application. This is why the litigation must be brought to a screeching halt. I sympathize and agree with Mr. Quinton’s plea that it made no sense: to covert his judicial review application to an action; to make him go through an examination for discovery, and then force him to attend a settlement conference with respect to a matter that should have and could have been decided on the record.

I also acknowledge his wish that this Court bring closure to the litigation. [ 21 ] A few comments are in order with respect to Mr. Quinton’s written arguments on this appeal. Mr. Quinton complains that the June 12, 1991 letter from the Council outlining his three pension options made no mention of a 1975 Memorandum of Agreement entered into between the Council and the Province. Mr. Quinton interprets that document so as to give former Council employees the right to move their Council pensions to the Province at a later date. According to Mr.

Quinton, had that information been contained in the June 12, 1991, letter, he would not have chosen option three. Mr. Quinton relies on Allison v. Noranda Inc. , 2001 NBCA 67 , 239 N.B.R. (2d) 211. [ 22 ] The short answer to this argument is that as the impugned letter came from the Council, it is to the Council that Mr. Quinton should seek legal redress. In any event, the 1975 Agreement says nothing about the right to purchase previously refunded pensionable service. [ 23 ] The appeal should be allowed and

summary judgment should be granted dismissing the action. With respect to the matter of costs, Mr. Quinton should not be faulted for his tenacity and his success below. Accordingly, there should be no order for costs. ____________________________________ J.T. ROBERTSON, J.A. WE CONCUR ____________________________________ K ATHLEEN A. QUIGG, J.A. ____________________________________ BRADLEY V. GREEN, J.A.