



COURT OF APPEAL FOR ONTARIO

CITATION: Meloche v. Meloche, 2021 ONCA 640

DATE: 20210922

DOCKET: C67648

Fairburn A.C.J.O., van Rensburg
    and Huscroft JJ.A.

BETWEEN

Michael Meloche

Applicant (Appellant)

and

Adrianna Costa Meloche

Respondent (Respondent)

Aaron Franks and Michael Zalev, for the
    appellant

Marcela Aroca and Ashley Harmon, for
    the respondent

Heard: March 26, 2021 by video
    conference

On appeal from the order of Justice Kirk
    W. Munroe of the Superior Court of Justice, dated October 22, 2019, with
    reasons reported at 2019 ONSC 6143.

Fairburn A.C.J.O.:

A.

Overview

[1]

This appeal concerns the division of pension payments
    for family law purposes. The central issue on appeal is this:

Where a retired member
    spouses pension payments are divided at source for family law purposes, can
    the parties agree (or can a court order or can an arbitrator award) that
    payment sharing continue to the non-member spouses estate for the balance of
    the retired member spouses life?

[2]

On a motion to decide a question of law under
    Rule 16(12)(a) of the
Family Law Rules
, O. Reg. 114/99 (
FLR
),
    the motion judge answered this question in the negative.
[1]
He concluded that the
Pension
    Benefits Act
, R.S.O. 1990, c. P.8 (
PBA
) specifically precludes
    a deceased non-member spouses share of a retired members pension payments
    from continuing to the non-members estate after the non-members death. In
    other words, the motion judge concluded that the death of the non-member spouse
    necessarily results in their share of the pension payment reverting back to the
    member spouse.

[3]

Respectfully, I disagree. There is nothing in
    the
PBA
, the
Family Law Act
, R.S.O. 1990, c. F.3 (
FLA
),
    or the
Family
Law Matters
, O. Reg. 287/11

(Regulation)
    (one of the regulations under the
PBA
) that precludes the parties from
    agreeing to, a court from ordering, or an arbitrator from awarding a
    continuation of shared pension payments to the deceased non-members estate for
    the balance of the member spouses life. Indeed, when these provisions are read
    together as a cohesive unit, they leave open the possibility of proceeding in
    exactly this way.

B.

Background

[4]

The parties were married for just over 33 years.

[5]

During their marriage, Adrianna was a teacher.
    Over the course of her career, Adrianna paid into the Ontario Teachers Pension
    Plan (OTPP). Upon her retirement on June 30, 2015, Adrianna elected a joint
    pension with a 60 percent survivor benefit. The pension payments to Adrianna then
    began. Once the payments started, the pension became what I will refer to as an
    in-pay pension. What I mean by this term is that [p]ayment of the first instalment
    of the retired members pension was due on or before the family law valuation
    date:
PBA
, s. 67.4(1)2.

[6]

Combined with additional bridging benefits that
    would end when Adrianna turned 65 years of age, she started receiving just
    under $5,000 per month in 2015.

[7]

Michael held various jobs over the years. Sadly,
    in April of 2016, shortly after Adriannas retirement, Michael fell seriously
    ill with Amyotrophic Lateral Sclerosis (ALS). At the time that he fell ill,
    he was working as a custodian with a school board. That work had to end when
    his illness set in. Michaels motion record suggests that he soon began
    receiving Ontario disability as his only source of income, just under $1,000
    per month.

[8]

Just over a year later, on July 13, 2017, the
    parties separated. This was the agreed-upon valuation date for purposes of
    the
FLA
. At the time that he brought the motion, Michael acknowledged
    that Adrianna was also voluntarily giving him $300 per month.

[9]

In her responding materials on the motion,
    Adrianna suggested that Michael was also receiving income from charity
    donations from the community and from GoFundMe.com. She maintained that she
    had assisted him in raising those funds. At the time of the motion, it appears that
    Michael was living in the matrimonial home and Adrianna was living elsewhere.

[10]

In April 2018, Michael applied to the court for
    a divorce, equalization of net family properties, spousal support, and exclusive
    possession of the matrimonial home, among other relief. Then, on May 24, 2019,
    he brought a motion to decide a question of law relating specifically to the
    division of Adriannas pension payments.

[11]

Separating spouses are strongly encouraged to resolve
    their family law disputes either entirely outside of court or with limited resort
    to the courts. Rule 16(12)(a) of the
FLR
permits the court, on motion,
    to decide a question of law before trial, if the decision may dispose of all
    or part of the case, substantially shorten the trial or save substantial costs.

[12]

As the Supreme Court of Canada recently
    emphasized in
Colucci v. Colucci
, 2021 SCC 24, at para. 69, There is
    a trend in family law away from an adversarial culture of litigation to a
    culture of negotiation (citations omitted). Recent amendments to both the
Divorce
    Act
, R.S.C., 1985, c. 3 (2nd Supp.) and the
FLA
require parties,
    to the extent that it is appropriate to do so, to try to resolve family law
    disputes outside the court structure through an alternative dispute resolution
    process, such as negotiation, mediation, or collaborative law: see
Divorce
    Act
, ss. 7.3, 7.7(2)(a), and 16.1(6);
FLA
, ss. 47.2(1),
    47.3(2)(a).

[13]

Rule 16(12)(a) of the
FLR
is a useful
    tool in this context. At the time of the motion, Adriannas pension had been
    valued for family law purposes. Following the procedures outlined in s. 67.2 of
    the
PBA
, which include actuarial assessments of each partys life
    expectancy,
[2]
the pension administrator determined that the imputed value of Adriannas pension
    for family law purposes was $1,281,826.54. Likewise, the pension administrator
    determined that the imputed value of Michaels survivor benefit for family law
    purposes was $103,952.15.

[14]

The pension administrator also determined that,
    if the parties agreed to divide the pension at source for family law purposes,
    Michael was entitled to receive 48.99 percent of Adriannas monthly pension
    payments. This meant that Michaels share of Adriannas pension, divided at
    source, would be $2,094.02 per month, with bridging benefits of an additional
    $294.36, which would continue until Adrianna turned 65 years of age.

[15]

There was significant common ground between the
    parties. They were well-placed to settle most, if not all, of the issues
    arising from the breakdown of their marriage without a trial. There was, and
    still is, no dispute about the imputed pension values for family law purposes.
    There was, and still is, no dispute about the pension administrators
    calculation as it pertained to Michaels share of Adriannas pension. There
    was, and still is, no dispute that the most valuable asset owned by the couple
    on the valuation date was Adriannas defined benefit pension with the OTPP.
[3]
There also was, and still is,
    no dispute that almost all of Adriannas pension was accumulated during the
    marriage, such that it would be included in Adriannas net family property as
    defined in s. 4(1) of the
FLA
.

[16]

Consequently, had Michaels equalization claim proceeded
    to trial, it appears that he would have been entitled to a substantial
    equalization payment pursuant to ss. 5(1) and 7(1) of the
FLA
. I will
    return to this concept shortly.

[17]

Instead, Michaels notice of motion suggests
    that he wanted to divide Adriannas pension payments at source. Notably, this
    is an available option under s. 10.1(5) (order for division of pension payments),
    s. 56.1(3) (division of pension payments under a domestic contract), and s. 59.4.1(3)
    (division of pension payments pursuant to a family arbitration award) of the
FLA
,
    all of which explicitly provide for the division of pension payments where the
    pension is, as in this case, already in pay.

[18]

However, the parties differed on what should
    happen to Michaels share of the divided pension payments following his death 
    which appeared to be imminent. Michael took the position that, if the pension
    payments were divided at source for family law purposes, then, after his death,
    his share of the pension could and should continue to his estate for the
    remainder of Adriannas lifetime. According to an affidavit filed in support of
    his motion, Michael took the position that any other approach would result in
    an absurd outcome, as it would fail to adequately respond to the exercise
    of attempting to equalize the net family property in substance as well as
    form.
[4]


[19]

Adrianna took the position that, if Michael
    predeceased her, the
PBA
precluded Michaels share of the pension payments
    from continuing to his estate. Instead, Adrianna argued that, following
    Michaels death, his share must revert back to her.

[20]

Given Michaels very short life expectancy at
    the time that these discussions were taking place, Adriannas position meant
    that dividing the pension payments at source would almost certainly result in Michael
    receiving far less than he would have otherwise received if he had proceeded to
    trial for a determination of his
entitlement
    to equalization under s. 5(1) of the
FLA
. I say this for the following reason.

[21]

Section
5(1) of the
FLA

reads in part: 
the spouse whose net family
    property is the lesser of the two net family properties is entitled to one-half
    the difference between them. An application for entitlement under s. 5(1) is
    brought under s. 7(1) of the
FLA
. Orders arising from s. 7(1)
    applications are made pursuant to s.
9(1)
    of the
FLA
.
Pursuant to that provision, the court may
    order:

(a) that one spouse pay to the other spouse
    the amount to which the court finds that spouse to be entitled under this Part;

(b) that security, including a charge on
    property, be given for the performance of an obligation imposed by the order;
    [and]

(c) that, if necessary to avoid hardship, an
    amount referred to in clause (a) be paid in instalments during a period not
    exceeding ten years or that payment of all or part of the amount be delayed for
    a period not exceeding ten years[.]
[5]

[22]

Therefore, to place this issue in its proper context, assuming that
    there were no other significant assets beyond Adriannas pension and Michaels
    survivor benefit in either partys net family property, Adrianna would have
    owed Michael an equalization payment of around $590,000.
I say this because, based on the pension administrators assigned
    values, the difference between the parties net family properties would be
    $1,177,874.39. Of course, Adrianna would owe half that amount to Michael if
    such an order had been made in accordance with the criteria set out in s. 9(1)
    of the
FLA
.

[23]

To be very clear, I am not suggesting that the
    amount of $590,000 reflects with any precision the actual amount of
    equalization that Adrianna would have owed Michael following a s. 7(1)
FLA
application. We simply do not have enough information on appeal to know with
    precision what that amount would have been.

[24]

What we do know, however, is that Adrianna does
    not dispute that her pension would have been the most valuable asset to be
    factored into the equalization assessment, and that there were few other assets
    that would have played a role in arriving at the ultimate determination of how
    much she owed Michael.

[25]

Therefore, had Michael simply sought an equalization
    payment by way of a s. 7(1) application under the
FLA
, it would have
    come at a very high cost to Adrianna. Even on Adriannas own position, it seems
    clear that she would have owed Michael a large sum of money.

[26]

Under s. 9(1)(a) of the
FLA
, the court
    may order one spouse to pay the other the full amount required to equalize
    their net family properties. Section 9(1)(c) permits the court to order that the
    amount or any part of the amount be paid in instalments, but only if necessary
    to avoid hardship and only over a maximum of 10 years. Therefore, where one
    party owes another an equalization payment of, say, $500,000, the court may
    order instalment payments under s. 9(1)(c), which could result in a payment
    exceeding $4,000 per month for 10 years.

[27]

Contrast that scenario with the potential
    pension division scenario for these parties where, based on the pension
    administrators undisputed calculations, Michael would have received a total monthly
    payment of just less than $2,400 per month (and less than that after Adrianna
    turned 65 years of age and the bridging benefits ended). Based upon this
    calculation, over the same 10-year period, well less than $300,000 would be
    paid. Of course, as will be further explained, if the pension division at
    source could continue to Michaels estate, it would continue until the end of
    Adriannas life. On Michaels calculations, if Adrianna lived for another 27
    years, which would put her at 86 years of age when she died, the amount paid
    through pension division at source would exceed $770,000, adjusted for
    increases on account of cost of living.

[28]

Michael saw the exercise of splitting the
    pension at source and having it continue to his estate as being based, as he
    put it in his motion materials, upon the delivery of an equalization payment.
    The difficulty for Michael was that the OTPP, in correspondence sent to his
    lawyer, took the position that the payments could only continue to his estate
    if there was a settlement instrument directing the OTPP to do so:

Please note that unless the settlement
    instrument which provides for the pension division specifically requires that
    the split continue to the former spouses Estate should he predecease the
    member, on his death the portion being paid to him reverts to the member.

[29]

Therefore, Michael had to move quickly to
    resolve this matter. The OTPP was prepared to have the split continue to his
    estate, but Michael needed a settlement instrument directing the OTPP
    accordingly. Contrary to Michael and the OTPP, Adrianna took the position that
    the
PBA
precluded what Michael contemplated would be a means of
    achieving some form of equalization. Accordingly, Michael brought a Rule
    16(12)(a) motion under the
FLR
.

[30]

As part of the disposition of what he described
    as a question of law before trial in accordance with Rule 16(12) of the
Family
    Law Rules
, Michael sought an order directing the OTPP administrators to
    pay his proportionate share of Adriannas monthly pension benefit directly to
    him, and for those monthly payments to continue to his estate until Adriannas
    death. He also asked for an order declaring [that] such remedy equalizes [Adriannas]
    pension in accordance with the meaning of the term 
equalization
 in
    the
Family Law Act
 (emphasis in original).

[31]

Michael died two days after the motion judges ruling
    was released. This appeal is brought by the sole Estate Trustee of the Estate
    of Michael Meloche.

C.

The Motion Judges Ruling

[32]

The motion judge framed the legal issue before
    him as follows:

Whether this court can and/or should make an
    order directing the Ontario Teachers Pension Plan to pay to the estate of Mr.
    Meloche his portion of his wifes monthly pension benefit for the life of his
    wife if Mr. Meloche predeceases his wife.

[33]

The motion judge answered this question in the
    negative on the basis that the
PBA
foreclosed the relief sought by Michael.

[34]

The motion judge began by pointing to s. 10.1(7)
    of the
FLA
to suggest that, if the

PBA
applies to the
    pension plan, which it does in this case, then the restrictions under s. 67.4
    of the
PBA
apply with respect to the division of the spouses
    interest in the plan by an order under s. 9 of the
FLA
. This was the
    only reference that the motion judge made to the
FLA
.

[35]

The motion judge referred to s. 67.5(1) of the
PBA
,
    which specifically says that an order made under Part I (Family Property) of
    the
Family Law Act
, a family arbitration award, or a domestic contract
    is not effective to the extent that it purports to require the administrator of
    a pension plan to divide the pension benefits in relation to an in-pay
    pension, other than in accordance with s. 67.4.

[36]

The motion judge also addressed s. 67.4 of the
PBA
in his reasons. He correctly observed that s. 67.4(1)2. pertains to those
    situations where the pension is in pay before the family law valuation date. As
    before, the pension payments in this case started after Adriannas retirement on
    June 30, 2015, and the family law valuation date was not until July 13, 2017. As
    correctly observed by the motion judge, this brought the pension payments in
    question squarely under s. 67.4 of the
PBA
.

[37]

Focusing upon s. 67.4, the motion judge noted
    that, in his view, nothing in the provision allows for the payment of a pension
    divided at source to continue to a non-member spouses estate where the
    non-member spouse dies first. Rather, the motion judge emphasized that s. 67.4
    directs that the proportion of the retired member spouses pension is to be
    paid to the eligible spouse, not the deceased eligible spouses estate.

[38]

The motion judge also relied on ss. 44(1),
    (3), and (3.1) of the
PBA
.

[39]

Section 44(1)
    mandates that a pension which goes into pay while a retired member still has a
    spouse within the meaning of s. 1(1) of the
PBA
shall be a joint and survivor pension.
    As before, Adrianna and Michael were still married and living together when her
    pension went into pay. As such, it was a joint and survivor pension.

[40]

Next, the
    motion judge turned his mind to ss. 44(3) and 44(3.1) of the
PBA
, concluding
    that they made clear that, upon the death of either the pension holder or the
    spouse, the remaining pension reverts back to the survivor. Those provisions
    read:

44(3) Upon the
    death of the retired member, the pension payable to his or her surviving spouse
    shall not be less than 60 per cent of the pension paid to the retired member
    during their joint lives.

44(3.1) If the spouse of the retired member
    dies before the retired member, the pension payable to the retired member after
    the spouses death
shall
    not be less than 60 per cent of the pension paid to the retired member during
    their joint lives
.

[41]

The motion judge interpreted these sections to
    mean that the non-member spouse would be guaranteed continued pension payments
     on the death of the pension holder (per s. 44(3)) but that any pension
    payments to the [non-member] spouse would end  on his or her death (per s.
    44(3.1)). This latter interpretation was based upon a finding that the
    statutory reference was to a surviving spouse and not to the estate of the surviving
    spouse: Again, the reference is to payments to the surviving spouse without
    any mention or suggestion that these payments are to be paid to the estate of
    the surviving spouse.

[42]

In addition, the motion judge concluded that continuing
    payments to a non-member spouses estate until the death of the pension
    holder (the situation for which Michael was advocating) would contravene s.
    44(3.1) because it would cause Adrianna to receive a pension payment of less
    than 60 percent of the total monthly payment. The motion judge reasoned that Michaels
    request for the pension sharing to continue to his estate had to be denied
    because, if his estate continued to receive 48.99 percent of the monthly
    payment owed under the pension, then Adrianna would only be receiving 51.01
    percent after his death, which is clearly less than the minimum 60 per cent
    that the motion judge saw as required pursuant to s. 44(3.1) of the
PBA
.

[43]

Finally, the motion judge pointed out that there
    is no statutory means by which the former spouse could bequeath or share their
    portion of the monthly payments of the pension. Indeed, as the motion judge
    noted, this is specifically prohibited under s. 65(1) of the
PBA
:
    Every transaction that purports to assign, charge, anticipate or give as
    security money payable under a pension plan is void.

[44]

For these reasons, the motion judge concluded
    that Michaels request for his share of the pension payments to continue to his
    estate after his death for the remainder of Adriannas lifetime was contrary to
    the
PBA
.

[45]

He then ordered that the OTPP pay Michael 48.99
    percent of each of Adriannas monthly pension payments, commencing
    retroactively from the valuation date. As he put it: In all other respects,
    the applicants motion is dismissed.

D.

Issues

[46]

The appellant raises two issues on appeal.

[47]

First, the appellant argues that the motion
    judge erred by concluding that the pension payments could not continue to be
    shared after Michaels death, with Michaels portion being paid to his estate for
    the remainder of Adriannas lifetime.

[48]

Second, and in the alternative, the appellant
    argues that the motion judge erred by ordering retroactive sharing of the
    monthly pension amounts. The appellant maintains that Michael did not ask for
    this on the motion. Instead, if he was unsuccessful on issue one, it was his
    intent to proceed to a s. 7(1)
FLA
application, seeking an
    equalization payment from Adrianna. Pursuant to s. 7(2)(a) of the
FLA
,
    an equalization application commenced before death can be continued by the estate.
    Michaels application was commenced before death.

[49]

On the first issue, the respondent argues that
    the motion judge was right to conclude that the
PBA
precludes pension
    sharing to the estate of a deceased spouse. On the second issue, the respondent
    disputes the appellants version of events. She maintains that Michaels
    counsel, during oral submissions at the motion, asked for the remedy ultimately
    granted by the motion judge as an alternative to his main request for relief.

[50]

For the reasons that follow, I would resolve
    this matter on the basis of the first issue. In my view, there is nothing in
    the
PBA
that precludes pension payments divided at source from
    continuing to the estate of a non-member spouse during the life of the member
    spouse, in the event that the non-member spouse predeceases the member spouse. Having
    resolved the narrow legal question that was properly before the motion judge, I
    would decline to address the second issue, and instead turn the matter back to
    the parties to determine how to proceed from here: either through pension
    division at source to Michaels estate or through an equalization payment.

(1)

Where a Non-Member Spouse Dies Before a Member Spouse, Does the
PBA
Preclude the Continued Sharing of a Pension Payment at Source to the Non-Member
    Spouses Estate for the Balance of the Retired Member Spouses Life?

(a)

The Parties Positions

[51]

The appellant argues that the motion judge erred
    by specifically concluding that the pension payments payable to Michael must
    cease upon his death rather than continue to his estate.

[52]

First, the appellant argues that the motion
    judge erred by failing to advert to s. 39(2) of the Regulation, which is said
    to provide a full answer on appeal. That provision reads:

The eligible spouses
    share of the retired members pension
,  is
    payable as of the payment date that falls on or immediately after the date on
    which the retired members pension is divided under subsection 67.4(4) of the
Pension
    Benefits Act
, and
is payable for the life of the
    retired member
or until the end of the period for which the pension
    instalment under paragraph 1 of subsection (1) is guaranteed, whichever is
    longer. [Emphasis added.]

[53]

Second, the appellant argues that the motion
    judges conclusion leads to an absurd result which, effectively, frustrates the
    legislative purpose of the statutory scheme.

[54]

Third, the appellant argues that the motion
    judge considered statutory provisions that were wholly irrelevant to the issue
    at hand. In particular, the motion judge is said to have erred by looking to s.
    44(3.1) of the
PBA
when determining whether a non-member spouses
    share of the pension payments could be paid into their estate after death. The
    appellant argues that this provision does nothing more than create minimum
    standards for pension plans that are irrelevant to the question of how pension payments
    can be divided for family law purposes, either through a domestic contract,
    family arbitration award, or court order.

[55]

Finally, the appellant points out that s. 65(3)5.
    of the
PBA
specifically precluded the motion judge from relying on s.
    65(1) of the
PBA
, which does not apply to prevent the assignment, by
    an order under the
Family Law Act
of an interest in money payable
    under a pension plan where s. 67.4 is operative.

[56]

For her part, Adrianna argues that the motion
    judge was correct in his analysis and that the
PBA
specifically
    forecloses the relief sought by the appellant.

[57]

Like the motion judge, Adrianna emphasizes that the
    not  less than 60 per cent requirement in s. 44(3.1) of the
PBA
precludes
    the appellants requested relief. While parties can waive the joint and
    survivorship provisions of the pension pursuant to s. 46(1) of the
PBA
,
    Michael and Adrianna took no steps to do so. As a result, since s. 44 of the
PBA
sets out the parameters for joint and survivor pensions, Michaels estate is
    precluded from continuing to receive the 48.99 percent of Adriannas pension after
    his death because it would force her payments below the statutory minimum of 60
    percent.

[58]

Adrianna also argues that s. 39(2) of the Regulation
    does not assist the appellant because it does not specifically authorize a
    share of the payments of a retired member spouses pension to be made to the
    estate of the non-member deceased spouse. Read in context, Adrianna argues that
    the use of the term eligible spouse in s. 39(2) of the Regulation confers
    rights only on a living person and not on an estate.

[59]

Adrianna further points out that s. 67.3(5) of
    the
PBA
, which applies to the division of pensions that are not yet in
    pay, allows for a lump sum to be payable to an eligible spouses estate or as
    otherwise prescribed. Had the legislature intended for payment sharing in
    relation to in-pay pensions to potentially continue to an estate under s. 67.4,
    the legislature would have included a similar provision. The silence of s. 67.4
    on this point is said to be compelling.

[60]

As for s. 65(3)5., Adrianna argues that the
    motion judge was right. While the provision allows a portion of her pension to
    be directly shared, it does not allow Michael to re-assign his share of the
    pension payment to a third party, specifically his estate.

(b)

Analysis

(i)

Overview

[61]

The parties agree that the issue to be decided
    on appeal involves a clear question of law. The standard of review is therefore
    correctness:
Housen v. Nikolaisen
, 2002 SCC 33, [2002] 2 S.C.R. 235,
    at para. 8;
Harvey v. Talon International Inc.
, 2017 ONCA 267, 137
    O.R. (3d) 184, at para. 32.

[62]

Respectfully, applying this standard of review,
    I conclude that the decision appealed from is incorrect.

[63]

While the
PBA
is undoubtedly important
    to the resolution of the issue lying at the heart of this matter, unlike the
    motion judge, I do not see the
PBA
as the singular guiding force in
    answering the central question on appeal. For questions involving the sharing
    of pension payments at source in family law matters, it is necessary to look to
    both the
PBA

and the
FLA
, as well as the Regulation
.

[64]

The answer to this appeal lies at the intersection
    of these two statutes and the Regulation. Reading the
PBA
, the
FLA
,
    and the Regulation as a cohesive whole, it becomes clear that the legislature
    has not precluded the possibility that pension payments which are divided at
    source for family law purposes may continue to the non-member spouses estate
    for the balance of the member spouses life in the event that the non-member
    spouse predeceases the member spouse. Said differently, parties can agree, a
    court can order, or an arbitrator can award that the sharing of pension
    payments at source shall continue to the non-member spouses estate after that
    spouses death.

(ii)

Interpreting the
PBA
Alongside the Regulation

[65]

The modern principles of statutory
    interpretation require that the words of a statute be read in their entire
    context and in their grammatical and ordinary sense harmoniously with the
    scheme of the Act, the object of the Act, and the intention of Parliament:

Bell ExpressVu Limited
    Partnership v. Rex
, 2002 SCC 42, [2002] 2 S.C.R.
    559, at para. 26. When interpreting any statutory provision, a textual,
    contextual and purposive analysis must be applied to find a meaning that is
    harmonious with the entire Act:
Canada Trustco Mortgage Co. v. Canada
,
    2005 SCC 54, [2005] 2 S.C.R. 601, at para. 10. When considering regulations,
    they must be read concurrently with, and in the context of, the enabling
    legislation:
Hickman Motors Ltd. v. Canada
, [1997] 2 S.C.R. 336, 148
    D.L.R. (4th) 1, at para. 37;
State Farm Mutual Automobile Insurance Company
    v. Old Republic Insurance Company of Canada
, 2015 ONCA 699, 127 O.R. (3d)
    465, at para. 68. As noted by this court, regulations will generally be
    interpreted using the same rules and techniques as statute law, albeit never
    losing sight of the context of the enabling provisions that give rise to the
    regulations that complete and implement the statutory scheme:
S.H. v. D.H.
,
    2019 ONCA 454, 146 O.R. (3d) 625, at para. 31; see also Ruth Sullivan,
Sullivan
    on the Construction of Statutes
, 6th ed. (Markham: LexisNexis, 2014) at
§
13.18.

[66]

Applying these principles to the interpretation
    of the operative legislation and regulation here admits of only one answer:
    that the pension payment sharing could continue to Michaels estate. I say this
    for the following reasons.

(iii)

Family Law Matters Under the
PBA

[67]

I start with the observation that only ss. 67.1
    to 67.9 of the
PBA
are devoted to Family Law Matters, as the heading
    plainly states in the statute. While the other provisions of the
PBA
clearly
    govern general pension matters, including the structure of pensions, it is only
    ss. 67.1 to 67.9 of the
PBA
that specifically address pension issues
    as they pertain to Family Law Matters.

[68]

This observation is supported by s. 10.1 of the
FLA,
which governs the interest in a pension plan for family law purposes, including
    the imputed value of a pension for those purposes. Section 10.1(7) establishes certain
    restrictions:

If the
Pension Benefits Act
applies
    to the pension plan,
the
restrictions under sections
    67.3 and 67.4
of that Act

apply
with respect to the
    division of the spouses interest in the plan by an order under section 9 or
    10.
[6]
[Emphasis added.]

Here, the
PBA
clearly applies
    to the pension plan, and therefore the restrictions under ss. 67.3 and 67.4
    apply as well.

[69]

The focus of ss. 67.1 to 67.9 of the
PBA
on family law matters is reinforced, not simply by the name given to that
    section of the
PBA
and by s. 10.1(7) of the
FLA
, but also by
    virtue of a special definition given to the term spouse for the specific purpose
    of those provisions. Immediately under the heading Family Law Matters, s. 67.1(2)
    of the
PBA
offers the following definition:

A reference in this section and in sections
    67.2 to 67.9 to the spouse of a member, former member or retired member of a
    pension plan is, where circumstances require,
a reference
    to him or her as the former spouse of the member, former member or retired
    member
. [Emphasis added.]

[70]

The expansive definition given to the term
    spouse only for the purpose of ss. 67.1 to 67.9 (Family Law Matters) can be
    contrasted with the much more limited definition offered to the term spouse
    in s. 1 of the
PBA
. Section 1 contains definitions that are applicable
    to this Act more generally. Notably, the definition of spouse in s. 1 of
    the
PBA
does not include former spouses of retired members.

[71]

Therefore, the more expansive definition offered
    to the term spouse in s. 67.1(2) of the
PBA
, including as it does a
    reference to the former spouse of the member, reinforces the fact that ss.
    67.1 to 67.9 of the
PBA
are directly relevant to Family Law Matters.
    It also reinforces that the sections of the

PBA
outside the
    section devoted to Family Law Matters, such as s. 44(3.1) of the
PBA
,
    do not apply to former spouses, which is what Michael was at the time that a
    continuing payment to his estate was being contemplated.

(iv)

Contrast Between Sections 67.3 and 67.4 of the
PBA

[72]

I am not persuaded by Adriannas argument that
    the silence about payments to an estate in s. 67.4, when contrasted with the
    explicit reference to payments to an estate in s. 67.3, demonstrates that payments
    cannot continue to an estate when the payment is governed by s. 67.4.

[73]

Section 67.3 of the
PBA
governs those
    pensions that are not yet in pay prior to the family law valuation date,
    contrary to s. 67.4, which governs pensions that are in pay as of that date. Section
    67.3(1) permits a former spouse to apply for an immediate transfer of a lump
    sum from the plan if various criteria are met, the second of which states that
    [n]o payment of an instalment of the members or former members pension was
    due on or before the family law valuation date.

[74]

Where the criteria in s. 67.3(1) are met, s. 67.3(2)
    permits the transfer of a lump sum for family law purposes directly from one
    spouses pension to another specified location involving enforced savings
    requirements: to another pension plan, to a prescribed retirement savings
    arrangement, or to another prescribed arrangement, or by leaving it in the pension
    plan to the credit of the eligible spouse. In this way, s. 67.3(2) places specific
    limits on the structure of lump sum transfers from pensions that were not in
    pay before the family law valuation date.

[75]

It is against that context that ss. 67.3(4) and
    (5) combine to allow a lump sum which is destined for one of the specified
    locations to be redirected to an estate, should the non-member spouse die
    before the transfer takes place. Sections 67.3(4) and (5) read:

(4) Once the application is complete, the
    administrator shall make the transfer within the prescribed period.

(5) If the lump sum is not transferred under
    subsection (4) before the death of the eligible spouse, the lump sum is payable
    instead to the eligible spouses estate or as otherwise prescribed.

[76]

Therefore, s. 67.3(5) spells out that, if a lump
    sum made payable under s. 67.3(2) has not been transferred before the death of
    the eligible spouse, then that sum will instead be made payable to the
    eligible spouses estate. Considering the statutory constraints placed upon
    where the lump sum amount can be directed pursuant to s. 67.3(2), it makes sense
    that the statute specifically addresses what happens to that amount should the death
    of the non-member spouse intervene.

[77]

In contrast, s. 67.4 does not involve lump sum payments
    directed to enforced savings accounts. Section 67.4(2) of the
PBA
, governing
    in-pay pensions, operates in a much simpler manner: the eligible spouse may
    apply to the administrator of the plan for division of the retired members
    pension and for payment of the eligible spouses share to him or her.

[78]

The absence of any reference to payments to the
    estate in s. 67.4 does not force the conclusion that divided pension payments
    cannot continue to an estate under s. 67.4. In my view, the contrast between ss.
    67.3(5) and 67.4 on this point makes sense given that, unlike s. 67.3(2), s.
    67.4 does not require that the divided pension payments be directed into forced
    savings plans.

[79]

Therefore, the silence of s. 67.4 on this point does
    not preclude the parties from agreeing to, a court from ordering, or an arbitrator
    from awarding exactly this approach.

[80]

To avoid uncertainty, where the division of pension
    payments under s. 67.4 is engaged, settlement agreements, court orders, and
    arbitration awards should always specify whether, in the event of the recipient
    spouses death, the intent is for those pension payments to continue to the
    recipient spouses estate or to revert back to the member spouse.

(v)

Section 44(3.1) of the
PBA
Does Not Preclude Payment to an
    Estate

[81]

Based upon the above, it follows therefore that
    it was an error to rely upon s. 44(3.1) of the
PBA

to answer
    the question posed at the motion. Quite simply, s. 44(3.1) does not fall within
    the section of the
PBA

dealing with Family Law Matters.

[82]

In any event, I would pause to note that s.
    44(3.1) does not stand for the proposition the motion judge appears to have
    accepted.

[83]

Recall that this section provides: If the
    spouse of the retired member dies before the retired member, the pension
    payable to the retired member after the spouses death
shall not be less
    than
60 per cent of the pension paid to the retired
    member during their joint lives
 (emphasis added).

[84]

The motion judge interpreted this section to
    preclude a monthly payment of 48.99 percent of Adriannas pension from
    continuing to Michaels estate, given that the motion judge determined this
    would necessarily mean that Adrianna was receiving less than 60 percent of the
    full pension amount (as 51.01 is less than 60). But that is not the effect of
    this section. Instead, s. 44(3.1) regulates the benefits that must be provided
    under pension plans. It requires that the survivor under a pension that has
    become joint and survivor will not, upon the death of their spouse, receive a
    pension payment that is less than 60% of the payment they were receiving during
    the life of their spouse. That is, it requires the pension payable to the
    retired member after the spouses death not to be less than 60 percent of the
    pension paid to the retired member
during their joint
    lives
 (emphasis added). Therefore, even if Michaels share continued to
    be paid to his estate, Adriannas share would not necessarily be reduced from
    what she was receiving during their joint lives.

(vi)

Section 65(1) of the
PBA
Does Not Apply

[85]

The motion judge also found that there was no
    statutory means by which the former member spouse could bequeath or share their
    portion of the monthly payments of the pension to an estate. In fact, he
    concluded that s. 65(1) of the
PBA
specifically precluded this approach because it prevents any 
transaction
    that purports to assign, charge, anticipate or give as security money payable
    under a pension fund.

[86]

Respectfully, this provision has no bearing on
    the question to be decided in this appeal. Aside from being outside of those
    provisions dealing specifically with family law matters, if that section
    precluded Michaels share of his pension from continuing to be paid to his
    estate, it would also preclude Adriannas pension division, which is expressly
    permitted in the Family Law Matters portion of the
PBA
from ss. 67.1
    to 67.9. Read as the respondent suggests, the
PBA
and the Regulation
    would produce an inconsistent result. Only a further limitation on the pension
    division in those sections dealing with Family Law Matters could have the
    effect that the motion judge assigned to s. 65(1).

[87]

Moreover, as the appellant points out, s.
    65(3)5. of the
PBA
specifically precludes the operation of s. 65(1) in
    this context. That provision reads as follows: Subsections (1) and (2) do not
    apply to prevent the assignment, by an order under the
Family Law Act
,
    a family arbitration award or a domestic contract, of an interest in money
    payable under a pension plan  under  [s]ection 67.4 (division of a pension
    for certain family law purposes).

(vii)

The Application of Section 39(2) of the
    Regulation

[88]

I turn next to the Regulation that is in force
    by virtue of s. 115 of the
PBA
. The Regulation relates to the family
    law matters governed by ss. 67.1 to 67.9 of the
PBA
. While Michael
    argued the relevance of the Regulation at the motion, the motion judge did not
    advert to it in his reasons.

[89]

Section 1 of the Regulation reads: This
    Regulation relates to the family law matters governed by sections 67.1 to 67.9
    of the Act. Therefore, the Regulation applies to divided pensions and the
    amounts payable pursuant to s. 67.4 of the
PBA
and addresses the
    intersection between the

FLA
and
PBA
.

[90]

As already mentioned, s. 39(2) of the Regulation
    provides that an in-pay divided pension is payable for the life of the member
    spouse. For ease of reference, I will set out that provision of the Regulation
    again here:

The
    eligible spouses share of the retired members pension
,  is payable as of the payment date that falls on or immediately
    after the date on which the retired members pension is divided under
    subsection 67.4(4) of the
Pension Benefits Act
, and
is payable for the life of the retired member
or until t
he end of the period for which the pension instalment under
    paragraph 1 of subsection (1) is guaranteed, whichever is longer. [Emphasis
    added.]

[91]

This provision specifically refers to payments
    of an eligible spouses share of an in-pay divided pension  precisely the type
    of payments at the heart of this dispute  as payable for the life of the
    retired member, in this case, Adrianna. Therefore, the plain language of the Regulation
    specifically states that the eligible spouses share of the retired members
    pension is payable for the life of the retired member or until some other
    guaranteed time, whichever is longer. While the Regulation alone does not
    provide a complete answer to this appeal, in the sense that it proactively
    states that divided pension payments can continue to an estate, there is nothing
    in the Regulation that precludes that outcome from occurring. Importantly, the
    only restriction introduced by the Regulation pertains to the members life: namely,
    that the pension payments cannot continue after that life has ended.

[92]

Therefore, the plain wording of this section in
    no way precludes what Michael requested in his Rule 16(12)(a) motion under the
FLR
.

(viii)

The Financial Services Commission of Ontario
    (FSCO) and the Pension Administrator Agree this is Possible

[93]

It is interesting to note that the regulator of
    pensions governed by the
PBA

at the time of the original
    dispute, FSCO,
[7]
acknowledges the possibility of payments continuing to the former spouses
    estate during the retired members lifetime in
Family Law related FAQs -
    Pension Payable Upon Death
(2012), online: Financial Services Commission
    of Ontario:

Q902. The former spouse of a retired member
    is receiving a share of the retired members pension. What happens to the
    former spouses share, if he/she dies before the retired member?

A902.
The Ontario
    Pension Benefits Act (PBA) does not address this issue. In the absence of a PBA
    requirement to continue paying the former spouses share to the former spouses
    estate, it is FSCOs view that the former spouses share of the retired
    members pension reverts back to the retired member
unless
    the Settlement Instrument
(court order, family arbitration award or
    domestic contract) that was filed with the Application to Divide a Retired
    Members Pension (FSCO Family Law Form 6)
requires
    payment to continue to the former spouses estate during the retired members
    lifetime
. [Bold in original; underlining added.]

[94]

Similarly, I note that the interpretation of the
PBA
offered in these reasons is also consistent with a letter from Ann
    Volpe, Senior Law Clerk, Pension Law & Policy, Ontario Teachers Pension
    Plan, dated January 18, 2019, sent to Michaels counsel in the court below. Indeed,
    it is that letter that caused Michael to bring his motion in the first place.

[95]

As noted earlier in these reasons, the pension
    administrator wrote a letter to Michaels lawyer, stating that pension division
    could only continue to his estate if a settlement instrument provided for it.
    The letter reads in part as follows:

Our member commenced her pension prior to the
    Family Law Valuation Date. Accordingly, the only option for division with her
    former spouse is a pension split, assuming that the parties wish to utilize the
    pension to satisfy equalization or support obligations.

The amount that is to be paid to the former
    spouse will be a deduction to the members pension. The member will lose that
    portion of her pension for so long as the split is required to be paid.

Please note that
unless
    the settlement instrument which provides for the pension division specifically
    requires that the split continue to the former spouses Estate should he
    predecease the member, on his death the portion being paid to him reverts to
    the member
. Of course, if the member predeceases her former spouse, the
    pension ceases and accordingly the pension split ceases as well. [Emphasis added.]

[96]

The FSCO guidance and the letter from the OTPP align.
    Both suggest that, while the retired member spouse is alive, the estate of the
    former spouse of the retired member is not precluded from receiving a share of
    the retired members pension for the balance of the retired members life. While
    not determinative, it is still noteworthy that neither FSCO nor the OTPP
    indicate that payments continuing to the estate for family law purposes are
    precluded by legislation or regulation.

[97]

In many instances, including in the
    circumstances of this case, continuing the payment sharing to the estate might
    be the only way to make this a viable alternative to a single substantial
    payment under s. 9(1)(a) of the
FLA
.

[98]

This takes me to the more general context of the
    intersection between the
PBA
and the
FLA
, which must inform
    the analysis.

[99]

I will now show that the
PBA
and the Regulation,
    read cohesively with the objectives of the
FLA
, accord with FSCO and
    the OTPPs articulation: that is, where pension payments are divided at source
    for family law purposes, nothing precludes those payments from continuing to
    the non-members estate for the balance of the retired members lifetime, as
    long as that is provided for by an agreement, court order, or arbitrator award.

(ix)

The Intersection of the
PBA
and the
FLA

[100]

The purpose of the
PBA
was commented upon in
Monsanto
    Canada Inc. v. Ontario (Superintendent of Financial Services)
, 2004 SCC
    54, [2004] 3 S.C.R. 152, at para. 38, as being of vital importance to long-term
    income security:

The Act is public policy legislation that
    recognizes the vital importance of long-term income security. As a legislative
    intervention in the administration of voluntary pension plans, its purpose is
    to establish minimum standards and regulatory supervision in order to protect
    and safeguard the pension benefits and rights of members, former members and
    others entitled to receive benefits under private pension plans[.]

[101]

Adrianna points to this long-term income security purpose of the
PBA
as antithetical to the appellants position. After all, once someone has died,
    there is no longer a need for income security. The difficulty with this
    approach  with this singular emphasis on the purpose of the
PBA
 is
    that it ignores the equally important legislative context of the
FLA
. The
    answer to this appeal lies at the intersection of these two pieces of
    legislation.

[102]

The equalization provisions within the
FLA
serve a very different purpose from the
PBA
, as reflected in the
    preamble to the
FLA
:

Whereas it is
    desirable to encourage and strengthen the role of the family; and whereas for
    that purpose it is necessary to recognize the equal position of spouses as individuals
    within marriage and to recognize marriage as a form of partnership; and whereas
    in support of such recognition
it
    is necessary to provide in law for the orderly and equitable settlement of the
    affairs of the spouses upon the breakdown of the partnership
, and to provide for other mutual obligations in family
    relationships, including the equitable sharing by parents of responsibility for
    their children[.] [Emphasis added.]

[103]

If the sharing of in-pay pension payments cannot continue to an
    estate, in many cases, dividing pension payments at source would lose force as
    a proxy for what would otherwise be entitlement to equalization of net family
    property under ss. 5(1), 7(1), and 9(1) of the
FLA
. This would be
    particularly true in situations like this one where, from an actuarial
    perspective, the retired member spouses life is likely to be long, but the non-member
    former spouses life is predicted to be short.

[104]

As before, s. 5(1) of the
FLA
provides that, when spouses
    separate and there is no reasonable prospect of resuming cohabitation, the
    spouse whose net family property is the lesser of the two net family properties
    is entitled to one-half the difference between them. Section 9(1)(a) of the
FLA
allows the court to order one spouse to pay the other the amount to which that
    spouse is entitled under the equalization regime. The idea here is that the
    value of property accumulated during the marriage partnership, in which spouses
    are assumed to have been equal partners, should be shared equally when that
    marriage ends. This includes the accumulation of a pension over the course of a
    marriage.

[105]

It is true that pensions have been referred to as sometimes elusive
    assets for equalization purposes, being in reality a right to a future stream
    of income, rather than a current and exigible fund: Kendra D.M.G. Coats
et
    al.
,
Ontario Family Law Practice 2020
, Volume 2 (Toronto:
    LexisNexis Canada, 2019), at p. 537. It is because of the elusive nature of the
    pension that a new regime was introduced in 2009 to address these difficult
    issues. At the same time, the

FLA
was amended so that the
    family law value of an Ontario-regulated pension would be determined by the
    pension administrator pursuant to a formula set out in the regulations to the
PBA
:
    see
FLA
, ss. 4(1)(c), 10.1;
PBA
, s. 67.2. Section 67.2(1)
    reads:

The preliminary value of a members pension
    benefits, a former members deferred pension or a retired members pension
    under a pension plan, before apportionment for family law purposes, is
    determined by the administrator in accordance with the regulations and as of
    the family law valuation date of the member, former member or retired member
    and his or her spouse.

[106]

Adriannas argument on appeal relies heavily on the sense that a
    pension payment, by its very nature, does not continue after death. This is of
    course true. Adriannas pension payments would and could continue only for her
    lifetime.

[107]

But what is at issue on this appeal was never
    the duration of the pension payments to Adrianna. They will certainly stop upon
    her death. Instead, what is at issue on appeal is whether, given Michaels
    entitlement under s. 5(1) of the
FLA
to one half the difference
    between his and Adriannas net family properties, the division of pension
    payments at source for family law purposes could instead continue to Michaels
    estate for the balance of Adriannas life.

[108]

Of course, as with all actuarial calculations, there is an element
    of risk. To divide an in-pay pension at source could ultimately be either more
    or less lucrative than a single payment pursuant to s. 9(1)(a) of the
FLA
.
    If the pension member spouse lived a long life, theoretically, the total value
    of the payments to the estate may exceed what would have been received through an
    equalization payment under the
FLA
. But, if the pension member spouse experiences
    an untimely passing, the value of the divided pension payments to the estate may
    result in a total value far less than what would have been received through
    equalization under the
FLA
.

[109]

As part of the policy to encourage out-of-court settlement of family
    law disputes, it is important that the option for pension sharing to continue
    to the estate  acknowledged by the OTPP and FSCO  remains available. There
    are many scenarios where such an option would clearly financially benefit both
    sides, thereby facilitating resolution. Viewed as a means by which to avoid
    placing a pension-holder in the difficult position of owing money to which they
    do not at the time have access, the sharing of pension payments at source for
    the continuation of the retired members life, which in no way is precluded by
    the relevant statutes or regulation, makes both conceptual and practical sense.

[110]

In my view, contrary to the decision appealed from, nothing in the
PBA
or the Regulation prohibits division of pension payments for family law
    purposes from continuing to a former spouses estate for the life of the
    pension member spouse.

E.

Conclusion

[111]

I would allow the appeal. The appellants motion was brought
    pursuant to Rule 16(12)(a) of the
FLR
, permitting a judge to decide a
    question of law before trial if the answer to the question will dispose of all
    or part of a case or substantially shorten the trial or save costs. This
    question has now been answered. There is nothing that precludes the parties
    from agreeing, a court from ordering, or an arbitrator from awarding that pension
    payments may continue to a non-member spouses estate after that individuals
    death.

[112]

The answer to this question having been given, the parties should now
    be provided with the opportunity to settle the litigation to their mutual
    benefit.

[113]

On consent, costs will be paid to the appellant
    in the amount of $20,000, all inclusive. In light of the disposition of the
    appeal, the motion judges costs order in favour of the respondent will be varied
    to provide that the respondent pay the appellant $6,500 in costs for the
    motion.

Released: September
    22, 2021 JMF

Fairburn A.C.J.O.

I agree. K. van Rensburg J.A.

I agree Grant Huscroft J.A.





[1]
As set out below, while the question of law put to the motion judge
    was framed somewhat differently, he answered the question framed on appeal in
    the negative.



[2]

The Regulation refers to making a preliminary valuation
    based upon the methods and actuarial assumptions that are consistent with
    section 3500 of the
Standards of Practice
:
    Regulation, s. 3(2); see also s. 38(3). Section 2(3) of the Regulation defines
    the
Standards of Practice

as
    follows: 
Standards of Practice
of the Actuarial Standards Board,
    published by the Canadian Institute of Actuaries, as amended from time to
    time. See
Standards of Practice
(2005,
    revised 2020), online: Canadian Institute of Actuaries <
www.cia-ica.ca/publications/standards-of-practice
>.



[3]
The appellant suggests the parties only material asset, beyond
    Adriannas pension, was their jointly owned home, holding a fair market value
    of between $400,000 and $520,000. While the respondent suggests that Michael
    also had a pension with the Ford Motor Company of Canada, it was not in-pay at
    the time of the motion, nor does it appear that the parties endeavoured to have
    that pension valued for family law purposes. Even so, a February 14, 2019 letter
    from the Ford Motor Company suggests that at the normal retirement date of May
    1, 2025, Michael would be entitled to monthly pension payments of $184.92.
    Therefore, that pension does not seem to have held much value. In any event,
    the question of law at issue in this case does not turn on the precise
    valuations of these parties other minimal assets.



[4]

Michael still had cognitive capacity as the litigation under
    Rule 16(12) of the
FLR
was nearing, but he had lost his ability to
    write. Michaels cousin took on signing authority for purposes of this
    affidavit, by virtue of his role as Michaels power of attorney for property
    (general) and personal care.



[5]
See also:
FLA
, s. 9(4).




[6]
See
    also:
FLA
, ss. 56.1 and 59.4.1.



[7]
Effective June 8, 2019, FSCOs regulatory functions were assumed by the Financial
    Services Regulatory Authority (FSRA). The FSCO website states: FSRA is
    actively reviewing all FSCO regulatory direction, including but not limited to
    forms, guidelines and FAQs. Until FSRA issues new regulatory direction,
all existing regulatory direction remains in force

    (emphasis added):
Family Law related FAQs -
Pension Payable Upon Death
(2012), online: Financial Services Commission of Ontario <
www.fsco.gov.on.ca
>
.


