



COURT OF APPEAL FOR ONTARIO

CITATION: Austin v. Bell Canada, 2020 ONCA 142

DATE: 20200221

DOCKET: C67404

MacPherson, Sharpe and Jamal JJ.A.

BETWEEN

Leslie Austin

Plaintiff (Appellant)

and

Bell Canada, Bell Media Inc., Expertech Network
Installation Inc., and Bell Mobility Inc.

Defendants (Respondents)

Mark Zigler, Jonathan Ptak, and Garth Myers, for the
    appellant

Dana Peebles, for the respondents

Heard: February 5, 2020

On appeal from the judgment of Justice E.M. Morgan of the
    Superior Court of Justice, dated August 12, 2019, with reasons reported at 2019
    ONSC 4757, 147 O.R. (3d) 198.

By the Court:

[1]

The appellant is the representative plaintiff in a
    class action brought on behalf of retirees who are beneficiaries of the
    respondents (Bell) Pension Plan.

[2]

The sole issue for this court to decide is the proper
    calculation of the cost-of-living adjustment under the Plan for 2017. That
    turns on the interpretation of the Plans definition of the Pension Index and
    how that definition works together with the provisions in the plan governing
    the calculation of the amount of the cost-of-living adjustment. The appellant
    argues that the motion judge erred by finding that Bell was entitled to round
    up the annual percentage increase in the Consumer Price Index, mathematically
    calculated as 1.49371%, to two decimal points, or 1.49%. The appellant says
    that, properly interpreted, the Plan requires Bell to follow Statistics
    Canadas policy of rounding to only one decimal point, or 1.5%. The difference
    is significant. Another provision in the Plan provides that to determine the
    annual pension increase for the appellant and most other Bell Pensioners, the
    Pension Index is to be rounded to the nearest whole number. If the appellant is
    right, 1.5% is rounded to 2%. If Bell is right, 1.49% is rounded to 1%. The difference
    to the class members between a 2% and a 1% increase in the 2017 pension is over
    $10 million for the first year and, over the long-term, over $100 million.

Background

[3]

The appellant, a longtime Bell Canada employee,
    brings this class proceeding on behalf of approximately 35,000 pensioners who
    are all beneficiaries of the common Pension Plan administered by the
    respondents which are all part of the Bell corporate family.

[4]

The motion judge certified the proceeding under
    the
Class Proceedings Act
, 1992,
    S.O. 1992, c. 6
. It was common ground that the
    matter was suitable for summary judgment. As we explain below, the motion judge
    concluded that Bell was entitled to round the Pension Index to two decimal
    points and accordingly granted summary judgment dismissing the action.

The Bell Pension Plan

[5]

The motion judges ruling and this appeal turn
    on two provisions in the plan dealing with the annual indexing of benefits.

[6]

The first is the definition of Pension Index in
    s. 1.29 of the Plan:

1.29
Pension Index means
    the annual percentage increase of the Consumer Price Index, as determined by
    Statistics Canada, during the period of November 1 to October 31 immediately
    preceding the date of the pension increase;

[7]

The second key provision is s. 8.7, which governs the calculation of the
    annual indexation increase. The case turns on how s. 1.29 and the determination
    of the Pension Index works in conjunction with the rounding provision in s.
    8.7(iv):

8.7
On every first day of January, the retirement
    benefits payable to a Member, the surviving Spouse or the Beneficiary under the
    DB Provisions shall be augmented by a percentage determined as follows:

(i) If, on the date of the increase, the Member has not reached
    65 years of age, or would not have reached 65 years of age in the case of a
    surviving Spouse or Beneficiary, the Pension Index, limited to a maximum of 2%
    and calculated on a compounded basis.

(ii) If, on the date of the increase, the Member has reached 65
    years of age, or would have reached 65 years of age in the case of a surviving
    Spouse or Beneficiary, the percentage shall be the greater of:

(a) 60% of the Pension Index,
    limited to a maximum of 4% and calculated on a compounded basis; or

(b) the percentage determined
    under paragraph (i) above.

(iii) For the purpose of any increase applicable to a Member,
    the surviving Spouse or the Beneficiary within the first year of retirement,
    the applicable percentage shall be prorated, taking into account the number of
    full calendar months of retirement in the calendar year preceding the date of
    the increase.

(vi) All percentage increases
    shall be rounded to the nearest 2 decimal points, except for the percentage
    increase under paragraph (i) above which shall be rounded to the nearest whole
    number.

[8]

It is common ground that for the relevant
    period, the Consumer Price Index rose from 127.2 to 129.1 and, as a matter of
    simple mathematics, that represented a 1.49371 % increase. It is also
    undisputed that Statistics Canada has a policy of rounding the annual percentage
    increase to one decimal point. Accordingly, Statistics Canada published the
    annual percentage increase for the relevant period as 1.5%. Section 8.7(iv)
    provides that percentage increase for all pensioners other than those who are
    in their first year of retirement (s. 8.7(iii)), is to be rounded to the
    nearest whole number. Accordingly, if, as the appellant argues, the Statistics
    Canada policy governs, the Pension index of 1.5% should be rounded to 2%. On
    the other hand, Bell asserts that the words of s. 8.7(iv) apply: All percentage
    increases shall be rounded to the nearest 2 decimal points. If s. 8.7(iv) does
    apply to s. 1.29, the Pension Index is 1.49% which, when rounded to the nearest
    whole number, becomes 1%.

The Motion Judges Reasons

[9]

The motion judge turned first to s. 1.29. He
    held that the proper interpretation of that provision depended upon the
    importance to be ascribed to the comma after the words Consumer Price Index.
    He reviewed in some detail case law and academic writing, both Canadian and
    American, dealing with the significance to be attached to commas that follow a
    sequence of items. 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: Ruth Sullivan,
Sullivan on the
    Construction of Statutes
, 6th ed. (Markham: LexisNexis
    Canada, 2014), at p. 470. 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.

[10]

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. He focused on the s. 8.7(iv) provision that [a]
ll
    percentage increases shall be rounded to the nearest 2 decimal points. There
    was uncontradicted expert evidence that the calculation required under s.
    8.7(ii)(a) for pensioners aged 65 or older  60% of the Pension Index  will
    never yield more than a two-decimal place figure if the Statistics Canada one-decimal
    place increase is used. The motion judge found, at para. 61, that as using
    Statistics Canadas one-decimal rounding of the Pension Index would eliminate
    the need for any further rounding as set out in s. 8.7(ii), it would render
    meaningless the provision in s. 8.7(iv) that all rounding be to two decimal
    places. He added that the expert evidence indicated that following Bells
    policy of rounding the Pension Index to two decimal places would often yield a
    three-decimal place figure in the s. 8.7(ii)(a) calculation. The Bell
    two-decimal point rounding of the Pension Index would therefore give s. 8.7(iv)
    meaning.

[11]

The motion judge concluded that while Statistics Canada uses the
    one-decimal place approach to rounding for its own purposes, that method did
    not govern the Plan when read as a whole. The key passage in his reasons is
    para. 65:

Section 8.7 of the Plan is a precisely drafted, mathematically
    crafted section that is dependent on rounding being part and parcel of the
    calculations it prescribes. It is not possible to surmise 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 Canadas method of
    rounding when doing the initial Pension Index calculation under s. 1.29 of the
    Plan.

[12]

At para. 64, the motion judge referred to the
contra proferentem
rule that would favour the pensioners as the non-drafting party, but stated
    that there is no rule of interpretation that would implement a version of the
    Plan that renders it partly meaningless or effectively gut a key aspect of
    the method of calculation.

ANALYSIS

[13]

The appellant accepts that as the issue in this
    appeal turns upon the interpretation of a contract, the standard of review is
    that laid down by
Sattva

Capital Corp. v. Creston Moly
    Corp.
, 2014 SCC 53, [2014] 2 S.C.R. 633 and
Housen
    v. Nikolaisen
, 2002 SCC 33, [2002] 2 S.C.R. 235
. To
    succeed, the appellant must establish either a palpable and overriding error of
    fact or an extricable error of law.

[14]

The appellant argues that this appeal turns on
    the plain and ordinary meaning of s. 1.29. The appellant accepts that s. 1.29
    must be read in the light of the Plan as a whole. The appellant argues,
    however, that the definition in s. 1.29 is unaffected by s. 8.7(iv) which deals
    only with percentage increase in pensions under s. 8.7. The appellant submits
    that the motion judge made a foundational error by finding that unless s.
    8.7(iv) applies to the definition of Pension Index, s. 8.7(iv) would be
    meaningless. The motion judge failed to take into account the uncontradicted
    evidence regarding the calculation under s. 8.7(iii) of the annual percentage
    increase of pensioners who retired during the current year. Those pensioners
    are not entitled to the full years cost-of-living increase and their annual
    percentage increase is prorated according to the number of months of
    retirement. The expert evidence established that by reason of the prorating,
    using a Pension Index rounded to one decimal place will often yield an annual
    percentage increase with three or more decimal places. Therefore, resort must
    be had to the s. 8.7(iv) two-decimal place rounding rule. That, in turn, means
    that using the Statistics Canada one-decimal point rounding to determine the
    Pension Index does not render s. 8.7(iv) meaningless and the whole foundation
    for the motion judges interpretation collapses.

[15]

Bell argues that the motion judge did not err.
    The evidence regarding the calculations and need to round or not round was
    uncontradicted and the argument that the motion judge made a palpable and
    overriding error of fact should be rejected. Bell has used the two-decimal
    rounding policy since 1998 with no complaint from the pensioners. The motion
    judge did not err by finding that the Statistics Canada one-decimal policy
    would render s. 8.7(iv) meaningless in relation to s. 8.7(ii) which governs the
    annual percentage increase for all but a very small number of pensioners.

[16]

For the following reasons, we conclude that the
    appeal should be allowed.

[17]

Our starting point is the language of s. 1.29.
    We agree with the appellant and the motion judge that, on its face, s. 1.29
    states that
both
the
    annual percentage increase and the Consumer Price Index are to be determined by
    Statistics Canada. That conclusion is supported by the comma following the
    phrase Consumer Price Index and the series qualifying rule referred to by
    the motion judge.

[18]

We add here that the appellant led evidence to
    explain the reason for the Statistics Canada one-decimal point rounding policy.
    An expert testified that the Consumer Price Index cannot be accurately measured
    to two decimal points and to publish more than one decimal point would convey
    a message about the precision and accuracy of the index that would not be
    justified. The one-decimal point rounding is also the convention among most
    statistical agencies.

[19]

We do not accept Bells submission that adhering
    to the one-decimal rounding policy is undermined by the experts admission on
    cross-examination that Statistics Canada follows the one-decimal rounding
    policy for its own purposes and is not in the business of telling people how
    to use [its] data. As the expert explained, the policy Bell adopts for the
    Plan is matter for negotiation between Bell and its employees. In our view this
    simply states the obvious. Statistics Canada determines and publishes the
    annual percentage increase in the Consumer Price Index using what it regards as
    sound statistical practices. Statistics Canada has no authority to dictate how
    pensions are to be adjusted for inflation and parties are free to adopt
    whatever method they wish. However, the question before the motion judge and
    before us is whether the words in the Plan require the parties to adopt the
    Statistics Canada approach.

[20]

We agree with the motion judge that the language
    the parties have adopted in s. 1.29 points in the direction of applying
    Statistics Canadas calculation of the annual percentage increase of the
    Consumer Price Index. That interpretation is supported by use of the comma
    indicating that the phrase as determined by Statistics Canada modifies both
    the phrases

Consumer Price Index and annual
    percentage increase.
It is also supported by the evidence of
    sound statistical methodology supporting the one-decimal rounding policy.

[21]

In our view, having regard to the grammatical
    meaning of s. 1.29 and the evidence regarding accepted statistical conventions
    for rounding, a strained interpretation of s. 1.29 would be required to make it
    mean that Statistics Canada determines only the increase in the Consumer Price
    Index and leaves it to Bell to adopt a different rounding policy to determine
    the Pension Index.

[22]

This brings us to the next stage, namely reading
    s. 1.29 in the context of the Plan as a whole. We agree with the motion judge
    that this is an important part of the interpretive exercise. We also agree that
    when a pension scheme should be interpreted as a whole and that the meaning of
    a particular clause should be considered in conjunction with other relevant
    clauses:
Dinney v. Great-West Life Assurance Co.
, 2009 MBCA 29, 236 Man. R., 299, at paras. 61-2; Geoff R. Hall,
Canadian
    Contractual Interpretation Law
(3rd ed.) (Toronto: LexisNexis
    Canada, 2016), at p. 256. There can be no doubt that the crucial point for the
    motion judge was his conclusion that accepting the Statistics Canada
    one-decimal rounding policy would render s. 8.7(iv) meaningless or partly
    meaningless. In our view, that conclusion rests on either (or both) a palpable
    and overriding error of fact or an extricable error of law.

[23]

The palpable and overriding error of fact is
    that the motion judges conclusion ignores the uncontradicted evidence that
    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 under s. 8.7(iii), and that the two-decimal
    rounding provision on s. 8.7(iv) applies and therefore has meaning.

[24]

Bell argues that as the evidence was
    uncontradicted, the motion judge could not have misunderstood or mistaken its
    effect. However, even if the motion judge understood and did not mistake the
    effect of the evidence, we have no explanation for why he failed to take it
    into account in reaching the conclusion that s. 8.7(iv) would be rendered
    meaningless. In our respectful view, the motions judges failure to apply the
    evidence to the interpretation of the Plan amounts to a palpable and overriding
    error of fact. In the words of
Waxman v. Waxman
(2004)
, 186 O.A.C. 201,
    at paras. 296-7, his finding was made in conflict with accepted evidence and
    is plain to see and therefore palpable. The error is also overriding as
    it determined the result.

[25]

If we were to accept Bells submission that the
    motion judge only meant meaningless in relation to s. 8.7(ii), we are left
    with his conclusion that s. 8.7(iv) would be rendered partly meaningless. In
    our view, that reflects an extricable error of law.

[26]

It is not apparent what partly meaningless
    means. A contractual provision either has a meaning or it does not. Courts will
    strive to give all provisions in a contract meaning and to avoid an
    interpretation of one provision that would render another provision meaningless
    or redundant. The redundancy rule relied upon by the motion judge was explained
    by this court in
Scanlon v. Castlepoint Development Corp
. (1992), O.R. (3d) 744, at para. 88 (leave to appeal refused, [1993]
    S.C.C.A. No. 62).

To the extent that it is possible
    to do so, [a contact] should be construed as a whole and effect should be given
    to all of its provisions. The provisions should be read, not as standing alone,
    but in light of the agreement as a whole and the other provisions thereof:
Hillis
    Oil & Sales Ltd. v. Wynn's Canada Ltd
., [1986] 1 S.C.R. 57 at p. 66, 25
    D.L.R. (4th) 649 at p. 655. The court should strive to give meaning to the
    agreement and "reject an interpretation that would render one of its terms
    ineffective":
National Trust Co. v. Mead
, [1990] 2 S.C.R. 410 at p.
    425, 71 D.L.R. (4th) 488 at p. 499.

[27]

In this case, as we have explained, the rounding
    provision in s. 8.7(iv) would not be rendered ineffective by giving s. 1.29 its
    plain grammatical meaning. It will be frequently necessary to round to two
    decimal points to determine the annual percentage increase for recently retired
    pensioners.

[28]

Bell asks us to ignore that fact as the recently
    retired pensioners represent only between 4% and 5% of the class. That number
    amounts to hundreds of pensioners each year. We fail to see why that category
    of pensioners should be ignored in the interpretation of the Plan.

[29]

Adhering to the Statistics Canada one-decimal
    rounding policy for the purpose of determining the Pension Index pursuant to s.
    1.29 does not strip s. 8.7(iv) of meaning. The plain grammatical reading
    of s. 1.29 is readily reconcilable with the rounding method specified by s.
    8.7(iv) with respect to the other provisions of s. 8.7 and it follows that the
    plain grammatical meaning should be followed.

[30]

Alternatively, the motion judge made an extricable error of law by
    failing to consider the
contra proferentem
rule. The motion judge
    found the wording of the Plan to be awkward (para. 69). He referred briefly
    to the appellants
contra proferentem
argument but did not explain why
    the doctrine should not apply.

[31]

The Plan was drafted by Bell without meaningful participation by the
    pensioners who are a vulnerable group in relation to Bell. The
contra proferentem
rule of interpretation applies to contracts  on the simple theory that any
    ambiguity  must be resolve against the author if the choice is between him and
    the other party to the contract who did not participate in its drafting:
McClelland
    & Stewart Ltd. v. Mutual Life
, [1981] 2 S.C.R. 6, at p. 15.
Contra
    proferentem
is regularly applied to resolve ambiguities in pension
    documents in favour of pensioners: see
ONeill v. General Motors of Canada
    Ltd
., 2013 ONSC 4654, 6 C.C.P.B. (2nd) 257, at paras. 21-2.

[32]

In our view, the Plan is not ambiguous and, for the reasons above, the
    appellants interpretation is the correct one. We therefore do not find it
    necessary to resort to
contra proferentem
. However, it is a very short
    step to take from the motion judges observation that the wording of the Plan
    is awkward to finding that the wording is ambiguous. Having found the wording
    to be awkward, the motion judge should have taken that step, applied the
contra
    proferentem
doctrine, and ruled that given the ambiguity, the
    interpretation favouring the pensioners should prevail. His failure to do so
    represents an extricable error of law reviewable by this court under the
Saatva
standard of review.

DISPOSITION

[33]

Accordingly, we allow the appeal, set aside the
    summary judgment dismissing the action and in its place award summary judgment
    in favour of the appellant. The matter is remitted to the motion judge for any
    ancillary or consequential matters that may arise from our judgment.

[34]

The appellant is entitled to costs fixed in the
    amount agreed to by the parties, namely $22,500 inclusive of taxes and
    disbursements.

Released: February 21, 2020

JCM

J.C. MacPherson
    J.A.

Robert J. Sharpe
    J.A.

M. Jamal J.A.


