Dudumas v Ontario (Superintendent Financial Services), 2016 ONFST 15
In August 2016 the Financial Services Tribunal released its decision regarding a request for Hearing filed by Josef Dudumas asking it to direct the Superintendent of Financial Services to order Crown Metal Packaging Canada LP to recalculate the commuted value of his pension benefits. The tribunal denied Mr. Dudumas’ request on the basis that he had received all of the pension benefits he was entitled to under the plan and Pension Benefits Act and therefore no recalculation of his benefits was needed. Having found that Mr. Dudumas’ claim and conduct were unreasonable, the tribunal awarded costs to Crown in the amount of $500. The decision is important because it is the first time the Tribunal has issued a cost award in a pensions matter.
Mr. Dudumas was employed by Crown from April 9, 1984 until his employment was involuntarily terminated on June 25, 2010 due to a plant closure. Prior to his last day of work Mr. Dudumas was asked by Crown to provide documentation to allow him to start collecting an immediate pension. He refused to initiate an immediate retirement in 2010 and refused to sign any application forms related to non-pension benefits such as life insurance, marital status or group insurance benefits. The plant closure triggered a partial wind-up of the plan in which Mr. Dudumas was included. As a result of the partial wind-up Mr. Dudumas was provided with an election form and on April 23, 2014 elected a transfer of the commuted value of his benefits.
The tribunal held that Mr. Dudumas had received all of the proper and full benefits that he was entitled to under the plan and the PBA.
As part of its submissions to the tribunal, Crown requested costs in the amount of $10,000. Section 24 of the Financial Services Commission of Ontario Act gives the tribunal authority to award costs in accordance with the rules of the tribunal. Rule 40.01 of the Rules of Practice and Procedure for Proceedings before the Financial Services Tribunal provides that:
Where the conduct or course of conduct of a party in a proceeding before the tribunal has been unreasonable, frivolous or vexatious, or a party has acted in bad faith during a proceeding, the tribunal may order the offending party to pay all or part of another party’s costs in the proceeding.
To determine whether Mr. Dudumas’ conduct was unreasonable, frivolous, vexatious or in bad faith, the tribunal applied the criteria in rule 41.01. Mr. Dudumas’ claim was determined to be “manifestly unfounded,” devoid of any legal merit and consequently unreasonable. The tribunal also pointed to Mr. Dudumas’ refusal of Crown’s offer, on numerous occasions, to provide him up to $5,000 to obtain independent actuarial or legal advice as relevant to determining whether he had failed to cooperate with other parties. However, the tribunal gave little weight to Crown’s argument that Mr. Dudumas’ refusal to admit the 2009 plan text into evidence was an unreasonable refusal to admit facts or documentary evidence not in dispute as Mr. Dudumas was self-represented. The tribunal made note of the fact that all parties acknowledged that Mr. Dudumas had a right to request a hearing and that an unsuccessful applicant should not automatically have a cost award made against them. This point is particularly salient in the context of an administrative tribunal where many applicants are self-represented and issues of access to justice may come in to play.
While ultimately holding that his conduct was unreasonable, the tribunal noted that Mr. Dudumas was self-represented and Crown had provided limited evidence and case law on the issue of costs. Although originally seeking $10,000, counsel for Crown indicated that they would be satisfied with a nominal award. The tribunal awarded Crown nominal costs of $500.
The tribunal’s analysis of the issue of costs is consistent with that which was previously provided in General Motors of Canada Limited v. Ontario (Superintendent Financial Services), 2015 ONFST 39 (CAMI). There are, however, two important elements that distinguish the decisions. The first is that in CAMI the question was whether a committee, represented by counsel, should have their costs paid out of the pension fund, whereas here the award was made against an unrepresented individual. The second is that in CAMI, while the analysis leads to the impression that it will only be in very limited circumstances that costs would be awarded against a party, there was no analysis of what constitutes unreasonable, frivolous, vexatious, or bad faith conduct. However, in the case of Mr. Dudumas, while the reluctance to make an award remains, the case provides an analysis of what particular conduct may be considered to be unreasonable.
Jason R. Paquette is a student at law at Financial Services Commission of Ontario