 |
Hudson's Bay Company / The Bay
|
For more information you may e-mail us at
hbcpension@kmlaw.ca or call us
at 1 866-778-7986. |
|
CLASS ACTION FILED AGAINST HUDSON'S BAY COMPANY AND OTHER
DEFENDANTS
Updated: August 20, 2007
CURRENT STATUS
On July 31, 2007, the Ontario Superior Court of Justice released its decision
which provides that it was acceptable for HBC to use the surplus of the Plan to
fund the defined-contribution plan of Zellers and Kmart employees. While
Justice Herman W. Siegel found that the pension fund assets are held
exclusively for the benefit of the pension plan members, His Honour went on to
find that "Hudson Bay Co. was entitled to apply the assets of the (pension)
trust fund to meet its funding obligations in respect of both the Zellers
employees brought into the plan effective Jan. 1, 1994, and the Kmart employees
brought in the plan effective Feb. 28, 1998." According to the Court, Simpsons
would have been within its rights to add a defined-contribution plan and new
employees to its existing defined-benefit pension plan and HBC inherited the
authority to make amendments to the plan, and to add new members. The Court
found that no breach of trust or breach of fiduciary duty had occurred because
both the Simpson Plan members and the Zellers and Kmart employees are rightful
beneficiaries of the trust fund. HBC's only obligation to the class members is
to ensure that there is enough funding to pay their pensions based on age,
years of service and salaries. The Court found that the class members would,
however, have a claim to those surplus funds if the company were to wind up the
pension plan or if the Plan had to be wound up.
The plaintiffs are appealing the decision. More information related to this
appeal will be posted as it becomes available.
To view the 81 page decision, please click here.
BACKGROUND
On August 7, 2002, an action was commenced under the Class Proceedings Act,
1992 on behalf of members of the Simpsons, Limited Supplementary Pension Plan
(the "Simpsons Plan") against the Hudson's Bay Company Limited ("HBC"), Royal
Trust Corporation ("Royal Trust") and Investors Group Trust Co. Ltd.
("Investors Group").
In a decision released on February 24, 2005, the Ontario Superior Court of
Justice certified the action as a class proceeding on behalf of the following
class:
all members, retirees and beneficiaries of the Simpsons, Limited Supplementary
Pension Plan as of the 1st of January, 1988, now known as the Dumai Pension
Plan, CCRA Registration Number 0358572.
The statement of claim alleges breach of trust, breach of fiduciary duties and
unlawful diversion of surplus assets in relation to the administration of the
former Simpsons Plan and seeks damages as a result.
The defendants HBC, Royal Trust and Investors Group had brought a motion for
partial summary judgment at the time of the certification motion. The court
struck certain paragraphs of the plaintiffs' statement of claim. Please
click here to view this order. Please
click here to view the Fresh as Amended Statement of Claim.
OTHER RELEVANT INFORMATION
Examinations for discovery were conducted and completed in late 2005. The trial
was held in January and February 2007.
In an endorsement of the court pertaining to the costs of the certification and
partial summary judgment motions of January 2005, the court awarded costs to
the plaintiffs in the amount of $67,625.00 plus GST for the certification
motion and costs to the defendants HBC and Investors Group in the amount of
approximately $25,000.00 plus GST. To view this court endorsement, please
click here.
This action was certified as a class proceeding by court order dated April 28,
2005. To view a copy of the certification order, please
click here.
A notice of certification was mailed to all class members in
late-June/early-July 2005. To view a copy, please
click here.
To view the other relevant court documents in these proceedings, please
click here. Please
click here for information relevant to members of the Hudson's Bay
Company Pension Plan and Hudson's Bay Company Executive Pension Plan. Please
click here to view information relevant to the Zellers and Kmart
Pension Plan members.
EARLIER PRELIMINARY PROCEEDINGS
In May 2003, the court ordered that representatives of The Hudson's Bay Company
Executive Pension Plan, The Hudson's Bay Company Pension Plan, the Kmart
Retirement Plan and the Zellers Pension Plan be named as defendants in this
class proceeding.
As a result of this court order, in May 2004, the court further ordered that
certain members of these pension plans be added to the proceeding as
representative defendants to represent defendant classes. The law firm of
McDonald & Hayden LLP and Warren Rapoport were the lawyers for the
representative defendants who represent the members of the Hudson's Bay Company
Executive Pension Plan and the Hudson's Bay Company Pension Plan. The law firm
of Paliare Roland Rosenberg Rothstein LLP was appointed the lawyers for the
defendants who represent the members of the Kmart Retirement Plan and the
Zellers Pension Plan. All members of these defendant classes are currently
accruing benefits on a defined basis in the Simpsons Plan.
By court order dated January 26, 2005, the law firm of McDonald & Hayden
LLP was replaced by Lang Michener LLP. Further, the law firm of Paliare Roland
Rosenberg Rothstein LLP was replaced by Doane Philips Young LLP.
The plaintiffs are not seeking any remedy against any of these individuals, nor
the classes that they represent. They have been added because the court found
that they are interested parties.
The certification motion was heard by the Superior Court of Justice on January
12 and 13, 2005. To view a copy of the decision released on February 24, 2005,
please click
here. In this decision, the court certified the action as a class
proceeding. The court also struck out the remedy of a variation of the pension
trust. The court denied certification of the proposed defendant classes but,
instead, appointed the proposed defendant representatives as representatives
under Rule 10 of the Rules of Civil Procedure.
As a result of a court order dated June 2004, the legal costs of the
representative defendants are payable out of the pension plans of which they
are members.
CONTACT US
If you have questions with respect to this matter, please call our 24-hour
hotline number at 1-866-778-7986. You may also email us at
hbcpension@kmlaw.ca.
This website is not designed to answer questions about specific situations or
individual entitlements. The information provided on these pages is not legal
advice or a substitute therefore. The contents of this website are subject to
solicitor/client privilege and all rights to that privilege are expressly
claimed and not waived.
|
|