London Life Pension Surplus Update

Ontario Superior Court finds against the applicants and members of the class

On June 20, 2011, Mr. Justice Wilton-Siegal of the Ontario Superior Court of Justice released his decision. He found against the applicants and members of the class, holding that:

the surplus assets in the Plan were not impressed with a trust in favour of Plan members, former Plan members or other beneficiaries;
members of the class were not entitled to the partial windup surplus or damages;
London Life did not commit any breaches of trust, breaches of fiduciary duty, breaches of its employer obligation of good faith or breaches of its statutory obligations in respect of members of the class;
a constructive trust in favour of class members should not be imposed over the entire partial windup surplus or over that part of the surplus attributable to special payments made by London Life; and
a resulting trust in favour of class members should not be imposed over the portion of the partial windup surplus attributable to contributions made by members.

A pdf copy of the decision is here.

Notice of Certification of a Class Proceeding

THE CLASS

TO: All Office members (i.e. administrative employees) of the London Life Insurance Company Staff Pension Plan, Registration No. 0343368 with a vested entitlement under the Plan, who were employed by the London Life Insurance Company ("London Life") and whose employment was terminated by London Life in 1996 or who voluntarily resigned or retired as a result of the 1996 reorganization of London Life or the discontinuance in 1996 of a significant portion of the business of London Life, including such members' beneficiaries or estates.

This Notice is published by order of the Ontario Superior Court of Justice

THE CLASS PROCEEDING

Barbara McGee and Pauline McCallum commenced an action against London Life in February, 2007. The action concerns the alleged failure of London Life to complete a partial wind-up of its staff pension plan following its 1996 reorganization (the “1996 partial wind-up”). The plaintiffs further allege that they and other class members are entitled to surplus funds attributable to the 1996 partial wind-up. The representative plaintiffs are seeking various forms of relief including a declaration that London Life breached its statutory obligations under the Pension Benefits Act, R.S.O. 1990, c.P.8 by failing to complete the 1996 partial wind-up; an order for restitution of an amount equal to the pension surplus attributable to the 1996 partial wind-up; an order directing an accounting of the Plan assets and accounting of the entitlement of each class member to their proper portion of the partial wind-up assets; and an order directing the distribution of the partial wind-up surplus to members of the class. In the alternative, they are seeking damages for breach of trust and breach of fiduciary duty for the amount of the partial wind-up surplus. London Life denies that it has breached any statutory or other obligation in connection with the 1996 partial wind-up and asserts that it is entitled to the surplus in the Plan on the wind-up or partial wind-up of the Plan. These matters have not yet been determined by a court.

This action was certified as a class proceeding by order of Madam Justice Lax of the Ontario Superior Court of Justice dated May 6, 2008. This order was made under the Class Proceedings Act, 1992, S.O. 1992 c.6 (the "CPA"). Barbara McGee and Pauline McCallum were appointed by the court as representative plaintiffs for the class.

On September 25, 2008, on consent of the parties, the action was converted to an application.

You are receiving this notice because you have been identified as a member of the Class.

LEGAL REPRESENTATION AND FEES

The representative plaintiffs have retained the law firm of Sack Goldblatt Mitchell LLP ("SGM") to represent them in this action. The representative plaintiffs have entered into a retainer agreement with SGM with respect to legal fees. This retainer agreement is subject to approval by the court.

OPTING OUT

As a member of the class, you will be bound by any judgment (whether favourable or not) in this proceeding including any settlement unless you opt out of the class proceeding.
If you wish to opt out of the class proceeding, you must send a written and signed notice of intention to opt out to SGM on or before December 1, 2008 to the following address: Sack Goldblatt Mitchell LLP, 20 Dundas Street West, Suite 1100, Toronto, ON M5G 2G8, Attention: London Life Pension Surplus Class Action.

If you do not opt out before this date, you will be deemed to be a member of the class and be bound by any judgment or settlement in this proceeding. You will not be permitted to opt out thereafter.

RIGHT TO PARTICIPATE

Any class member is entitled to participate in the class proceeding, subject to the approval of the court. The court will determine the manner in terms that such participation will be permitted.

FINAL CONSEQUENCES OF THIS PROCEEDING

If this class action is successful (either by way of court approved settlement or judgment) the legal fees will be payable to legal counsel in accordance with the retainer agreement described above, and/or on other terms approved by the court.

If the action is successful, the court will determine how much each class member should be compensated. You may need to participate at that stage by providing access to documents in your possession. Whether or not the action is successful, all class members who do not opt out will be bound by the result.

If you have any questions, you may contact Sack Goldblatt Mitchell LLP as follows:

Sack Goldblatt Mitchell LLP
20 Dundas Street West, Suite 1100
Toronto, ON M5G 2G8
Attention: Tricia Brioux, Clerk, London Life Pension Surplus Class Action

Tel: 416-977-4233
Toll Free: 1-800-387-5422
Fax: 416-591-7333
Email: londonlifeclassaction@sgmlaw.com