Legally married spouse privileged for pension death benefit

Carrigan v. Carrigan Estate, 2012 ONCA 736 decides who receives the pension death benefit when the member of a pension plan entitled to a deferred pension dies and is survived by both a common law spouse with whom he resided at the time of death and a legally married spouse from whom he was separated but whom he designated a beneficiary of his pension plan.  It is the legally married spouse.  The Court holds:

 

 

[24]       Section 48(1) gives statutory priority to the member’s spouse. When s. 48(1) is engaged, it applies even if the member has designated a beneficiary as envisaged by s. 48(6) or dies intestate as envisaged by s. 48(7). Given the assumption that both Mrs. Carrigan and Ms. Quinn are spouses, we encounter difficulty in applying s. 48(1): while the statutory priority is in favour of “the spouse of the member”, here the member has two spouses.

 

[25]       The canons of statutory interpretation require that the statutory provision being interpreted be considered in the context of the statute as a whole. Considering s. 48(1) in context, it is readily apparent that it does not apply in all circumstances. Section 48(3) defines a situation in which s. 48(1) does not apply. It states that “[s]ubsection (1) … [does] not apply where the member or former member and his or her spouse are living separate and apart on the date of the death of the member or former member.” In other words, when the member and his or her spouse are living separate and apart when the member dies, s. 48(1) does not apply, and therefore there is no statutory direction that the death benefit be paid to the member’s spouse.

 

[26]       The trial judge regarded s. 48(3) as imposing a “requirement” that “the spouse and the member cannot be living separate and apart on the day of the member’s death” in order for a spouse to receive the death benefit. She made much of the fact that Ms. Quinn was living with Mr. Carrigan at the date of his death. Thus, she was convinced that Ms. Quinn satisfied s. 48(3)’s “requirement”. However, on its face, s. 48(3) does not impose a requirement; rather, it sets out a circumstance that makes s. 48(1) inapplicable. The trial judge erred by applying s. 48(1) when the circumstance contemplated by s. 48(3) existed.

 

[27]       The circumstance contemplated by s. 48(3) existed because Mr. Carrigan and Mrs. Carrigan were living separate and apart at the time of his death. Given the assumption on this leg of the analysis that the word “spouse” in s. 48(3) may mean “either” Ms. Quinn or Mrs. Carrigan, it is enough that Mrs. Carrigan satisfies the circumstance in s. 48(3). Mrs. Carrigan triggers the application of s. 48(3) as she, a spouse, was living separate and apart from Mr. Carrigan on the date of his death.

 

[28]       In fact, it is apparent that the word “spouse” in s. 48(3) must always refer to the legally married spouse. Under the PBA it makes no sense to conceive of a common law spouse living separate and apart from the member. While a person may be a common law spouse in other contexts, only a legally married spouse can live separate and apart from the member and still be a “spouse” under the PBA. That is because paragraph (b) of the statutory definition applies to two persons not legally married who “are living in a conjugal relationship”. The circumstance contemplated by s. 48(3) – that the member and his or her spouse are living separate and apart on the date of the death – can only be satisfied by the legally married spouse.

 

[29]       To make this clearer, consider a hypothetical statute that has a dual definition of the term “person” that provides that a “person” means “either” a man or a woman. However, if the term “pregnant person” is employed in a particular provision of the statute, that particular provision could only refer to a “woman” even though “person” could mean either a man or a woman in other provisions. The particular provision would have to be interpreted and applied to mean a “woman”. In the same way, the term “spouse living separate and apart from the member” must necessarily connote the legally married spouse of the member. In the context of the PBA, it is not possible for a common law spouse to be living separate and apart from the member any more than a man can be pregnant.

 

[30]       Consequently, even if one assumes the definition of “spouse” encompasses both Mrs. Carrigan and Ms. Quinn, only Ms. Carrigan could be the “spouse” referred to in s. 48(3). Since the circumstance contemplated by s. 48(3) exists, s. 48(1) is rendered inapplicable. Since s. 48(1) is inapplicable, the difficulty in applying the spousal priority falls away. When s. 48(1) does not apply, there is no provision that the “spouse” of the member is entitled to the death benefit. As there is no spousal entitlement, the member’s designated beneficiary is entitled to the death benefit under s. 48(6) of the PBA.

 

[31]       Section 48(6) provides that the designated beneficiary is entitled to the death benefit if either of two circumstances exists. Either, the member does not have a spouse on the date of death; or, the member is living separate and apart from his or her spouse on that day. The structure of s. 48(6) indicates that the existence of either circumstance triggers the application of the subsection. The same reasoning employed in regard to s. 48(3) applies to the second circumstance in s. 48(6). Mr. and Mrs. Carrigan were living separate and apart on the date of his death. The second circumstance in s. 48(6) exists and the application of the section is triggered. Therefore, s. 48(6) is triggered and the designated beneficiaries are entitled to Mr. Carrigan’s death benefit.

 

[32]       The result is that neither Mrs. Carrigan nor Ms. Quinn is entitled to the pension benefit as a spouse. Rather Mrs. Carrigan and her two daughters are entitled to Mr. Carrigan’s death benefit as his designated beneficiaries.

 

[33]       I next analyse the situation by assuming the appellant is correct about the interpretation of the statutory definition and the legally married spouse is the sole spouse. In that scenario, s. 48(1) refers to Mrs. Carrigan. However, s. 48(3) still applies as Mr. and Mrs. Carrigan were living separate and apart at his death. Section 48(3) makes s. 48(1) inapplicable. As well, the second circumstance in s. 48(6) exists, the application of s. 48(6) is triggered, and the result is that Mrs. Carrigan and her two daughters are entitled to Mr. Carrigan’s death benefit as his designated beneficiaries.

 

[34]       Therefore, under both the appellant’s and the respondent’s understanding of the statutory definition, the statute provides that Mrs. Carrigan and her two daughters are entitled to the death benefit as the designated beneficiaries under s. 48(6).

 

[35]       In light of this conclusion, it is not necessary to deal with Mrs. Carrigan’s other claims.

 

[36]       I have had the opportunity to consider the reasons of my colleague LaForme J.A., but, with respect, I do not find them persuasive. Had the drafters desired the result my colleague reaches with his interpretation, they could simply have included the words “and living with” in s. 48(1) and dispensed with s. 48(3) entirely. That is, section 48(1) could have been easily drafted to read:

 

If a member…dies before commencement of payment of the deferred pension, the person who is the spouse of and living with the member…on the date of death is entitled to…[the death benefit].

 

[37]       Instead, the drafters deliberately chose to include a separate provision at section 48(3), which makes s. 48(1) entirely inapplicable.

 

[38]       It seems to me that the analysis he suggests reads s. 48(3) as if it provides that s. 48(1) does not apply “to the spouse to who s. 48(3) applies”.  I, on the other hand, read the words of s. 48(3) to provide that when it applies s. 48(1) does not apply. I see no words in s. 48(3) to indicate that s. 48(1) does not apply only to the spouse that triggers s. 48(3), leaving room for it to apply to another spouse. My earlier observation that the word “spouse” in s. 48(3) must always refer to a legally married spouse--an observation I consider indisputable—is not a necessary component of my analysis. It matters not that Ms. Quinn does not trigger the application of s. 48(3), when Mrs. Carrigan does.

 

[39]       Moreover, I see no particular policy rationale for interpreting the PBA to provide unequivocally that in all circumstances where there is a legally married spouse and a common law spouse, the common law spouse is entitled to the member’s death benefit. Given the diversity of possible relationships, it is more desirable to interpret the statute to allow pension members the freedom to order their affairs in a way that suits their particular circumstances.