Supreme Court of Nova Scotia Orders Retired Worker to repay more than $40K in Pension Overpayments
December 13, 2022
If a pension is paid to a retired worker in error, is the worker required to pay the funds back once the error is discovered?
That was the question posed to the Supreme Court of Nova Scotia in Belmont Financial Services Incorporated v. James Watters.
For background: Watters, the defendant, joined Local Union 56 in Halifax in the 1970s, and his employers started making pension contributions on his behalf to the Halifax Union pension plan, which the plaintiff, Belmont, administered.
In 2006, Watters transferred to Edmonton, joining Union Local 448. In 2008, he transferred his pension from the Halifax Union to the Edmonton Union. At some point, however, due to a new collective agreement, Watters was entitled to a retroactive payment of approximately $9,000, which was placed in his Halifax pension account.
When Watters retired in 2016, he received his full pension payment from the Edmonton Union plan, but due to an administrative error on Belmont’s part, he also received a full pension payment from the Halifax Union plan (rather than a smaller payment based on the account’s $9,000 total).
When Belmont discovered the error in 2019 and asked for the overpayments to be returned, Watters said he’d already spent the money. In 2020, Belmont took legal action to retrieve it.
When Justice D. Timothy Gabriel heard the case, he ruled in favour of the plaintiff, pointing to International Longshore & Warehouse Union, Local 502 v. Ford, 2016 BCCA 226, [2016] B.C.J. No. 1063 as precedent. In that case, Justice Garson stated:
“In my view, this ‘carelessness’ defence cannot succeed. First, it must be recalled that this cause of action is nearly always based on conduct of the plaintiff that is said to be mistaken. In cases of money had and received by mistake, the plaintiff nearly always bears some degree of fault, but is entitled to the return of money because it would generally be against conscience to permit the recipient to keep money he or she was never entitled to.”
In the end, Justice Gabriel ordered Watters to pay Belmont $42,348.92. Click more information below to see the full case:
