“The ball is in the court of OMERS and respondents to provide facts to an arbitrator,” says the executive assistant of CUPE Ontario, Antoni Shelton. “The outside party can decide if the members’ interests were upheld, and if senior executives should repay money.”
John Pierce, vice-president of corporate communications for OMERS says: “We would consider any remedy that is in the interest of the plan and that could get this case resolved. We’re disappointed it has gone on this long.”
CUPE’s announcement came after the case saw another procedural reorganization on December 13 when the Ontario Court of Appeal overturned a previous ruling about which of CUPE’s claims could and could not proceed to trial.
The court is allowing some of CUPE’s claims that were previously dismissed by the Superior Court in August 2006 to be included again. Claims against Borealis Capital Corporation have been reinstated, which brings president and chief executive officer of OMERS, Michael Nobrega, into the lawsuit. The appeal judge also ruled that the legal costs of CUPE should be paid from the pension fund.
“We believe the appeal ruling is noteworthy,” says Shelton, “because it is the first time judges have acknowledged that outside suppliers may owe a special duty to a pension plan.”
“This ruling is only about procedural details,” says Pierce. “There has been no finding on the evidence yet.”
The suit began back in May 2005 when CUPE Ontario brought a case against OMERS, Borealis Capital Corporation, Borealis Real Estate Management Inc.(BREMI)and certain senior executives. Allegations are related to contracts and payments associated with OMERS’s decision to outsource asset management of its real estate, infrastructure and private equity investments to Borealis and then bring asset management in-house in 2004.
In response, OMERS challenged CUPE’s statement of claim and the Ontario Superior Court ruled in August 2006 which claims could proceed to trial and which were to be dismissed. CUPE appealed that decision.
In August 2007, the Financial Services Commission of Ontario(FSCO)released a report from its three-year investigation of the 2004 sale of Borealis Capital Corporation to OMERS. It found no wrongdoing or waste of pension fund money by anyone associated with the transaction.
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