IN THE SUPREME COURT OF BRITISH COLUMBIA RESPONSE TO CIVIL CLAIM. TimberWest Forest Corp. (the "Defendant") Division 1-Defendant's Response to Facts

Transcription

1 N THE SUPREME COURT OF BRTSH COLUMBA NO. S VANCOUVER REGSTRY BETWEEN: GEORGE JABLONSKY PLANTFF AND: TMBERWEST FOREST CORP. DEFENDANT RESPONSE TO CVL CLAM Brought under the Cass Proceedings Act, R.S.B.C. 1996, c. 50 Fied by: Part 1: TimberWest Forest Corp. (the "Defendant") RESPONSE TO NOTCE OF CVL CLAM FACTS Division 1-Defendant's Response to Facts 1. The facts aeged in paragraphs 2, 6, 23, 24 and the first sentence of paragraph 12 of Part of the Notice of Civi Caim are admitted, subject to the quaification in paragraph 4 beow regarding putative cass members. 2. The facts aeged in paragraphs 3, 4, 5, 7-11, 15-22, and the baance of paragraph 12, of Part of the Notice of Civi Caim are denied. 3. The facts aeged in paragraphs and 13 of Part of the Notice of Civi Caim are outside the knowedge of the Defendant GBB

2 GBB Paragraph 14 of the Notice of Civi Caim aeges that the action is brought on behaf of a "cass" which has not yet been certified. TimberWest does not admit anything in respect of putative cass members whose identity is not yet ascertainabe. 5. Paragraph 30 of the Notice of Civi Caim is a peading of aw, not fact. Division 2 - Defendant's Version of Facts. Background 1. The Defendant, TimberWest Forest Corp. ("TimberWest"), is a corporation duy. incorporated according to the aws of Canada and extra-provinciay registered in British Coumbia. TirnberWest has a registered office ocated at Dunsmuir Street, Vancouver, BC, V7Y 1K2. 2. TimberWest's corporate history incudes severa corporate transactions by which TimberWest acquired certain interests in and/or assets of the foowing companies: Crown Zeerbach Canada Limited ("Crown Zeerbach"), British Coumbia Forest Products Limited (''BC Forest Products"), Crown Forest ndustries Limited ("Crown Forest"), Fetcher Chaenge Canada Limited ("Fetcher Chaenge"), TimberWest Forest Limited ("TWFL"), and Pacific Forest Products Limited ("Pacific Forest Products"). These companies are referred to coectivey and for convenience as the "Predecessors" but without any admission by the use of that term as to the ega reationship between the respective companies and TimberWest. 3. The specific obigations that TimberWest assumed from the Predecessors, if any, incuding any obigations with respect to former empoyees of the Predecessors, vary with the nature and specific terms of the reevant corporate transaction. 4. At various times, TimberWest and each of the Predecessors made various forms. of post-retirement heathcare benefits avaiabe to eigibe retired empoyees (the "Post Retirement Benefits"). 5. The specific benefits made avaiabe to a particuar retired empoyee and the amount that the retired empoyee is required to contribute to the cost of such benefits vary depending upon a number of factors incuding: the company the empoyee retired from, the

3 3 nature of the retired empoyee's former empoyment (union or saaried), the ocation of the retired empoyee's former empoyment, when the empoyee retired, the ength of his or her service, and corporate decisions made from time to time by Timber West and the Predecessors. 6. Foowing TimberWest's incorporation in 1997 and subsequent corporate transactions invoving certain of the Predecessors, TimberWest made Post-Retirement Benefits avaiabe to its retired empoyees and to retired empoyees of the Predecessors. 7. Each of the pans and programs Timer West and the Predecessors made avaiabe to retirees at various times contain a unique set of benefits and imitations. n particuar, these pans and programs vary with respect to, inter aia, the specific expenses covered, the percentage of coverage for such expenses, ifetime and annua maximums for overa benefits and/or specific categories of benefits, and eigibiity criteria for retirees, spouses and dependants. 8. TimberWest currenty provides Post-Retirement Benefits to approximatey 450 putative Empoyee Cass Members (as defined in the Notice of Civi Caim) who retired from TimberWest or a Predecessor, and to their eigibe spouses and dependants. 9. Timber West maintains separate pans with separate sets of benefits for retirees of Pacific Forest Products and retirees resident outside of Canada. 10. Particuars of the Post-Retirement Benefits TimberWest and the Predecessors provided, the Predecessors' reationships to Timber West, and the number of putative Empoyee Cass Members that retired from TimberWest and each of the Predecessors are set out beow.. Crown Zeerbach 11. Crown Zeerbach was a British Coumbia company continued by amagamation in or about Crown Zeerbach operated unti in or about Approximatey 65 putative Empoyee Cass Members retired from Crown Zeerbach or its predecessors between 1967 and At certain times, Crown Zeerbach made various forms of Post-Retirement Benefits avaiabe to eigibe retired empoyees GBB

4 4 14. The Post-Retirement Benefits were impemented and subsequenty made avaiabe to retired empoyees gratuitousy, as a matter of poicy and at the discretion of Crown Zeerbach. 15. From time to time, the Post-Retirement Benefits may have been referenced in communication materias such as brochures, bookets or guides produced by Crown Zeerbach and provided to empoyees. f such references were made, these communication materias were provided to empoyees for information purposes ony and did not, nor were they intended or understood to, form part of the empoyees' contracts of empoyment. 16. Some retiring Crown Zeerbach empoyees received retirement etters that addressed the Post-Retirement Benefits. The information provided in these retirement etters with respect to the Post-Retirement Benefits varies, incuding with respect to the scope of the Post Retirement Benefits, their duration, the recipients thereof, and the cost to the recipients. These etters were provided to empoyees for information purposes ony and did not, nor were they intended or understood to, form a contract, as aeged or at a, with any retiring empoyee. 17. Some retiring Crown Zeerbach empoyees entered into individua retirement agreements that specificay referenced Post-Retirement Benefits. 18. At a materia times, Crown Zeerbach maintained and reserved the right to amend, incuding to discontinue, the Post-Retirement Benefits and/or to change the amounts that retired empoyees are required to contribute to the cost of such benefits. 19. From time to time, Crown Zeerbach, its successors, and/or TimberWest, gratuitousy and without any ega obigation to do so, increased the specific benefits made avaiabe to a eigibe Crown Zeerbach retirees, incuding those who had aready retired. 20. n the aternative, if Crown Zeerbach owed any ega obigations to any of the putative cass members, which is denied, then TimberWest denies that it is iabe for any contractua or other obigations owed by Crown Zeerbach to its former empoyees, to empoyees of Crown Zeerbach's corporate predecessors, or to the spouses or dependants of those empoyees GBB

5 GBB BC Forest Products 21. BC Forest Products was a British Coumbia company incorporated in or about BC Forest Products operated unti in or about Approximatey 50 putative Empoyee Cass Members retired from BC Forest Products between 1974 and At certain times, BC Forest Products made various forms of Post-Retirement Benefits avaiabe to eigibe retired empoyees. 24. The Post-Retirement Benefits were impemented and subsequenty made avaiabe to retired empoyees gratuitousy, as a matter of poicy and at the discretion of BC Forest Products. 25. From time to time, the Post-Retirement Benefits may have been referenced in communication materia such as brochures, bookets or guides produced by BC Forest Products and provided to empoyees. f such references were made, these communication materias were provided to empoyees for information purposes ony and did not, nor were they intended or understood to, form part of the empoyees' contracts of empoyment. 26. Some retiring BC Forest Products empoyees received retirement etters that addressed the Post-Retirement Benefits. The references to the Post-Retirement Benefits in these etters were provided to empoyees for information purposes ony and did not, nor were they intended or understood to, form any contract, as aeged or at a, with any retiring empoyee. 27. Some retiring BC Forest Products empoyees entered into individua retirement agreements that specificay referenced Post-Retirement Benefits. Some of these retirement agreements specified that the retirees woud continue to receive such Post-Retirement Benefits as were "made avaiabe from time to time by the Company to retired saaried empoyees". 28. At a materia times, BC Forest Products maintained and reserved the right to amend, incuding to discontinue, the Post-Retirement Benefits and/or to change the amounts that retired empoyees are required to contribute to the cost of such benefits.

6 GBB From time to time, BC Forest Products, its successors, and/or TimberWest, gratuitousy and without any ega obigation to do so, increased the specific benefits made avaiabe to a eigibe BC Forest Products retirees, incuding those who were aready retired. 30. n the aternative, if BC Forest Products owed any ega obigations to any of the putative cass members, which is denied, then TimberWest denies that it is iabe for any contractua or other obigations owed by BC Forest Products to its former empoyees, to empoyees of BC Forest Products' corporate predecessors, or to the spouses or dependants of those empoyees. 1 ~ t.! f 1 j! : 't!,j ~ j j t ' \! t i 1! V. Crown Forest 31. Crown Forest was a British Coumbia corporation that began operations in or about Crown Forest operated unti in or about Approximatey 40 putative Empoyee Cass Members retired from Crown Forest between 1983 and At certain times, Crown Forest made various forms of Post-Retirement Benefits avaiabe to eigibe retired empoyees. 34. The Post-Retirement Benefits were impemented and subsequenty made avaiabe to retired empoyees gratuitousy, as a matter of poicy and at the discretion of Crown Forest. 35. From time to time, the Post-Retirement Benefits were referenced m communication materias, incuding brochures, produced by Crown Forest and provided to empoyees. These documents, and the references to Post-Retirement Benefits contained therein, were provided to empoyees for information purposes ony and did not, nor were they intended or understood to, form part of the empoyees' contracts of empoyment. 36. Limitations to the Post-Retirement Benefits provided by Crown Forest at certain times incuded, inter aia, a ifetime maximum per caimant of $250, Some retiring Crown Forest empoyees received retirement etters that addressed the Post-Retirement Benefits. The references to the Post-Retirement Benefits in these etters

7 GBB were provided to empoyees for information purposes ony and did not, nor were they intended or understood to, form any contract, as aeged or at a, with any retiring empoyee. 38. Some retirement etters sent prior to approximatey 1985 stated that Post- Retirement Benefits woud continue for the ifetime of the retiree and of the retiree's spouse, but did not address the cost of the Post-Retirement Benefits. 39. Some retirement etters sent after approximatey 1985 stated that whie Crown Forest hoped to continue the Post-Retirement benefits to retirees and their dependants at no cost and for the baance of the retiree and spouse's ifetimes, it must of necessity be understood that the cost arrangements may be revised if, in Crown Forest's opinion, conditions so warrant. 40. At a materia times, Crown Forest maintained and reserved the right to amend, incuding to discontinue, the Post-Retirement Benefits and/or to change the amounts that retired empoyees are required to contribute to the cost of such benefits. 41. From time to time, Crown Forest, its successors, and/or TimberWest, gratuitousy and without any ega obigation to do so, increased the specific benefits made avaiabe to a eigibe Crown Forest retirees, incuding those who were aready retired. 42. n the aternative, if Crown Forest owed any ega obigations to any of the putative cass members, which is denied, then TimberWest denies that it is iabe for any contractua or other obigations owed by Crown Forest to its former empoyees, to empoyees of Crown Forest's corporate predecessors, or to the spouses or dependants of those empoyees. V. Fetcher Chaenge 43. Fetcher Chaenge was a British Coumbia company continued as a corporate successor to BC Forest Products in or about Fetcher Chaenge began operations in or about 1988 when it acquired portions of the respective businesses of Crown Forest and BC Forest Products; Fetcher Chaenge ceased operating at or about the end of Approximatey 130 putative Empoyee Cass Members retired from Fetcher Chaenge between 1988 and 1993.

8 GBB.10$ At certain times, Fetcher Chaenge niade various forms of Post-Retirement Benefits avaiabe to eigibe retired empoyees. 46. The Post-Retirement Benefits were impemented and subsequenty made avaiabe to retired empoyees gratuitousy, as a matter of poicy and at the discretion of Fetcher Chaenge. 47. From time to time, the Post-Retirement Benefits were referenced in communication materias, incuding brochures, produced by Fetcher Chaenge and provided to empoyees. These documents, and the references to Post-Retirement Benefits contained therein, were provided to empoyees for information purposes ony and did not, nor were they intended or understood to, form part of the empoyees' contracts of empoyment. 48. Brochures pubished by Fetcher Chaenge stated that, whie Fetcher Chaenge hopes to continue the Post-Retirement Benefits for the baance of retirees' and spouses' ifetimes, Fetcher Chaenge reserves the right to change or discontinue coverage if the need arises. 49. Some retiring Fetcher Chaenge empoyees received retirement etters that addressed the Post-Retirement Benefits. The information provided in these retirement etters with respect to the Post-Retirement Benefits vru:ies, incuding with respect to the scope of the Post Retirement Benefits, their duration, the recipients thereof, the cost to the recipients, and the right of Fetcher Chaenge to change or discontinue them. These etters were provided to empoyees for information purposes ony and did not, nor were they intended or understood to, form any contract, as aeged or at a, with any retiring empoyee. 50. Some retiring Fetcher Chaenge empoyees entered into individua retirement agreements that specificay referenced Post-Retirement Benefits. Some of these retirement agreements specified that the retirees woud continue to receive Post-Retirement Benefits "to the extent permitted" by the reevant medica and denta pians. 51. At a materia times, Fetcher Chaenge maintained and reserved the right to amend, incuding to discontinue, the Post-Retirement Benefits and/or to change the amounts that retired empoyees are required to contribute to the cost of such benefits.

9 GBB From time to time, Fetcher Chaenge, its successors, and/or TimberWest, gratuitousy and without any ega obigation to do so, increased the specific benefits made avaiabe to a eigibe Fetcher Chaenge retirees, incuding those who were aready retired. 53. n the aternative, if Fetcher Chaenge owed any ega obigations to any of the putative cass members, which is denied, then TimberWest denies that it is iabe for any contractua or other obigations owed by Fetcher Chaenge to its former empoyees, to empoyees of Fetcher Chaenge' s corporate predecessors, or to the spouses or dependants of those empoyees. V. TWFL 54. TWFL was a British Coumbia company, a predecessor of which was incorporated in or about n or about 1993, that predecessor's name was changed to TWFL. 55. Foowing an initia pubic offering in or about December 1993, Fetcher Chaenge and its whoy owned subsidiary Ek Fas Forest ndustries Limited ("EFFL") coectivey hed a majority of the outstanding common shares oftwfl. 56. Between 1993 and 1996, TWFL acquired certain assets from Fetcher Chaenge and/or EFFL, incuding, inter aia, certain sawmis, reated timber tenures and ogging operations, and certain private timberands and Crown timber tenures. 57. TWFL operated unti in or about 1997, when a predecessor of TimberWest was incorporated and acquired portions of TWFL's business, incuding, inter aia, through the purchase of TWFL shares. 58. Approximatey 25 putative Empoyee Cass Members retired from TWFL between 1993 and At certain times, TWFL made various forms of Post-Retirement Benefits avaiabe to eigibe retired empoyees. 60. The Post-Retirement Benefits were impemented and subsequenty made avaiabe to retired empoyees gratuitousy, as a matter of poicy and at the discretion oftwfl.

10 GBB From time to time, the Post-Retirement Benefits were referenced in communication materias, incuding brochures, produced by TWFL and provided to empoyees. These documents, and the references to Post-Retirement Benefits contained therein, were provided to empoyees for information purposes ony and did not, nor were they intended or understood to, form part of the empoyees' contracts of empoyment. 62. Brochures pubished by TWFL stated that, whie TWFL hopes to continue the Post-Retirement Benefits for the baance of retirees' and spouses' ifetimes, TWFL reserves the right to change or discontinue coverage if the need arises. i 1! ~ :1 j i!!. ' 1 ' i ~! :1 :i i 1 :1 63. Some retiring TWFL empoyees received retirement etters that addressed the Post-Retirement Benefits. The information provided in these retirement etters with respect to the Post-Retirement Benefits varies, incuding with respect to the scope of the Post-Retirement Benefits, their duration, the recipients thereof, the cost to the recipients, and the right of TWFL to change or discontinue them. These etters were provided to empoyees for information purposes ony and did not, nor were they intended or understood to, form any contract, as aeged or at a, with any retiring empoyee. 64. Some retiring TWFL empoyees entered into individua retirement agreements that specificay referenced Post-Retirement Benefits. Some of these retirement agreements specified that the retiree and eigibe dependants woud be entited to Post-Retirement Benefits "to the extent permitted by the pan". 65. At a materia times, TWFL maintained and reserved the right to amend, incuding to discontinue, the Post-Retirement Benefits and/or to change the amounts that retired empoyees are required to contribute to the cost of such benefits. 66. From time to time, TWFL, its successors, and/or TimberWest, gratuitousy and without any ega obigation to do so, increased the specific benefits made avaiabe to a eigibe TWFL retirees, incuding those who were aready retired. 67. n the aternative, if TWFL owed any ega obigations to any of the putative cass members, which is denied, then TimberWest denies that it is iabe for any contractua or other

11 GBB obigations owed by TWFL to its former empoyees, to empoyees of TWFL's corporate predecessors, or to the spouses or dependants of those empoyees. V. Pacific Forest Products 68. Pacific Forest Products was a British Coumbia company, a predecessor of which was incorporated in or about n or about 1993, that predecessor's name was changed to Pacific Forest Products. 69. n or about 1993, Pacific Forest Products acquired certain assets of Canadian Pacific Forest Products Limited. 70. Pacific Forest Products operated unti in or about 1997, when a predecessor of TimberWest was incorporated and acquired portions of Pacific Forest Products' business, incuding, inter aia, through the purchase of Pacific Forest Products' shares. 71. Approximatey 10 putative Empoyee Cass Members retired from Pacific Forest Products between 1992 and Approximatey 15 putative Empoyee Cass Members retired from predecessors of Pacific Forest Products before At certain times, Pacific Forest Products made various forms of Post-Retirement Benefits avaiabe to eigibe retired empoyees. 74. The Post-Retirement Benefits were impemented and subsequenty made avaiabe to retired empoyees gratuitousy, as a matter of poicy and at the discretion of Pacific Forest Products. 75. From time to time, the Post-Retirement Benefits may have been referenced in communication materia such as brochures, bookets or guides produced by Pacific Forest Products and provided to empoyees. f such references were made, these communication materias were provided to empoyees for information purposes ony and did not, nor were they intended or understood to, form part of the empoyees' contracts of empoyment.

12 GBB Some retiring Pacific Forest Products empoyees may have received retirement etters that addressed the Post-Retirement Benefits. f any such references were made, these etters were provided to empoyees for information purposes ony and did not, nor were they intended or understood to, form any contract, as aeged or at a, with any retiring empoyee 77. At a materia times, Pacific Forest Products maintained and reserved the right to amend, incuding to discontinue, the Post-Retirement Benefits and/or to change the amounts that retired empoyees are required to contribute to the cost of such benefits. ~ ]' j j r j j! : 78. From time to time, Pacific Forest Products, its successors, and/or TimberWest, gratuitousy and without any ega obigation to do so, increased the specific benefits made avaiabe to a eigibe Pacific Forest Products retirees, incuding those who were aready retired. 79. n the aternative, if Pacific Forest Products owed any ega obigations to any of the putative cass members, which is denied, then TimberWest denies that it is iabe for any contractua or other obigations owed by Pacific Forest Products to its former empoyees, to empoyees of Pacific Forest Products' corporate predecessors, or to the spouses or dependants of those empoyees. V. TimberWest 80. A predecessor of TimberWest was incorporated in or about 1997, and in or about 1997 acquired portions of the respective businesses of TWFL and Pacific Forest Products. n or about 1998, that predecessor changed its name to TimberWest. 81. Approximatey 90 putative Empoyee Cass Members retired from TimberWest between 1997 and May 1, At the materia times, TimberWest made various forms of Post-Retirement Benefits avaiabe to eigibe retired empoyees. 83. The Post-Retirement Benefits were impemented and subsequenty made avaiabe to retired empoyees gratuitousy, as a matter of poicy and at the discretion of Timber West.

13 GBB From time to time, the Post-Retirement Benefits were referenced m communication materias, incuding brochures, produced by TimberWest and provided to empoyees. These documents, and the references to Post-Retirement Benefits contained therein, were provided to empoyees for information purposes ony and did not, nor were they intended or understood to, form part of the empoyees' contracts of empoyment. 85. Brochures pubished by TimberWest at certain times between approximatey 1997 and approximatey 2002 state that TimberWest reserves the right to ater or discontinue the Post Retirement Benefits if the need arises. 86. state that: Brochures pubished by TimberWest at certain times after approximatey 2002 (a) (b) (c) Whie TimberWest hopes to continue the Post-Retirement Benefits in the future, it reserves the right to ater or discontinue coverage at any time in its soe discretion; TimberWest reserves the right to change the Post-Retirement Benefits at any time, which changes coud incude, but are not imited to, increasing, decreasing or eiminating (i) coverage for peope and benefits, or (ii) amounts for premiums or deductibes; or Post-Retirement Benefits are contingent benefits; that is, TimberWest does not guarantee to provide these benefits in their current form indefinitey to retirees, and that in particuar TimberWest reserves the right to change these benefits at any time, which changes coud incude, but are not imited to, increasing, decreasing, or eiminating (i) coverage for peope and benefits, or (ii) amounts for premiums and deductibes. 87. Some retiring TimberWest empoyees received retirement etters that addressed the Post-Retirement Benefits. The information provided in these retirement etters with respect to the Post-Retirement Benefits varies, incuding with respect to the scope of the Post-Retirement Benefits, their duration, the recipients thereof, the cost to the recipients, and the right of TimberWest to change or discontinue them. The references to the Post-Retirement Benefits in

14 GBB these etters were provided to empoyees for information purposes ony and did not, nor were they intended or understood to, form any contract, as aeged or at a, with any retiring empoyee. ' 1 i! 1 ' i 'i :!!! 88. Some retirement etters sent before approximatey 2003 state that whie TimberWest hopes to continue the Post-Retirement Benefits, it shoud be understood that the arrangements for continuation of this coverage may be revised if, in TimberWest's opinion, conditions so warrant. 89. Some retirement etters sent after approximatey 2003 state that, whie TimberWest hopes to continue the Post-Retirement Benefits indefinitey, it is important for the retiree to understand that the Post-Retirement Benefits are contingent benefits; that is, TimberWest does not guarantee to provide these benefits in their current form indefinitey to eigibe TimberWest retirees, and that in particuar TimberWest reserves the right to change these benefits at any time, which changes coud incude, but are not imited to, increasing, decreasing, or eiminating (i) coverage for peope and benefits, or (ii) amounts for premiums and deductibes. 90. Some retiring TimberWest empoyees entered into individua retirement agreements that specificay referenced Post-Retirement Benefits. Some of these retirement agreements specified that the retiree woud be entited to Post-Retirement Benefits, and that whie TimberWest hopes to continue these benefits for the baance of the retiree and spouse's ifetimes, TimberWest reserves the right to discontinue coverage at its soe discretion. 91. At a materia times, TimberWest maintained and reserved the right to amend, incuding to discontinue, the Post-Retirement Benefits and/or to change the amounts that retired empoyees are required to contribute to the cost of such benefits. 92. From time to time, TimberWest, gratuitousy and without any ega obigation to do so, increased the specific benefits made avaiabe to a eigibe TimberWest retirees, incuding those who were aready retired.

15 GBB X. Summary 93. An approximate summary of the putative Empoyee Cass Members' retirement dates and the companies they retired from is as foows: Company Period Number of Retirees Crown Zeerbach BC Forest Products Crown Forest Crown Forest Fetcher Chaenge TimberWest Forest Limited Pacific Forest Products Pre corporate predecessors Pacific Forest Products Timber West 1997-May 1, Unknown 25 X. Changes to Post-Retirement Benefits 94. Since the Post-Retirement Benefits were impemented by the Predecessors and Timber West, the cost of providing the Post-Retirement Benefits to eigibe retired empoyees has increased significanty. The increase in cost is due to factors beyond the contro of Timber West, incuding increases in Medica Services Pan premiums evied by the Province of British Coumbia, de-isting 0f certain heath services from the pubic medica system and escaating cost of prescription drugs. 95. n response to the increasing costs of providing Post-Retirement Benefits, effective on or about September 1, 2009, TimberWest discontinued out-of-province emergency medica coverage for retirees resident in Canada who had retired after 1989.

16 GBB n further response to the increasing costs of providing Post-Retirement Benefits, effective on or about May 1, 2010, TimberWest: (a) (b) for retirees resident in Canada who had retired before 1990, froze its contributions to British Coumbia Medica Services Pan premiums at the 2010 rate; and for retirees resident in Canada who had retired after 1989, impemented the foowing changes to extended heath care benefits: (i) froze its contributions to British Coumbia Medica Services Pan premiums at 50% of the 2010 rate; (ii) discontinued out-of-province medica trave/accommodation coverage; (iii) for eigibe expenses covered at 80%, no onger increased coverage to 100% after $1,000 has been paid for a person in a caendar year (inappicabe to members of the pan maintained for retirees of Pacific Forest Products); (iv) reduced pharmaceutica drug coverage from 100% to 80% of the first $3,000 covered in a caendar year, and 100% thereafter in that caendar year, incuding dispensing fees; (v) appied Pharmacare's ow cost aternative and reference drug program to the reimbursement of eigibe drugs and medicines; (vi) introduced a dispensing fee cap of $8.25 per prescription; (vii) introduced an annua maximum per caimant of $5,000 for prescription drug coverage; and (viii) introduced a ifetime maximum per caimant of $250,000.

17 GB B Division 3 - Additiona Facts 1. NA. Part 2: RESPONSE TO RELEF SOUGHT. The Defendant consents to the granting of the reief sought in paragraphs NL of Part 2 of the Notice of Civi Caim. 2. The Defendant opposes the granting of the reief sought in paragraphs ALL of Part 2 of the Notice of Civi Caim. 3. The Defendant takes no position on the granting of the reief sought m paragraphs NL of Part 2 of the Notice of Civi Caim. Part 3: LEGAL BASS. No Breach of Contract 1. TimberWest denies any contractua obigation on the part of TimberWest or of any of the Predecessors to provide the Post-Retirement Benefits to the Paintiff or to any of the putative cass members. 2. Timber West denies that descriptions of various forms of Post-Retirement Benefits set out from time to time in communication materias produced by TimberWest or any of the Predecessors, incuding brochures, bookets, guides and retirement etters, created or refected existing contractua obigations. Such descriptions were not intended to be and were not contractua promises. 3. n specific answer to paragraphs 4-12 of Part 1 of the Notice of Civi Caim, TimberWest denies that it is iabe for any contractua or other obigations owed by any of the Predecessors to their respective former empoyees, to the empoyees of their respective corporate predecessors, or to the spouses or dependants of those empoyees. 4. Further, any aeged contract to provide Post-Retirement Benefits is void for uncertainty and cannot be enforced. n particuar, as any Post-Retirement Benefits aegedy promised were subject to modification from time to time (and such benefits that were provided

18 GBB were modified from to time), it is not possibe to determine the essentia terms of any aeged contract with a reasonabe degree of certainty. 5. n specific answer to paragraph 6 of Part 3 of the Notice of Civi Caim, TimberWest denies that persons other than former empoyees have standing to bring a caim for breach of contract, whether on the basis of the principed exception to the doctrine of privity or otherwise. 6. n the aternative, if TimberWest or any of the Predecessors were contractuay required to provide Post-Retirement Benefits to the Paintiff or to any of the putative cass members, which is not admitted and is expressy denied: (a) (b) At a materia times, it was an express, or aternativey, an impied term of any such agreement that TimberWest and the Predecessors maintained and reserved the right to amend, incuding to discontinue, the Post-Retirement Benefits and/or to change the amounts that retired empoyees are required to contribute to the cost of such benefits; and/or TimberWest did not breach any contractua obigation to the Paintiff or putative cass members by the modifications to the Post-Retirement Benefits effective September 1, 2009 and May 1, 2010 as those modifications were contractuay permitted. 7. n the further aternative, if any putative Empoyee Cass Members entered into contracts for Post-Retirement benefits during their empoyment, which is not admitted and is expressy denied, and such contracts did not permit TimberWest or a Predecessor to modify the Post-Retirement Benefits as set out in paragraph 6(a) above, then such contracts were varied from time to time by new contracts entered into post-retirement whereby: (a) TimberWest or a Predecessor offered to increase the specific content of Post-Retirement Benefits, in consideration for, inter aia, the putative Empoyee Cass Member granting TimberWest or the Predecessor the right to modify the Post-Retirement Benefits as set out in paragraph 6(a) above; and

19 GBB (b) The Empoyee Cass members accepted such offers by, inter aia, accepting the increased Post-Retirement benefits. 8. n the further aternative, the Paintiff and putative cass members are estopped and precuded from aeging that TimberWest breached any contractua obigation owed to any of them. 9. n particuar, TimberWest and the Predecessors provided Post-Retirement Benefits. to the Paintiff and putative cass members in excess of any contractua or other obigation to do so, in reiance on and subject to an expressed reservation of rights to modify the Post-Retirement Benefits as set out in paragraph 6(a) above. 10. Having accepted Post-Retirement Benefits in excess of any contractua entitement to receive such benefits, the Paintiff and putative cass members are estopped from aeging that TimberWest or the Predecessor's expressed reservation of rights is not binding on them, and that TimberWest's modifications to the Post-Retirement Benefits breached a contractua obigation owed to them. TimberWest peads and reies upon aches, estoppe and acquiescence. 11. n the further aternative, if TimberWest breached any contractua obigation owed to the Paintiff or putative cass members, which is not admitted and is expressy denied, TimberWest denies that the Paintiff or putative cass members have suffered damage or oss as caimed, and puts the Paintiff and putative cass members to the strict proof thereof. 12. n the further aternative, if the Paintiff or putative cass have suffered any damage or oss, which is not admitted and is expressy denied, the Paintiff and putative cass members have faied and continue to fai to mitigate any damage or oss suffered.. No Unjust Enrichment 13. n specific response to paragraphs 7 to 10 of Part 3 of the Notice of Civi Caim, TimberWest denies that: (a) Timber West or any of the Predecessors were enriched in the absence of a juristic reason. TimberWest expressy denies it or any of the Predecessors

20 GBB received the vaue of the work of Paintiff and of the putative Empoyee Cass Members on the basis of written or other representations that the Paintiff or any other putative cass members, incuding spouses or dependants, woud receive the Post-Retirement Benefits, either free of charge or at a; and (b) The work performed by the putative Empoyee Cass Members gave rise to benefits enjoyed by TimberWest or any of the Predecessors for which any of the putative cass members suffered corresponding deprivation. 14. Specificay, but without imiting the generaity of the foregoing, TimberWest denies it received any vaue whatsoever from the spouses or dependants of the putative Empoyee Cass Members or that those spouses or dependants suffered a corresponding deprivation.. No Vesting 15. n answer to the whoe of the Notice of Civi Caim, the Post-Retirement Benefits were never intended to, nor did they ever, vest in the Paintiff or putative cass members. As a resut, TimberWest was and remains egay entited to modify the Post-Retirement Benefits. Defendant's address for service is c/o the aw firm of Lawson Lunde LLP, whose pace of business and address for service is West Georgia Street, Vancouver, British Coumbia V6C 3L2 (Attention: Craig A.B. Ferris). Fax number address for service is: (604) E-mai address for service is: cferris@awsonunde.com Dated at the City of Vancouver, in the Province of British Coumbia, this 19th day of September, Soicitors for the Defendant, TimberWest Forest Corp. This Response to Civi Caim is fied by Craig A.B. Ferris, of the aw firm of Lawson Lunde LLP, whose pace of business and address for deivery is West Georgia Street, Vancouver, British Coumbia V6C 3L2.

21 GBB Rue 7-1(1) of the Supreme Court Civi Rues states: (1) Uness a parties of record consent or the court otherwise orders, each party of record to an action must, within 35 days after the end of the peading period, (a) prepare a ist of documents in Form 22 that ists (i) (ii) a documents that are or have been in the party's possession or contro and that coud, if avaiabe, be used by any party at tria to prove or disprove a materia fact, and a other documents to which the party intends to refer at tria, and (b) serve the ist on a parties of record.

22 NO. NO. S VANCOUVER REGSTRY N THE SUPREME COURT OF BRTSH COLUMBA BETWEEN: GEORGE JABLONSKY PLANTFF AND: TMBER WEST FOREST CORP DEFENDANT RESPONSE TO CVL CLAM CAF/gbb ~LAWSON 41LUNDEL~ Barristers & Soicitors 1600 Cathedra Pace 925 West Georgia Street Vancouver. British Coumbia V6C 3L2 Phone: (604) Attention: Craig A.B. Ferris GBB