SUPREME COURT OF PRINCE EDWARD ISLAND. Citation: Vail & McIver v. WCB 2011 PESC 06 Date: Docket: S1-GS Registry: Charlottetown

Transcription

1 SUPREME COURT OF PRINCE EDWARD ISLAND Citation: Vail & McIver v. WCB 2011 PESC 06 Date: Docket: S1-GS Registry: Charlottetown Between: Gordon Richard Vail and Frederick Joseph McIver Plaintiffs And: The Workers Compensation Board of PEI and the Attorney General of PEI Defendants Before: The Honourable Justice Gordon L. Campbell Rosemary Scott, Q.C., for the Workers Compensation Board of PEI Ruth DeMone, for the Attorney General of PEI Peter Ghiz, for Gordon Richard Vail and Frederick Joseph McIver Place and Date of Hearing Place and Date of Judgment Charlottetown, Prince Edward Island October 21, 2010 Charlottetown, Prince Edward Island March 17, 2011

2 Page 2 PRACTICE - Motion to strike Statement of Claim - no reasonable cause of action - plain and obvious test - Charter of Rights s. 7 and s Workers Compensation - pension calculation Cases Referred to: Ward v. Workers Compensation Board (P.E.I.) (1985), 52 Nfld & P.E.I.R. 89 (PESCAD.); Stretch v. Workers Compensation Board (P.E.I.) (1991), 96 Nfld & P.E.I.R. 254 (PESCAD.); Blanchard v. Workers Compensation Board (P.E.I.) 2003 PESCAD 20; Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959; BMO v. City of Charlottetown, 2006 PESCAD 26; Cameron v. Medical Society, PESCTD 31; Rofe v. Kay Aviation, 2001 PESCAD 7; Kelly v. Canada 2009 PESC 4; Roeder v. Lang Michener Lawrence and Shaw 2007 BCCA 152; Toronto (City) v. CUPE, Local SCC 63; Andrews [Andrews v. Law Society of British Columbia, [1989] 1 S.C.R. 143]; Beliveau St-Jacques v. Fédération des employées et employés de services publics inc., [1996] 2 S.C.R 345); Bell Canada v. Quebec (Commission de la santé et de la sécurité du travail), [1988] 1 S.C.R. 749; Pasiechnyk v. Saskatchewan (Workers Compensation Board), [1997] 2 S.C.R. 890; Law v. Canada (Minister of Employment and Immigration)1999 CanLII 675 (SCC), S.C.R. 497; Nova Scotia (Workers Compensation Board ) v. Martin, 2003 SCC 54; Piercey v. General Bakeries Ltd CanLII 107 (NL S.C.T.D; Irwin Toy Ltd. v. A.G. Que, [1989] 1 S.C.R. 927, 1989 CanLII 87 (S.C.C.); Godbout v. Longueuil (City) 1997 CanLII 335 (S.C.C.); Terzian v. Ontario (Workers Compensation Board) 1983 CarswellOnt 1265, 42 O.R. (2d) 144; Hernandez v. Palmer 1992 CarswellOnt 65, (1992) 46 MVR (2d) 26; Gosselin v. Quebec (Attorney General) 2002 SCC 84; Ross v. City of Charlottetown 2008 PESCAD 6; Provenzano v. Thunder Bay (City), 2008 CanLII (ON); Mack v. Canada (Attorney General) 2002 CanLII (ONCA); MacKay v. Manitoba, [1989] 2 SCR 357; Pellikaan v. Canada, 2002 FCT 221 (CanLII); Gratton-Masuy Environmental Technologies Inc. v. Ontario, 2010 ONCA 501 CanLII; Ravndhal v. Saskatchewan 2009 SCC 7; Canadian Council of Churches v. Canada (Minister of Employment and Immigration), [1992] 2 S.C.R. 236, 1992 CarswellNat 25(SCC); Burns v. British Columbia (Workers Compensation Board) 2003 BCSC 1896 (CanLII); Statutes Referred to: Workers Compensation Act, RSPEI 1974, W-10, (the old Act ); Workers Compensation Act, SPEI 1994 Cap.67, hereafter cited as RSPEI 1988, Cap. W-7.1 (the new Act ); Charter of Rights and Freedoms s. 7 and s. 15; Workers Compensation Act, 1983 (Nfld) (the Newfoundland Reference), [1987] N.J. No. 331 (Nfld CA); Workmen s Compensation Act, R.S.O., 1980, c.539; Workers Compensation Act 1983 (Newfoundland) ss. 33 & 34, [1989] 1 S.C.R. 922; Limitation of Actions Act, RSS 1978, c. L-15; Statute of Limitations Act, RSPEI 1988, Cap. S-7; Judicial Review Act, RSPEI 1988 Cap J-3. Rules Referred to: Rules of Court, Province of Prince Edward Island, Rule (1)(b); Rule (1)(a); Rule 21.01(3)(d); Rule 25.06(1); Rule (8);

3 Page 3 Campbell J.: Introduction [1] Each of the plaintiffs were injured in separate workplace accidents. Mr. Vail sustained compound fractures to his spinal column in a workplace accident in May In 1980 he was assessed by the Workers Compensation Board ( WCB or the Board ) medical panel as having 35% permanent partial disability. This was increased to 50% in [2] Mr. McIver suffered a very serious injury in 1977 which resulted in his hand being severed from his wrist. It was reattached, but with poor results. In 1986, McIver suffered a second workplace accident and a second permanent partial disability, relating to an ankle injury. Together the injuries rendered McIver permanently totally disabled. He has not worked since Background summary of the nature of the claim by the plaintiffs [3] At the time of their injuries, and until 1994, the Workers Compensation Act, RSPEI 1974, W-10, (the old Act ) provided for injured workers to be paid a disability pension reflecting the workers loss of earnings (ss. 42 and 43). Notwithstanding those provisions of the old Act, the Board paid pensions to the plaintiffs based on their percentage of physical impairment rather than their loss of earnings. This method of pension calculation is sometimes graphically referred to as the meat chart approach. [4] In 1994, the old Act underwent significant amendments which are embodied in the Workers Compensation Act, SPEI 1994 Cap.67, hereafter cited as RSPEI 1988, Cap. W-7.1 (the new Act ). The method set out in the new Act for calculating an injured workers benefits continues to be stated to be one determined by reference to the workers loss of earning capacity (s.40). However, with respect to workers who were already receiving a pension based on a medically assessed percentage of disability (the meat chart approach), their pensions were to continue to be paid on that basis and not on the basis of wage loss (s.50). [5] The plaintiffs challenge the past decisions and calculations of the Board and

4 Page 4 alleged the Board did not follow its own Act when they applied the meat chart calculation instead of the wage loss calculation. They refer to a number of decisions from the Supreme Court of Prince Edward Island-Appeal Division (now the Court of Appeal of Prince Edward Island) which they submit directed the Board to stop using the physical impairment approach and instead follow the provisions of the Act requiring pension calculations to be on the basis of wage loss. (See Ward v. Workers Compensation Board (P.E.I.) (1985), 52 Nfld & P.E.I.R. 89 (PESCAD.), Stretch v. Workers Compensation Board (P.E.I.) (1991), 96 Nfld & P.E.I.R. 254 (PESCAD.), and Blanchard v. Workers Compensation Board (P.E.I.) 2003 PESCAD 20, which will be more fully discussed later). [6] The conduct of the Board in refusing to reconsider the method of calculating the plaintiffs pensions is also challenged. The claim alleges the Board was biased and acted in bad faith in failing to abide by the provisions of its own act and the decisions of the Supreme Court-Appeal Division in Ward, Stretch, and Blanchard, supra. [7] The plaintiffs claim the new Act violates the Charter of Rights and Freedoms s. 7 regarding the right to life, liberty and security of the person, and s.15 guaranteeing equal treatment under the law) by perpetuating the unlawful method of calculating pensions for pre-existing pensioners, and by creating two or more classes of injured workers based on the date of their injury. They submit that by failing to provide preexisting injured workers with the lawful benefits they were entitled to all along, namely benefits based on a wage loss formula instead of in accordance with the degree of their physical impairment, the new Act violated the plaintiffs Charter rights. [8] The plaintiffs also claim that either or both of the impugned acts violate the Charter and the plaintiffs fundamental rights by limiting the amount injured workers can collect and prohibiting workers from seeking to collect damages at common law in the same manner as is available to other members of Canadian society. The provisions of the new Act are said to infringe the Charter because they single out injured workers as an identifiable group and limit their compensation, relegating them to relative poverty as compared to others who become injured.

5 Page 5 Procedural background [9] Prior to filing their statement of claim on this matter, the plaintiffs had filed an application seeking a declaration that s. 50 of the Workers Compensation Act, RSPEI 1988, Cap. W-7.1 (the new Act ) contravened s-s. 15 (1) of the Charter of Rights and Freedoms. The defendants successfully brought a motion requiring the plaintiffs to proceed by way of statement of claim as opposed to by way of application. The statement of claim was filed on March 1, Motion to Strike [10] Before filing a defense, the defendants brought the within motion seeking, inter alia, to strike the statement of claim. Specifically, the defendants filed notices of motion seeking: (i) an order striking out the plaintiffs statement of claim without leave to amend pursuant to Rule (1) (b) of the Rules of Court; (ii) an order for determination of questions of law pursuant to Rule (1) (a) of the Rules of Court; (iii) an order staying or dismissing the plaintiffs action on the grounds that it is frivolous or vexatious, or is otherwise an abuse of process of the Court pursuant to Rule 21.01(3)(d); and (iv) if necessary, an order granting each of the defendants an extension of time to file their Statement of Defense until a reasonable time after the disposition of this motion; [11] The defendant WCB also seeks an order awarding the Board costs of the motion on a substantial indemnity basis. The defendant AG had originally asked for costs on the motion, but abandoned that request at the hearing. In the course of this decision, references to the defendants are intended to include both defendants unless it is obvious from the context that the reference is only to one of the defendants.

6 Page 6 [12] The general grounds for the defendant WCB s motion are: (a) The Statement of Claim, in whole or in part, discloses no reasonable cause of action; (b) the determination of questions of law raised by the Statement of Claim before trial may dispose of all or part of the action, substantially shorten the trial, or result in a substantive savings of costs; and (c) the action is frivolous or vexatious or is otherwise an abuse of the process of the Court. The statement of claim runs to 15 pages, but counsel for the plaintiffs states the essence of their claim is set out in paragraph C (9) whereby the plaintiffs seek: (9) an Order directing that the Board pay the Plaintiffs the disability benefits they are entitled to at law or, referring the matter back to the Board to assess and pay the disability benefits in accordance with law, retroactive to the date their claims originally should have become payable; [13] As the defendants are seeking to strike the claim in its entirety, and as their arguments are addressed, in part, by reference to paragraph numbers appearing in the statement of claim, and in part, by reference to what is not in the statement of claim, I believe it is of benefit to produce the entire statement of claim in order to appreciate the nature of the claims made and follow the written submissions of the parties with respect to each of the various aspects of the claim. The claim is therefore set out as follows: CLAIM 1. The Plaintiffs, Gordon Richard Vail and Frederick Joseph McIver, claim as follows against the Defendants, the Workers Compensation Board of Prince Edward Island (hereafter the Board ) and the Attorney General of Prince Edward Island, pursuant to ss. 24 (2) and s. 52 of the Canadian Charter of Rights and Freedoms (hereafter the Charter ):

7 Page 7 A. Relief arising from the interrelationship between the old and new Workers Compensation Acts and the actions of the Workers Compensation Board in purporting to apply them. (1) a declaration that the Board s actions in determining and paying them their disability benefits purported to be pursuant to the provisions of the Workers Compensation Act, R.S.P.E.I., 1974, Cap. W-10, (repealed) (hereafter the old Act ) contravened ss. 7 and 15 of the Charter; (2) a declaration that the Board s actions in determining and paying them their disability benefits under the old Act and purported to be commuted pursuant to s. 50 of the Workers Compensation Act, R.S.P.E.I. 1988, Cap. W-7.1 (hereafter the new Act ) to be pensions under the provisions of the new Act contravenes ss. 7 and 15 of the Charter; (3) a declaration that s. 50 of the new Act infringes s. 7 of the Charter, to the extent that it legislates that disability benefits that were determined and paid in a manner not in accordance with the provisions of the old Act could be commuted into disability benefits under the new Act, despite the absence of legislative authority for the benefits in the first place; (4) a declaration that the actions of the Board in determining and paying the disability benefits to the Plaintiffs pursuant to the provisions of the old and new Acts, do not accord with minimum constitutional standards required by ss. 7 and 15 of the Charter that require it to be impartial. B. Relief arising from infringements of s. 7 and 15 of the Charter because the provisions of the old and new Act create or allow substantive discrimination and place unreasonable limits on s. 7 rights that do not accord with principles of fundamental justice (5) a declaration that the provisions of either or both of the old and new Acts infringe ss. 7 and 15 of the Charter for reasons which

8 Page 8 include the following: (I) by eliminating the right of disabled workers to recover compensation for general damages, by comparison to what is available to other members of Canadian society who are free to advance such claims; (ii) by limiting the right of disabled workers to recover comparable compensation for loss of income, by comparison to what is available to other members of Canadian society who are free to advance such claims; (iii) by eliminating, in appropriate cases, the right of disabled workers to recover punitive or aggravated damages, by comparison to what is available to other members of Canadian society who are free to advance such claims; (iv) by limiting the amount of compensation recoverable by dependents of deceased workers, by comparison to what is available to other members of Canadian society who are free to advance such claims (v) by limiting the amount of compensation for loss of income that may be paid to an injured worker who has suffered a permanent total disability or a permanent partial disability, by comparison to what is available to other members of Canadian society who are free to advance such claims at common law; (vii) by limiting the amount of compensation for loss of income that may be paid to an injured worker who has suffered a temporary permanent total disability or a temporary partial disability, by comparison to what is available to other members of Canadian society who are free to advance such claims; (viii) by allowing the Board the sole discretion to commute the whole or any part of an injured worker s benefit payments due or payable to the injured worker, or his or her beneficiaries, to a lump sum in lieu of such payments and also to then divide that compensation into periodic payments; (6) a declaration that ss. 42 and 43 of the old Act collectively infringe both ss. 7 and 15 of the Charter because they have the effect of

9 Page 9 exploiting and marginalizing injured workers who have been traditionally disadvantaged members of Canadian society; (7) a declaration that the wage loss provisions and s. 50 of the new Act collectively infringe both ss. 7 and 15 of the Charter because they have the effect of exploiting and marginalizing injured workers who have been traditionally disadvantaged members of Canadian society; (8) a declaration that the actions of the Board in relation its determination and payment of disability benefit infringes both ss. 7 and 15 of the Charter because they have the effect of exploiting and marginalizing injured workers who have been traditionally disadvantaged members of Canadian society; C. Other relief (9) an Order directing that the Board pay the Plaintiffs the disability benefits they are entitled to at law or, referring the matter back to the Board to assess and pay the disability benefits in accordance with law, retroactive to the date their claims originally should have become payable; (10) damages in the amount of their unpaid disability benefits; (11) interest payable in accordance with the provisions of the Judicature Act, R.S.P.E.I Cap. J-2.1 (12) costs on a full indemnity scale or such other scale as may be warranted in the circumstances; and (13) such other relief as may be warranted in the circumstances of the case. D. Claims History 2. Gordon Richard Vail (hereafter Mr. Vail ) and Frederick Joseph McIver (hereafter Mr. McIver ) (hereafter Mr. Vail and Mr. McIver shall be collectively referred to as the Plaintiffs ) receive compensation from the Board for injuries they received in the

10 Page 10 workplace. (I) Frederick Joseph McIver 3. Mr. McIver suffered two separate permanent partial disabilities from workplace accidents that occurred on August 4, 1977 and again on October 14, As a result of the first accident, Mr. McIver s hand was severed from his wrist. It was reattached, with poor results. 5. At the time of the first accident, Mr. McIver was employed as a plumber s apprentice. His injury caused him to discontinue in his chosen career. 6. Mr. McIver was no longer able to work in the plumbing trade and on July 9, 1980, he was assessed as having a permanent partial disability of 50% even though the Board accepted the hand was a complete loss. 7. As a result of the second workplace accident on October 14, 1986, Mr. McIver sustained a second permanent partial disability relating to an injured ankle. This injury exacerbated his previous losses. 8. In combination, both injuries resulted in a permanent total disability. Mr. McIver was unable to work after 1986 due to his injuries. 9. On each occasion, the Board determined and paid Mr. McIver s disability benefits on the basis of physical impairment, rather than in accordance with the requirements of the old Act which required a loss of earning capacity calculation and an assessment on the basis of a permanent total disability. (ii) Gordon Richard Vail 10. Mr. Vail was permanently injured in a workplace accident on May 15, 1974 sustaining compression fractures of the spinal column. 11. In 1980, Mr. Vail was assessed by the Board s medical panel as having a 35% permanent partial disability. In 1983, this was

11 Page 11 increased to 50%. 12. In 1983, Mr. Vail was advised by the Board that he could not work due to an aggravation of his original injury. However, the Board determined his disability benefits on the basis of physical impairment, rather than a loss of earning capacity calculation and an assessment on the basis of a permanent total disability. 13. Mr. McIver and Mr. Vail s actual loss included: (1) loss of income; (2) loss of income potential; (3) loss of enjoyment of life; and (4) pain and suffering. E. Incorrect interpretation and application of the old Act and hardship created by the legislation 14. On each occasion, the Board determined and paid the Plaintiffs disability benefits on the basis of physical impairment rather than calculating their disability benefits on the basis of a loss of income calculation as required by the applicable provisions of the old Act. These provisions state: 42. Where permanent total disability results from injury, the amount of the compensation shall be a weekly or other periodical payment during the life of the worker equal to seventy-five per cent of his average weekly earnings during the previous twelve months if he has been so long employed, but if he has not been so long employed then for any less period during which he has been in the employment of his employer. R.S.P.E.I. 1974, Cap. W-10, s. 43; 1976, c. 34, s Where permanent partial disability results from the injury, the compensation shall be a weekly or other periodical payment during the life of the worker equal to seventy-five per cent of the difference between the average weekly or other periodical earnings of the workers before the accident and the average amount which he is earning or is able to earn in some suitable employment or business after the accident and such

12 Page 12 compensation shall be payable during the lifetime of the worker When the Board initially determined and paid the Plaintiffs disability benefits, it purported to be acting pursuant to the applicable provisions of the old Act. 16. The requisite provisions of the old Act required that where a worker was disabled as the result of an injury in the workplace, he or she was entitled to compensation on the basis his or her loss of earning capacity. 17. This calculation did not take into account the income potential a worker would likely have achieved during his or her career. Over time, the provisions of the old and new Acts and the Board s improper determination and payment of disability benefits had the effect of reducing or eliminating an injured worker s disability benefits for reasons other than an amelioration of the worker s disability or need for income. 18. This resulted from a number of factors which include: (1) the wage amounts prior to the accident did not reflect income potential; (2) inflation; (3) the Board s usage of physical impairment rather than a loss of earning capacity calculation to calculate entitlement; and (4) attempts to work to avoid poverty. 19. It also occurred as a result of the Board s erroneous interpretation of the essential provisions of the of the old Act. Where an injured worker suffered another injury that resulted in him or her being unable to work, the Board determined the disability benefits on the basis of the per cent of physical impairment and then added the result to the disability benefits being paid for the first disability rather than perform a loss of earning capacity assessment pursuant to s.42 and 43 of the old Act. 20. Neither plaintiff received compensation that is generally available to others in Canadian society for: (1) loss of income; (2) loss of income potential (3) loss of enjoyment of life; and (4) pain and suffering. 21. At the time, the Board improperly determined the amount of the Plaintiffs disability benefits on the basis of physical impairment, rather than calculating each persons disability benefits and the basis of a wage loss calculation as was required by the essential

13 provisions of the old Act. Page 13 F. Judicial interpretation of the old Act 22. In Stretch v. The Workers Compensation Board of Prince Edward Island 1991 CanLII 2740 (PESCAD), (1991), 96 Nfld. & P.E.I.R. 254 (PESCAD), (hereafter Stretch ), the Prince Edward Island Court of Appeal found that the Board s determination and payment of disability benefits using the physical impairment method was not in accordance with the provisions of the old Act and ordered the Board to reassess Mr. Stretch s disability benefits in accordance with the old Act. This required that the calculation be done using an actual loss of earnings basis rather than the physical impairment method. 23. Stretch followed a previous decision of the same court in Ward v. Workers' Compensation Board (P.E.I.) (1985), 52 Nfld. & P.E.I.R. 89 (P.E.I.C.A.). 24. In Blanchard v. Workers Compensation Board 2003 PESCAD 20 (CanLII), 2003 PESCAD 20, the physical impairment method was explained and contrasted with the actual loss of earnings method of assessing disability and calculating wage related benefits. At paragraphs 4 and 7, the court stated as follows: Generally and as a matter of policy, prior to January 1, 1992 the Board utilized what is known as the "physical impairment" method to assess the degree of an injured worker's disability and the worker's loss of earning capacity. Under this method of assessment, the medical doctor made a clinical examination of the injured worker and using the AMA guidelines medically determined the impact of the disability on the worker's capacity to earn wages in the future. The AMA guidelines directed that the impact on earnings would be affected by the nature and extent of the body part injured. The guidelines ascribed percentage rates to certain disabilities resulting from a particular injury. This method required the disability to be rated as a percentage of total disability according to the projected degree of functional impairment. It has been traditionally used to calculate pensions for loss of earning capacity. See: Ison, Terence G.: Compensation Systems for Injury and Disease: The Policy Choices, (Butterworths, 1994) The physical impairment method of assessing a worker's loss of earning capacity is to be contrasted with the actual loss of wages/earnings method in which the amount of compensation is assessed on a continuing basis by reference to a worker's wage

14 Page 14 rate at the time of injury. From this amount is deducted the amount the worker is currently earning or deemed capable of earning, together with the amount he or she is prevented from earning for reasons other than the compensable disability. The amount of the periodic payment may change from time to time or at set intervals according to changes in the estimated actual loss of earnings resulting from the worker's residual disability. See: Ison, supra at p. 25. (Emphasis added) G. Conduct of the Board in the wake of the jurisprudence 25. Over the years since the date they were injured, each Plaintiff, in writing and in person, requested that the Board reconsider the basis upon which their disability benefits were determined and paid and ultimately required that the Board to determine and pay their disability benefits in accordance with the law required by the provisions of the old Act as interpreted by the Pince Edward Island Court of Appeal in Stretch, infra, Ward, infra and Blanchard, infra. 26. Despite the directives given by the Court of Appeal in Ward, Stretch and Blanchard, the Board persisted in making the same errors and determined the amount of the Plaintiffs disability benefits on the basis of percentage of physical impairment, rather than calculating each persons loss of earning capacity calculation as required by s. 42 and 43 of the old Act. 27. The Board continued to pay them the benefits that were originally assessed on the basis of physical impairment, with the result that the Plaintiffs never received the disability benefits they were entitled to under the old Act. 28. At the time these requests were made, the Board knew or ought to have known what the requirements of the law were but refused to follow them. 29. The Board has never provided the Plaintiffs with its reasons why it refused to determine and pay them their pensions on the basis of their actual wage loss rather than on the basis of physical impairment. 30. Effective January 1, 1995, the new Act was proclaimed into law. 31. Pursuant to s. 40 of the new Act, compensation for loss of earning capacity is to be assessed on the basis of the worker s actual wage

15 Page 15 loss and compensation is payable until the loss of earning capacity comes to an end or age 65, whichever comes first. 32. Under the new Act, the benefits had to be regularly assessed and are subject to reduction for the receipt of wages earned and any collateral benefits received such as Canada Pension Plan. 33. After the proclamation of the new Act, the Plaintiffs continued to request the Board to determine and pay their disability benefits calculated in accordance with the provisions of the old Act as was interpreted by the Prince Edward Island Court of Appeal in Stretch, infra and Ward, infra. 34. The Board persisted in its refusal, did not provide the Plaintiffs with reasons for its refusal and eventually invoked s. 50 of the new Act and commuted the benefits the Plaintiffs had been receiving purportedly under the old Act into disability benefits under the new Act. F. Specific allegations in support of the Plaintiffs claims for relief (I) Differential treatment of groups created by s.50 of the new Act. 35. Pursuant to s. 50 of the new Act, workers receiving benefits under the old Act are entitled to receive those benefits for life with the benefit of annual indexing and without reduction for income earned or collateral benefits received. 36. Section 50 states: 50. (1) A worker who, on the coming into force of this section, is in receipt of a permanent partial or total disability pension based on a medically assessed disability awarded by the Board prior to January 1,1994 shall continue to receive such pension for the lifetime of the worker and the worker shall not be eligible for a wage loss benefit provided under this Part except as provided in subsection (3). 37. Under the provisions of the new Act, there are three distinct groups of injured

16 Page 16 workers presently receiving wage related benefits: (1) those who were injured and had their benefits assessed prior to Stretch and prior to the new Act becoming law; (2) those who had their benefits assessed after Stretch and before the new Act became law; and (3) those workers who had their benefits assessed after the new Act became law. 38. Section 50 of the new Act protected the right of those workers who were receiving benefits prior to its enactment, to continue to receive those benefits for life under the old Act. 39. The Plaintiffs are included in the first mentioned group. However, their benefits have never been properly calculated in accordance with the provisions of the old Act. The Plaintiffs state: (1) contrary to s. 7 of the Charter, they have denied the protection of principles of fundamental justice that require that the law be respected; (2) contrary to s. 15 of the Charter, they are being discriminated against because others who are similarly situated have had their disability benefits calculated in accordance with law; (3) contrary to 15 of the Charter, they are being discriminated against because others in Canadian society in similar circumstances are being treated differently who enjoy disability benefits that have been properly determined and paid; (ii) Bad Faith and Partiality 40. The Plaintiffs state the Board erred or acted in bad faith in assessing their claims and requests for reconsideration, the particulars of which include that it: (1) lacked impartiality, was biassed and acted in bad faith in dealing with their claims and requests for reconsiderations; (2) failed to give a valid reason, or any reason at all, why it would not comply with the law and do the wage loss calculation; (3) refused to comply with the law in determining the Plaintiffs disability benefits;

17 Page 17 (4) it commuted the Plaintiffs benefits determined under the old Act before considering whether their benefits were determined in accordance with the provisions of the old Act; (5) owed a duty under the new Act to review the benefits paid to workers on a periodic basis and the Board breached this duty by commuting the benefits paid to the Plaintiffs without any consideration of the legitimate interest of the Plaintiffs; (6) the old and new Acts place the Board in a fiduciary relationship with injured workers and the Board breached this duty for reasons which include the foregoing. (iii) Board s improper application of the old Act 41. The Plaintiffs state that: (1) the Board s actions in determining and paying their disability benefits purported to be pursuant to the provisions of the old Act contravenes s. 7 and 15 of the Charter for the following reasons: (I) (ii) (iii) it failed to comply with the requirements of the old Act and determined and paid pensions that were not legally permissible under its provisions; it refused to reconsider the Plaintiffs claims despite their requests and the existence of jurisprudence that unequivocally stated that the basis that it had determined and paid the Plaintiffs pensions was not in accordance with the old Act; it disregarded the Plaintiffs requests to have their pensions reconsidered in accordance with the provisions of the old Act in circumstances where it knew that such conduct was contrary to

18 Page 18 law; (iv) (v) it failed to abide the rule of law as expressed in the old Act and as found by the Court of Appeal in Ward, supra, Stretch,supra, and Blanchard, supra, and chose to determine and pay disability benefits by what amounted to fiat; it discriminated against the Plaintiffs and denied them the protections embodied in principles of fundamental justice compared to other disabled workers who had their pensions determined and paid in accordance with the provisions of law; (vi) (vii) (viii) it treated the Plaintiffs differently from all other members of Canadian society thereby discriminating against them; it failed or refused to give reasons for its disregard for the law and as such acted in a high handed and illegal manner; and it failed to abide the rule of law. (iv) The Board s actions in commuting pensions under s. 50 of the new Act (2) The Board s actions in determining and paying the Plaintiffs disability benefits purported to be pursuant to s. 50 of the new Act contravenes s. 7 and 15 of the Charter for the following reasons; (I) (ii) it commuted their disability benefits (called pensions in the new Act) that were not legally permissible under the provisions of the old Act; it discriminated against the Plaintiffs by comparison to others who had their disability benefits properly determined in accordance with law. (v) Constitutionality of s. 50

19 Page 19 (3) Section 50 of the new Act infringes s. 7 of the Charter because it permits disability benefits that were determined and paid in a manner not in accordance with the provisions of the old Act to be commuted into a disability benefits under the new Act; (vi) Constitutionality of the limits and exclusions on injured workers right to seek compensation contained in the old and new Act (4) The provisions of either or both of the old and new Acts infringe ss. 7 and 15 of the Canadian Charter of Rights and Freedoms for reasons which include the following: (I) (ii) (iii) (iv) (v) (vi) by eliminating the right of disabled workers to recover compensation for general damages at common law, by comparison to what is available to other members of Canadian society who are free to advance such claims; by limiting the right of disabled workers to recover comparable compensation for loss of income, by comparison to what is available to other members of Canadian society who are free to advance such claims; by eliminating, in appropriate cases, the right of disabled workers to recover punitive or aggravated damages, by comparison to what is available to other members of Canadian society who are free to advance such claims; by limiting the amount of compensation recoverable by dependents of deceased workers, by comparison to what is available to other members of Canadian society who are free to advance such claims; by limiting the amount of compensation that may be paid to an injured worker who has suffered a permanent total disability or a permanent partial disability, by comparison to what is available to other members of Canadian society who are free to advance such claims at common law; by limiting the amount of compensation that may

20 Page 20 be paid to an injured worker who has suffered a temporary permanent total disability or a temporary partial disability, by comparison to what is available to other members of Canadian society who are free to advance such claims; (vii) (vii) by granting the Board the sole discretion to commute the whole of any part of the payments due or payable to an injured worker or his or her beneficiaries to a lump sum in lieu of such payment and also to then divide the compensation into periodic payments. Substantive deprivations (5) The provisions of the new Act collectively infringe both ss. 7 and 15 of the Charter because they single out injured workers as an identifiable group, limit the compensation that is available to them and, over time, diminish the value of the benefits they are entitled to thereby by relegating them to relative poverty for the remainder of their lives as compared to the rights and benefits that are available to others who become injured; (6) The provisions of the old Act collectively infringe both ss. 7 and 15 of the Charter, on its own and in conjunction with s. 50 of the new Act, because they single out injured workers as an identifiable group, limit the compensation that is available to them and, over time, diminish the value of the benefits they are entitled to thereby by relegating them to relative poverty for the remainder of their lives as compared to the rights and benefits that are available to others who become injured; (7) The actions of the Board in relation its determination and payment of disability benefit infringe both ss. 7 and 15 of the Charter because they single out injured workers as an identifiable group, limit the compensation that is available to them and, over time, diminish the value of the benefits they are entitled to thereby by relegating them to relative poverty for the remainder of their lives as compared to the rights and benefits that are available to others who become injured. G. Conclusion 42. The Plaintiffs state that as a result of the statutory provisions contained in the old and new Act, separately and by virtue of their ongoing interrelationship, infringes. 7 or 15 of the Charter and that

21 Page 21 they are entitled to an appropriate remedy pursuant to s. 24(2) or s. 52 thereof. 43. The Plaintiffs state that the Board s determination and payment of their disability benefits infringe s. 7 or 15 of the Charter and that they are entitled to an appropriate remedy pursuant to s. 24(2) or s. 52 thereof. Defendants Motion [14] The defendants motion is made, in part, pursuant to Rule 21.01(1)(b) of the Rules of Court. That Rule reads: (1) A party may move before a judge,... (b) to strike out a pleading on the ground that it discloses no reasonable cause of action or defence, and the judge may make an order or grant judgment accordingly. [15] Two other provisions of Rule 21 have bearing on this motion as well. The defendants submit certain aspects of this matter can be addressed by the determination of questions of law before trial as set out in Rule 21.01(1)(a): (1) A party may move before a judge, (a) for the determination, before trial, of the question of law raised by a pleading in an action where the determination of the question may dispose of all or part of the action, substantially shorten the trial or result in a substantial saving of costs; [16] Further, the defendants submit Rule (3) (d) applies as well: (3) A defendant may move before a judge to have an action stayed or dismissed on the ground that,... (d) the action is frivolous or vexatious and is otherwise an abuse of the process of the court, and the judge may make an order or grant judgment accordingly. [17] The test for striking a statement of claim was set out in Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959, in which the Supreme Court of Canada said the following:

22 Page Most recently, in Dumont v. Canada (Attorney General), [1990] 1 S.C.R. 279, I made clear at p. 280 that it was my view that the test set out in Inuit Tapirisat was the correct test. The test remained whether the outcome of the case was "plain and obvious" or "beyond reasonable doubt". 33 Thus, the test in Canada governing the application of provisions like Rule 19(24)(a) of the British Columbia Rules of Court is the same as the one that governs an application under R.S.C. O. 18, r. 19: assuming that the facts as stated in the statement of claim can be proved, is it "plain and obvious" that the plaintiff's statement of claim discloses no reasonable cause of action? As in England, if there is a chance that the plaintiff might succeed, then the plaintiff should not be "driven from the judgment seat". Neither the length and complexity of the issues, the novelty of the cause of action, nor the potential for the defendant to present a strong defence should prevent the plaintiff from proceeding with his or her case. Only if the action is certain to fail because it contains a radical defect ranking with the others listed in Rule 19(24) of the British Columbia Rules of Court should the relevant portions of a plaintiff's statement of claim be struck out under Rule 19(24)(a). [18] This was applied in the context of our Rule 21.01(1)(b) by the Prince Edward Island Supreme Court Appeal Division in BMO v. City of Charlottetown, 2006 PESCAD 26: 11. Rule 21.01(1)(b) provides that a party may move before a judge to strike out a pleading on the ground that it does not disclose a reasonable cause of action or defence. Rule 21.01(2)(b) provides that no evidence is admissible on such a motion. In considering such a motion, the judge is to accept as correct the facts as pleaded in the pleading under attack, in this case the statement of claim. There is a presumption at this stage of the proceeding that the facts as pleaded in the statement of claim are capable of proof at trial. 12. In the application of Rule 21.01(1)(b), the court must guard against the possibility of depriving a person of access to the judgment seat without the benefit of a trial where the person has an opportunity to bring forth all the relevant facts. Nevertheless, there are those cases which, as pleaded, do not stand any chance of success. It would work a similar injustice and an abuse of the court's processes to have the party opposite expend resources to defend the action when it is plain and obvious the claim cannot succeed. 13. Only in the clearest of cases will the court strike out a statement of claim at this stage of the proceedings. On a generous reading of the pleading and accepting that it discloses facts which are correct, it must be plain and obvious the statement of claim does not disclose a reasonable

23 Page 23 cause of action in fact and law before it will be struck. If there is a chance a plaintiff might succeed, the action should be allowed to continue. The length or complexity of the proceeding, the novelty of the action and the potential of the defendant presenting a vigorous defence are not factors which enter into a consideration of whether the statement of claim should be struck out as disclosing no reasonable cause of action. See: Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959 (SCC) at p [19] With respect to the determination of a question of law before trial under Rule 21.01(a), DesRoches C.J. was of the view that a court should answer such a question of law if it is satisfied it is in a position to answer the question without the benefit of the evidence that would emerge at trial and the arguments of counsel made in the context of such evidence. In Cameron v. Medical Society, PESCTD 31, he stated, at para. 14: The relative difficulty with the question should not, by itself, be determinative. Rather I believe the question should be whether the Court is satisfied that the issue can be determined correctly without the full factual background that would be obtained at the trial. [20] In assessing whether a statement of claim discloses a recognizable cause of action, we are to assume that the facts alleged in the pleadings can be proven. However, we must be careful to distinguish between facts properly pleaded and allegations, argument and conjecture that may also be contained in the statement of claim. (See: Rofe v. Kay Aviation, 2001 PESCAD 7 at paras , and Kelly v. Canada 2009 PESC 41 at paras ). Similarly, a claim asserting conclusions without providing any legal basis for those conclusions risks being stricken as being frivolous or vexatious in accordance with Rule 21.01(3)(d). Or, where it is clear that a question has been finally determined by an appropriate authority, for example, the Supreme Court of Canada, an action seeking to relitigate a question would be seen as a collateral attack and an abuse of process. (See: Roeder v. Lang Michener Lawrence and Shaw 2007 BCCA 152 at paras , and Toronto (City) v. CUPE, Local SCC 63 at paras ) [21] In order to consider the motion to strike, or to have questions determined before trial, it is necessary to have a clear understanding of the claims made. The statement of claim is broadly written with similar allegations made in various paragraphs. The key themes expressed in the statement of claim have been identified by the defendants in their motion to strike. I consider as well what plaintiffs counsel called the essence of the plaintiffs claim and what they are seeking. It was set out as follows: (9) an Order directing that the Board pay the Plaintiffs the disability benefits they are entitled to at law or, referring the matter back to

24 Page 24 the Board to assess and pay the disability benefits in accordance with law, retroactive to the date their claims originally should have become payable; [22] In summary, the plaintiffs argue their pensions have been paid on the wrong scale, and notwithstanding jurisprudence to the contrary, various workers compensation boards knowingly continued to pay pensions improperly calculated on an unapproved scale. Further they argue that a scheme that prevents them from commencing a civil legal action against their employer deprives them of rights enjoyed by others not subject to the workers compensation scheme. As well, they allege the conduct of entrenching, in the new Act, pensions that were calculated not in accordance with the old Act constitutes bad faith on the part of the WCB. In addition, the new Act specifies that pensions calculated on a wage loss scale are only payable to age 65, as opposed to being payable for life as previously provided for in the old Act. Several questions are raised by these allegations. These issues are to be assessed, at this stage, in light of the tests for determining whether the statement of claim discloses a reasonable cause of action, is frivolous or vexatious, can be determined in whole or in part before trial, or should, in whole or part, be stricken. [23] The defendant submits four basic arguments against these specific claims. The defendant states: (i) the issues raised by the plaintiffs claims have already been determined by binding decisions of the Supreme Court of Canada, (ii) the plaintiffs are well beyond any limitation period in respect of their own personal claims, and they have no standing to make claims on behalf of workers in general, as none is disclosed by the pleadings, (iii) the plaintiffs have not alleged any breach of anyone s right to life, liberty and security of the person, or any breach or principles of fundamental justice, as referred to in s.7 of the Charter, and (iv) they have not alleged differential treatment based on an enumerated or analogous ground such as would trigger s.15 of the Charter.

25 Page 25 Claims under s.15 of the Charter [24] The discrimination alleged by the statement of claim, particularly in paras. 1.B(5), 1.B(6), 1.B(7), 41(4) and (5) and 42, is said to arise because it eliminates the rights of disabled workers and their dependents to advance claims that other members of Canadian society are free to pursue in the courts, such as claims for general, aggravated or punitive damages. By doing so, the plaintiffs compensation for wage loss is limited compared to what is available to injured Canadians not subject to the Workers Compensation Act with respect to their injuries. The plaintiffs submit this form of discriminatory treatment exploits and marginalizes injured workers and relegates them to a life of poverty. [25] The defendants argue the plaintiffs are attempting to mount a highly generalized attack against the workers compensation systems as they have existed for the past several decades. They argue these claims do not establish a recognizable cause of action and there are no material facts set out in the statement of claim to support these claims. [26] In each of the old Act and the new Act, s. 13 does indeed bar common law actions by injured workers against their employers by stating that the rights to collect benefits pursuant to the Workers Compensation Act are in lieu of all rights and rights of action, statutory or otherwise, to which a worker or his dependents are or may be entitled as against the employer of such worker... and no action in respect of such accident or any injury arising therefrom shall lie. [27] The plaintiffs claim those provisions of the WCA infringe upon their rights as guaranteed by s. 15(1) of the Charter, which reads as follows: 15.(1) Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability. [28] The issue of barring actions in exchange for compensation provided by the Workers Compensation Act (WCA) was addressed by the Newfoundland Court of Appeal in Reference re: Workers Compensation Act, 1983 (Nfld) (the Newfoundland Reference) [1987] N.J. No. 331 (Nfld CA). [29] A summary of the history, purpose and objectives of the WCA was provided by Goodridge C.J. in the Newfoundland Reference. Briefly, at para. 28, he stated:

26 Page 26 Workers compensation law is founded on five principles. These are that there should be (1) compensation without fault, (2) security of payment, (3) collective liability on the part of employers, (4) an administrative body to collect assessments and disburse benefits, and (5) an adjudicative body to assess quantum. [30] He described the scheme as an historic trade-off in which the employees gave up their right of action [against their employers] and the employers [collectively] agreed to pay compensation regardless of fault. Goodridge C.J. concluded, at paragraph 66, that the fundamental issue before the court was not whether the legislature may remove a cause of action or right upon which action may be based. The issue is whether the removal of such cause or right creates an inequality that is discriminatory. [31] The principle of legislative supremacy gives a legislature power to create or remove rights. The Charter allows courts to intervene to protect rights only where the legislation is unfair or unreasonable to identifiable persons or classes of persons. After reviewing the workers compensation scheme, Goodridge C.J. concluded, at para 133, it cannot be said to be either unfair or unreasonable. While there may be inequalities, there is no discrimination and the legislation cannot be condemned as being inconsistent with s.15(1) of the Charter. [32] The Newfoundland Reference was appealed to the Supreme Court of Canada and its decision is found at Reference re: Workers Compensation Act 1983 (Newfoundland) ss. 33 & 34, [1989] 1 S.C.R The Supreme Court of Canada panel unanimously affirmed that such provisions did not discriminate in a way that violated s. 15 of the Charter. LaForest J., speaking for the court stated: The situation of the workers and dependents here is in no way analogous to those listed in s.15(1), as a majority in Andrews [Andrews v. Law Society of British Columbia, [1989] 1 S.C.R. 143], stated was required to permit recourse to s.15(1). [33] The Newfoundland Reference arose when a widow, who had been collecting workers compensation benefits in respect of a workplace injury that killed her husband, commenced an action for damages directly against her deceased husband s employer. A similar situation arose in Quebec when a workers compensation claimant sought to bring a civil action for workplace harassment against her employer and co-worker. (Beliveau St- Jacques v. Fédération des employées et employés de services publics inc., [1996] 2 S.C.R 345). Gonthier J. conducted a similar review of workers compensation schemes to that undertaken by Goodridge, C.J. in the Newfoundland Reference. Speaking for the majority in Beliveau St-Jacques, supra, Gonthier J. stated, at paragraph CXXXIII: