NOVA SCOTIA WORKERS COMPENSATION APPEALS TRIBUNAL

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1 NOVA SCOTIA WORKERS COMPENSATION APPEALS TRIBUNAL Applicant: [X] Respondents: [X] and The Workers Compensation Board of Nova Scotia (Board) SECTION 29 APPLICATION DECISION Representatives: [X] Action: S.H. No WCB Claim No.: [X] Date of Decision: May 13, 2009 Decision Summary: The action by the Respondents Getson et al against the Applicant is not barred by operation of s. 28 of the Act, according to the reasons of Appeal Commissioners Louanne Labelle, K. Andrew MacNeil and Brent Levy.

2 2 BACKGROUND TO THE APPLICATION: This application was made to the Tribunal on June 25, 2008 by Christina MacDougall under s. 29 of the Workers Compensation Act, S.N.S , c. 10 as amended [the Act ]. Christina MacDougall [ MacDougall ] is the defendant in an action brought on behalf of several plaintiffs who are the survivors of Richard Slauenwhite, tragically killed in a motor vehicle accident on June 5, She is seeking a ruling that the action against her by the plaintiffs in S.H. No , respondents in this application, hereinafter referred to as the Respondents Getson, is barred by operation of s. 28 of the Act. The Tribunal issued a preliminary decision in this matter finding that it had jurisdiction to hear the application pursuant to s. 29 of the Act [Decision PAD, NSWCAT, January 12, 2009]. The application then proceeded by way of written submissions and was considered by a panel of three Appeal Commissioners. The parties to this application filed an Agreed Statement of Facts together with relevant documentation on October 1, Submissions on the merits of the application were filed by all counsel following the issuance of Decision PAD. Counsel for MacDougall filed submissions and supporting book of authorities on February 6, Counsel for the Respondents Getson filed submissions together with supporting documentation on February 9, Counsel for the Board filed written submissions on February 19, ISSUE AND OUTCOME: Is the action by the Respondents Getson against MacDougall barred by operation of s. 28 of the Act? No. The action is not barred by s. 28 of the Act. The Respondents Getson exercised their right under the Act to elect to receive compensation and to be governed by the laws of the Province of Newfoundland and Labrador [hereinafter referred to as Newfoundland ]. Their action in the Supreme Court of Nova Scotia is an exercise of the right provided to them under that legislation. FACTUAL BACKGROUND: Section 29 of the Act gives exclusive jurisdiction to this Tribunal to determine whether an

3 3 action is barred by operation of the Act. The Respondents Getson have begun an action against MacDougall who has, in turn, applied to this Tribunal for determination as to whether the action is barred by operation of s. 28 of the Act. Section 28 reads as follows: 28 (1) The rights provided by this Part are in lieu of all rights and rights of action to which a worker, a worker's dependant or a worker's employer are or may be entitled against (a) the worker's employer or that employer's servants or agents; and (b) any other employer subject to this Part, or any of that employer's servants or agents, as a result of any personal injury by accident (c) in respect of which compensation is payable pursuant to this Part; or (d) arising out of and in the course of the worker's employment in an industry to which this Part applies. (2) Clause (1)(b) does not apply where the injury results from the use or operation of a motor vehicle registered or required to be registered pursuant to the Motor Vehicle Act , c. 10, s. 28. The parties in this matter have filed an Agreed Statement of Facts. The facts are not in dispute. A motor vehicle accident occurred on June 5, 2007 in Marystown, Newfoundland. Mr. Richard Slauenwhite was one of two people killed in the accident. Mr. Slauenwhite s estate has commenced a legal action in the Supreme Court of Nova Scotia against MacDougall, who was the driver of the vehicle in which Mr. Slauenwhite was travelling. At the time of the accident, Ms. MacDougall and Mr. Slauenwhite were employees of RGIS Inventory Specialists of Canada, LLC, [ RGIS ] a body corporate registered to carry on business in Nova Scotia. They were both residents of Nova Scotia working on assignment in Newfoundland for RGIS. Following the accident, counsel for the Respondents Getson advised the Workers Compensation Board of Nova Scotia, the Workplace Health, Safety and Compensation

4 4 Commission of Newfoundland and Labrador [ WHSCC ] and RGIS that Mr. Slauenwhite s survivors were exercising their rights under s. 27 of the Act to elect to be subject to the laws of Newfoundland and to proceed with an action in damages. At the request of the Newfoundland and Labrador WHSCC, the Respondents Getson completed an election to claim compensation (extra-jurisdictional) form dated July 15, The election form indicated that Getson chose to claim compensation (or damages) under the law of Newfoundland where the fatality occurred. Getson subsequently elected to opt out of claiming compensation under the Workplace Health, Safety and Compensation Act, R.S.N.L Chapter W-11, as amended, [the Newfoundland Act ], choosing rather to make a claim in damages before the courts. Getson elected to proceed with an action for damages under Newfoundland and Labrador s Fatal Accidents Act, R.S.N.L., 1990 c. F-6, as amended, in the Supreme Court of Nova Scotia as evidenced by the pleadings, particularly the Originating Notice (Action) and Statement of Claim filed in S.H. No in November, MacDougall filed a defence to the action on December 21, 2007claiming that the action was statute-barred pursuant to s. 28 of the Act. There is no dispute that MacDougall and the deceased Slauenwhite were co-workers, both employed by RGIS, a covered employer in Nova Scotia at the time of the accident. There is also no dispute that RGIS was a covered employer in Newfoundland at the time of the accident, as RGIS pays into the workers compensation schemes of any province where RGIS employees work. Attached to the Agreed Statement of Facts is Exhibit G, a statement of account from the Nova Scotia Board indicating a remittance for the month of June 2007 for 66 covered employees. Attached as Exhibit I is a statement from the Newfoundland and Labrador WHSCC indicating that RGIS declared having 61 workers on their payroll for June A copy of the WHSCC claim file in Newfoundland is attached to the Respondents submissions. The file contains documents which include an employer s death report filed with the Newfoundland WHSCC on June 5, 2007 relating to the accident that resulted in Mr. Slauenwhite s death. There is no dispute that the Respondents Getson were entitled to claim compensation under the laws of Newfoundland or of Nova Scotia and that an election was made under s. 27 of the Act. Section 27 of the Act reads as follows: 27 (1) Where a worker is entitled to compensation pursuant to

5 5 (a) the laws of the jurisdiction where the accident occurred; and (b) this Part, the worker shall decide to be compensated according to either the laws of the jurisdiction where the accident occurred, or this Part. (2) Notice in writing of a decision made pursuant to subsection (1) shall be given to the Board within six months of the occurrence of the accident. (3) Where, pursuant to subsection (1), a worker (a) decides to claim compensation in the jurisdiction where the accident occurred; or (b) fails to make an election, the worker may not claim compensation pursuant to this Part , c. 10, s. 27. The Respondents Getson then elected to proceed with an action for damages under s.45(2) of the Newfoundland Act: Where action allowed 45. (1) Where a worker sustains an injury in the course of his or her employment in circumstances which entitle him or her or his or her dependents to an action (a) against some person other than an employer or worker; (b) against an employer or against a worker of that employer where the injury occurred otherwise than in the conduct of the operations usual in or incidental to the industry carried on by the employer; or (c) where section 44.1 applies, the worker or his or her dependents, where they are entitled to compensation, may claim compensation or may bring an action. (2) The worker or his or her dependents shall make an election under subsection (1) within 3 months of the injury and an application for compensation is a valid election for the purpose of this section.

6 6 (3) Where the worker or his or her dependents elect to bring an action, he or she or they shall immediately serve notice in writing of the election on the commission, and where an action is commenced, he or she or they shall immediately serve notice in writing of the action on the commission. Section 45(1) refers to s which states as follows: No compensation 44.1 (1) Section 44 shall not apply where the worker is injured or killed (a) while being transported in the course of the worker's employment by a mode of transportation in respect of which public liability insurance is required to be carried; or (b) as a result of an accident involving the use of a motor vehicle by the worker or another person, in the course of the worker's employment. (2) In subsection (1) "motor vehicle" means (a) a motor vehicle (i) registered under the Highway Traffic Act, or (ii) authorized under section 12 or 17 of the Highway Traffic Act to be operated on a highway in the province without being registered under that Act, whether or not it is being operated on a highway; or (b) another motor vehicle while being operated on a highway in the province and for the purpose of this definition "highway" means a highway as defined in the Highway Traffic Act. ANALYSIS: The issue in this matter revolves around a question of statutory interpretation. What is the effect of an election under s. 27 of the Act? Does it only confer onto the Respondents Getson the right to claim compensation provided in the Newfoundland Act, as opposed

7 7 to damages? Does s. 28 of the Act apply to the circumstances of this action? The historic compromise is the underlying principle behind workers compensation legislation. Section 28 of the Act sets out the historic trade-off in the Nova Scotia legislation. A worker gives up the right to sue in exchange for the right to compensation under the Act. Section 28 provides for an exception. A right of action may exist if the injury or death results from the use or operation of a motor vehicle. However, even though a death, as in this case, arises out of the operation and use of a motor vehicle, it is not an exception to the statutory bar as the exception only applies to the circumstances in s. 28(1)(b), an action against an employer (or that employer s servants) other than the worker s employer or that employer s servants. An action in the same circumstances is not barred by ss. 44 and 44.1 of the Newfoundland Act as the exception applies whether or not it is an action against a co-worker or the worker s employer. The basis of the exception rests, apparently purely, on the fact that there is a liability insurer involved. Board counsel submitted that the Respondents, having exercised their right under s. 27 of the Act, are no longer entitled to compensation under the Act in accordance with s. 27(3). As there is no claim filed with the Board in Nova Scotia and the Respondents Getson opted not to receive compensation in Nova Scotia, the Board took no position with respect to the application. Counsel for the Respondents Getson argued that the Respondents properly exercised their rights under s. 27, therefore, their claims were extinguished under the Act. Having elected to be subject to the laws of Newfoundland, they could then elect to sue for common law damages under ss. 44 and 45 of the Newfoundland Act. Counsel for the Respondents Getson argues further that the statutory bar at s. 28 only applies if a person claims compensation under the Act. However, under s. 28(1) (d) of the Act, an action can be barred if the injury arises out of and in the course of the worker s employment in an industry to which the Act applies. Therefore, the statutory bar is not negated simply because there is no compensation payable. After considering the relevant legislative provisions, the panel agrees that an election duly made under s. 27 of the Act effectively discharges the Respondents Getson from the operation of s. 28. The Respondents Getson can avoid the statutory bar at s. 28 of the Act by opting to claim compensation under the Newfoundland Act where a bar in similar circumstances does not apply. Our findings rest on the interpretation of the relevant statutory provisions and the interplay

8 8 between two distinct schemes of workers compensation legislation, that of Nova Scotia and that of Newfoundland. Similarly, the interplay between the Government Employees Compensation Act, R.S.C. 1985, c. G-8 [ GECA ] and the Act has been considered by the Nova Scotia Court of Appeal on several occasions. The Court in Cape Breton Development Corporation v. Morrison Estate, 2003 NSCA 103 referred to the relevant principles of statutory interpretation as summarized by the Court of Appeal in Thomson v. Nova Scotia (Workers Compensation Appeals Tribunal), (2003) 212 N.S.R. (2d) 81 (N.S.C.A.), which also dealt with the interplay between GECA and the Act: As in any case of statutory interpretation, the Court must strive to give the statute its most appropriate interpretation. The appropriate interpretation is to be arrived at by taking account of the statute s total context having regard to its purpose, the consequences of proposed interpretations and presumptions and special rules of interpretation. The appropriate interpretation is one which is plausible in the sense that it complies with the text of the statute, which is efficacious in the sense that it promotes the legislative purpose and that is acceptable, in the sense that the outcome is reasonable and just. Ruth Sullivan (ed.) Driedger on the Construction of rd Statutes (3, 1994) at 131. The application of these principles leads the panel to the conclusion that s. 27 must be interpreted as giving the option to a worker, or his dependents in this case, to elect to be governed by a workers compensation scheme in another province notwithstanding differences in rights and obligations. Having exercised their rights, they now gain rights under Newfoundland legislation which may be different in many respects to the rights they might have had under Nova Scotia legislation. However, their rights cannot be abrogated or limited by an Act to which they have chosen not to be subject. Section 27 of the Act speaks of a worker deciding to be compensated or to claim compensation. Section 49 of the Newfoundland Act appears to be the statutory foundation for paying compensation to workers from other provinces in a system which is otherwise governed by residency. Section 49 speaks of compensation, as distinguished from damages when dealing with the reciprocity with other provinces. The use of the word compensation in s. 27 of the Act and s. 49 of the Newfoundland Act does not lead to the conclusion that workers only gain rights to compensation, as a benefit under the Act, as distinguished from civil damages. The term compensation can mean remuneration, wages, benefits or even damages

9 9 awarded by the courts [ something awarded to compensate for loss, suffering or injury as rd defined in The Concise Oxford Dictionary, Oxford University Press, 3 ed., 2001]. There is no doubt that, when used in the context of workers compensation legislation, it refers to benefits payable under the legislation. However, the meaning of compensation when used in s. 27 must be viewed in the context of cross-jurisdictional statutes of similar purpose providing workers in certain circumstances the option to choose between two compensation schemes. It should not be interpreted restrictively as giving a worker a choice to receive only the benefits provided for under the workers compensation legislation. The terms compensation, as distinguished from damages are used in s. 49 of the Newfoundland Act so as to specify the circumstances that allow for cross-jurisdictional recognition of claims. Giving the election under s. 27 a wide interpretation also accords with the accepted principle that a liberal interpretation be given to workers compensation legislation. The Court in Morrison, cited above, referred with approval to the following: That liberal interpretation is also reflected by this Court s decision in Workers Compensation Appeal Board v. Penney [(1980), 38 N.S.R. (2d) 623 (S.C.A.D.) at para 7, in which the following passage from Halsbury s Laws of England was quoted with approval: The [Worker s Compensation] Acts are so clearly remedial measures that the courts will be slow to cut down the remedy given either by reference to the schedule of the compensation or by adopting an interpretation which will introduce exceptions not made by the legislature. The more plausible, efficacious and acceptable interpretation is that the right provided to a worker under s. 27 of the Act is the right to choose between legislative schemes and all their respective provisions. Counsel for MacDougall frame the issue as follows: should the law of Nova Scotia be applied by the Tribunal, and the action commenced by the Respondents in the Supreme Court of Nova Scotia be barred, by the relevant provisions of the Act? They set out several reasons why the action in the Supreme Court of Nova Scotia should be statute-barred under s. 28 of the Act. We summarize these briefly as follows: - the Act is a type of statutory contract between employers and workers and, as such, the laws of the jurisdiction with the closest and most real connection to the transaction between the parties is to be applied...;

10 10 - a worker s right to elect compensation pursuant to s. 27 of the Act may be disjunctive from the provisions of s. 28 in assessing whether an action is statute-barred; - the issue to be decided is not whether the Respondents are entitled to compensation but rather the nature of such compensation and this is a matter for the lex fori (or the law of the forum of the action), which is Nova Scotia; - principles at the heart of workers compensation schemes mitigate for the application of s. 28 as the whole premise of the scheme is based on the protection of employers from civil suits; and, - the issue to be considered by this Tribunal is not the proper law of the tort; even if it is, there is evidence to suggest that the forum conveniens is Nova Scotia. We will address these arguments in no particular order. Counsel for MacDougall find support in the basic principles of the historic compromise. They refer to the often quoted decision of the Supreme Court of Canada in Pasiechnyk v. Saskatchewan (Workers Compensation Board), 1997 Carswell Sask 401 (S.C.C.), where the Court discussed the history and purpose of workers compensation legislation and stated in particular the following at paragraph 26: I would add that this so-called negative feature is a necessary feature. The bar to actions against employers is central to the workers compensation scheme as Meredith conceived of it: it is the other half of the trade-off. It would be unfair to allow actions to proceed against employers where there was a chance of the injured worker s obtaining greater compensation, and yet still to force employers to contribute to a no-fault insurance scheme. There is no doubt that the statutory bar is central to workers compensation schemes. However, in this case, although these two statutes are complementary and have similar purposes, there is a conflict between the legislative schemes as to the exception to the statutory bar. The exception to the statutory bar in Newfoundland applies more generally to circumstances where there is a liability insurer in the background, even though it may be the employer s insurer. Whereas Nova Scotia has chosen to limit the exception to the bar to cases involving other employers and their workers, the exception does not apply to a suit against a worker s employer or co-workers. Therefore, applying Newfoundland law as opposed to Nova Scotia law does not offend basic principles of the historic compromise. Counsel for MacDougall suggest that the workers compensation system is a form of statutory contract and that the blind application of the law of Newfoundland, being the

11 11 jurisdiction of the tort, would be an error in law. This Tribunal is not applying the law of Newfoundland because it is the jurisdiction of the tort. It is applying the law of Nova Scotia because the Respondents have a right to elect under the law of Nova Scotia to be governed by the law of Newfoundland. RGIS is a covered employer in Nova Scotia as well as in Newfoundland and as such is bound by the laws of these jurisdictions. We do not accept the proposition that the Respondents Getson have brought a legal action against MacDougall in tort as a negligent driver, therefore ignoring the existence of workers compensation legislation. In fact, the workers compensation legislation allows for the election and also allows for the action. Counsel suggest further that the issue involves the nature of compensation to which the Respondents Getson are entitled and is therefore a matter of procedural law, governed by the laws of Nova Scotia. We disagree that this is a matter of procedural law. If the s. 28 bar applies, the Respondents lose their right of action. This is not a mere procedural question, this is a substantive issue. Counsel also argue that if the reasoning of the Nova Scotia Court of Appeal in Spencer v. Mansour s Ltd., 2000 Carswell NS 133 (N.S.) is followed, any rights of the Respondents to seek compensation in Newfoundland is a moot issue and only the legislative provisions of the Act relating to the statutory bar of civil actions are to be considered on a stand alone basis. Therefore, an application of the provisions of the Act would clearly bar the action of the Respondents in the civil courts and s. 27 of the Act would be disjunctive from the provision of the Act addressing whether a civil claim is statute-barred. In Spencer, the Court was dealing with an action by a New Brunswick resident who was suing in Nova Scotia after receiving compensation from the New Brunswick commission. The worker was suing with the permission of the New Brunswick commission. The panel accepts the proposition that the fact that a worker may have received compensation does not necessarily impact on the right to sue. It does not justify ignoring the impact of an election under s. 27 of the Act. Counsel for MacDougall refer to a case decided by the Ontario Workplace Safety and Insurance Appeals Tribunal in Decision No. 2273/031 and 2273/03, 2004 Carswell Ont 4694 (Ont. WSIAT). In that matter, co-workers in the course of their employment were involved in a motor vehicle accident in Utah. One of them commenced an action in Ontario against the other invoking Utah tort law to avoid a statutory bar. WSIAT found that the provisions of the Ontario Workplace Safety and Insurance Act [ WSIA ] set out a comprehensive code intended to cover workplace accidents involving Ontario workers and Ontario employers regardless of where the accidents occur. The Tribunal stated further that the relationship between the parties directly and indirectly involved in this action all arose out of contractual arrangements entered into and

12 12 enforceable in Ontario. Therefore, application of the lex loci delicti rule would permit an Ontario worker of an Ontario employer injured outside of Ontario to do what he or she would not be permitted to do, if the accident had occurred within Ontario. It would mean that coverage under the WSIA for Schedule 1 employers, directors, workers, and coworkers would vary whenever a worker left Ontario, no matter how briefly. WSIAT therefore found that the right to sue was barred. This case can be distinguished. The Respondents Getson are suing in Nova Scotia under the tort law of Newfoundland, where the accident occurred. However, in this case, the worker s dependents exercised a right provided by the contractual arrangement between the workers, their employer and the Board. They exercised the right to be covered by the workers compensation legislation of Newfoundland. In essence, the conflict in this case arises because of the difference in the legislative provisions relating to the statutory bar. The Respondents have avoided the statutory bar in Nova Scotia by exercising rights that are granted to them by laws of Nova Scotia. We do not agree that the Respondents Getson opting out of the Nova Scotia legislation, as permitted, is completely contrary to the fundamental principles of the workers compensation system. The workers compensation system, in fact, grants the right to opt out. They have exercised that right, and have acquired the right under Newfoundland s legislation to sue. Therefore, the action is not barred by the operation of s. 28 of the Act. CONCLUSION: The action by the Respondents Getson against MacDougall is not barred by the operation of s. 28 of the Act, for the reasons set out above. DATED AT HALIFAX, NOVA SCOTIA, this 13th day of May, Louanne Labelle Chief Appeal Commissioner K. Andrew MacNeil Appeal Commissioner Brent Levy Appeal Commissioner

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