2005 BCSC 1650 Western Stevedoring Co. Ltd. v. Workers' Compensation Board of British Columbia

Before: The Honourable Mr. Justice Groberman

Reasons for Judgment

Counsel for the Petitioners	Daniel A. Webster, Q.C. Craig E. Jones
Counsel for the Respondent	Gerald W. Massing Scott A. Nielsen
Date and Place of Trial/Hearing:	April 7, 8 and 25, 2005
	Vancouver, B.C.

[1] This petition concerns Workers Compensation Board (“the Board”) policies and practices with respect to a reserve set up under s. 39(1)(e) of the Workers Compensation Act, R.S.B.C. 1996, c. 492. That reserve is used to pay for “that portion of [a worker’s] disability enhanced by reason of a pre-existing disease, condition or disability.” The petitioners say that the Board’s policies and practices result in a failure to use the s. 39(1)(e) reserve as extensively as it should be. The consequence, they say, is that employers who hire previously injured or disabled employees tend to be charged higher premiums than they ought to be charged. They say that Western Stevedoring is one such employer, and they seek remedies in respect of the premiums assessed to that company.

[2] The Board, in addition to saying that the policies and procedures that have been adopted are reasonable ones, within its jurisdiction, also takes issue with the nature of the petition, arguing that it is an impermissible attempt to circumvent review and appeal procedures mandated by statute.

The Petitioners

[3] Western Stevedoring is an employer within the meaning of the Workers Compensation Act. In recent years, its premiums have included a substantial surcharge (between about 15% and 30% of the basic premium) as a result of successful claims for compensation made by its employees. It says that the Board’s practices with respect to the s. 39(1)(e) reserve are an important factor influencing the magnitude of its premiums. Throughout this judgment, when I refer to “the petitioner”, I refer to Western Stevedoring.

[4] The second petitioner, Angus Qually Howard Consultants Ltd., is a consulting company that represents a number of employers, including Western Stevedoring, before the Workers’ Compensation Board. I have serious doubts that the second petitioner has standing to bring the petition. However, as it does not raise any issues that are not raised by the first petitioner, and as the two are represented by the same counsel, the issue of standing has little practical effect on the disposition of this matter. In the circumstances, and because the issue of standing has not been argued before me, I will refrain from making any ruling on the standing of Angus Qually Howard to bring the petition.

Workers Compensation Premiums

[5] The Workers Compensation Act establishes a no-fault insurance scheme to compensate employees injured in the course of their employment. The scheme is funded by premiums paid by employers in what has been termed a “modified collective liability scheme” (Canada Safeway Ltd. v. B.C. (Workers’ Compensation Board) (1998), 59 B.C.L.R. (3d) 317 (CA)). Sections 39(1) and 42 of the Workers Compensation Act give the Board broad authority to set premiums:

39(1) For the purpose of creating and maintaining an adequate accident fund, the Board must every year assess and levy on and collect from independent operators and employers in each class, by assessment rated on the payroll, or by assessment rated on a unit of production, or in a manner the Board considers proper, sufficient funds, according to an estimate to be made by the Board to

(a) meet all amounts payable from the accident fund during the year;

(b) provide a reserve in aid of industries or classes which may become depleted or extinguished;

(c) provide in each year capitalized reserves sufficient to meet the periodical payments of compensation accruing in future years in respect of all injuries which occur during the year;

(d) provide a reserve to be used to meet the loss arising from a disaster or other circumstance which the Board considers would unfairly burden the employers in a class;

(e) provide and maintain a reserve for payment of that portion of the disability enhanced by reason of a pre-existing disease, condition or disability; and

(f) provide and maintain a reserve for payment of retirement benefits.

...

42. The Board must establish subclassifications, differentials and proportions in the rates as between the different kinds of employment in the same class as may be considered just; and where the Board thinks a particular industry or plant is shown to be so circumstanced or conducted that the hazard or cost of compensation differs from the average of the class or subclass to which the industry or plant is assigned, the Board must confer or impose on that industry or plant a special rate, differential or assessment to correspond with the relative hazard or cost of compensation of that industry or plant, and for that purpose may also adopt a system of experience rating.

[6] Section 37 of the Act requires the Board to group employers into employment classes and subclasses. The petitioner comes within the “Transportation and warehousing” class, and it has been placed by the Board within a subclass of employers who engage in “general wharf operations”.

[7] Statistical and actuarial calculations and expert assessments are used to determine the basic premium rate for employers within a subclassification. The actual premium paid by a given employer may be higher or lower than the basic rate depending on (among other things) its own claims history. To take into account an individual employer’s claims history, the Board establishes an “experience rating adjustment”: based on the projected value of claims that have arisen over the previous three years, an employer may be required to pay a surcharge over the basic rate, or may be given a discount.

[8] Not all projected claims payments are considered, however, in establishing the experience rating adjustment for an employer. Claims allocated to the s. 39(1)(e) reserve are not considered in establishing an employer’s experience rating adjustment.

Board Policy and Practice on Section 39(1)(e)

[9] The apparent purpose of s. 39(1)(e) is to remove any disincentive that employers might have to hiring workers who have pre-existing injuries or disabilities. Section 39(1)(e), however, is skeletal legislation, merely providing that the Board must levy assessments in order to maintain the reserve. The actual operation of the reserve is largely governed by formal Board policies and practices.

[10] Under section 82 of the Workers Compensation Act, the board of directors of the Board is required to establish “policies” regarding compensation. The word “policy” may be somewhat misleading, since the “policies” are effectively inflexible rules. Their existence is authorized by statute, so as long as the policies adopted are within the board of directors’ jurisdiction, no issues of unlawful fettering of discretion arise.

[11] Board of directors’ policy provides that only the portion of a claim extending beyond the initial 10 weeks will be considered for allocation to the s. 39(1)(e) reserve. Practice directives (which set out the Board’s general practices, but which do not constitute “policy” under s. 82 of the Act) set out the manner in which cases are allocated to the s. 39(1)(e) reserve. For all claims that exceed 10 weeks in duration, the Board requires its case workers to make a determination of whether or not a claim has been enhanced by reason of a pre-existing disease, condition or disability.

[12] Prior to September 2002, the determination was generally made 13 weeks into a claim. Between September 2002 and July 2003, the determination was made at 10 weeks into a claim. In each case, if new evidence emerged after the initial determination, the decision could be reconsidered.

[13] In July 2003, the Board issued Practice Directive #62, which provides that the determination is made at six months into a claim, or at the time the claim is closed, if the claim subsists for less than six months. The change was made partly because legislative amendments limited the Board’s powers of reconsideration, and partly because experience had shown that 10 weeks is often too early in the life of a claim to determine whether or not it has been “enhanced by reason of a pre-existing disease, condition or disability.”

[14] The petitioner alleges that the policies and practices of the Board have resulted in systematic underutilization of the s. 39(1)(e) reserve. They allege that the underutilization is a result of three factors:

1. Claims that last less than 10 weeks are automatically excluded from the s. 39(1)(e) reserve;

2. The first 10 weeks of longer claims are excluded from the s. 39(1)(e) reserve;

3. For claims that were evaluated prior to July 2003, the determination as to whether a portion of the claim would be allocated to the reserve was made at too early a time; this is said to have resulted in too few claims having been found to have been “enhanced by reason of a pre-existing disease, condition or disability.”

[15] The petitioner says that the Board’s policies and practices are patently unreasonable, given the apparent purpose of s. 39(1)(e). It seeks to have the Board’s imposition of a surcharge against it quashed, and also seeks various forms of declaratory relief directing the Board as to how it should make determinations under s. 39(1)(e).

Does the Petition Attack a Reviewable Decision?

[16] While the issues raised in the petition concern the manner in which the Board assigns claims to the s. 39(1)(e) reserve, the petitioner does not challenge any particular decision by the Board not to allocate a claim to the reserve. Instead, it challenges the Board’s imposition of a premium surcharge against it. It argues that because the Board systematically under-assigns claims to the s. 39(1)(e) reserve, the claims history on which the surcharge is based is flawed. The result, it says, is that the surcharge cannot stand.

[17] The Board argues that the petitioner cannot bring its challenge in this way. It says that the imposition of a premium surcharge is not reviewable under the Judicial Review Procedure Act, R.S.B.C. 1996, c. 241 (the “JRPA”).

[18] Section 2(2) of the JRPA sets out the types of remedies that may be claimed in judicial review proceedings. It reads as follows:

2(2) On an application for judicial review, the court may grant any relief that the applicant would be entitled to in any one or more of the proceedings for:

(a) relief in the nature of mandamus, prohibition or certiorari;

(b) a declaration or injunction, or both, in relation to the exercise, refusal to exercise, or proposed or purported exercise, of a statutory power.

Section 1 of the JRPA defines a number of terms, including the following:

"decision" includes a determination or order;

“statutory power of decision" means a power or right conferred by an enactment to make a decision deciding or prescribing

(a) the legal rights, powers, privileges, immunities, duties or liabilities of a person, or

(b) the eligibility of a person to receive, or to continue to receive, a benefit or licence, whether or not the person is legally entitled to it,

and includes the powers of the Provincial Court;

"statutory power" means a power or right conferred by an enactment

(a) to make a regulation, rule, bylaw or order,

(b) to exercise a statutory power of decision,

(c) to require a person to do or to refrain from doing an act or thing that, but for that requirement, the person would not be required by law to do or to refrain from doing,

(d) to do an act or thing that would, but for that power or right, be a breach of a legal right of any person, or

(e) to make an investigation or inquiry into a person's legal right, power, privilege, immunity, duty or liability.

[19] The Board argues that the JRPA only allows judicial review to take place where a “statutory power of decision” has been exercised. It argues that the imposition of a surcharge is not such an exercise.

[20] The Board’s argument on this issue would have to be rejected even if one accepted the premise that only statutory powers of decision are reviewable. The power to impose a surcharge is included in the power to levy an assessment. Like all other powers of the Board, it derives from statute. It affects the legal liabilities of a person, and therefore comes within s-s. (a) of the definition of “statutory power of decision” in the JRPA.

[21] The Board’s argument must also be rejected on a more fundamental ground. The JRPA defines the scope of judicial review only by indicating the types of remedies that are available in judicial review proceedings. Two categories of remedies are available. The first consists of remedies set out in s. 2(2)(a): remedies that were historically granted by way of the prerogative writs of certiorari, mandamus, and prohibition. These remedies comprise the core of the superior courts’ inherent supervisory jurisdiction over inferior tribunals. Modern developments in administrative law have given these remedies very broad scope.

[22] The second category of remedies available in judicial review proceedings consists of remedies that owe their origins to private law, but which are now important public law remedies. These remedies – injunctions and declarations in respect of statutory powers – are provided for in s. 2(2)(b) of the JRPA. “Statutory powers” include, but are not limited to, statutory powers of decision. Almost all powers exercised by public authorities today have a statutory basis, so s. 2(2)(b) is also broad in scope.

[23] In the result, the JRPA affirms the very broad judicial review jurisdiction that the Supreme Court enjoyed at common law, and further expands the remedial jurisdiction in respect of exercises of statutory powers. Almost all power exercised by a public authority may be reviewed by the court under the JRPA. The imposition of a premium surcharge is well within the scope of judicial review.

Can the Petitioner Collaterally Attack Allocation Decisions?

[24] Although I find that the imposition of a premium surcharge can be reviewed by the court, the nature of the challenge in this case raises certain difficulties. The Board’s “decision” to implement a surcharge is purely arithmetical. The Board considered the petitioner’s claims history, and arrived at the appropriate surcharge level according to mathematical formulae. The petitioner does not challenge the legitimacy of the formulae, or the accuracy of the math. Instead, it says that the data to which the formulae have been applied are faulty; because the s. 39(1)(e) reserve is under-utilized, the petitioner’s claims history is worse than it believes it should be.

[25] The petition, then, while purporting to challenge the imposition of a surcharge, is, effectively, a challenge to the numerous administrative decisions that have resulted in the petitioner’s claims history. The Board argues that these proceedings amount to a “collateral attack” on decisions in individual claims as to whether or not those claims should be allocated to the s. 39(1)(e) reserve. It says that a collateral attack on those underlying decisions ought not to be entertained.

[26] It is true that Canadian courts have shown reluctance to allowing administrative decisions to be attacked collaterally. This reluctance has been most notable in penal proceedings. In Regina v. Consolidated Maybrun Mines Ltd., [1998] 1 S.C.R. 706, the Supreme Court of Canada considered the ability of a corporation charged with violation of an order of an administrative tribunal to defend itself against the charge by arguing that the underlying order itself was improperly made. In determining whether such a collateral attack could be undertaken, the court considered that five factors should be taken into account: (1) the wording of the statute from which the power to issue the order derived; (2) the purpose of the legislation; (3) the availability of an appeal; (4) the nature of collateral attack (i.e. whether the same attack could have been argued before an appellate administrative body); and (5) the penalty on a conviction for failing to comply with the order. These factors reflect the primary concern of the Supreme Court of Canada in Consolidated Maybrun, which was to ensure that decisions that are intended to be entrusted to administrative bodies not be inappropriately transferred to the court.

[27] While the law with respect to the availability of collateral attack in civil cases has not been altogether consistent, similar considerations apply. Courts must be careful to ensure that collateral attacks do not result in courts usurping jurisdiction that is intended to be exclusively exercised by an administrative tribunal. Courts have also recognized the desirability of certainty and finality in decision-making as a factor militating against allowing collateral attacks on administrative decisions: see, for example the recent Federal Court of Appeal decisions in Berhad v. Canada, 2005 FCA 267, 338 N.R. 75 and Grenier c. Canada, 2005 CAF 348.

[28] In civil and criminal cases, collateral attacks on administrative decisions can raise other concerns as well. A court hearing a civil or criminal matter may, for instance, not be the court that would have had jurisdiction to entertain a judicial review proceeding. This can lead to undesirable inconsistencies in the law (this was a factor considered in Grenier). As well, it may be that the procedures that apply in penal proceedings and in civil claims are less well-suited to the efficient and complete review of administrative decisions than are the rules that have been developed to deal specifically with judicial review of administrative action.

[29] There is a common theme to the various objections to collateral attack. As was observed by Arbour J. in Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77 at para. 34, prohibited collateral attacks are improper because they constitute an abuse of the court’s process.

[30] The court must be careful in approaching a judicial review proceeding that attacks administrative decisions collaterally. It must ensure that the proceeding is not an abuse of the court process. A collateral attack should not be allowed to circumvent statutory limitations on the availability of judicial review (for instance, limitation periods prescribed in s. 57 of the Administrative Tribunals Act, S.B.C. 2004, c. 45, or s. 18.1(2) of the Federal Courts Act, R.S.C. 1985, c. F-7). A collateral attack should also not allow a petitioner to get around discretionary bars to judicial intervention, such as unreasonable delay or mootness. As well, the court must ensure that a collateral attack is not an attempt to usurp the jurisdiction of the administrative tribunal. The standard of review applied to underlying administrative decisions must be identical whether a judicial review application attacks those decisions directly or collaterally.

[31] There are numerous dangers facing a court in attempting to deal with a case, such as the present, which indirectly attacks decisions. The record before the court in this case is, necessarily, incomplete and selective. The court is invited to accept broad generalizations in place of a consideration of detailed facts. The main legal issue – the legality of the board of directors’ policy to exclude the first ten weeks of a claim from the s. 39(1)(e) reserve – is artificially isolated from the particular contexts in which the policy operates.

[32] By refraining from challenging the individual allocation decisions directly, the petitioner provides the court with a limited factual foundation upon which to consider the reasonableness of the Board’s policies. Further, out of the numerous issues that might arise in any individual claim adjudication, the petitioner seeks to isolate the issue of a board of directors’ policy.

[33] Despite these difficulties, I am of the view that the current litigation provides a suitable framework in which to review the legality of the impugned policy. The factual matrix presented to the court, while not comprehensive, appears to me to be adequate. Further, this is not a case in which the petitioner is seeking a legal ruling on an issue that is (or may be) of purely academic concern.

[34] In the case at bar, I am not convinced that the collateral attack on the underlying decisions is abusive of the court’s process. The court clearly has jurisdiction to entertain a judicial review application challenging the Board’s underlying decisions on individual claims. The petitioner is in a position to attack those decisions directly. So long as the petitioner does not seek to take advantages from a collateral attack that would not be available in a direct attack, I am not convinced that there is a basis for the court refusing to entertain the application. In saying this, I recognize that the court must be vigilant to ensure that the same legal considerations are applied to this judicial review as would be applied to a direct attack on the underlying administrative decisions.

Has the Petitioner Failed to Exhaust Adequate Alternative Remedies?

[35] The Board also argues that the court ought to reject the application for review on the basis that the petitioner has failed to exhaust administrative remedies available to it under the Workers Compensation Act.

[36] Judicial review is generally a remedy of last resort. Where statutory provisions allow for decisions or policies to be challenged before administrative tribunals, such provisions are generally seen as providing an adequate alternative remedy to judicial review. The courts will not normally exercise supervisory jurisdiction unless the internal remedies of the administrative scheme have been exhausted. The denial of judicial review on the basis that other remedies are available is, however, discretionary, and depends on an evaluation of a number of factors to determine whether those other remedies are “adequate” alternatives: Harelkin v. University of Regina, [1979] 2 S.C.R. 561 at 588; Canadian Pacific v. Matsqui Indian Band, [1995] 1 S.C.R. 3.

[37] The Workers Compensation Act provides a scheme for the review and appeal of decisions within its administrative framework. Section 96.2 allows an employer to request a review of a decision to allocate a compensation payment to it rather than to the s. 39(1)(e) reserve. Under s. 239, an appeal lies from a review decision to the Workers Compensation Appeal Tribunal (“WCAT”), a body independent of the Board. As a general rule, litigants seeking to review decisions of the Board have been required to exhaust the internal review and appeal procedures before approaching the court seeking judicial review – see, for example, Adams v. British Columbia (Workers’ Compensation Board) (1989), 42 B.C.L.R. (2d) 228 (CA).

A.) Review of Board of Directors’ Policy

[38] The difficulty in the present case is the limited degree to which the internal review and appeal mechanisms are able to deal with the legality of rules set down by the Board’s board of directors as “policy”. Under s. 82 of the Workers Compensation Act, the board of directors of the Board is required to establish “policies” regarding compensation. Section 99 of the Act prohibits officers of the Board, in making decisions in cases, from departing from policies set down by the board of directors:

99 (1) The Board may consider all questions of fact and law arising in a case, but the Board is not bound by legal precedent.

(2) The Board must make its decision based upon the merits and justice of the case, but in so doing the Board must apply a policy of the board of directors that is applicable in that case. [Emphasis added]

A similar provision applies to the WCAT:

250 (1) The appeal tribunal may consider all questions of fact and law arising in an appeal, but is not bound by legal precedent.

(2) The appeal tribunal must make its decision based on the merits and justice of the case, but in so doing the appeal tribunal must apply a policy of the board of directors that is applicable in that case. [Emphasis added]

[39] Section 251 of the Act provides an exception to the general rule that the WCAT is required to follow the policies of the board of directors:

251 (1) The appeal tribunal may refuse to apply a policy of the board of directors only if the policy is so patently unreasonable that it is not capable of being supported by the Act and its regulations.

(2) If, in an appeal, the appeal tribunal considers that a policy of the board of directors should not be applied, that issue must be referred to the chair and the appeal proceedings must be suspended until the chair makes a determination under subsection (4) or the board of directors makes a determination under subsection (6), as the case may be.

(3) As soon as practicable after an issue is referred under subsection (2), the chair must determine whether the policy should be applied.

(4) If the chair determines under subsection (3) that the policy should be applied, the chair must refer the matter back to the appeal tribunal and the tribunal is bound by that determination.

(5) If the chair determines under subsection (3) that the policy should not be applied, the chair must

(a) send a notice of this determination, including the chair’s written reasons, to the board of directors, and

(b) suspend any other appeal proceedings that are pending before the appeal tribunal and that the chair considers to be affected by the same policy until the board of directors makes a determination under subsection (6).

(6) Within 90 days after receipt of a notice under subsection (5) (a), the board of directors must review the policy and determine whether the appeal tribunal may refuse to apply it under subsection (1).

(7) On a review under subsection (6), the board of directors must provide the following with an opportunity to make written submissions:

(a) the parties to the appeal referred to in subsection (2);

(b) the parties to any appeals that were pending before the appeal tribunal on the date the chair sent a notice under subsection (5) (a) and that were suspended under subsection (5) (b).

(8) After the board of directors makes a determination under subsection (6), the board of directors must refer the matter back to the appeal tribunal, and the appeal tribunal is bound by that determination.

(9) The chair must not make a general delegation of his or her authority under subsection (3), (4) or (5), but if the chair believes there may be a reasonable apprehension of bias the chair may delegate this authority to a vice chair or to a panel of the appeal tribunal for the purposes of a specific appeal.

[40] The provision was enacted by s. 33 of the Workers Compensation Amendment Act (No. 2), S.B.C. 2002, c. 66. It is an odd provision in a number of respects. It effectively grants the WCAT the power to determine whether a policy is “patently unreasonable” (a power normally reserved to a court on judicial review), but does not allow it to act on such a determination without permission from both the Chair of the board of directors and the board of directors itself. The bases upon which the Chair and the board of directors are to determine whether or not a policy must be followed by the WCAT (notwithstanding the Tribunal’s determination that the policy is patently unreasonable) are not set out in the statute.

[41] I am not convinced that the internal review provisions in the Workers Compensation Act furnish an adequate alternative remedy to judicial review where the matter in issue is legality of a policy issued by the board of directors of the Board. Throughout the process, decision-makers are required to defer to the policies of the board of directors. Even where the policies are found to be patently unreasonable, there is no certainty that the decision-makers will be allowed to depart from them.

[42] I am not satisfied that, where the sole issue is the legality of a policy, the aggrieved party should be required to follow the Act’s lengthy and inconclusive procedures of review and appeal. Such a course would be time-consuming, and even if the petitioner succeeds in convincing the WCAT that the policies are ultra vires, there is no certainty that those policies will not be applied.

[43] The Board argues that the internal processes ought to be followed, in any event, in deference to the expertise of the reviewing officers and the Appeal Tribunal. I am unable to accept that argument. The reviewing officers have no jurisdiction to even inquire into the validity of policy. It is clear that the statute does not intend that decisions as to the jurisdiction of the board of directors to implement a particular policy be made at their level.

[44] While the Act does allow the WCAT limited authority to address the validity of policy, it does not do so in a manner suggestive of expertise. The WCAT is allowed to review policy only on a standard of “patent unreasonableness”, the narrowest of all possible standards of review. It is evident that on judicial review, the court itself would be entitled to review policies of the board of directors on the same standard – it would owe no deference at all to any finding of the WCAT on the issue.

[45] The very limited powers of the WCAT to review board of directors’ policy, and their impotence to make any binding determination that the policy is ultra vires convinces me that the internal remedies set out in the Workers Compensation Act are not adequate alternative remedies to judicial review where the sole issue is one covered by policies of the board of directors.

[46] In saying this, I do not ignore the elaborate scheme that has been developed for the formulation, implementation, and modification of board of directors’ policy. That scheme is not aimed at testing the jurisdiction of the board of directors to adopt a policy, but only to the wisdom of the policy. The court does not intrude on that scheme when it determines that an adopted policy is outside the jurisdiction of the board of directors.

[47] The Board argues that in Switzer v. British Columbia (Workers’ Compensation Board), 2004 BCSC 1616, [2004] B.C.J. No. 2545, this court effectively held that it was necessary to exhaust the appeal process under the Workers Compensation Act before applying for judicial review of a board of directors’ policy. I do not read the case as standing for that proposition.

[48] In Switzer, the applicant sought to challenge a change in Board policy that resulted in greater restrictions on the types of situations in which interest would be paid to claimants. Mr. Switzer had sought interest in the course of Board proceedings, which culminated in a hearing before the WCAT. The WCAT denied his request for interest, holding that Mr. Switzer would not have been entitled to interest under either the new or the old policies.

[49] Mr. Switzer did not challenge the WCAT decision. Instead, he attempted to judicially review the Board’s policy directly. This court held that such a course of action was not available to the applicant. Having pursued the internal review and appeal processes available under the Workers Compensation Act, he could not ignore the results of those proceedings. If he was to succeed in obtaining a payment of interest, he could only do so by judicially reviewing the decision of the WCAT.

[50] As I read Switzer, it is not a case about the adequacy of the remedies available under the review and appeal process set out in the Workers Compensation Act. Rather, it is a case concerned with whether a person who has pursued those processes unsuccessfully can ignore the result and commence a fresh proceeding to challenge the Board’s policy.

[51] In the case at bar, a primary target of the petitioner’s argument is a policy issued by the Board’s board of directors which prohibits the assignment of the first ten weeks of any claim to the s. 39(1)(e) reserve. For reasons I have given, I am not satisfied that the review and appeal process under the Workers Compensation Act constitutes an “adequate alternative remedy” such that this court should refuse to hear the issue until the administrative review mechanisms have been exhausted.

B.) Review of Pre-July 2003 Practices

[52] The same cannot be said, however, in respect of other aspects of this application that do not touch upon policy issued by the board of directors. To the extent that this application is based on the assertion that claims adjudicated prior to July 2003 tended to be made at too early a time, the appeal provisions of the Act appear to me to have given the reviewing officers and the WCAT jurisdiction to deal with and correct pre-mature adjudications.

[53] The petitioner argues that those internal mechanisms failed to provide a realistic remedy where cases were adjudicated pre-maturely, because Board practices tended to make it difficult for the employer to obtain information about the claim, and because WCAT and Board jurisprudence make it difficult to obtain an extension of time limits for review. In the result, it says, the Board’s practices made the issue of premature adjudication evasive of internal review.

[54] I am not persuaded by that argument. It was open to the petitioner to challenge disclosure policies or jurisprudence on extension of time limits if it was of the view that those factors violated rights to procedural fairness and thwarted internal review mechanisms.

[55] The issue of disclosure is a complex one, which arguably must take into account not only the employer’s right to procedural fairness, but also the worker’s privacy interests. In March 1996, the Information and Privacy Commissioner issued an investigation report on the issue, under the authority of s. 42(1)(a) of the Freedom of Information and Protection of Privacy Act, R.S.B.C. 1996, c. 165. The report, “Investigation P96-006: An Investigation into the Practices of the Workers Compensation Board of British Columbia with Respect to Disclosing Personal Information about Injured Workers to Employers” is detailed. The Board purports to follow its recommendations.

[56] The material before this court does not challenge the soundness of the Information and Privacy Commissioner’s recommendations, nor does it address the reasonableness of the Board’s disclosure practices. It is open to the petitioner to challenge those practices in a properly constituted judicial review proceeding. If the practices are, as the petitioner seems to suggest, a violation of employers’ rights to procedural fairness, then this court can deal with the issue directly, rather than treating it as a reason to circumvent the clear review and appeal provisions of the Workers Compensation Act.

[57] The situation is even clearer with respect to the allegation that Board and WCAT decisions regarding extension of time for appeals are inappropriate. It was open to the petitioner to apply for extensions in individual cases, and, if it considered that extensions were improperly denied, to seek review of those decisions. It has not done so.

[58] I conclude that the internal remedies of the Workers Compensation Act were adequate alternatives to judicial review in respect of arguments about pre‑mature adjudications.

[59] I also note that the Board’s practice of making an initial determination on the allocation of claims to the s.39(1)(e) reserve has changed since July 2003. The petitioner is, in this application, challenging decisions of some vintage, which were based on a practice that no longer subsists. The remedy it seeks (cancelling surcharges) could cause serious disruption, as the Board would have to fund reserves in some manner. Delay in bringing judicial review proceedings is a discretionary ground for denying relief. In the circumstances of this case, inordinate delay in bringing the matter to the court would be an alternative ground for dismissing the application in respect of the pre-July 2003 decisions.

[60] In the result, I conclude that internal review and appeal provisions do not provide an adequate alternative remedy to judicial review in respect of the board of director’s policy against allocating the first ten weeks of a claim to the s. 39(1)(e) reserve. In all other respects, the matters raised in this application were amenable to internal review by the Board and the WCAT. Having failed to avail itself of those internal administrative reviews and appeals, the petitioner is barred from bringing the matters to this court on judicial review.

The Standard of Review

[61] I will, then, proceed to consider whether the Board’s policy of refusing to allocate the first ten weeks of a claim to the s. 39(1)(e) reserve ought to be quashed. The first issue to be determined is the standard of review that the court should apply to that policy.

[62] The parties agree that under the pragmatic and functional approach that the court must follow in judicial review proceedings, the appropriate standard of review in this case is one of “patent unreasonableness”. They cite several authorities, in support of this proposition, including Pasiechnyk v. Saskatchewan (Workers’ Compensation Board), [1997] 2 S.C.R. 890.

[63] I agree with the proposition that the “patently unreasonable” standard applies here. Section 96 of the Workers Compensation Act is a strong privative clause that allows the Board’s decisions to be reviewed only in circumstances where the WCAT has appellate jurisdiction. In those cases, s. 255 of the Act protects WCAT decisions with a similarly strong privative clause. The wording makes it clear that the court’s jurisdiction to deal with Board and WCAT decisions is very limited.

[64] As well, we are dealing with a tribunal that has significant expertise in dealing with the area of compensation for workplace injuries. The Board is a complex administrative body with comprehensive powers to administer the compensation scheme, and to encourage safety in the workplace. The issue before the court is one of general policy. In this case, I consider the choice of the standard of review to be a straightforward one. As there is no dispute as to the appropriate standard, I do not propose to say more about it. I will apply a standard of “patent unreasonableness”.

The Scope of Discretion under s. 39(1)(e)

[65] As I have indicated, s. 39(1)(e) is skeletal legislation, which merely provides that the Board is required to levy assessments on employers in order to maintain a reserve (within the accident fund) “for payment of that portion of the disability enhanced by reason of a pre-existing disease, condition or disability.” The Board argues that nothing in the Act specifically requires that reserve to be administered as a separate fund, or specifically directs that those portions of claims allocated to s. 39(1)(e) be excluded from consideration in setting an employer’s premiums. In its argument, it says:

There is no statutory provision that describes the application and operation of the reserve fund. How the reserve fund is to be assessed, what categories of injury or claim will be considered, what factors qualify an injury or claim for consideration, what relief will be considered, who will make the decisions, or how the decisions will be implemented are matters on which the Workers Compensation Act is silent, and are matters left to the Board to resolve as matters of policy. The Board has answered those questions. Having given the Board authority to levy the assessments, their manner of assessment and how they are factored into the assessment rate are left to the Board.

In support of these propositions, the Board cites Merrill Ring Wilson Ltd. v. Workmen’s Compensation Board, [1933] 4 D.L.R. 57 (PC). While Merrill Ring does establish that the precise manner of making s. 39 assessments rests with the Board, I do not accept that it goes so far as to grant the Board unfettered discretion in determining how it will establish, fund and utilize the various reserves.

[66] For its part, the petitioner agrees that the Act does not expressly require the Board to relieve individual employers from the burden of paying surcharges to cover the portion of their employees’ claims that are attributable to pre-existing disease, conditions or disabilities. It argues, however, that the clear intention of s. 39(1)(e) is to relieve employers of the disincentive that they might otherwise have to hiring workers with pre-existing diseases, conditions or disabilities. The petitioner goes on to argue that any exercise of discretion by the Board which is not in keeping with this intention is a patently unreasonable one.

[67] Section 39(1)(e) does establish a reserve with the purpose of removing disincentives to the hiring of workers with pre-existing diseases, conditions or disabilities. I agree that in exercising its discretion with respect to the operation of the accident fund, and in calculating and assessing premiums, the Board must have this purpose in mind. It is not, however, the only factor that the Board is entitled to take into account in setting policies applicable to s. 39(1)(e). The section does not exist in a vacuum. Rather, it is part of a complex scheme that has numerous objectives. The Board is, therefore, entitled to consider a variety of factors in establishing and operating the s. 39(1)(e) reserve, including, for example, efficiency in administering the accident fund, and the practicality of adjudication. If the Board were not allowed to consider such matters, it would have made little sense for the legislation to give the Board discretion in the operation of the reserve

[68] The real question, then, is whether the Board’s decision to exclude the first ten weeks of a claim from allocation to the s. 39(1)(e) reserve is a patently unreasonable exercise of discretion. I am not convinced that it is. It is apparent that the cost associated with assessing claims for allocation to the s. 39(1)(e) reserve justifies the establishment of a threshold before a claim is considered. Indeed, the petitioner concedes that that is so. It argues, however, that the Board should be required to demonstrate that there is a rationale for setting that threshold at ten weeks rather than some other length of time. With all due respect, that argument ignores the fact that it is for the petitioner to demonstrate that the period chosen by the Board is patently unreasonable. It has not done so.

[69] In particular, it does not appear to me that in setting the threshold at ten weeks, that Board has taken into account improper considerations, acted for an improper purpose, or failed to consider the purpose of s. 39(1)(e). While thresholds other than ten weeks might be justifiable, or even preferable to the ten-week threshold, there is no basis for finding the ten-week threshold to be patently unreasonable.

[70] I am also unable to say, in the context of the evidence in this case, that a policy of excluding the first ten weeks of longer claims from allocation to the s. 39(1)(e) reserve is clearly irrational, given the multitude of considerations that the board of directors of the Board is entitled to take into account in setting policy. In particular, the evidence does not satisfy me that this limitation on employer relief from assessments is so serious as to undermine the goals of s. 39(1)(e). The evidence relative to this issue in this case is minimal, however, and I would not preclude the possibility that a focussed attack on this particular policy in a particular case might not result in a different assessment by the court.

Conclusion

[71] In the result, I decline to entertain this application with respect to whether pre‑July 2003 decisions on allocation of cases to the s. 39(1)(e) reserve were made prematurely. The petitioner had adequate alternative remedies in respect to that issue internal to the administrative process.

[72] I dismiss the application insofar as it challenges board of directors’ policy to exclude the first ten weeks of a claim from allocation to the s. 39(1)(e) reserve. I cannot find that policy to be patently unreasonable.

[73] The petition is therefore dismissed, with costs on scale 3.

“P.D. Dohm, A.C.J. for H. Groberman, J.”
The Honourable Associate Chief Justice P.D. Dohm
for The Honourable Mr. Justice H. Groberman

Citation:	*Western Stevedoring Co. Ltd. v. W.C.B.,*
	2005 BCSC 1650