2006 BCSC 722 Cowburn v. Worker's Compensation Board of British Columbia

Before: The Honourable Mr. Justice Maczko

Reasons for Judgment

Counsel for the Petitioner:	M. Pongracic-Speier
Counsel for the Respondent:	S. Nielsen L. Courtenay
Date and Place of Hearing:	March 29 and 30, 2006
	Vancouver, B.C.

[1] This is an application to quash a policy decision of the Worker’s Compensation Board (“WCB”) Board of Directors (“BOD”) on the ground that it made a patently unreasonable interpretation of the Workers Compensation Act R.S.B.C. 1996, C. 492 (the “Act”).

[2] The petitioner suffered a work related injury (lung disease) and receives a disability pension. Over the years, his condition has deteriorated. The Act, prior to June 30, 2002, provided that if a worker who suffers a work related disease deteriorates, compensation would be increased based on the percentage of disability being suffered.

[3] In June 2002, the Act was amended to provide that if a worker suffered a “recurrence” of an injury after retirement, there would be no additional compensation. The BOD interpreted the Act to mean that the word “recurrence” included deterioration, so that if a worker is on a disability pension and the injury deteriorates after he retires, there will be no additional compensation.

[4] The issue before me is whether the word “recurrence” in s. 35.1(8) of the Act includes the concept of deterioration.

FACTS

[5] The petitioner is a 75 year-old retired mill worker. He worked at Eurocan Pulp Mill in Kitimat from March 1973 to November 1994. He was exposed to asbestos and developed lung problems which required him to retire in 1994. In 2002, after undergoing a lung biopsy, the petitioner was diagnosed with asbestos-related lung disease and he applied for compensation for an occupational disease. He was assessed at having a twenty-eight percent disability as of October 1998, and was awarded compensation on that basis. The petitioner was reassessed from time to time and was found to have a twenty-eight percent disability in June 2002, a fifty-one percent disability in December 2003, and a sixty-five percent disability in August 2004. The petitioner receives a disability pension of approximately $800 per month, based on a disability rating of twenty-eight percent. The petitioner applied for an increase in his pension because of his increased disability, due to a deterioration of his condition. The case manager rejected his claim in February 2005, on the basis that the Act had been amended to provide that for a worker who is over 65 and retired will receive no further compensation for any injury which recurs after June 2002.

[6] The petitioner appealed this decision to the Board of Review which rejected his appeal on September 27, 2005. For reasons which I shall explain shortly, he did not pursue an appeal to the Workers’ Compensation Appeal Tribunal. Instead he sought judicial review of the policy decision which interpreted s. 35.1 (8) of the Act and which the case manager relied on in rejecting his claim.

HISTORY OF THE LEGISLATION

[7] The Act, prior to 2002, provided that if a worker was injured or suffered an occupational disease and was permanently disabled, he would receive a disability pension. If that disability deteriorated, the pension would be increased in proportion to the increase in disability.

[8] The Act was amended in 2002 so that once a worker reached 65 he or she would no longer receive a disability pension. The new Act provided for a transition so that workers who already had pensions, which were for job related injuries, would not have their benefits reduced.

[9] Section 35.1 provides as follows:

35.1 (1) In this section, "transition date" means the date that this section comes into force.

(2) Subject to subsection (7), this Act, as amended by the Workers Compensation Amendment Act, 2002, applies to an injury that occurs on or after the transition date.

(3) Subject to subsections (4) to (8), this Act, as it read immediately before the transition date, applies to an injury that occurred before the transition date.

(4) Subject to subsections (5) to (8), if a worker's permanent disability first occurs on or after the transition date, as a result of an injury that occurred before the transition date, this Act, as amended by the Workers Compensation Amendment Act, 2002, applies to the permanent disability.

(5) For the purposes of subsection (4), sections 22 (1) and 23 of this Act, as amended by the Workers Compensation Amendment Act, 2002, apply as if

(a) all references, other than references in section 23 (3)(d)(i),

(i) to 90% were read as 75%, and

(ii) to "average net earnings" were read as "average earnings determined under this Act immediately before the transition date", and

(b) section 23 (3)(d)(i) read as follows:

(i) the average earnings that the worker is earning after the injury, as determined under this Act immediately before the transition date.

(6) Section 34 (2) of this Act, as enacted by the Workers Compensation Amendment Act, 2002, does not apply in the circumstances described in subsection (4).

(7) Subject to section 19 (2.1) of this Act, section 25 of this Act, as that section read on the date section 35.2 (5) came into force, applies to compensation paid on or after that date to a worker, irrespective of the date the worker was injured.

(8) If a worker has, on or after the transition date, a recurrence of a disability that results from an injury that occurred before the transition date, the Board must determine compensation for the recurrence based on this Act, as amended by the Workers Compensation Amendment Act, 2002.

[10] It was agreed by both counsel that, under the current provisions of the Act, disability pensions are calculated on ninety-percent of the net earnings to age 65 and the worker would receive a retirement benefit of five percent of the permanent disability award. The injured worker would receive no disability pension after June 30, 2002. The result is that workers injured after June 30, 2002, receive no disability pension after age 65. However, workers injured before June 30, 2002, who were receiving a disability pension, would continue to receive that pension, but would not receive any increase if the injury “recurs”.

[11] In 2003, the BOD formulated a policy and interpreted s. 35.1 (8) to mean that if an injury recurred or deteriorated after a person retired, there would be no additional compensation. The issue is whether the BOD was correct in deciding that the word “recurrence” in s. 35.1(8) included deterioration.

[12] The petitioner made a claim and was awarded a disability pension based on a twenty-eight percent disability as of 1998. He made a claim for an increased pension based on a sixty-five percent disability, which was assessed in 2004. His claim was turned down by the claims examiner and his appeal to the Board of Review was turned down on September 27, 2005. He was told it was turned down because of the BOD policy which was that:

Policy item #1.03 defines recurrence as including any permanent changes in the nature and degree of a worker’s permanent disability. Therefore, the current provisions of the Act apply to the worker’s increased impairment in 2003 and 2004. The current provisions of the Act do not provide for permanent periodic disability payments beyond age 65. Therefore, no additional award for increased impairment can be paid as the worker was more than 65 years or age and he had already received compensation for permanent functional impairment to age 65.

[13] This decision was never appealed to the Worker’s Compensation Appeal Tribunal (“WCAT”) because counsel for the plaintiff became aware of another case which went to the WCAT on exactly the same issue. In that case, the WCAT ruled that the policy directive no. 1.03 declaring recurrence to include deterioration was patently unreasonable. The decision was referred back to the BOD. The BOD decided that the policy was not patently unreasonable and reaffirmed its policy.

APPEAL PROCEDURE

[14] The appeal system, within the Worker’s Compensation system, is as follows: First a decision is made by a claims examiner. Then an appeal may be taken to a review panel. From there, an appeal lies to the WCAT. If the WCAT is reviewing a policy of the BOD it many only overrule that policy if it is patently unreasonable.

Section 251 provides as follows:

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. [emphasis added]

(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.

The BOD is then required to review its decision. If the BOD decides that its interpretation of the Act is not patently unreasonable, then the WCAT is bound by that decision.

[15] That is what happened in WCAT decision no. 2005-01710. Counsel for the petitioner concluded that it would be futile to appeal to the WCAT because it was bound by that previous ruling by the BOD. Counsel therefore came directly to this court to determine whether the interpretation of s. 35.1(8) by the BOD is a patently unreasonable. I agree with counsel that it would be futile to exhaust internal remedies in this case, adding considerable expense merely to wind up before this court at a much later date. I therefore rule that the petitioner is not required, on the facts of this case, to exhaust all internal remedies.

[16] Counsel for the petitioner made a further argument that the petitioner was not provided with natural justice in not being given an opportunity to make submission to the BOD in the case of 2005-01710. However, counsel abandoned that application once I pointed out that the probable result would be to be sent back to make submissions to the BOD.

[17] If I were dealing merely with a BOD policy over which it had discretion, it is clear that the court would not interfere. Here the issue is whether the BOD so seriously misinterpreted the Act that its interpretation of s. 35.1(8) is patently unreasonable and cannot be supported by the Act.

HISTORY OF THE POLICY.

[18] In the months immediately following the amendment of the Act in 2002, it was WCB policy that, the proper interpretation of s. 35.1(8) required that a recurrence and deterioration were two different things. The policy that preceded the one at issue here read: “A recurrence must be distinguished from deterioration. An example of a recurrence is where there has been total recovery from a disability and wage-loss payments have been terminated….An example of deterioration is where a disability award has been assessed and the disability subsequently worsens.”

[19] This policy was amended by resolution on October 16, 2002 to erase the distinction between a recurrence and deterioration, so that both were defined as “any permanent changes in the nature and degree of a worker’s permanent disability”. It is this definition that was found to be patently unreasonable by the WCAT in Decision Number 2005-01710 and that is the subject of this judicial review.

[20] Following the decision of the WCAT, the BOD carried out a review of the policy as it is required to do under s. 251(6) of the Act. As part of that review, the BOD solicited written submissions from the parties to the appeal and parties to other appeals that were pending and that were suspended pursuant to s. 251(5)(b). It received 30 submissions from those parties and, in addition, sought advice from both its general counsel and outside counsel and from its Policy and Research Division. We do not know what advice the BOD received. On August 8, 2005, the BOD decided that the interpretation was supported by the Act and thus not patently unreasonable and that the WCAT was bound by it.

STANDARD OF REVIEW

[21] I find that the proper standard of review is determined by s. 58 of the Administrative Tribunals Act, S.B.C. 2004, c. 245.

[22] Section 58 of the Administrative Tribunals Act provides:

58(1) If the tribunal's enabling Act contains a privative clause, relative to the courts the tribunal must be considered to be an expert tribunal in relation to all matters over which it has exclusive jurisdiction.

(2) In a judicial review proceeding relating to expert tribunals under subsection (1)

(a) a finding of fact or law or an exercise of discretion by the tribunal in respect of a matter over which it has exclusive jurisdiction under a privative clause must not be interfered with unless it is patently unreasonable,

(b) questions about the application of common law rules of natural justice and procedural fairness must be decided having regard to whether, in all of the circumstances, the tribunal acted fairly, and

(c) for all matters other than those identified in paragraphs (a) and (b), the standard of review to be applied to the tribunal's decision is correctness.

[23] The policy decision is effectively a finding of law. The standard of review, pursuant to s. 58(2)(a), is patent unreasonableness.

[24] I do not make a finding that the policy of the BOD is patently unreasonable. The question is whether the BOD had the power to implement such a policy in the face of the Act. In other words, was the interpretation of s. 35.1(8) patently unreasonable. I have concluded that it is. I can find nothing the Act or the history of the section which is capable of sustaining the interpretation given to it by the BOD. Their decision is focused more on policy and the finances of the WCB than what the legislature intended with s. 35.1(8).

PATENTLY UNREASONABLE

[25] The judgment of Mr. Justice Iacobucci in Canada (Director of Investigation & Research) v. Southam Inc., [1997] 1 S.C.R. 748, is frequently cited by courts attempting to define patent unreasonableness. He said the following at p. 777:

The difference between "unreasonable" and" patently unreasonable" lies in the immediacy or obviousness of the defect. If the defect is apparent on the face of the tribunal's reasons, then the tribunal's decision is patently unreasonable. But if it takes some significant searching or testing to find the defect, then the decision is unreasonable but not patently unreasonable. As Cory J. observed in Canada (Attorney General) v. P.S.A.C., [1993] 1 S.C.R. 941, at p. 963, "[i]n the Shorter Oxford English Dictionary' patently', an adverb, is defined as 'openly, evidently, clearly"'. This is not to say, of course, that judges reviewing a decision on the standard of patent unreasonableness may not examine the record. If the decision under review is sufficiently difficult, then perhaps a great deal of reading and thinking will be required before the judge will be able to grasp the dimensions of the problem. See National Corn Growers Assn. v. Canada (Canadian Import Tribunal), [1990] 2 S.C.R. 1324, at p. 1370, per Gonthier J.; see also Toronto (City) Board of Education v. O.S.S.T.F., District 15, (1997), 144 D.L.R. (4th) 385 per Cory J. But once the lines of the problem have come into focus, if the decision is patently unreasonable, then the unreasonableness will be evident. [emphasis added]

[26] He expanded on this principle in Ryan v. Law Society (New Brunswick), [2003] 1 S.C.R. 247, where he said at ¶ 52:

[A] patently unreasonable defect, once identified, can be explained simply and easily, leaving no real possibility of doubting that the decision is defective. A patently unreasonable decision has been described as "clearly irrational" or "evidently not in accordance with reason" (Canada (Attorney General) v. P.S.A.C., [1993] 1 S.C.R. 941 (S.C.C.), at pp. 963-964, per Cory J., Sherbrooke (Ville) c. Centre communautaire juridique de l'Estrie, [1996] 3 S.C.R. 84 (S.C.C.), at paras. 9-12, per Gonthier J.). A decision that is patently unreasonable is so flawed that no amount of curial deference can justify letting it stand.

[27] More recently, in Voice Construction Ltd. v. Construction & General Workers' Union, [2004] 1 S.C.R. 609, Mr. Justice LeBel offered the following comment at ¶ 41:

It is illuminating in this respect to consider the definition of patent unreasonableness by Dickson J. (as he then was) in C.U.P.E., Local 963 v. New Brunswick Liquor Corp., [1979] 2 S.C.R. 227 (S.C.C.), at p. 237, which is the seminal judgment of our Court in the development of a modern law of judicial review. Rather than contemplating the metaphysical obviousness of the defect, he explained that a decision will only be patently unreasonable if it "cannot be rationally supported by the relevant legislation."

[28] In Canada Safeway Ltd. v. Retail, Wholesale and Department Store Union, Local 454, [1998] 1 S.C.R. 1079 the Supreme Court of Canada considered the concept of patent unreasonableness in relation to the definition of a word in a legal document, in that case, a collective agreement. In that case, the Board of Arbitration found that an employee had been subject to a “constructive layoff” and was eligible to exercise certain remedies under the contract, even though she continued to work the same number of hours as before. After reviewing the interpretation of the term “layoff” in a number of decisions by courts and arbitrators, the majority of the Court (with L’Heureux-Dube J. dissenting) found that the Board’s use of the term of “constructive layoff” was patently unreasonable. Cory J. and McLachlin J. (as she then was) wrote at ¶ 75, “for there to be a layoff, there must be a cessation of work. If the employee continues to work substantially the same number of hours, his or her grievance is not, whatever else in might be, a layoff.”

[29] At ¶ 77, the majority suggested that one of the reasons the Board fell into error was that they had defined layoff too broadly. In my view, the Board here has made the same error. I am persuaded by the clear and articulate reasons given by Jill Callan, the Chair of the Worker’s Compensation Appeal Tribunal in the WCAT decision 2005-10710. I adopt her reasons and make them part of my own and would quash the decision of the BOD for those reasons.

[30] On the face of it, the ordinary meaning of the word “recurrence” in s. 35.1(8) does not include the concept of deterioration. In ordinary parlance one would not use the word “recurrence” to mean deterioration as a synonym or as a word that includes deterioration. The defect in interpretation is obvious and immediate.

[31] The dictionary definitions of recurrence do not lend themselves to any nuance that could include a concept of deterioration. The New Lexicon Webster’s Dictionary defines recur as: to return, come back, to occur again esp. after some lapse of time. The Oxford Concise Dictionary defines recur as: present itself again, occur again, be repeated.

[32] The Act itself does not define recur or recurrence to include the word or any concept of deterioration. Indeed, other sections of the Act appear to draw a distinction between recurrence and deterioration. For example, s. 32 provides as follows:

32(1) For the purpose of determining the amount of compensation payable where there is a recurrence of temporary total disability or temporary partial disability after a lapse of 3 years following the occurrence of the injury, the Board may calculate the compensation as if the recurrence were the happening of the injury if it considers that by doing so the compensation payable would more nearly represent the percentage of actual loss of earnings suffered by the worker by reason of the recurrence of the injury.

(2) Where a worker has been awarded compensation for permanent partial disability for the original injury and compensation for recurrence of temporary total disability under subsection (1) is calculated by reference to the average earnings of the worker at the date of the recurrence, the compensation must be without deduction of the compensation payable for the permanent partial disability; but the total compensation payable must not exceed the maximum payable under this Part at the date of the recurrence.

(3) Where more than 3 years after an injury a permanent disability or an increased degree of permanent disability occurs, the compensation payable for the permanent disability or increased degree of permanent disability may be calculated by reference to the average earnings of the worker at the date of the occurrence of the permanent disability or increased degree of permanent disability. [emphasis added]

Subsection 1 and 2 refer to recurrence of disability, whereas ss. 3 refers to an increased degree of permanent disability. The two concepts are clearly distinguished in this section.

[33] Section 92 of the Act provides as follows:

96(2) Despite subsection (1), at any time, on its own initiative, or on application, the Board may reopen a matter that has been previously decided by the Board or an officer or employee of the Board under this Part, if since the decision was made in that matter,

(a) there has been a significant change in a worker’s medical condition that the Board has previously decided was compensable, or

(b) there has been a recurrence of a worker’s injury. [emphasis added]

This section, again, refers to the two concepts of a condition which changes and an injury which recurs.

[34] What little evidence can be found in Hansard tends to support the view that the legislature did not intend the word recurrence to include the concept of deterioration. When speaking to the amendments in the legislature, on May 16, 2002, the Minister made the following statement:

Let me emphasis again that this bill does not reduce any benefits already awarded to injured workers. I just want to say that again for people to understand, because there could be people who are fearful that these changes relative to the benefit they’re receiving today will be changed. That is not correct. I will say it again. This bill does not reduce any benefits already awarded to injured workers. The new method of calculating benefits applies only to those benefits awarded after this legislation comes into force.

[35] Counsel for the WCB argued that the Minister used the phrase “the bill does not reduce any benefits already awarded to injured workers” and that meant there would be no reduction in the amount of money injured workers were already receiving. I do not agree. The Minister used the word “benefits”. One of the benefits that the workers had already received was the right to an increased pension, if his condition got worse. To take this away is the taking away of a benefit already awarded. In my view, the legislation clearly intended that workers who had suffered injuries prior to the 2002 amendments should retain those rights. Any workers who suffered an injury or a recurrence of an injury after the 2002 amendments would have their compensation calculated under the new system. The legislature could easily have included the word “deterioration” or some similar concept in s. 35 and it chose not to. The Minister made it clear that no retired pensioner would lose any benefits and the section makes it clear that no retired worker would lose benefits unless an injury recurred.

[36] I can find no basis on which the BOD interpretation of the Act can be justified. As I said earlier, the policy itself may not lead to an unreasonable result, but the BOD interpreted the statute in a way that is, in my view, patently unreasonable. If the legislature wishes to implement the policy articulated by the BOD, the statute can be easily amended.

[37] I find that the BOD interpretation of the word “recurrence” to include to deterioration is patently unreasonable.

SUMMARY

[38] I can find no basis for justifying the interpretation of the word recurrence given by the BOD.

1. The words of the Minister speaking to the legislation make is clear that no worker injured before the amendments to the legislation, would lose any benefit;

2. The original policy of the BOD was to distinguish between recurrence and deterioration;

3. Any common sense interpretation of the word “recurrence” would not include the word or a concept of “deterioration”. The defect in interpretation is immediate and obvious;

4. There is no dictionary definition that would allow for the interpretation of “recurrence” to include the word “deterioration”;

5. There is nothing in the legislation that would justify the interpretation given to the word “recurrence” by the BOD. Indeed other sections of the Act tend to support the distinction between “recurrence” and “deterioration” of an injury.

6. The WCAT found the BOD’s interpretation of the word recurrence to be patently unreasonable.

[39] I find the BOD’s interpretation of the word recurrence to be patently unreasonable.

“F. Maczko, J.”
The Honourable Mr. Justice F. Maczko

Citation:	*Cowburn v. Worker’s Compensation Board of British Columbia,*
	2006 BCSC 722