2007 BCSC 24 Johnson v. Workers' Compensation Board et al

Before: The Honourable Madam Justice Gray

Reasons for Judgment

Counsel for the Petitioner:	F. Andrew Schroeder
Counsel for the Respondent, Workers' Compensation Board:	Scott A. Nielsen
Counsel for the Respondent, Workers' Compensation Appeal Tribunal:	Caroline F. Berkey
Date and Place of Hearing:	October 16 and 17, 2006
	Vancouver, B.C.

INTRODUCTION

[1] The petitioner Mr. Johnson was injured in a workplace accident in 1985 and received benefits from the Workers’ Compensation Board (“WCB”) for several months that year. About 14 years later, in 1999, he underwent surgery and sought further benefits from WCB on the basis that the 1999 surgery resulted from the 1985 workplace accident. WCB initially refused his claim for further benefits. Mr. Johnson successfully appealed. In late 2001, WCB paid Mr. Johnson about $19,000 in retroactive wage loss benefits, but did not pay him any interest on the basis that he did not qualify under the WCB policy that I will refer to as the "New Interest Policy".

[2] Mr. Johnson appealed the decision to deny him interest on the retroactive payments. His appeal was assigned to a "precedent panel" of the Workers’ Compensation Appeal Tribunal (“WCAT”), which dismissed the appeal. Mr. Johnson commenced this proceeding under the Judicial Review Procedure Act, R.S.B.C. 1996, c. 241 ("JRPA").

[3] The relief Mr. Johnson seeks in this proceeding includes several declarations: first, that WCB’s New Interest Policy contravenes the Workers Compensation Act, R.S.B.C. 1996, c. 492 ("WCA"); second, and alternatively, that the New Interest Policy contravenes the Canadian Charter of Rights and Freedoms, Part 1 of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (U.K.), 1982, c. 11 (the "Charter"); third, that the application of the New Interest Policy is ultra vires the statutory authority of the WCB; and fourth, that WCAT’s decision on Mr. Johnson's appeal was patently unreasonable.

[4] Mr. Johnson also seeks an order in this proceeding that the precedent panel's decision be set aside, or alternatively that WCAT be required to re-determine the matter in accordance with the court's reasons, and that the court direct WCB to pay interest to Mr. Johnson.

[5] The application before me is Mr. Johnson’s application for an order certifying this proceeding as a class proceeding under the Class Proceedings Act, R.S.B.C. 1996, c. 50 ("CPA"), and appointing him as representative of the class. The proposed class is all workers claiming compensation under the WCA who were injured and denied benefits prior to November 1, 2001 and who have been denied interest by the WCB on retroactive wage loss and pension awards.

[6] WCB opposes certification of these proceedings as class proceedings. WCAT takes no position on that issue.

ISSUES

[7] There were numerous issues raised at the certification hearing. Many of them related to the merits of Mr. Johnson’s underlying claim. The only issue which it is necessary to resolve is whether the proceedings should be certified as a class proceeding.

FACTS

[8] Effective May 7, 1984, the WCB Rehabilitation Services and Claims Manual detailed what I refer to as the "Old Interest Policy". It provided that the WCB would pay interest to injured workers on retroactive wage-loss and pension lump-sum payments where the benefit was for a condition which was previously overlooked or for which the WCB previously decided that no payment was due. It provided that no interest would be paid unless the commencement date of the retroactive benefits was more than one year prior to the date the retroactive payment was being processed.

[9] Mr. Johnson is a disabled welder who lives in Barriere, B.C. He injured his lower back in a workplace accident on August 15, 1985, when he was 25 years old. The injury occurred when he was assisting a co-worker to escape a dangerous situation. Mr. Johnson was initially diagnosed with lumbosacral strain and lower back pain with signs of left-sided sciatica, and later with probable interspinous ligament strain, possibly at multiple levels.

[10] Mr. Johnson received wage loss benefits from August 16, 1985 to December 20, 1985. The WCB deemed him fit to return to work as of December 20, 1985.

[11] Mr. Johnson deposed that he continued to have lower back problems throughout the 1980s and 1990s. In addition, he also injured his mid-back and neck in two more workplace accidents, in 1988 and in 1996, and he received wage loss benefits from the WCB for periods immediately following those accidents.

[12] In late March 1999, Mr. Johnson suffered pain to a degree that he could not walk and went to the hospital by ambulance. He was seen by a neurosurgeon who diagnosed a herniated disc with nerve root compression and spondylolisthesis at the L5-S1 level of the spine. Mr. Johnson elected to have a discectomy in an effort to correct the herniation and nerve root compression. The surgery was performed on March 31, 1999, and Mr. Johnson was off work for several months after that. Mr. Johnson's loss of his usual employment income caused him financial strain. He resorted to using credit cards and cashing in RRSPs to meet his essential purchases.

[13] On April 21, 1999, Mr. Johnson wrote WCB asking that his 1985 claim be reopened. In July 1999, a WCB case manager denied that request. Mr. Johnson appealed the denial of his claim to the Workers’ Compensation Review Board ("Review Board").

[14] On May 29, 2000, Mr. Johnson re-injured his lower back at work and made a WCB claim. He has not worked since then.

[15] On September 21, 2001, being about 2½ years after Mr. Johnson sought further benefits, the Review Board allowed Mr. Johnson’s appeal, concluding that the 1999 surgery would not have been required but for the 1985 back injury. Mr. Johnson was not immediately paid these benefits. The WCB policy at the time was to defer payment of retroactive compensation until the expiry of the 30-day time period for an appeal or referral of the Review Board finding to the Appeal Division.

[16] On October 15, 2001, being within 30 days from the Review Board's decision on Mr. Johnson's appeal, a WCB panel of administrators passed the New Interest Policy regarding payment of interest, replacing the Old Interest Policy. The preamble states that the policy and regulation development bureau had conducted extensive consultation with shareholders regarding the appropriate criteria for entitlement to interest and the method of payment calculation.

[17] The New Interest Policy says that the WCB’s discretion to pay interest on retroactive wage-loss and pension lump-sum payments will only be exercised where it is determined that "a blatant Board error necessitated the payment". The New Interest Policy describes “blatant” as an “obvious and overriding error” and states that an understandable error based on mis-judgment is not a "blatant" error. The New Interest Policy provides that, where interest is paid, it will be at a rate equivalent to the prime lending rate of the banker to the government. The New Interest Policy states that it is “effective November 1, 2001 and will apply to all decisions to award or charge interest on or after that date”.

[18] By letter dated December 4, 2001, WCB informed Mr. Johnson that he would be paid retroactive wage loss benefits to cover the period March 27, 1999 through November 23, 1999, with the exception of two days when he worked in August. The total paid was $18,864.83, without including any sum for interest.

[19] On February 4, 2002, Mr. Johnson asked a WCB manager, Jeff Miniely, why the WCB did not pay him interest on the retroactive wage loss benefits. Mr. Miniely told Mr. Johnson that it was as a result of the New Interest Policy. Mr. Johnson asked Mr. Miniely to confirm the WCB’s position. Mr. Miniely wrote Mr. Johnson’s union advocate a letter dated May 17, 2002, setting out that position.

[20] Mr. Johnson commenced an appeal of the May 17, 2002 decision letter with the Review Board. In 2002, the WCA was amended and the Review Board was eliminated. Because Mr. Johnson's appeal was not considered by a Review Board panel prior to March 3, 2003, it was transferred to WCAT (under the transitional provisions contained in Part 2 of the Workers Compensation Amendment Act (No. 2), 2002, S.B.C. 2002, c. 66, s. 38(1)).

[21] On October 29, 2003, WCB awarded Mr. Johnson a permanent disability pension of the equivalent to 14.5 percent permanent functional impairment for his back disability, effective January 15, 2001. The pension was attributed 50 percent to his 1985 WCB claim and 50 percent to the 2000 WCB claim. Mr. Johnson did not receive interest on the retroactive award.

[22] The WCAT chair determined that the matters in Mr. Johnson's appeal were "of special interest or significance to the workers' compensation system" as a whole, and appointed a three-member panel under s. 238(6) of the WCA. Item #8.20 of WCAT's Manual of Rules of Practice and Procedure uses the term "precedent panel" to describe a panel appointed under s. 238(6). While the term "precedent panel" is not used in the WCA, I will use that term to refer to a panel appointed under s. 238(6) of the WCA.

[23] Section 250(3) of the WCA provides that WCAT is bound by a decision of a precedent panel unless:

(a) the specific circumstances of the matter under appeal are clearly distinguishable from the circumstances addressed in the panel's decision, or

(b) subsequent to the panel's decision, a policy of the board of directors relied upon in the panel's decision was repealed, replaced or revised.

[24] Sections 250(1) and (2) of the WCA are as follows:

(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.

[25] Section 246(2)(i) authorizes WCAT "to request any person or representative group to participate in an appeal if [WCAT] considers that this participation will assist [it] to fully consider the merits of the appeal". WCAT invited participation in Mr. Johnson’s appeal under this subsection. By letter of November 30, 2004, the following groups were notified of the appointment of a precedent panel and were invited to participate in Mr. Johnson's appeal:

B.C. Federation of Labour

Business Council of B.C.

Coalition of B.C. Businesses

Employer's Forum to the WCB

Employers' Advisers

Workers' Advisers

Workers' Compensation Advocacy Group

[26] WCAT received submissions from the Employers' Advisers (January 19, 2005) and Workers' Advisers (January 21, 2005) regarding interest on retroactive benefits. They both replied to the submission of the other on March 11, 2005. These submissions were disclosed to Mr. Johnson, and his union representative provided a submission dated May 2, 2005.

[27] On July 8, 2005, being about six years after Mr. Johnson sought further benefits, almost four years after he was paid retroactive wage loss benefits without interest, and about three years after he appealed the interest decision, the WCAT precedent panel dismissed Mr. Johnson’s appeal. The three-member precedent panel issued a unanimous written decision, which is 29 pages long (including a two-page summary). The precedent panel considered the New Interest Policy to be a policy of the board of directors, which s. 250(2) requires WCAT to apply if applicable.

[28] The precedent panel concluded that the wording of the New Interest Policy suggested that it should apply to all decisions made after November 1, 2001 about whether or not interest was payable. The precedent panel concluded that such an interpretation would have a retrospective effect, meaning that it would change the future effects of a past situation. The precedent panel concluded that such an interpretation would not be retroactive, referring to changing past effects of a past situation. As a result, the precedent panel did not address the common law presumption that legislation is not intended to be retroactive unless such construction is expressly, or by necessary implication, required by the language of the statute. Similarly, the precedent panel did not consider the March 1, 1993 WCB policy on retroactivity of policy changes.

[29] The precedent panel concluded that the decision to deny interest to Mr. Johnson was made on December 4, 2001, when WCB advised Mr. Johnson of the amount payable. The precedent panel also concluded that the Review Board finding of September 21, 2000, that Mr. Johnson was entitled to wage loss benefits, left the question of interest to be adjudicated by a WCB officer because it did not mention interest. The precedent panel determined that Mr. Johnson's entitlement to interest had not been established prior to November 1, 2001, and that the July 1999 denial of benefits had been a question of judgment rather than a "blatant" error, so interest was not payable to Mr. Johnson under the New Interest Policy.

[30] The precedent panel concluded that the New Interest Policy applies to initial adjudicative decisions concerning interest on or after November 1, 2001, but not to appeals where the initial adjudicative decision concerning interest was made prior to November 1, 2001.

[31] Mr. Johnson is awaiting a decision from WCB on his eligibility for a permanent disability award on a loss of earnings basis, meaning a pension based on the difference between his pre-injury earnings and what he is currently capable of earning. He deposed that he is struggling with debilitating back pain, which causes him to spend up to several days at a time in bed. He takes morphine and Gabapentin on a daily basis for the pain.

[32] Mr. Johnson’s counsel, Mr. Schroeder, stated during the hearing that Mr. Johnson cannot afford to pay for this litigation, and that if certification is not granted, Mr. Johnson will have to abandon the case. While there was no evidence to that effect, Mr. Johnson's individual claim would be for about two years of interest (representing the period from his actual wage loss in the period May to November 1999 until the payment in December 2001) on about $19,000. Even assuming an interest claim at 5% per year totalling $1,900 for the two years, it is clear that it would be uneconomic for Mr. Johnson to pursue his claim individually.

[33] The WCB has responded to two decisions of this court on the basis that they were test cases.

[34] In Grigg v. British Columbia (1996), 138 D.L.R. (4th) 548, [1996] B.C.J. No. 1869 (S.C.) (QL), this court considered legislation providing that surviving spouses of injured workers lost their right to ongoing benefits if they remarried or entered a common-law relationship. This court held that the legislation discriminated on the basis of marital status and contravened the Charter.

[35] The WCB reviewed its files and advertised in newspapers seeking to locate surviving spouses and to advise them of their right to have their pensions reinstated. As of August 2006, WCB had reinstated about 1,400 pensions representing about $450 million in pension reserves.

[36] In Cowburn v. British Columbia (Worker's Compensation Board), 2006 BCSC 722, this court held that a policy decision of the WCB was based on a patently unreasonable interpretation of the WCA. The WCB policy provided that if an injured worker's condition deteriorated, it was considered a reoccurrence, and the worker was not entitled to additional compensation.

[37] In response to this court's decision in Cowburn, supra, the WCB identified about 800 workers whose claims required re-adjudication. The WCB is in the process of hiring further staff to handle the re-adjudication. The WCB estimates that changing past decisions will amount to about $46 million in additional benefits to workers. It estimates that the impact on current and future claims will amount to about $61 million in additional benefits to workers.

[38] During the hearing on October 16, 2006, I granted Mr. Johnson leave under s. 2(3)(b) of the CPA to apply for certification of the proceeding as a class proceeding, even though the application was made after expiry of the time period set out in s. 2(3)(a). WCB did not oppose the application. The delay resulted from the time WCB took to compile the record and the time involved in scheduling hearings in this court.

ANALYSIS

[39] Section 4 of the CPA provides that the court must certify a proceeding as a class proceeding if certain criteria are met. Section 4 is as follows:

(1) The court must certify a proceeding as a class proceeding on an application under section 2 or 3 if all of the following requirements are met:

(a) the pleadings disclose a cause of action;

(b) there is an identifiable class of 2 or more persons;

(c) the claims of the class members raise common issues, whether or not those common issues predominate over issues affecting only individual members;

(d) a class proceeding would be the preferable procedure for the fair and efficient resolution of the common issues;

(e) there is a representative plaintiff who

(i) would fairly and adequately represent the interests of the class,

(ii) has produced a plan for the proceeding that sets out a workable method of advancing the proceeding on behalf of the class and of notifying class members of the proceeding, and

(iii) does not have, on the common issues, an interest that is in conflict with the interests of other class members.

(2) In determining whether a class proceeding would be the preferable procedure for the fair and efficient resolution of the common issues, the court must consider all relevant matters including the following:

(a) whether questions of fact or law common to the members of the class predominate over any questions affecting only individual members;

(b) whether a significant number of the members of the class have a valid interest in individually controlling the prosecution of separate actions;

(d) whether other means of resolving the claims are less practical or less efficient;

(e) whether the administration of the class proceeding would create greater difficulties than those likely to be experienced if relief were sought by other means.

[40] I will go through each of the criteria of s. 4(1) in the order set out in the section.

(a) Whether the Pleadings Disclose a Cause of Action

[41] The unusual feature of this case is that Mr. Johnson seeks to certify as a class proceeding, a proceeding which he wishes to pursue under the JRPA.

[42] The position of the WCB is that the pleadings in this case do not disclose a cause of action, because proceedings for judicial review do not constitute causes of action.

[43] A similar question was addressed and decided for the purpose of the application by Allan J. in Auton (Guardian ad litem of) v. British Columbia (Minister of Health) (1999), 12 Admin. L.R. (3d) 261, 32 C.P.C. (4th) 305. Allan J. addressed the question at paras. 54-56, as follows:

54 In this case, Mr. Groberman submits that the plaintiffs' claim for relief in the nature of mandamus or a declaration does not disclose a "cause of action". He submits that the clear legislative intent of section 4(1)(a) is to specifically exclude otherwise legitimate claims which do not technically comprise causes of action. He cites numerous authorities in support of the proposition that a claim for declaratory relief does not constitute a cause of action: e.g. Guaranty Trust Company of New York v. Hannay & Company, [1915] 2 K.B. 536 (C.A.); Gariepy v. Canada (Administrator of Federal Court), [1989] 1 F.C. 544 (T.D.) citing Simmons v. Foster, [1955] S.C.R. 324. On the other hand, Mr. Hinkson cites, by way of example, obiter of Madam Justice Wilson in Operation Dismantle v. R. (1985), 18 D.L.R. (4th) 481 (S.C.C.) for the proposition that a declaration pursuant to s. 24(1) of the Charter may constitute a cause of action.

55 The defendants stress the significance of the wording of the Act which requires that the pleadings disclose a "cause of action" rather than a "claim" such as a declaration. I note that Rule 5(22) provides that "no proceeding shall be open to objection on the ground that only a declaratory order is sought...." If the declaration sought by the plaintiffs does not constitute a cause of action, then the defendants' interpretation of s. 4(1)(a) would impose a restriction which is not imposed on any other proceeding. However, s. 40 of the Act provides that the Rules of Court apply to class proceedings to the extent they are not in conflict with the Act. As the Act is clearly remedial, the plaintiffs urge a generous interpretation of a cause of action to include declaratory relief.

56 For the purpose of this application, I accept the plaintiffs' submissions that a declaration can constitute a cause of action. ...

[44] In considering the interpretation of the reference to a "cause of action" in s. 4(1)(a) of the CPA, it is appropriate to consider the purposes of the CPA. Those were summarized by Allan J. at paras. 34-37 of Auton, as follows:

34 In Campbell v. Flexwatt Corp. (1997), 15 C.P.C. (4th) 1 (B.C.C.A.), Cumming J.A., on behalf of the Court, characterized the purpose of the Act:

The Legislature enacted the Class Proceedings Act on 1 August 1995 to make available in this province a procedure for the fair resolution of meritorious claims that are uneconomical to pursue in an individual proceeding, or, if pursued individually, have the potential to overwhelm the courts' resources. (at p. 12)

35 Mr. Justice Smith emphasized the remedial nature of the legislation in Endean v. Canadian Red Cross Society (1997), 36 B.C.L.R. (3d) 350 at 364 (S.C.) varied (1998), 157 D.L.R. (4th) 465 (B.C.C.A.);

...[T]he object of the Act is not to provide perfect justice, but to provide a "fair and efficient resolution" of the common issues. It is a remedial, procedural statute and should be interpreted liberally to give effect to its purpose. It sets out very flexible procedures and clothes the court with broad discretion to ensure that justice is done to all parties. As was said in Bendall v. McGhan Medical Corp. (1993), 14 O.R. (3d) 734 at 747, 106 D.L.R. (4th) 339 (Ont. Gen. Div.):

Certification is a fluid, flexible procedural process. It is conditional, always subject to decertification.

36 Smith J. also described the three general objectives of the Act:

(1) judicial economy, or the efficient handling of potentially complex cases of mass wrongs;

(2) improved access to the courts for those whose actions might not otherwise be asserted. This involves claims which might have merit but legal costs of proceeding were disproportionate to the amount of each claim and hence many plaintiffs would be unable to pursue their legal remedies; and,

(3) modification of the behaviour of actual or potential wrongdoers who might otherwise be tempted to ignore their public obligations.

37 The Act is remedial legislation and those goals provide a purposive framework for the analysis of determining whether plaintiffs have established the requirements for certification in a particular case.

[45] Defining "cause of action" in s. 4(1)(a) to exclude proceedings under the JRPA would unnecessarily restrict application of the CPA. The remedial nature of the CPA and its general objectives suggest that the court should construe the term "cause of action" broadly, and include claims properly brought regardless of the procedure followed.

[46] Mr. Nielsen made extensive arguments regarding the merits of Mr. Johnson's claim. For example, he argued that Mr. Johnson was effectively seeking to rely on the Old Interest Policy, which did not confer rights on Mr. Johnson or impose obligations on WCB. WCB's position is that, prior to the March 3, 2003 amendments to the WCA, its internal policy had no legal effect.

[47] The court is not entitled to weigh the merits of the claim in determining whether there is a cause of action. The threshold under s. 4(1)(a) of the CPA is relatively low. The test is the same as that on a Rule 19(24) application: the plaintiff will fail only if the claim is "certain to fail" or if it is "plain and obvious" that it will fail (see, for example, Elms v. Laurentian Bank of Canada (2001), 90 B.C.L.R. (3d) 195, 2001 BCCA 429, aff'g 73 B.C.L.R. (3d) 366, 2000 BCSC 379, and Samos Investments Inc. v. Pattison (2001), 22 B.L.R. (3d) 46, 2001 BCSC 1790, aff'd 10 B.C.L.R. (4th) 234, 2003 BCCA 87).

[48] A declaration can constitute a cause of action as required by s. 4(1)(a) of the CPA as accepted by Allan J. in Auton. Mr. Johnson's petition discloses a cause of action for the purposes of the CPA. It is not plain and obvious that Mr. Johnson's claim will fail. Mr. Johnson has satisfied s. 4(1)(a) of the CPA.

(b) Whether Identifiable Class of Two or More Persons

[49] Conceptually, a class proceeding combines what could otherwise be a series of individual lawsuits.

[50] Usually a single person or company is affected by the decision of a tribunal on whom a statutory power of decision is conferred, and that party is the only party which can and does pursue judicial review. See, for example, O’Sullivan v. Canada, [1992], 1 F. C. 522, 45 F.T.R. 284.

[51] However, other parties who can demonstrate non-remote injury to an identifiable interest that is distinguishable from injury suffered by the public at large may also have standing to pursue judicial review: see Smith v. Ontario (AG), [1924] S.C.R. 331, [1924] 3 D.L.R. 189, and Hy and Zel’s Inc. v. Ontario (AG), [1993] 3 S.C.R. 675 at 702, 107 D.L.R. (4th) 634. Therefore, other injured workers affected by the precedent panel’s decision in Mr. Johnson’s appeal might be in a position to seek judicial review of that decision.

[52] Cowburn, supra, involved judicial review of a policy decision of the WCB board of directors. Maczko J. concluded that the board of director's interpretation of the legislation such that its policy could apply was patently unreasonable.

[53] In Cowburn, the petitioner's claim was turned down by a claim's officer and his appeal to the board of review was turned down on the basis of the board of director's policy. The decision was not appealed to WCAT because counsel became aware of another case which went to WCAT on exactly the same issue. In that other case, WCAT ruled that the policy was patently unreasonable and referred it back to the board of directors. The board of directors decided that the policy was not patently unreasonable and reaffirmed its policy.

[54] Counsel for Mr. Cowburn concluded it would be futile to appeal on Mr. Cowburn's behalf to the WCAT because it was bound by the previous ruling of the board of directors. Maczko J. agreed that it would be futile to exhaust internal remedies in that case, adding considerable expense merely to wind up before the court at a much later date. He therefore ruled that Mr. Cowburn was not required on the facts of that case to exhaust all internal remedies.

[55] In short, in Cowburn, the court entertained judicial review of the policy decision of the board of directors. In a sense, that was a judicial review of a previous decision which affected Mr. Cowburn’s rights even though he was not a party to the decision.

[56] In the case at bar, Mr. Johnson's appeal was decided by a precedent panel of WCAT. The precedent panel was chosen because the matters in Mr. Johnson's appeal were "of special interest or significance to the workers' compensation system as a whole". WCAT invited participation by a number of parties beyond Mr. Johnson and WCB, and received submissions from both the Employer's Advisers and the Worker's Advisers.

[57] In these circumstances, it is likely that the court would grant standing to any worker who was affected by the precedent panel's decision on Mr. Johnson's appeal. It would be surprising if parties affected by the decision were deprived of the right to challenge it.

[58] Mr. Johnson has not provided details of any other worker who has been denied interest by the WCB on retroactive wage loss and pension awards. However, the fact that the WCAT chair considered that Mr. Johnson's appeal was "of special interest or significance to the workers' compensation system as a whole", and the fact that the precedent panel received submissions not only from Mr. Johnson and the WCB but also from other parties, demonstrates that at least one and probably many more people are affected by the New Interest Policy. Presumably, the WCB has information concerning what injured workers have been affected by the New Interest Policy as interpreted by the precedent panel.

[59] The WCB argued that determining who might be a member of the proposed class would be a very time-consuming and expensive project. I discuss below the composition of an appropriate class and the necessary steps to determine its membership.

[60] Mr. Johnson has established that a class can be identified which comprises two or more persons, and as a result has satisfied s. 4(1)(b) of the CPA.

(c) Whether Claims of Class Members Raise Common Issues

[61] Section 1 of the CPA provides that “common issues” means:

(a) common but not necessarily identical issues of fact, or

(b) common but not necessarily identical issues of law that arise from common but not necessarily identical facts.

[62] In considering whether the claims of the class members raise common issues, the court need only identify issues of fact or law that move the litigation forward. The resolution of a common issue does not have to be sufficient to determine liability. The question of whether a common issue should be certified will also depend on consideration of the preferable procedure, discussed under the next heading.

[63] Endean v. Canadian Red Cross Society (1997), 36 B.C.L.R. (3d) 350 at para. 35, 148 D.L.R. (4th) 158 (B.C.S.C.) describes this approach to determination of common issues as follows:

A common issue is sufficient if it is an issue of fact or law common to all claims, and that its resolution in favour of the plaintiffs will advance the interests of the class, leaving individual issues to be litigated later in separate trials, if necessary: Harrington v. Dow Corning Corp. (1996), 22 B.C.L.R. (3d) 97 (B.C.S.C.) at 105, 110. As well the court should not attempt to weigh the ultimate merits of the proposed common questions, but should merely ascertain whether they raise triable issues: Campbell v. Flexwatt Corp. (1996), 22 B.C.L.R. (3d) 329 (B.C.S.C.) at 343.

[64] Mr. Johnson's position is that the common issues are as follows:

a) Do items 2 and 6 of the New Interest Policy contravene s. 5(1) of the WCA?

b) Do items 2 and 6 of the New Interest Policy contravene s. 15 of the Charter?

c) Is item 6 of the New Interest Policy with regard to the retroactive application of the New Interest Policy ultra vires the statutory authority of the Board?

d) Is the precedent panel's interpretation of the New Interest Policy and in WCAT decision no. WCAT-2005-03622RB [the precedent panel's decision on Mr. Johnson's appeal] patently unreasonable?

i) Alleged Contravention of WCA

[65] Mr. Johnson's first proposed common issue is whether the material portions of the New Interest Policy contravene s. 5(1) of the WCA. In my view, s. 5(2) may also be important. Sections 5(1) and (2) are as follows:

(1) Where, in an industry within the scope of this Part, personal injury or death arising out of and in the course of the employment is caused to a worker, compensation as provided by this Part must be paid by the Board out of the accident fund.

(2) Where an injury disables a worker from earning full wages at the work at which the worker was employed, compensation is payable under this Part from the first working day following the day of the injury; but a health care benefit only is payable under this Part in respect of the day of the injury.

[66] During argument, Mr. Schroeder argued on behalf of Mr. Johnson that it may be appropriate to rely on ss. 5.1 and 6 of the WCA as well.

[67] As I understand Mr. Johnson's proposed argument, it would be that the New Interest Policy is patently unreasonable by failing to restore a worker to the position the worker would have been in if "compensation" was paid commencing on the first working day following the day of the injury.

[68] I understand the position of the WCB to be that determination of compensation is a matter for the WCB, and because the legislation does not specifically refer in s. 5 to payment of interest, interest is a matter within the discretion of the WCB. The only references to interest in the WCA regarding compensation matters are in ss. 19(2)(c) and 258. Section 19(2)(c) relates to surviving spouses of deceased workers. Section 258 relates to deferrals of payment during appeals pursuant to the WCA.

[69] The question of whether the New Interest Policy is patently unreasonable in the face of s. 5 of the WCA is an issue which would be common to all workers claiming under that section who were denied interest on the basis of the New Interest Policy. This would include workers injured after November 1, 2001.

ii) Alleged Charter Contravention

[70] Mr. Johnson's second proposed common issue is whether the material sections of the New Interest Policy contravene s. 15 of the Charter. This argument was not explained in the amended petition or in argument. It is not clear to me on what basis Mr. Johnson alleges discrimination and as a result, I am unable to determine whether this issue would be common to other members of the proposed class.

iii) Alleged to be Retroactive and Ultra Vires

[71] Mr. Johnson's third proposed common issue is whether the section of the New Interest Policy providing that it is effective November 1, 2001 and applies to all decisions to award or charge interest on or after that date, is retroactive and therefore ultra vires the statutory authority of the WCB.

[72] This issue would apparently be common to a more narrow group of injured workers than the first proposed common issue. For example, workers injured after November 1, 2001 would have no interest in whether the New Interest Policy is retroactive or not. The issue would be common to those injured before November 1, 2001, and denied benefits after that date.

iv) Alleged to be Patently Unreasonable

[73] Mr. Johnson's fourth proposed common issue is whether the precedent panel's decision in Mr. Johnson's appeal was patently unreasonable. As I understand it, Mr. Johnson's position is that the decision was patently unreasonable because of the alleged contravention of s. 5(1) of the WCA, s. 15 of the Charter, and because it had retroactive effect. In other words, this proposed common issue is simply a restatement of the first three.

v) Conclusion Regarding Common Issues

[74] In my opinion, Mr. Johnson's first and third proposed common issues are issues which are common to an appropriate class and satisfy s. 4(1)(c) of the CPA. Without more information about the alleged Charter claim, I am unable to determine whether the second proposed common issue raises a common issue.

(d) Whether Class Proceedings are the Preferable Procedure

[75] This question was highly contentious.

[76] In brief, Mr. Johnson's position is that a class action, by which he is the representative petitioner, is the preferable procedure because it is the only way that he can afford to pursue this claim. He argued that his claim is one of those procedures for which the CPA was designed, because without class certification, the claim will not proceed. Mr. Johnson says that his claim has sufficient merit that it ought to be considered by the court, but the legal costs of proceeding are disproportionate to the amount of his claim, and as a result, both he and other members of the proposed class would be unable to pursue their legal remedies individually.

[77] The WCB argued that a class proceeding is not the preferable procedure. The WCB's position is that the preferable procedure is for Mr. Johnson to pursue his claim as a "test case" judicial review proceeding. Mr. Nielsen essentially argued on behalf of the WCB that it was not possible to have a JRPA procedure certified as a class action. He referred in particular to Auton, supra, in that regard.

[78] In Hoy v. Medtronic, Inc. (2003), 14 B.C.L.R. (4th) 32, 2003 BCCA 316, Chief Justice Finch, writing for the majority of the Court of Appeal, gave the court guidance on the analysis of whether a class action is the preferable procedure. I reproduce paragraphs 39-43 from his reasons, which quote extensively from earlier reasons of the Supreme Court of Canada in Rumley v. British Columbia, [2001] 3 S.C.R. 184, 2001 SCC 69:

[39] The Supreme Court of Canada commented on the analysis required by s. 4(1)(d) in Rumley v. British Columbia, [2001] 3 S.C.R. 184, 2001 SCC 69. McLachlin C.J.C., writing for the court, stated at paragraph 35:

[35] The question remains whether a class action would be the preferable procedure. Here I would begin by incorporating my discussion in Hollick as to the meaning of preferability: see Hollick, supra, at paras. 28-31. While the legislative history of the British Columbia Class Proceedings Act is of course different from that of the corresponding Ontario legislation, in my view the preferability inquiry is, at least in general terms, the same under each statute. The inquiry is directed at two questions: first, "whether or not the class proceeding [would be] a fair, efficient and manageable method of advancing the claim", and second, whether the class proceedings would be preferable "in the sense of preferable to other procedures" (Hollick, at para. 28). I would note one difference, however, between the British Columbia Class Proceedings Act and the corresponding Ontario legislation. Like the British Columbia legislation, the Ontario legislation requires that a class action be "the preferable procedure" for the resolution of the common issues: see Ontario Class Proceedings Act (1992) s. 5(1)(d); British Columbia Class Proceedings Act, s.4(1)(d). Unlike the Ontario legislation, however, the British Columbia legislation provides express guidance as to how a court should approach the preferability question, listing five factors that the court must consider: see s.4(2). I turn, now, to these factors.

[40] The factors described in s. 4(2) are whether the common issues predominate over individual issues; whether class members have a valid interest in pursuing individual actions; whether the claims of the proposed class are or have been the subject of another proceeding; whether other means of resolving the claims are less practical or less efficient; and whether the administration of the class proceeding would likely create greater difficulties than other means of resolving the claims.

[41] The B.C. legislation, unlike its Ontario counterpart, details a non-exhaustive list of factors to be considered in the preferability analysis. In general terms, however, the preferability inquiry is similar under the B.C. and Ontario statutes.

[42] In Hollick v. Toronto (City), [2001] 3 S.C.R. 158, 2001 SCC 68 ("Hollick"), McLachlin C.J.C. spoke of the requirement that a class action be the preferable procedure for 'the resolution of the common issues':

[29] The Act itself, requires only that a class action be the preferable procedure for “the resolution of the common issues” (emphasis added), and not that a class action be the preferable procedure for the resolution of the class members’ claims. I would not place undue weight, however, on the fact that the Act uses the phrases “resolution of the common issues” rather than “resolution of class members’ claims”. ...

[30] The question of preferability, then, must take into account the importance of the common issues in relation to the claims as a whole. It is true, of course, that the Act contemplates that class actions will be allowable even where there are substantial individual issues: see s. 5. It is also true that the drafters rejected a requirement, such as is contained in the American federal class action rule, that the common issues “predominate” over the individual issues: see Federal Rules of Civil Procedure, Rule 23(B)(3) (stating that class action maintainable only if “questions of law or fact common to the members of the class predominate over any questions affecting only individual members”); see also British Columbia Class Proceedings Act, s. 4(2)(a) (stating that, in determining whether a class action is the preferable procedure, the court must consider “whether questions of fact or law common to the members of the class predominate over any questions affecting only individual members”). I cannot conclude, however, that the drafters intended the preferability analysis to take place in a vacuum. There must be a consideration of the common issues in context.

[43] A judge, in determining whether a class proceeding is preferable, is therefore obliged to evaluate the common issues in context, and must consider, as one of at least five factors, whether the common issues predominate over individual issues.

[79] I will first consider the five factors, and then consider the overall question of whether certification is consistent with the purposes of the CPA. None of the factors is determinative. All must be considered by the court in determining whether a class proceeding would be the preferable procedure for the fair and efficient resolution of the common issues.

(i) Do questions of fact or law common to the members of the class predominate over any questions affecting only individual members?

[80] If common issues predominate over individual issues, that is a factor which would suggest that certification is the preferable procedure.

[81] In Rumley, supra, at para. 36, the Supreme Court of Canada said the following about the predominance of common issues on the facts of that case:

[36] The first factor is "whether questions of fact or law common to the members of the class predominate over any questions affecting only individual members": s. 4(2)(a). As I noted above, it seems likely that there will be relevant differences between class members here. It should be remembered, however, that as the respondents have limited their claims to claims of "systemic" negligence, the central issues in this suit will be the nature of the duty owed by JHS to the class members and whether that duty was breached. Those issues are amenable to resolution in a class proceeding. While the issues of injury and causation will have to be litigated in individual proceedings following resolution of the common issue (assuming the common issue is decided in favour of the class, or at least in favour of some segment of the class), in my view the individual issues will be a relatively minor aspect of this case. There is no dispute that abuse occurred at the school. The essential question is whether the school should have prevented the abuse or responded to it differently. I would conclude that the common issues predominate over those affecting only individual class members.

[82] Here, the common issues discussed above would predominate. The individual issues would relate to calculation of interest and the procedural history of the claim within the WCB including when and whether internal remedies were pursued. The individual issues are likely to be relatively straight-forward.

(ii) Do a significant number of the members of the class have a valid interest in individually controlling the prosecution of separate actions?

[83] There is no reason to expect that any members of the class have an interest in individually controlling the prosecution of separate judicial review proceedings. There was no evidence at the hearing about any other proceedings regarding the New Interest Policy. There was no opposition by potential class members to certification of this claim as a class proceeding.

(iii) Would the class proceeding involve claims that are or have been the subject of any other proceedings?

[84] There was no evidence that there were any other relevant proceedings under way or in contemplation.

(iv) Are other means of resolving the claim less practical or less efficient?

[85] In brief, Mr. Johnson's position is that certification of this JRPA proceeding is the preferable procedure because otherwise his claim will not proceed owing to the small amount involved compared to the high cost of proceeding.

[86] The WCB's position is that Mr. Johnson's claim should proceed as a "test case", and an individual JRPA is the preferable procedure. Mr. Nielsen particularly relied on Auton, supra.

[87] In Auton, the infant plaintiff and his mother sought relief requiring the named defendant Ministers of the Government of British Columbia to fund certain treatment for autistic children. The plaintiff sought to have the action certified as a class action, with the proposed class consisting of the following:

All parents and guardians in B.C. of children diagnosed with autism and/or an autism spectrum disorder whose requests to the provincial government for funding for intensive behavioural autism treatment based on the Lovaas Autism Treatment Method had been rejected in whole or in part by one or more of three named Ministries.

[88] In Auton, the contest was apparently between whether the claims would proceed by writ of summons certified as a class proceeding or as an individual claim under the JRPA. It does not appear that the court was asked to consider whether the matter could proceed pursuant to the JRPA, as what I would term a "Class JRPA".

[89] Allan J. referred at para. 51 to the fact that the CPA specifically encompasses "class proceedings" rather than "class actions". She noted that in s. 1 of the CPA, "defendant" is defined to include "respondent" and "plaintiff" to include "petitioner". Thus, she concluded that the legislation contemplates class certifications of petition proceedings as well as actions.

[90] However, Allan J. went on to say at para. 56:

I am unable to accept the plaintiff's assertion that the provisions of the Act "trump" those of the JRPA. There are powerful historical policy reasons behind the requirement that proceedings in the nature of mandamus (and, in this case, the declaration sought) be determined summarily to clarify the nature and extent of impugned public duties. The laudatory goals of class proceedings legislation do not nullify that policy.

[91] Ultimately, Allan J. dismissed the certification application, on the basis that a class proceeding was not the preferable procedure.

[92] In this case, Mr. Johnson specifically wishes to proceed with a Class JRPA. He is not asking that the provisions of the CPA "trump" those of the JRPA. He wishes to proceed summarily to clarify the legality of the New Interest Policy. There is no suggestion that any facts are in dispute. The common issues Mr. Johnson seeks to raise are legal ones.

[93] Mr. Nielsen also relied on the decision of Sigurdson J. in Williams v. College Pension Board of Trustees (2005), 45 B.C.L.R. (4th) 158, [2005] BCSC 788. In that case, Sigurdson J. certified a class action. He considered whether the preferable procedure was a class action or a judicial review. It does not appear that the alternative of being a Class JRPA was argued or considered in that case. The plaintiffs’ position was that the focus of their claim was for damages, and that even though the JRPA might apply to the declaratory relief sought, there were other claims not subject to the JRPA.

[94] Mr. Johnson's case is distinguishable from both Auton and Williams because Mr. Johnson is seeking a Class JRPA, in a matter that will not proceed unless it is certified as a class proceeding.

[95] I also considered the decision of Swinton J. of the Ontario Superior Court of Justice in S.R. Gent (Canada) Inc. v. Ontario (Workplace Safety and Insurance Board) (1999), 45 O.R. (3d) 106, 43 C.P.C. (4th) 176. In that case, Swinton J. concluded that a class proceeding was not the preferable procedure for challenging the determination of workplace safety premiums payable by certain employers. However, she wrote at para. 15 that "the record does not suggest that access to the courts will be prevented, absent the certification of a class proceeding." In Mr. Johnson’s case, access to the courts will be prevented without class certification.

[96] The main advantage to Mr. Johnson of a certification order regarding his JRPA proceeding relates to legal costs. If Mr. Johnson's claim succeeds as a class JRPA, the appropriate legal fee for his lawyer should reflect to some extent the number of people affected. As a result, a lawyer would likely be willing to pursue this relatively minor claim which may benefit a large class, while be unwilling to act in exchange for a fee which takes into account only the impact on Mr. Johnson. Thus, Mr. Johnson is likely to obtain legal counsel if the claim is certified even though the claim is uneconomic on an individual basis.

[97] In contrast, Mr. Johnson's claim is unlikely to proceed as a test case because it would be uneconomic for him to pursue it. While WCB responded to both Grigg, supra, and Cowburn, supra, on the basis that they were test cases, there was no suggestion that class certification was sought for either case. In those cases, the amount involved in the individual claims was apparently enough to compel Ms. Grigg and Mr. Cowburn to proceed. The others affected by these decisions benefited from the work on behalf of Ms. Grigg and Mr. Cowburn without making any financial contribution.

v) Whether the administration of the class proceeding would create greater difficulties than those likely to be experienced if relief were sought by other means.

[98] One of the WCB's major concerns about certification appeared to be the cost of investigation to determine the members of the potential class and the cost of notifying potential class members. I note, however, that s. 19(2) of the CPA provides that the court may dispense with giving notice to class members if the court considers it appropriate to do so having regard to the factors set out in subsection (3). The factors under that subsection include the cost of giving notice, the size of the individual claims of the class members, and the number of class members.

vi) Summary regarding preferable procedure

[99] Mr. Johnson has not provided a plan regarding whether and when class members should be notified about certification. That must be the subject of further submissions, as discussed below.

[100] In the circumstances of this case, where the decision under review was intended and expected to affect more people than just Mr. Johnson, the amount of Mr. Johnson's claim is so small that he would not pursue it as an individual claim, and Mr. Johnson proposes to proceed summarily with a Class JRPA, class certification of Mr. Johnson's JRPA proceeding is the preferable procedure for the fair and efficient resolution of the common issues. Mr. Johnson has satisfied s. 4(1)(d) of the CPA.

(e) Representative Plaintiff

[101] The Board did not argue that Mr. Johnson was not an appropriate representative plaintiff. As I understand it, his plan would be to instruct his counsel to proceed to the judicial review hearing.

[102] However, Mr. Johnson has not produced a plan that sets out a workable method of notifying class members of the proceeding as required by s. 4(1)(e)(ii) of the CPA.

[103] In addition, I am concerned that the class proposed by Mr. Johnson is not appropriate. The class he proposes is as follows:

All workers claiming compensation under the Workers Compensation Act who are injured and denied benefits prior to November 1, 2001, and who have been denied interest by the respondent WCB on retroactive wage loss and pension awards.

[104] This proposed class would not include workers injured after November 1, 2001, who will also be affected by the New Interest Policy and by the argument that it contravenes the WCA. The class proposed by Mr. Johnson may be an appropriate subclass which would be affected by his third proposed common issue relating to retroactivity.

[105] The claims of some potential class members might be barred by their failure to pursue remedies provided by the WCA. However, the court or another tribunal may have discretion to consider the claims despite delays. It may be that the possibility that a claim is barred by failure to pursue WCA remedies can be handled through appropriate description of the class.

FURTHER SUBMISSIONS

[106] I ask counsel to contact the registry and arrange a further half-day hearing before me either to address the following questions, or to schedule further hearings to do so:

(a) should the class be described as follows, or in some other way:

all workers whose claim for interest on retroactive wage loss and pension awards was decided on or after November 1, 2001, a subclass of which is those who were injured prior to November 1, 2001;

(b) should the court dispense with giving notice of the certification to class members, and if not, when and by what means should notice be given to the class members and what form will the notice take; and

[107] I note that there are cases in which the court has entertained summary trial applications before certification, as set out by MacKenzie J. in Consumers' Assn. of Canada v. Coco-Cola Bottling Co. (2005) 46 B.C.L.R. (4th) 137, 2005 BCSC 1042 at para. 51. I will leave it to counsel to argue whether by analogy the court should hear the JRPA petition before completion of the certification order.

CONCLUSION

[108] In summary, this JRPA proceeding is an appropriate case for certification as a class JRPA, so long as the class is properly described, and Mr. Johnson provides a plan with a workable method of advancing the proceeding on behalf of the class and of notifying class members of the proceeding. Certification as a class proceeding is consistent with the purposes of the CPA, particularly by providing improved access to the courts for those whose actions might not otherwise be asserted. I seek further submissions from counsel with respect to the remaining aspects of class certification and with respect to the further management of this case, as discussed above.

“V. Gray, J.”
The Honourable Madam Justice V. Gray

Citation:	*Johnson v. Workers' Compensation Board et al.,*
	2007 BCSC 24