IN THE SUPREME
COURT OF BRITISH COLUMBIA
Citation: | Lockyer-Kash v. Workers Compensation Board, |
| 2013 BCSC 467 |
Date: 20130212
Docket: S125585
Registry:
Vancouver
Between:
Deborah Lockyer‑Kash
Plaintiff
And
Workers’
Compensation Board
Defendant
Brought
under the Class Proceedings Act, R.S.B.C. 1996 c. 50
Before:
The Honourable Mr. Justice Pearlman
In
Chambers
Counsel for the Plaintiff: | F.A. Schroeder |
Counsel for the Defendant: | L.M. Courtenay |
Place and Date of Hearing: | Vancouver, B.C. February 5, 2013 |
Place and Date of Judgment: | Vancouver, B.C. February 12, 2013 |
INTRODUCTION
[1]
THE COURT: The defendant Workers’ Compensation Board applies to
strike the whole of the plaintiff’s Notice of Civil Claim pursuant to Supreme
Court Civil Rule 9‑5(1)(a) and (d).
[2]
Rule 9‑5(1) provides that:
. . . the court may order to be struck out or
amended the whole or any part of a pleading . . . on the ground
that
(a) it discloses no reasonable claim or defence, as the case
may be,
. . . [and]
(d) it is otherwise an abuse of the process of the court.
[3]
On an application under Rule 9‑5(1)(a), no evidence is admissible.
It is assumed that the facts pleaded in the Notice of Civil Claim can be
proved. The test is whether it is plain and obvious that the claim discloses
no reasonable cause of action. If there is a chance the plaintiff might
succeed, then she should not be driven from the judgment seat: Hunt v.
Carey Canada Inc., [1990] 2 S.C.R. 959 at 993.
[4]
Evidence is admissible on the application to strike for abuse of
process. In order to succeed on an application under Rule 9‑5(1)(d), the
applicant must establish that it is plain and obvious that the action is an
abuse of process: Shuswap Lake Utilities Ltd. v. British Columbia (Comptroller
of Water Rights), 2008 BCCA 176 at para. 35.
[5]
The defendant also applies pursuant to Rule 9‑6 for dismissal of
the plaintiff’s action for abuse of statutory authority against the Workers’
Compensation Board’s board of directors.
THE PLAINTIFFS CLAIM
[6]
The Notice of Civil Claim concerns a challenge brought by the plaintiff
to Policy #50.00, adopted by the board of directors of the Workers’
Compensation Board and subsequently under s. 251 of the Workers’
Compensation Act, R.S.B.C. 1996, c. 241 (the Act). That policy
provides as follows:
INTEREST
With respect to compensation matters, the Act provides
express entitlement to interest only in the situations covered by sections
19(2)(c) and 258. In these situations, the Board will pay interest as provided
for in the Act (see policy items #55.62 and #100.83).
The Board has discretion to pay interest in situations other
than those expressly provided for in the Act. In these situations, interest may
be paid subject to the following conditions:
‑ The retroactive payment is:
‑ To a worker or employer in respect of a wage loss
payment provided under sections 29 and 30 of the Act.
‑ To a worker or employer in respect of a permanent
disability lump sum payment provided under sections 22 and 23 of the Act.
‑ To a dependant of a deceased worker in respect of a
payment provided under section 17 of the Act.
‑ It has been determined that there was a blatant
Board error that necessitated the retroactive payment. For an error to be
"blatant" it must be an obvious and overriding error. For example,
the error must be one that had the Board officer known that he or she was
making the error at the time, it would have caused the officer to change the
course of reasoning and the outcome. A "blatant" error cannot be
characterized as an understandable error based on misjudgment. Rather, it
describes a glaring error that no reasonable person should make.
[7]
I pause to interject that it is the "blatant error" test
adopted by the board of directors that lies at the heart of these proceedings.
[8]
The policy then goes on to set out the manner in which interest will be
calculated:
In all cases where a decision to
award interest is made, the Board will pay simple interest at a rate equal to
the prime lending rate of the banker to the government.
[9]
The relief sought in the plaintiff’s Notice of Civil Claim includes,
first:
An order that these proceedings are certified as a class
proceeding:
(a) the class is all workers whose claim for interest was
decided on or after November 1, 2001;
(b) the Plaintiff is appointed the representative of the
class.
[10]
The application to certify the class is presently set for hearing on
February 15, 2013.
[11]
In addition, the plaintiff seeks the following relief:
2. A declaration that Item #2 of the New Interest
Policy, the "blatant error" test for interest, is patently
unreasonable.
3. A declaration that the Plaintiff and members of
the class are entitled to interest on their retroactive pension and wage loss
awards.
4. A declaration that, in the introduction and
maintenance of the New Interest Policy "blatant error" test for
entitlement to interest, the WCB board of directors have acted in abuse of
their statutory powers.
5. Damages being interest
calculated and paid in accordance with the provisions of the New Interest
Policy.
BACKGROUND
[12]
The background to this proceeding is set out in some detail in the Notice
of Civil Claim. Before turning to the grounds upon which the defendant seeks
to strike the Notice of Civil Claim, I will review the background to this
proceeding.
[13]
An injured worker, Mr. Gregory Johnson, brought a challenge to the New
Interest Policy set out in the Board’s Policy #50.00 by petition for judicial
review. That proceeding was certified by the Honourable Madam Justice Gray by reasons
for judgment dated September 26, 2007, and indexed as Johnson v. Workers’ Compensation
Board, 2007 BCSC 1410. Her Ladyship determined that the New Interest
Policy was patently unreasonable.
[14]
In the view of Madam Justice Gray, compensation under s. 5 of the Act
included interest and therefore interest ought to have been paid as of right on
retroactive compensation payments.
[15]
The Board appealed Madam Justice Gray’s decision. By reasons for
judgment indexed as Johnson v. British Columbia (Workers’ Compensation
Board), 2008 BCCA 232, the Court of Appeal set aside the decision of Madam
Justice Gray. At para. 11, the Court of Appeal said this:
With respect, I think the judge
erred by finding error in the decision of the Appeal Tribunal on an issue that
the tribunal was not called upon to consider and did not consider. It is
fundamental to judicial review of decisions or orders of tribunals that reviews
be confined to those matters that were determined by the tribunal. What the
judge did here was decide in the first instance the issue of the legality of
the new interest policy on application of the patently unreasonable test as
though that issue ought to have been decided by the tribunal.
[16]
And at para. 13:
Because the chambers judge
purported to overturn the decision of the Appeal Tribunal on an issue that was
not before the tribunal, I would allow the appeal.
[17]
On July 2, 2009, by reasons for judgment indexed as Johnson v.
British Columbia (Workers’ Compensation Board), 2009 BCSC 877, Madam
Justice Gray determined that the judicial review should proceed on the issue of
whether or not the Board’s New Interest Policy was patently unreasonable, even
though the Workers’ Compensation Appeal Tribunal (WCAT) had not yet
determined that point.
[18]
By reasons for judgment indexed as Johnson v. British Columbia
(Workers’ Compensation Board), 2009 BCSC 1931, Madam Justice Gray held again
that the blatant Board error requirement in the New Interest Policy was
patently unreasonable and remitted the policy to the Board for reconsideration
in light of her reasons for judgment.
[19]
On the hearing of that application, the petitioner sought an order that the
Board forthwith develop and implement a reasonable interest entitlement policy
effective November 1, 2001. However, Her Ladyship declined to make that order
on the basis that the determination of policy was a matter for the Board.
[20]
On June 2, 2011, following a further appeal by the Workers’ Compensation
Board, the Court of Appeal set aside the judgment of Madam Justice Gray and
dismissed the petition for judicial review.
[21]
In reasons for judgment indexed as Johnson v. British Columbia
(Workers’ Compensation Board), 2011 BCCA 255, the Court of Appeal said this
at paras. 47 and 48:
[47] As counsel for the WCB submits to this Court, where
a challenge to a board of directors policy is made through the WCA internal
process, the [Workers’ Compensation Appeal Tribunal] appeal and the policy
review provide an opportunity for submissions, creation of a full record and
issuance of reasons for decision that can be considered on judicial review.
Depending on the petitioners degree of success before the appeal tribunal, the
court on judicial review will have at least one, and possibly all of the
following: a WCAT appeal panel decision, a WCAT chair determination
. . . and a board of directors determination . . .
[48] I agree with counsel for the WCB when he states in
his factum:
Whether the [New Interest Policy] is consistent with the WCA
and its regulations is the epitome of a question that should be fully addressed
through internal administrative procedures prior to any judicial consideration.
The WCA and its regulations are lengthy and complex. Most (if not all) WCA
interpretive issues will be interwoven with other provisions and policies, and
have significant consequences for ancillary aspects of the WCB scheme. The
provisions and policies in question are laden with historical context and
meaning . . . .
[22]
At para. 50, the Court said this:
The task of the chambers judge
was to review the decision of WCAT on the patently unreasonable standard. As
the appellant puts it, judicial review in these circumstances is not a review
of the policy per se. It is a review of an interpretation of the
WCA and related findings made by the administrative body statutorily charged
with interpreting the statute and with determining the consistency between a
policy and that statute. The patently unreasonable standard of review
requires a good measure of deference to the decision of the administrative
body, a decision the administrative body had not been asked to make.
[23]
Accordingly, the Court determined that the chambers judge had erred in
proceeding in the absence of the reasons from the statutory decision-makers
charged with the policy review.
[24]
On April 18, 2012, the Chair of WCAT, acting under s. 251 of the Act,
found that the blatant Board error requirement in the Board’s interest policy
was patently unreasonable on the ground that there is no nexus between the
purpose of interest and a blatant Board error that would support the
distinction made by the policy.
[25]
Section 251(1) provides that:
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.
[26]
Subsections (2) through (4) of s. 251 set out the process for referral
to the WCAT Chair. Under s. 251(5), if the Chair determines the policy should
not be applied, the Chair must provide notice of this determination, together
with her written reasons, to the board of directors, and must suspend any other
appeal proceedings that are pending before the WCAT that the Chair considers to
be affected by the same policy, until the board of directors makes a
determination under subsection (6).
[27]
Subsection 6 provides:
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).
[28]
The Tribunal Chair referred the policy to the board of directors under
s. 251(5). On July 17, 2012, the board of directors determined that the
policy was supported by the Act and was not patently unreasonable. The board
of directors provided no explanation of the grounds for its determination in
its decision of July 17, 2012.
[29]
The Board subsequently issued a policy discussion paper on August 7,
2012, which purported to set out a fulsome explanation or analysis of the
bases for the board of directors’ decision that the policy was not patently
unreasonable.
[30]
In the event of further proceedings in this matter, it will be for the court
hearing those proceedings to determine whether or not the board of directors is
entitled to rely upon the analysis set out in the Board’s policy discussion
paper as reasons for the Board’s decision on July 17, 2012. That is a matter
that I am not called upon to determine today.
DISCUSSION
[31]
Against that background, I turn now to the defendant’s application to
strike the Notice of Civil Claim as disclosing no reasonable claim. The Board
advances three arguments. First, it submits that the proper remedy for the
plaintiff is by way of petition under the Judicial Review Procedure Act,
R.S.B.C. 1996, c. 241. Second, the Board submits that the plaintiff is seeking
orders that the court cannot grant. Third, the Board submits that the
plaintiff has failed to plead material facts to support the claim against the
board of directors for abuse of statutory powers.
[32]
The allegation lying at the heart of these proceedings is that the board
of directors, in exercising their powers under s. 82 and s. 251 of
the Act to adopt and then later affirm a policy that is patently
unreasonable, misinterpreted and misapplied the Act. One of the
remedies sought by the plaintiff is a declaration that the board of directors’
New Interest Policy is patently unreasonable. That is a claim which would
normally be brought by way of a petition for judicial review.
[33]
Section 2 of the Judicial Review Procedure Act provides that an
application for judicial review must be brought by way of a petition proceeding.
Subsection (2) provides that:
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.
[34]
Here, the declaratory relief is sought with respect to the exercise or
purported exercise of the statutory powers of the board of directors.
[35]
Section 5 of the Judicial Review Procedure Act provides that:
(1) On an application for
judicial review in relation to the exercise, refusal to exercise, or purported
exercise of a statutory power of decision, the court may direct the tribunal
whose act or omission is the subject matter of the application to reconsider
and determine, either generally or in respect of a specified matter, the whole
or any part of a matter to which the application relates.
[36]
Section 7 provides the court with the power to set aside a decision
rather than grant a declaration.
[37]
Section 12(2) provides that:
An application for relief in the
nature of mandamus, prohibition or certiorari, must be treated as an
application for judicial review under section 2.
[38]
Section 13 provides that:
(1) On the application of a party
to a proceeding for a declaration or injunction, the court may direct that any
issue about the exercise, refusal to exercise or proposed or purported exercise
of a statutory power be disposed of summarily, as if it were an application for
judicial review.
[39]
Section 13(2) states that:
(2) Subsection (1) applies
whether or not the proceeding for a declaration or injunction includes a claim
for other relief.
[40]
Here, the plaintiff submits that she is entitled to claim the
declarations sought in an action brought by Notice of Civil Claim, and relies
on s. 13 of the Judicial Review Procedure Act.
[41]
The plaintiff says that if her class proceeding is certified, she
intends to proceed summarily. She argues that the Court may exercise its
discretion under s. 13 of the Judicial Review Procedure Act to
direct that the issue of the board of directors’ exercise or purported exercise
its statutory power under s. 251 of the Act should be disposed of
summarily, as if it were an application for judicial review.
[42]
In considering whether or not it would be appropriate to direct that the
issues raised by the plaintiff relating to the board of directors exercise or
purported exercise of statutory powers be determined pursuant to s. 13(1) of
the Judicial Review Procedure Act, I refer again to the particular
declarations sought in this proceeding. The first is a declaration that Item #2
of the New Interest Policy, the "blatant error" test for interest, is
patently unreasonable.
[43]
The second declaration sought is a declaration that the plaintiff and
the members of the class are entitled to interest on their retroactive pension
and wage loss awards.
[44]
The third declaration is a declaration that in the introduction and
maintenance of the New Interest Policy "blatant error" test for
entitlement to interest, the Workers’ Compensation Board board of directors has
acted in abuse of its statutory powers.
[45]
The other remedy the plaintiff seeks is an award of damages as interest
calculated and paid in accordance with the provisions of the New Interest
Policy. By that, I understand the plaintiff to mean damages calculated under
the formula in the New Interest Policy, but without application of the blatant
error test.
[46]
The first declaration relates to the board of directors’ exercise of its
statutory power to make policy under s. 82 of the Act and to review
policy and determine whether the Appeal Tribunal may refuse to apply it under
s. 251 of the Act.
[47]
That declaration challenges the exercise of statutory powers and, in my
view, is properly the subject of judicial review proceedings.
[48]
The second declaration, that the plaintiff and all other members of the
class are entitled to interest on their awards, would have the court substitute
its exercise of discretion for that of the Workers’ Compensation Board, and
would have the court usurp the function of the Board, and of WCAT on appeals,
to adjudicate interest on awards of retroactive compensation benefits. The
court’s role on judicial review is not to substitute its own decision for that
of an expert statutory tribunal.
[49]
The third declaration sought goes beyond a declaration that the board of
directors has acted in breach of its statutory powers. It is, in effect, a
declaration that the board of directors have committed the tort of abuse of
statutory power.
[50]
In my view, the second and third declarations seek relief that lies
beyond the scope of s. 13(1) of the Judicial Review Procedure Act.
The determination of the entitlement of the plaintiff and other members of the
proposed class to interest is beyond the ambit of the court’s supervisory role
on judicial review.
[51]
The third declaration relating to the plaintiff’s claim of abuse of
statutory powers requires more than a summary determination about the exercise
or purported exercise of a statutory power. It requires proof of malice or bad
faith by decision makers who knew they were acting without authority, and that
their actions would likely cause harm to the plaintiff.
[52]
I find that neither the second nor the third declarations raise issues
suitable for summary determination as if this proceeding were an application
for judicial review.
[53]
Section 13 is generally invoked where one party in an action asserts
that the claim for a declaration or injunction either does or does not require
a conventional trial and discovery processes: see for example Glacier View
Lodge Society v. British Columbia (Minister of Health), [1998] B.C.J. No.
852, and Auton (Guardian ad litem of) v. British Columbia (Minister
of Health) (1999), 12 Admin. L.R. (3d) 261 (B.C.S.C.).
[54]
Here, both parties agree that the issue relating to the board of
directors’ exercise or purported exercise of statutory powers and the question
of whether the New Interest Policy is patently unreasonable should be
determined summarily.
[55]
It seems to me that the central issue in this litigation is the exercise
of statutory powers by the board of directors of the Workers’ Compensation
Board. In my view, the challenge to the board of directors’ exercise of their
statutory powers should be brought by petition under the Judicial Review
Procedure Act.
[56]
In Stewart v. Clark, 2012 BCSC 1093, at para. 14, Mr. Justice
Affleck, after referring to the Crown’s submission that the plaintiff’s Notice
of Civil Claim could only succeed against the Crown if the court were satisfied
that the Superintendent had acted unlawfully, went on to say this:
In essence that proposition is
correct but in my view slightly misstates the fatal flaw in the plaintiffs
position. The plaintiffs action is bound to fail because the plaintiff has no
right of action by a Notice of Civil Claim to challenge the exercise of a
statutory power of decision. The law of British Columbia provides for such a
challenge pursuant only to the Judicial Review Procedure Act. In Part 1
of the plaintiffs Notice of Civil Claim he alleges the Superintendent acted
without lawful authority. A government actor, such as the Superintendent,
whose legal authority to make a decision is challenged by a person, such as the
plaintiff, who believes himself aggrieved by an unlawful decision, is subject
to the law which applies to judicial review of administrative action. Section 2
of the Judicial Review Procedure Act provides that an application for
judicial review must be brought by petition, and that the reviewing court may
grant various forms of relief including a declaration or injunction in relation
to the exercise, or purported exercise, of a statutory power, or may grant
relief in the nature of prerogative writs to control the behaviour of a public
official.
[57]
As counsel for the Workers’ Compensation Board points out in her written
submissions, there is no action in tort available for the unreasonable exercise
of statutory powers. Where the decision of an administrative tribunal is
challenged on the basis that it is unreasonable, the remedy is by way of
judicial review.
[58]
In Johnson v. British Columbia (Workers’ Compensation Board),
2011 BCCA 255, the Court of Appeal discussed the Court’s role in reviewing a
determination under s. 251 by the board of directors on a deferential
standard of review at para. 50:
. . . the chambers
judge was not at liberty to reach her own conclusions on whether or not the
policy met the provisions of s. 5 of the WCA. The task of the chambers
judge was to review the decision of WCAT on the patently unreasonable
standard. As the appellant puts it, judicial review in these circumstances is
not a review of the policy per se. It is a review of an
interpretation of the WCA and related findings made by the administrative body
statutorily charged with interpreting the statute and with determining the
consistency between a policy and that statute.
[59]
In the event that the court were to find that the board of directors’
determination was patently unreasonable, the appropriate remedy would not be a
declaration, but rather an order quashing and setting aside the decision and
remitting the matter for reconsideration.
[60]
Counsel for the Workers’ Compensation Board has drawn to the court’s
attention the recent decision of the Court of Appeal in Jozipovic v. British
Columbia (Workers Compensation Board), 2012 BCCA 174, where the Court of
Appeal concluded that it could review a policy of the board of directors on
judicial review after the policy review process under s. 251 of the Act
had been completed.
[61]
Both Johnson and Jozipovic provide authority in the proposition
that a challenge to a policy adopted or affirmed by the Workers’ Compensation board
of directors is properly brought by way of judicial review.
[62]
I have already made the point that the application for a declaration
that the plaintiff and members of the class are entitled to interest on the
retroactive pension and wage loss awards would have the court substitute its
discretion for that of the Board, and thereby usurp the role of the Workers’
Compensation Board and WCAT.
[63]
The defendant has shown that is relief the court cannot grant without
trenching upon the jurisdiction of the Workers’ Compensation Board and thereby
exceeding the proper supervisory role of this court on judicial review.
[64]
I turn now to the Board’s submission that the plaintiff has failed to
plead material facts in support of her claim for abuse of statutory powers. At
paragraph 40 of the Notice of Civil Claim, the plaintiff alleges:
By
their stubborn and unreasonable refusal to correct the WCB interest policy and
pay proper interest to the Plaintiff and the other members of the class, the
WCB board of directors have acted in bad faith and have abused their statutory
power.
[65]
The elements of the tort of abuse of statutory power were stated by the
Supreme Court of Canada in Odhavji Estate v. Woodhouse, [2003] 3 S.C.R.
263, at paras. 22 and 23. There, the court said this:
22 What then are the
essential ingredients of the tort, at least insofar as it is necessary to
determine the issues that arise on the pleadings in this case? In Three
Rivers, the House of Lords held that the tort of misfeasance in a public
office can arise in one of two ways, what I shall call Category A and Category
B. Category A involves conduct that is specifically intended to injure a
person or class of persons. Category B involves a public officer who acts with
knowledge both that she or he has no power to do the act complained of and that
the act is likely to injure the plaintiff. This understanding of the tort has
been endorsed by a number of Canadian courts: see for example Powder
Mountain Resorts . . .; Alberta (Minister of Public
Works, Supply and Services) . . . ; and Granite Power
Corp. v. Ontario . . . It is important, however, to recall
that the two categories merely represent two different ways in which a public
officer can commit the tort; in each instance, the plaintiff must prove each of
the torts constituent elements. It is thus necessary to consider the elements
that are common to each form of the tort. [citations omitted.]
23 … First, the public officer
must have engaged in deliberate and unlawful conduct in his or her capacity as
a public officer. Second, the public officer must have been aware both that
his or her conduct was unlawful and that it was likely to harm the plaintiff.
…
[66]
In this case, there is a bare assertion that the board of directors
acted in bad faith and abused their statutory power. The plaintiff has pleaded
no facts to show that the board of directors either intended to harm the
plaintiff or that the board of directors knowingly acted outside the scope of
their authority and did so knowing that it was likely that their actions would
cause loss or harm to the plaintiff or other members of the class.
[67]
In my view, that is a fatal defect in the pleadings. The pleadings do
not meet the minimum level required to sustain a cause of action for the tort
of abuse of statutory powers.
[68]
I find that it is plain and obvious that the claim as framed will fail.
The challenge to the board of directors’ exercise of their statutory powers
ought to have been brought by petition for judicial review. Some of the relief
sought exceeds the powers of the court in exercising its judicial review
function and would require the court to substitute its discretion for that of
the board of directors. And finally, the failure to plead material facts
necessary to support the claim for abuse of process means that that claim is
bound to fail.
[69]
Having determined that the Notice of Civil Claim does not make out a
reasonable claim or cause of action, it is unnecessary for me to determine
whether or not the claim should be struck as an abuse of process.
[70]
Furthermore, having determined that the plaintiff’s Notice of Civil
Claim must be struck, it is unnecessary to decide whether the plaintiff’s
action for abuse of statutory power should be dismissed and I decline to do so.
[71]
Accordingly, the plaintiff’s Notice of Civil Claim is struck pursuant to
Rule 9‑5(1)(a).
[72]
The plaintiff is at liberty to apply by petition for judicial review of
the board of directors’ decisions relating to the New Interest Policy.
[73]
I should hear briefly from counsel on the matter of costs.
[74]
MS. COURTENAY: My Lord, I actually don’t have instructions regarding
costs. Normally a Tribunal does not seek costs and I suspect that is the decision
of the Board, but I should just confirm that with instructions.
[75]
THE COURT: All right. I anticipated that that might be your position.
I will make no order as to costs. If counsel, for any reason, wish to make
submissions then you can do so by way of written submissions through the
registry.
PEARLMAN
J.