IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20130906

Docket: S127611

Registry:
Vancouver

Between:

Daniel Christopher Scott,
Mark Douglas Campbell, Gavin Michael, David Flett, Kevin Albert Matthew Berry,
Bradley Darren Quast, Aaron Michael Bedard

Plaintiffs

And:

The Attorney
General of Canada

Defendant

Before:
The Honourable Mr. Justice Weatherill

Reasons for Judgment

Introduction

[1]            
This action is about promises the Canadian Government made to men and
women injured while in service to their country and whether it is obliged to
fulfill those promises.

[2]            
The plaintiffs are members or former members of the Canadian Forces who were
injured, physically or psychologically, in the course of duty.

[3]            
Injured veterans are entitled to claim benefits, assistance and
compensation under federal legislation.  Until 2006, the governing legislation
was the Pension Act, R.S.C. 1985, c. P-6.  On April 1, 2006, the Canadian
Forces Members and Veterans Re-establishment and Compensation Act, S.C.
2005, c. 21 came into force (which the plaintiffs refer to as the “New Veterans
Charter” or “NVC”).

[4]            
The NVC established, inter alia, a lump sum payment program for
Canadian Forces members and veterans in lieu of disability pensions previously
provided under the Pension Act.

[5]            
Each of the plaintiffs has received pension and other compensation from
Veterans Affairs Canada pursuant to the provisions of the NVC.  However they
complain that the compensation provided under the provisions of the NVC is arbitrary,
substandard and inadequate for supporting themselves and their families.  They
say their compensation and other benefits have been substantially reduced from what
was formerly granted under the provisions of the Pension Act.  Moreover
they say they are being treated unequally because the benefits and compensation
available under the NVC are substantially less favourable than those that are
available to injured persons claiming under tort law or workers compensation
laws.

[6]            
The plaintiffs assert the existence of a “Social Covenant” that gives
rise to a fiduciary duty on the part of the federal government and invoke
provisions of the Canadian Charter of Rights and Freedoms (“Charter”),
specifically ss. 7, 15 and 24(1) in an effort to effect a remedy.  They also
frame their claim under the doctrine of the “Honour of the Crown”, breach of a
public duty, breach of their property rights contrary to the Canadian Bill
of Rights, S.C. 1960, c. 44, the Charter and the UN Universal
Declaration of Human Rights, G.A. Res. 217(III), UNGAOR, 3d Sess., Supp.
No. 13, UN Doc. A/810 (1948) 71.  Further, they make allegations with respect
to the Statutory Instruments Act, R.S.C. 1985, c. S-22, the Table of Disabilities
under the NVC and the Canadian Human Rights Act, R.S.C. 1985, c. H-6.

[7]            
Counsel for the defendant concedes, for the purpose of this application,
that the benefits and services formerly available to Canadian Forces members
and veterans under the Pension Act were substantially better than those
that are now available to them under the NVC.

[8]            
The plaintiffs filed this action as a proposed class proceeding.  The
action is in its early stages.  The defendant has not yet filed its response to
the notice of civil claim.

[9]            
The defendant applies pursuant to R. 9-5(1) of the Supreme Court
Civil Rules for an order striking out the plaintiffs’ claim in its entirety
on the basis that it does not disclose a reasonable cause of action.

[10]        
Counsel for the defendant says that Canada brings this application not
because Canada questions the service dedication and sacrifices of the Canadian
Forces members and veterans but because the claim as presently framed has no
chance of success.  He stressed that Canada “acknowledges the gravity of the
injuries suffered by many of the members of the proposed class”.  He maintains,
however, that the object of the NVC is to ameliorate the effects of such
injuries and that this action is not the appropriate vehicle for the expression
of the plaintiffs’ concerns.

[11]        
For the reasons that follow, the defendant’s application is dismissed
except in small part.

Background

A.       The Canadian Forces

[12]        
The Canadian Forces consists of:

a)    the “Regular
Force” comprised of officers and non-commissioned members enrolled for
continuing, full-time military service;

b)    the “Reserve
Force”, comprised of officers and non-commissioned members enrolled for other
than full-time military service; and

c)     the “Special
Force” established by the Governor-in-Council in consequence of any action
undertaken by Canada under the UN Charter, the North Atlantic Treaty, the North
American Aerospace Defence Command Agreement or any other similar instrument to
which Canada is a party pursuant to s. 16(1) of the National Defence Act,
R.S.C. 1985, c. N-5.

B.       The NVC Benefit Regime

[13]        
The NVC empowers the Minister of Veterans Affairs to provide to eligible
Canadian Forces members and veterans various benefits and services, including:

a)    earnings
loss benefits (s. 18(1));

b)    permanent
impairment allowance for veterans experiencing permanent and severe impairments
in respect of physical or mental health problems (s. 38(1));

c)     career
transition services (s. 3(1));

d)    rehabilitation
services (s. 8(1));

e)    clothing
allowances (s. 60);

f)     
detention benefits (s. 64(1));

g)    supplementary
retirement benefits (s. 25(1)); and

h)    income support
benefits (for eligible veterans who received earnings loss benefit pursuant to
s. 18 or would, but for their level of income, have received it) (s. 27).

[14]        
The NVC empowers the Minister to provide similar services and benefits
to the spouses, common law partners and survivors of veterans and to enter into
a contract for a group health insurance program and make contributions and
premiums under the program (s. 66(1)(a)-(c)).  The Minister may provide
disability awards for eligible members and veterans who are suffering from a
disability resulting from a service-related injury or disease, or a non-service
related injury or disease that was aggravated by service (s. 45(1)). 
Disability awards may also be made in respect of loss, impairment or permanent
loss of the use of paired organs or limbs where the member or veteran has
received a disability award under s. 45 for the loss or permanent loss of the
use of the other paired organ or limb (s. 47(1)).

[15]        
Like under the Pension Act, the assessment of the extent of a
disability under the NVC is based upon the statutory instructions and a Table
of Disabilities created by the Minister to guide the assessment.

[16]        
Prior to 2011, disability awards under the NVC were payable as a lump
sum.  The 2011 amendments now provide claimants with the option of annual
payments (s. 52.1(1)(b)) subject to certain conditions.

Test for Striking a Claim

[17]        
A claim will only be struck if, assuming the facts pleaded are true, it
is plain and obvious that the pleadings disclose no reasonable cause of action. 
To put it another way, the claim has no reasonable prospect of success: R.
v. Imperial Tobacco Canada Ltd.  2011 SCC 42, at para. 17.

[18]        
A plaintiff is not entitled to rely on the possibility that new facts
may turn up as the case progresses. It is incumbent on the plaintiff to plead
all of the facts upon which the claim is being made: Imperial Tobacco,
at para. 22.

[19]        
Conclusions of law in the pleading that are not supported by the pleaded
facts will be struck: Young v. Borzoni, 2007 BCCA 16 at para. 20;
Canadian Bar Association v. British Columbia, 2008 BCCA 92 (leave to appeal
refused [2008] S.C.C.A. No. 185) at para. 51.

[20]        
The court will be generous and will err on the side of permitting a
novel but arguable claim to proceed to trial: Imperial Tobacco, at para.
21.

[21]        
No special consideration is given for class actions (Merchant Law Group
v. Canada (Revenue Agency), 2010 FCA 184 at para. 40), for Charter
infringement claims (Canadian Bar Association at para 51) or for claims
alleging the existence of a fiduciary duty (Alberta v. Elder Advocates of
Alberta Society, 2011 SCC 24 at para. 60).  Each claim must stand or fall
on the pleadings.

Analysis

A.       Social Covenant and the Honour of the Crown

[22]        
For the purposes of this application, the following facts pleaded in the
amended notice of civil claim are assumed to be true:

218.     When members of the Canadian Forces put on the
uniform of their country they make an extraordinary personal commitment to
place the welfare of others ahead of their personal interests, to serve Canada
before self and to put themselves at risk, as required, in the interests of the
nation.  A veteran, whether regular or reserve, active or retired, is someone
who, at one point in their life, wrote a blank cheque made payable to “the
Government of Canada,” for an amount of “up to and including their life.”  This
commitment to make the ultimate sacrifice reflects their honour in the service
of their country.

220.     There is no equivalent profession to that of service
in the Canadian Forces.  Because of this extraordinary commitment, there is a
long-recognized covenant that exists between the Canadian nation, the nation’s
people and those who hazard their lives in its service as members of the armed
forces.

221.     This Social Covenant or Social Contract between
Canada and those who serve it guarantees military members adequate recognition
and benefit for the sacrifices they make and the service they render Canada is
of paramount importance in a country that relies upon the voluntary recruitment
of its youth to fill its military ranks.

224.     Members of the Canadian Forces are entitled to
expect that if they sustain illness or injury in the line of duty, they will be
taken care of by the country they serve.  If the Canadian Forces is to retain
and reinforce the loyalty and commitment of its members and attract new
recruits, Canadian forces policies must strive to ensure that such expectations
are well met.

225.     Canada’s covenant to those who serve in the Canadian
forces is based on the following principles:

a.     that
members have their service be treated with dignity and respect;

b.     that
members be assured of reasonable career progression;

c.      that
the members of the Canadian Forces are fairly and equitably compensated for the
services they perform and the skills they exercise in performance of their many
duties with compensation that properly takes into account the unique nature of
military service;

d.     that the
members of the Canadian forces be provided with appropriate equipment and kit
commensurate with their duties;

e.     that all
members and their families are provided with ready access to suitable and
affordable accommodation which conform to modern standards and the reasonable
expectations of those living in today’s society;

f.       that
military personnel and their families be provided with access to a full and
adequate range of support services, offered in both official languages, that
will ensure their financial, physical and spiritual well-being;

g.     that
suitable care and compensation be provided to members, veterans and those
injured in the service of Canada through programs and services required to meet
the complex needs of individual members;

h.     that
military personnel and their families be provided with assistance in a seamless
transition from military to civilian life;

i.       that
the guiding principle for the recognition, care and compensation must always be
compassion; and

j.       that
Canada provides appropriate recognition and commemoration for the service and
sacrifice of military personnel and their families.

227.     As Canadian troops prepared for the Battle of Vimy
Ridge in 1917, they were visited by the Prime Minister, Sir Robert Borden, who
made this commitment on behalf of their country:

“You can go into this action
feeling assured of this, and as the head of the government I give you this
assurance, that you need have no fear that the government and the country will
fail to show just appreciation of your service to the country in what you are
about to do and what you have already done.  The government and the country
will consider it their first duty to prove to the returned men its just and due
appreciation of the inestimable value of the services rendered to the country
and Empire; and that no man, whether he goes back or whether he remains in
Flanders, will have just cause to reproach the government for having broken
faith with the men who won and the men who died”.

228.     Later in 1917 the Borden’s Unionist national unity
Canadian government made a further solemn commitment to those in uniform that:

“The men by whose sacrifice and
endurance the free institutions of Canada will be preserved must be re-educated
where necessary and re-established on the land or in such pursuits or vocations
as they may desire to follow.  The maimed and the broken will be protected, the
widow and the orphan will be helped and cherished. Duty and decency demand
that those who are saving democracy shall not find democracy a house of
privilege, or a school of poverty and hardship.”

229.     Subsequently, Canadian veteran legislation included
paragraphs reiterating the recognition by Canada of the Social Contract or
Social Covenant and the obligation of the nation to be generous towards
veterans and those who serve in the armed forces of the country.  Examples are:

Pension Act, R.S.C., 1985,
c. P-6

Construction

2. The provisions of this Act shall
be liberally construed and interpreted to the end that the recognized
obligation of the people and Government of Canada to provide compensation
to those members of the forces who have been disabled or have died as a result
of military service, and to their dependants, may be fulfilled.

War Veterans Allowance Act, R.S.C.,
1985, c. W-3

Construction

1.01 The provisions of this Act
shall be liberally construed and interpreted to the end that the recognized
obligation of the people and Government of Canada to those who have served
their country so well and to their dependants may be fulfilled; and

Veterans Review and Appeal Board
Act, S.C. 1985, c. 18

Construction

3. The provisions of this Act and
of any other Act of Parliament or of any regulations made under this or any
other Act of Parliament conferring or imposing jurisdiction, powers, duties or
functions on the Board shall be liberally construed and interpreted to the end that
the recognized obligation of the people and Government of Canada to those
who have served their country so well and to their dependants may be fulfilled.

234.     The Social Covenant or Social Contract between
Canada and those who serve has also been reflected in the representation of
Canadian Forces recruiters who met with Class members prior to their enlistment,
including representations that members of the Canadian Forces injured in
their service would be fairly and adequately compensated, such compensation
including adequate provision for return to civilian life and adequate provision
for the maintenance of the Member’s spouse and children.  These representations
were relied upon by Class members and were critical to the individual Class
members’ decision to join the Canadian Forces.

236.     Many Class members enlisted in the Canadian Forces
at the time when the Pension Act governed their compensation for
injuries and disabilities but later found that they were to be awarded much
less compensation under the New Veterans Charter.

237.     The existence of a disability pension was an
essential condition of the relationship between members and the Canadian Forces
following enlistment, as evidenced by its inclusion as a term in the Conditions
of Service.

238.     These Conditions of Service were unilaterally
changed by Parliament with the enactment of the New Veterans Charter during a
period at which Canada was at war sustaining heavy casualties and injuries.

241.     With respect to those who serve and have served
Canada in the Canadian Forces at the risk of their lives, the Honour of the
Crown is paramount because it is always assumed that the Crown intends to
fulfill its promises, particularly promises such as the social covenant or
contract between Canada and those who hazard their lives in its service.

[Underline Emphasis added]

[23]        
The foregoing assumed facts disclose a long standing and legislated
recognition in Canada of the unique service and sacrifices of those who serve
and have served in its armed forces.  The Government of Canada represented to
its armed forces its commitment to fairly and adequately compensate those
members who were injured as well as their dependants.  Indeed, the existence of
a disability pension was an “essential condition of the relationship” following
enlistment (amended notice of civil claim at para. 237).

[24]        
The plaintiffs argue that this long standing and legislated recognition
amounts to a “Social Covenant” that, by virtue of the evolving legal doctrine
known as the “Honour of the Crown”, the defendant is honour bound to carry out.

[25]        
For the purposes of this application, the defendant accepts that the
Crown made this Social Covenant but denies the assertion that it has failed to
carry it out.  The defendant points out the plaintiffs were content with the
compensation and other benefits previously available under the Pension Act
and it was only after the NVC was unanimously passed by all members of
Parliament that the plaintiffs began to complain.  It is therefore the change
in government policy that is being attacked.

[26]        
In addition, the defendant points out that, in June 2010, the NVC was
reviewed by the House of Commons Standing Committee on Veterans Affairs and was
subsequently amended in October 2011 to provide for additional benefits as part
of an ongoing attempt to improve the lot of veterans.  Moreover, there is a
statutory requirement for further comprehensive review that must be commenced
before October 2013.  The defendant submits that this is the proper vehicle for
the review of any complaints the plaintiffs may have with the NVC, not a class
action in the courts.

[27]        
The “Honour of the Crown” doctrine refers to the principle that servants
of the Crown must conduct themselves with honour when acting on behalf of the
sovereign: Manitoba Métis
Federation Inc. v. Canada (Attorney General), 2013 SCC 14 at para 65.  It
gives rise to different duties in different circumstances: Haida Nation v.
British Columbia (Minister of Forests), 2004 SCC 73 at para. 18.

[28]        
In Manitoba Métis
Federation, the Supreme Court of Canada stated that the Honour of the Crown
is not a cause of action itself; rather, it speaks to how obligations that
attract it must be fulfilled (para. 73).  The case involved the allegation that
the federal government breached its obligations owed to the Métis pursuant to the Manitoba
Act.  The Court concluded that s. 31 of the Manitoba Act, which
provided for land grants to Métis
children, created a constitutional obligation owed to the Métis and thereby
engaged the Honour of the Crown.  The government had promised that it would
implement the s. 31 land grants in the most “effectual and equitable manner”. 
The Court found the government failed to meet that promise and commented that a
government sincerely intent on fulfilling the duty that its honour demanded
“could and should have done better” (para. 128).

[29]        
The Honour of the Crown doctrine has been applied:

a.     as giving
rise to a fiduciary duty when the Crown assumes discretionary control over a
specific Aboriginal interest: Haida Nation, at para. 18

b.     as
informing the purposive interpretation of s. 35 of the Charter and giving
rise to a duty to consult when the Crown contemplates an action that will
affect a claimed by as of yet unproven Aboriginal interest: Haida Nation,
at para. 25;

c.     in respect
of treaty-making and implementation: Mikisew Cree First Nation v. Canada
(Minister of Canadian Heritage), 2005 SCC 69, at para. 51; and

d.     to require
the Crown to act in a way that accomplishes the intended purpose of treaty and
statutory grants to Aboriginal peoples: R. v. Marshall, 1999 CanLII 665
(SCC) at para. 43.

[30]        
No Canadian court has applied the doctrine of the Honour of the Crown outside
of the Aboriginal context, although it was referenced in the context of the
sale of land: Doe dem. Henderson v. Westover (1852), 1 U.C.E. & A.
465 (U.C.C.E.A. at 468) and in the context of statutory interpretation: R.
v. Belleau (1881), 7 S.C.R. 53 at 71 and Windsor & Annapolis Railway
Co. v. R, (1885), 10 S.C.R. 335 at 371.  It was also referenced in England
in the context of a criminal prosecution: R. v. Garside and Mosley
(1884) 2 AD. & E. 265 103 (K.B.) at p. 107: “We are not to presume that any
promise made by the King even to the meanest and most criminal of his subjects
will not be sacredly observed”.  These older decisions (two of which predate
the Confederation of Canada) suggest that the Honour of the Crown doctrine has
a lengthy history that extends beyond the Aboriginal context.

[31]        
The defendant argues that members of the armed forces do not have the
same historical relationship with Canada that Aboriginal peoples do and that
there is nothing analogous between the Aboriginal context and that of armed
forces members.  Moreover, it submits that the Honour of the Crown doctrine cannot
be used to invalidate otherwise valid legislation.  Parliament has the power to
enact any law that falls within its legislative competence and is compliant
with the Charter. It says that the remedy for those who believe that
legislation is unjust or unfair lies in the ballot box.

[32]        
As applied to the unique circumstances of Canada’s Aboriginal peoples,
the Honour of the Crown mandates that the Crown is bound to honour the
historical promises it made to them.  In my view, it is not plain and obvious
that the same principle could not be found to bind the Crown in respect of the
historical promises it made to the members of the armed forces.

[33]        
Members of the Canadian Forces bear a unique relationship with the Crown
insofar as they are required by law to face injury or death to carry out the
orders of their military commanders in furtherance of the policies determined
by the Government of Canada.  Casualties are anticipated and planned for by
superior officers.  Canadian Forces members are given no choice.  They must
obey the orders of their superiors to go into battle or face severe military
sanctions.  Indeed, until 1998 when the National Defence Act was
amended, the death penalty existed for several military offences such as
showing cowardice before the enemy.

[34]        
In return for undertaking these onerous and often dangerous obligations,
armed forces members were promised that they and their dependants would be
fairly and adequately compensated.

[35]        
In Manitoba Métis
Federation, the Supreme Court of Canada fashioned a new constitutional
obligation derived from the Honour of the Crown albeit within the Aboriginal
context.  It appears to me that this doctrine may well be an evolving one.  On
the facts as pleaded, I cannot find it is plain and obvious that the Honour of the
Crown doctrine could never be extended to impose an obligation on the Crown to
fulfill the Social Covenant it made to its armed forces despite changes in
government policy.  It is conceivable that the promise to provide suitable and
adequate care for the armed forces and their families meets the threshold of an
overarching reconciliation of interests that engages the Honour of the Crown.  The
issue is an important one that is deserving of full inquiry and should appropriately
be left for determination after a trial on the merits.

B.       Public Law Duty

[36]        
The plaintiffs seek a declaration that, by virtue of the unique
relationship between the Crown and the Canadian Forces members and veterans,
the Crown owes them a public law duty to exercise its legislative functions in
a manner that is consistent with the Social Covenant.  They also seek a
declaration that the defendant has breached that duty.

[37]        
The defendant submits the Supreme Court of Canada has repeatedly held
that no cause of action can be founded upon a breach of a public law duty and
that a breach of a public law duty is unknown in law, relying on R. v.
Saskatchewan Wheat Pool, [1983] 1 S.C.R. 205 at 225, Pasiechnyk v.
Saskatchewan (Workers’ Compensation Board), [1997] 2 S.C.R. 890 at para. 49
and Kamloops (City) v. Nielsen, [1984] 2 S.C.R. 2 at 35.  On this basis,
the defendant argues the plaintiffs’ claims in this regard should be struck.

[38]        
None of those decisions support the bold proposition put forward by the
defendant.  In Saskatchewan Wheat Pool, the issue was whether a breach
of a statutory duty gave rise to a civil cause of action.  In Pasiechnyk,
the issue was whether a civil action against the government alleging it failed
to meet its duties under the Saskatchewan Occupational Health and Safety Act
was barred by the Saskatchewan Workers’ Compensation Act.  In Kamloops,
the issue was whether pure economic loss was recoverable against a negligent
building inspector.

[39]        
The defendant also relies on the decision of this court in Bingo City
Games Inc. v. BC Lottery Corp., 2003 BCSC 637.  There, the plaintiffs
claimed that the British Columbia Lottery Corp. was in breach of its “public
duty of care” when it divested charities of their responsibilities to manage
bingo operations.  The pleading in support of that assertion stated:

52.       The defendants and each of them have a public law
duty of care to conduct business, or to act, in furtherance of the creation of
or implementation of public policy, in a reasonable manner, bona fide in the
exercise of statutory authority, and not to act unlawfully or contrary to the
public interest, or in a manner which abuses the public confidence or trust.

53.       The defendants and each
of them, breached their public law duty of care in the conduct of business or
in their actions in furtherance of public policy, by acting unreasonably,
without regard to bona fides, in the exercise of purported exercise of
statutory authority, by acting unlawfully or contrary to the public interest,
or in a manner which breached public confidence or trust, by imposing the BOSA
unlawfully, by approving the BCA relocation negligently or contrary to the law,
by making negligent misrepresentations and by abusing economic power in their
dealings with the Plaintiff BCG.

[40]        
No authority was provided in support of a cause of action founded on a
“breach of public law duty” and the court concluded “there is no such beast”
(para. 56).  It struck the claims on that basis and also because they were an
unnecessary “exercise in rhetoric” (para. 57).

[41]        
In order to establish the existence of a duty of care, the plaintiff
must prove that :

                
i.         
the facts disclose a relationship of proximity in which failure to take
reasonable care might foreseeably cause loss or harm to the plaintiff, creating
a prima facie duty; and

               
ii.         
there are no residual policy concerns that ought to negate or limit that
duty of care.

Hill
v. Hamilton-Wentworth Regional Police Services Board, 2007 SCC 41 at
para. 20

[42]        
A duty of care may also arise by way of precedent.  The courts have
developed “categories” where specific types of relationships are recognized as
giving rise to a duty of care.

[43]        
I am unaware of any authority recognizing the existence of a “public”
duty of care between veterans and members of the Canadian Forces and the Crown
and none was provided to me. This is not surprising given that an argument for
a public duty of care fails on both stages of the duty of care analysis, in
view of the reasons of the Supreme Court of Canada in Imperial Tobacco.

[44]        
Imperial Tobacco
was a defendant in two actions, one involving a claim by the British Columbia
government seeking to recover the cost of paying for the medical treatment of
individuals suffering from tobacco-related illnesses and the other involving a
class action brought by consumers of light or mild cigarettes for the
misleading nature of their packaging.  Imperial Tobacco commenced third party
proceedings against the federal Crown, alleging that it negligently
misrepresented the health attributes of low-tar cigarettes to consumers and was
therefore liable to Imperial Tobacco on the basis of contribution and indemnity
pursuant to the Negligence Act.  It further alleged the federal Crown
negligently misrepresented the health attributes of low-tar cigarettes to tobacco
companies and on that basis was liable to those companies in the event of their
loss in the two actions.  The federal Crown successfully applied to strike the
negligent misrepresentation claims.  The decision was overturned by the British
Columbia Court of Appeal.

[45]        
McLachlin C.J.C., writing for the Court, first considered whether the
facts as pleaded brought either claim within a recognized duty of care
category. She concluded there was no example of a government being held liable
for negligent misrepresentation to an industry.

[46]        
McLachlin C.J.C. then considered whether a duty of care nevertheless
existed on the basis of the two-stage test in Anns
v. Merton London Borough Council,
[1978] A.C. 728 (H.L.), which was adopted into Canadian law in Cooper v. Hobart,
2001 SCC 79 at paras. 25, 29 – 39.

[47]        
On the proximity stage of the analysis, McLachlin C.J.C. found that no prima
facie duty of care existed with respect to the class members.  Sufficient
proximity between a person and government can only be found in circumstances
where there is a statutory scheme giving rise to this duty of care, either
expressly or by implication, or by way of specific interactions between the
claimant and government (and the duty is not negated by statute) (para. 43).

[48]        
McLachlin C.J.C. noted that, as there were no specific interactions
between Canada and members of the class proceeding, the duty of care could only
arise by way of governing statutes (para. 49).  She found that the relevant
statutes established only general duties to the public, and no private law
duties to particular consumers (para. 50).  In regard to those statutes,
she cited from Mr. Justice Sharpe’s reasons in Eliopoulos Estate v. Ontario
(Minister of Health and Long-Term Care) (2006), 276 D.L.R. (4th) 411 (O.N.C.A.)
at para. 17:

I fail to see how it could be
possible to convert any of the Minister’s public law discretionary powers, to
be exercised in the general public interest, into private law duties owed to
specific individuals.

[49]        
However, McLachlin C.J.C. did find there was sufficient proximity
between the federal Crown and the tobacco companies to find a prima facie
duty of care: the representations had been specifically made to these
manufacturers in the course of Health Canada’s regulatory and other activities
(para. 55).

[50]        
In any event, on the second stage of the analysis, McLachlin C.J.C.
found that there were policy concerns to justify negating the existence of a
duty of care between the federal government and the tobacco companies.  She
found the representations made to the tobacco companies were matters of
government policy. “Core” government policy decisions are not justiciable and
cannot give rise to tort liability, as opposed to operational decisions (para.
85).  Core policy decisions are decisions made by legislators or officers whose
official responsibility requires them to assess and balance public policy
considerations.  McLachlin C.J.C. further held at para. 87:

The weighing of social, economic,
and political considerations to arrive at a course or principle of action is
the proper role of government, not the courts.  For this reason, decisions and
conduct based on these considerations cannot ground an action in tort.

[51]        
I note that operational decisions were defined in Just v. British
Columbia, [1989] 2 S.C.R. 1228 as the implementation of policy decisions
(see paras. 18 and 19).  McLachlin C.J.C. attempted to do away with the
ambiguity arising from this attempt to distinguish between policy and
operational decisions by focusing her analysis upon defining “core” policy
decisions in Imperial Tobacco.

[52]        
It is clear from Imperial Tobacco that a cause of action based on
a “public duty of care” does not exist.  There can only be a private duty of
care imposed on a public authority.  Proximity will be established by way of a
statutory provision giving rise to a private duty of care or by way of specific
interactions between the parties, such that the harm arising from a negligent
act would be foreseeable to the public authority.  Further the government’s
decision must come within the realm of operational decisions.

[53]        
The government may, in certain circumstances, be found to owe a duty of
care; it is not immune from the law of negligence.  However, as stated in Allen
Linden and Bruce Feldthusen’s text, Canadian Tort Law, 9th ed. (Markham:
LexisNexis Canada, 2011) at 660, “the Crown may only be liable in tort to the
extent that it consents to be so.”  The reason for this limitation on liability
with respect to public authorities is obvious: public authorities enjoy unique
powers that are distinct from the circumstances of private citizens.

[54]        
A duty of care will only be found in specific circumstances that are
analogous to the relationship between private citizens.  In this way, the duty
of care is properly characterized as private, rather than public.  To
characterize it otherwise would be to expose the government to expansive
liability.  It would also conflict with its obligation to act in the best
interest of society as a whole, which requires that it balance different (even
competing) interests.  This is precisely why the courts have instructed that no
duty of care will be found when the government is making a policy decision.

[55]        
In my view, it is plain and obvious that a cause of action grounded in a
public duty of care has no prospect of success and is bound to fail on the
proximity stage of the Anns/Cooper analysis.

[56]        
However, I am bound to consider the defendant’s application on the basis
of the pleadings as they stand or might be amended: Kripps v. Touche Ross
& Co. (1992), 69 B.C.L.R. (2d) 62 (C.A.) at 68.  The plaintiffs may
amend their claim to plead that the defendant owed them a private law duty of
care to recognize and give effect to the Social Covenant.  In light of my
findings with respect to the CLPA set out below, it is not plain and
obvious that s. 9 would bar such a claim.

C.       Fiduciary Duty

[57]        
The Supreme Court of Canada has recently made it clear that the range of
cases in which a fiduciary duty on the government is found will be limited and
that plaintiffs suing for breach of such a duty must be prepared to have their
claims tested at the pleadings stage: Elder Advocates at para. 54.

[58]        
Here the plaintiffs allege that:

249.     Where, as is the case with those who serve and have
served, including the Plaintiffs and proposed Class members, the Crown has
assumed discretionary control over specific interest, the Honour of the Crown
gives rise to a fiduciary duty in relation to specific interests flowing from their
service to the country.

250.     The fiduciary duty arising from the Honour of the
Crown requires the Crown to keep the promises that Canada has made in its
Social Covenant of Social Contract with those who serve.

351.     To the extent that ministerial discretion is validly
granted to the Minister, the Plaintiffs plead that because of the unique power
that the Minister and Defendant exercises with respect to the Class members,
and the peculiar vulnerability of the Class members, the Defendants [sic] owe a
duty to the Class to avoid conflicts of interest and to act in the best
interests of the Class and plead that each of the Class members stands in a
relationship of trust and confidence with the Minister and the Defendant.

352.     The Defendant at all times knew, or ought to have
known, that the Class members were relying upon them to care for them, to
protect their right and entitlement to the services and benefits required by
Canada’s covenant to those who serve in the Canadian Forces and the Honour of
the Crown, and to act in their best interests.

353.     By virtue of this
relationship of trust and confidence, the Defendant owes a fiduciary duty to
the Class members.

[59]        
The question is whether this pleading, in the context of the facts
pleaded in the amended notice of civil claim as a whole, discloses a
supportable cause of action.

[60]        
The leading authority on fiduciary duty claims against public
authorities is Elder Advocates.  The Supreme Court of Canada clarified
when the law imposes an ad hoc fiduciary duty upon the Crown.  The
plaintiffs were a large group of elderly residents of Alberta’s long-term care
facilities.  They alleged the government had artificially inflated the
accommodation charges to the residents in order to subsidize the medical
expense costs which were the responsibility of the government.  The government
applied to strike the various claims, including a claim for breach of fiduciary
duty.

[61]        
The Supreme Court of Canada summarized the general requirements for
imposition of a fiduciary duty in cases not covered by an existing category in
which fiduciary duties have been recognized at para 36:

a)     vulnerability
arising from the relationship (established by way of the Frame v. Smith,
[1987] 2 S.C.R. 99 test):

                          
i.         
the alleged fiduciary has scope for the exercise of some discretion or
power;

                         
ii.         
the alleged fiduciary can unilaterally exercise that power or discretion
so as to affect the beneficiary’s legal or practical interests; and

                        
iii.         
the alleged beneficiary is peculiarly vulnerable to or at the mercy of
the alleged fiduciary holding the discretion or power;

b)     an
undertaking by the alleged fiduciary to act in the best interests of the
alleged beneficiary or beneficiaries;

c)     a defined
person or class of persons vulnerable to a fiduciary’s control; and

d)    
a legal or substantial practical interest of the beneficiary or
beneficiaries that stands to be adversely affected by the alleged fiduciary’s
exercise of discretion.

a)       Vulnerability

[62]        
In my view, it is not plain and obvious that the plaintiffs will be
unable to demonstrate the three hallmarks of vulnerability, as set out above. 
The Crown has wide scope for the exercise of discretion and power over the
interests of Canadian Forces members and veterans.

b)       An Undertaking

[63]        
A fiduciary duty may arise from an undertaking to act in the best
interests of the alleged beneficiary whose legal or practical interests are
vulnerable to the alleged fiduciary’s control: Manitoba Metis Federation,
at para. 50.

[64]        
The Supreme Court of Canada noted in Elder Advocates that the
existence and character of the undertaking are informed by the norms relating
to the particular relationship.  However, the Court also found that “[t]he
party asserting the duty must be able to point to a forsaking by the alleged
fiduciary of the interests of all others in favour of those of the beneficiary,
in relation to the specific legal interest at stake” (para. 31).

[65]        
The duty in question is one of utmost loyalty to the beneficiary.  Where
a government is exercising its power or discretion, the circumstances in which it
will be found to have undertaken to act in the best interests of the alleged
beneficiary will be extremely rare (Elder Advocates, paras. 42 and 43). 
As noted by the Court, the duty is particularly difficult to prove in relation
to the Crown as it is the Crown’s duty to act in the best interests of society
as a whole (Elder Advocates, para. 44).  If the undertaking allegedly
flows from statute, the language in the legislation must clearly support it. 
It may also flow from the nature of the parties’ relationship and should be
determined by focussing on analogous cases (Elder Advocates, paras.
45 – 46).

[66]        
Notwithstanding the foregoing, in my view, it is not plain and obvious
that the plaintiffs will be unable to demonstrate the Crown gave an undertaking
of utmost loyalty and responsibility, express or implied, to ensure that
Canadian Forces members and veterans would be provided suitable and adequate
care and compensation for their service to their county.  That undertaking was
first made by Prime Minister Borden on behalf of the country as Canadian troops
prepared for the Battle of Vimy Ridge in 1917 and was repeated and perpetuated
in subsequent statements in Parliament, Royal Commissions, Reports of Standing
Committees and legislation.

[67]        
The assumed facts arguably disclose that the Crown solemnly undertook to
act in the best interests of injured veterans upon their return from battle even
if it meant putting veterans’ interests before those of the Crown and its
citizens.  That makes sense when one considers that it is the Canadian Forces
members and veterans who fought and in many cases died and continue to fight
and die for the freedom of all Canadians and the fundamental principles that
all Canadian citizens treasure.

c)       A Defined Person or Class of Persons

[68]        
The Canadian Forces members and veterans injured during service clearly
meet the test of a defined person or class of persons.

d)       A Legal or Substantial Practical Interest that Stands to be Adversely
Affected by the Alleged Fiduciary’s Exercise of Discretion

[69]        
The Supreme Court of Canada in Elder Advocates made it clear that
access to a benefit scheme without more will not constitute an interest giving
rise to a fiduciary duty.  Such a benefit is a creation of public law and is
subject to the government’s public law obligations in the administration of the
scheme (para 52).  The degree of control exerted by the government over the
interest in question must be equivalent or analogous to direct administration
of that interest (para 53).

[70]        
The specific fiduciary duty that the plaintiffs seek to establish is not
about the legislation of a benefit and service scheme for injured armed forces
members and veterans.  Rather, it encompasses an overarching obligation on the
part of the Crown to keep the promises it made to them that, in return for their
services and sacrifices, the government would ensure that they and their
dependents received adequate services, assistance and compensation should they
become injured or die.

[71]        
I disagree with the defendant’s submissions that the plaintiffs have
failed to articulate a specific interest being affected.  The interest that is
affected, as pleaded, is an injured veteran’s ability to meaningfully survive
after discharge.  While I accept that imposing a fiduciary duty on the Crown is
inherently at odds with its duty to act in the best interests of society as a
whole, I do not accept that, in the circumstances of this case, it is plain and
obvious a court will decide a fiduciary duty cannot exist.

[72]        
Clearly, veterans’ specific interests to meaningfully survive were and
are vulnerable to the Crown’s control.  In the words of plaintiffs’ counsel
they are “left to the whim of the Crown’s veterans’ disability pension scheme”.

[73]        
There are several examples of the courts refusing to strike claims
against the Crown alleging breach of fiduciary duty in the context of
veterans.

[74]        
In Duplessis v. Canada (2000), 197 FTR 87 (affirmed 2001 FCT 1038),
a Canadian Forces veteran suffering from post-traumatic stress disorder claimed
that the callous and arbitrary treatment he received upon his return from
active duty overseas amounted, inter alia, to a breach by the government
of its fiduciary duty owed to him.  The Court held that there was a serious
question of law as to whether or not a fiduciary duty existed.  That question
was more appropriately left for determination at a trial on the merits (para.
31).

[75]        
In Cross v. Sullivan, 2003 CanLII 44082 (OSC), the plaintiff was
a former Canadian Forces member who filed a successful grievance regarding
alleged deficiencies in his performance.  He alleged that members of the
military had conspired against him in respect of the unfavourable assessments
of his performance.  He sought leave to amend his statement of claim to allege,
inter alia, breach by the Crown of its fiduciary duty owed to him. 
After reviewing the decision in Duplessis, the court allowed the
application, stating:

[23]      The Crown has given no legal authority which deals
with the relationship or possibly the special relationship between a member of
the Armed Forces and the Crown and the Armed Forces.

[24]      In these circumstances,
I conclude that it is not beyond all doubt that the claim is clearly impossible
to success.

[76]        
In Stopford v. Canada, 2001 FCT 887, the plaintiff was a member
of the Canadian Forces and had served in a number of overseas locations.  In
the course of his duties in Croatia, he was exposed to hazardous materials. 
Upon his return to Canada, he began exhibiting symptoms that eventually led to
his discharge from duty as he was determined to be medically unfit.  He claimed
that Canada had breached a fiduciary duty owed to him by the manner in which
his disability claim was handled.  The court noted that the categories giving
rise to a fiduciary duty remained open (para. 26).  The court further noted Mr.
Justice Dickson’s attempt in Guerin v. Canada, [1984] 2 S.C.R. 335 at
384 – 385 (para. 27) to articulate a broad definition of fiduciary duty based
on the nature of the relationship at issue and not the actors involved.  The
court concluded that it was not plain and obvious the claim would fail (para.
31).

[77]        
Counsel for the defendant submits that, even assuming a fiduciary duty
could exist in the circumstances outlined in the plaintiffs’ pleadings, no
facts have been pleaded to support a finding that the defendant breached that
duty.

[78]        
The amended notice of civil claim pleads, inter alia, that:

a)     injured
Canadian Forces members and veterans “have been provided with a total financial
compensation package [under] the New Veterans Charter that is insufficient to
maintain a normal lifestyle for those of similar employment background in
Canadian society” (para. 339);

b)     members of
the class who are Reserve Force members recently injured in Afghanistan are not
adequately compensated for their life-time reduction in earning capacity (para.
340); and

c)    
the NVC arbitrarily assesses disabilities and artificially caps
financial recovery of catastrophically injured members: (para. 349)

[79]        
The issue in this case is whether Parliament, in passing the NVC and in
the face of its admitted Social Covenant and undertaking to sufficiently
provide for injured veterans, can do otherwise in furtherance of a change in
government policy.  That issue is worthy of a full trial on the merits.

D. Charter – s. 15(1)

[80]        
Section 15(1) of the Charter provides:

15(1)    Every individual is
equal before and under the law and has the right to equal protection and equal
benefit of the law, without discrimination and, in particular, without
discrimination based on race, national or ethnic origin, colour, religion, sex,
age or mental or physical disability.

[81]        
The plaintiffs allege at para. 391 of the amended notice of civil claim
that the “arbitrary, sub-standard and inadequate support and compensation
scheme(s) established by the defendant under the New Veterans Charter violate
the equality rights of the plaintiffs and the class protected under s. 15 of
the Canadian Charter of Rights and Freedoms in a manner that is
inconsistent with the principles of fundamental justice”.

[82]        
The parties agree that, in order to succeed on this aspect of their
claim, the plaintiffs must establish that (a) the law in question creates an
adverse distinction based on an enumerated or an analogous ground and (b) the impact
of the distinction perpetuates disadvantage, prejudice or stereotyping: Quebec
(Attorney General) v. A, 2013 SCC 5 at para 324.  Whether or not the
plaintiffs succeed will be determined on the basis of a flexible and contextual
inquiry into whether a distinction has the effect of perpetuating arbitrary
disadvantage because of their membership in an enumerated or analogous ground: Quebec
v. A. at para. 331.  For the purpose of this application, I must determine
whether the pleadings, accepted as true, disclose a reasonable cause of action,
considering these requirements succinctly set out in Quebec v. A.

(a)      Does the NVC Create a Distinction Based on an Analogous Ground?

[83]        
The defendant argues that the plaintiffs’ claim is devoid of any plea of
material facts that would support this aspect of the Quebec v. A. test. 
It points out that basing a s. 15 Charter claim on a temporal
distinction, as the plaintiffs appear to do in contrasting their treatment
under the NVC with the treatment of Canadian Forces members and veterans who
were disabled during their military service prior to April 1, 2006 and who are
entitled to benefits pursuant to the Pension Act, is fatal.  As noted by
Professor Hogg in his text Constitutional Law in Canada, 5^th ed.
(supp), loose-leaf (Toronto: Carswell, 2012) at p. 55-25:

“…every change in the law creates a distinction between those
who were governed by the law before the change and those who are governed by
the new law, but this is not discrimination under s. 15, because a temporal
distinction is not an analogous ground.”

[Emphasis in original]

[84]        
The defendant further notes that the plaintiffs attempt to compare themselves
with claimants who may sue in tort or claim benefits under provincial workers’ compensation
schemes, thereby basing their s.15 Charter claim on the “forum” for
compensation, which is clearly not an enumerated or analogous ground.  It
argues that government is entitled to create different regimes that provide
different benefits designed to address different needs and vary eligibility
rules and, potentially, vary amounts of compensation.  It relies on the Ontario
Superior Court decision in Wareham v. Ontario (Minister of Community and
Social Services), (2008), 166 C.R.R. (2d) 162 (O.N.S.C.) which held that
creating different public benefit regimes entailing different access rules does
not amount to discrimination under the Charter.  The Ontario Court of
Appeal upheld the motion judge’s decision to strike the statement of claim with
respect to the s. 15 claim (2008 ONCA 771).

[85]        
The plaintiffs’ case is that they are being denied a benefit that is
available to all other injured Canadians, namely the availability of adequate
compensation for their work-related injuries.  They acknowledge that the courts
have not yet recognized employment status as analogous to the enumerated
grounds under s. 15(1).  However, they submit there is an arguable case
that their status as Canadian Forces members and veterans is an analogous ground
and that the NVC creates an adverse distinction based upon that status.  They
point to the Supreme Court of Canada’s decision in R. v. Généreux, [1992] 1 S.C.R. 259,
as support for their argument that employment in the Canadian Forces may be determined
to be an analogous ground in certain circumstances.

[86]        
In Généreux, Mr. Justice Lamer, writing for the majority, stated,
in obiter at 310 – 311:

The appellant sought as well to rely on s. 15 of the Charter. I think that this submission equally can be
dealt with briefly.  In my opinion, the appellant, in the context of this
appeal, cannot claim to be a member of a "discrete and insular
minority" so as to bring himself within the meaning of s. 15(1) of the Charter: Andrews v. Law Society of British Columbia, supra.  For the
purposes of this appeal, the appellant cannot be said to belong to a category
of person enumerated in s. 15(1), or one analogous thereto.

I emphasize, however, that my conclusion
here is confined to the context of this appeal.  I do not wish to suggest that
military personnel can never be the objects of disadvantage or discrimination in a manner that could bring them within
the meaning of s. 15 of the Charter.  Certainly it is the case, for instance, that after a period of
massive demobilization
at the end of hostilities, returning military personnel may well suffer from
disadvantages and discrimination peculiar to their status, and I do not
preclude that members of the Armed Forces might constitute a class of persons
analogous to those enumerated in s. 15(1) under those circumstances.  However, no
circumstances of this sort arise in the context of this appeal, and the
appellant gains nothing by pleading s. 15 of the Charter.

[Emphasis added]

[87]        
More recently, the Supreme Court of Canada in Ontario (Attorney
General) v. Fraser, 2011 SCC 20, at para. 116, left open the possibility
that occupational status could be an analogous ground.

[88]        
When a person becomes a member of the Canadian Forces, he or she is
bound to serve until lawfully released: National Defence Act, s. 23. 
This imposes a legal obligation upon Canadian Forces members that is unlike that
upon members of civilian society.  Civilians who decide to quit their job may
face the prospect of loss of employment or threat of legal action for breach of
contract.  In contrast, Canadian Forces members who abandon or fail to report
for duty face far more serious repercussions including imprisonment,
potentially for life: National Defence Act, ss. 88 and 90.

[89]        
The plaintiffs argue there is no requirement that they specifically
identify a comparator group against whom their treatment under the NVC is
contrasted, citing Professor Hogg’s text at 55-34.4:

In Withler v. Canada (2011),
the Court suddenly resiled from its insistence on finding a precise comparator
group to which the claimant’s position was to be compared…the Court was
obviously signaling a concern about their reasoning in Hodge and Auton,
where ‘the definition of the comparator group determines the analysis and the
outcome.

[90]        
I agree with the plaintiffs.  It is not plain and obvious that status as
a Canadian Forces member or veteran injured while serving Canada’s interests
would never be found to constitute a class of persons analogous to those enumerated
in s. 15(1).  Moreover, on the facts as pleaded, it is not plain and
obvious that the effect of the NVC does not impose a differential treatment on injured
members and veterans compared to other Canadians who are injured on the job.

(b)      Does the Distinction Perpetuate Disadvantage, Prejudice or Stereotyping?

[91]        
The defendant submits that there are no pleaded facts capable of
supporting a finding of discrimination on the basis of the perpetuation of
prejudice or stereotyping.

[92]        
The plaintiffs say that the facts pleaded establish that the NVC
perpetuates arbitrary disadvantage.

[93]        
In Québec
v. A, Madam Justice Abella, writing the majority reasons on s. 15(1)
of the Charter, framed the appropriate approach to the second stage of
the s. 15(1) analysis as follows:

[325] In referring to prejudice and
stereotyping in the second step of the Kapp reformulation of the Andrews
test, the Court was not purporting to create a new s. 15 test. Withler
is clear that “[a]t the end of the day there is only one question: Does
the challenged law violate the norm of substantive equality in s. 15(1) of the Charter?” (para.
2 (emphasis added)).  Prejudice and stereotyping are two of the indicia that
may help answer that question; they are not discrete elements of the test which
the claimant is obliged to demonstrate, as Professor Sophia Moreau explains:

Such a narrow
interpretation will likely have the unfortunate effect of blinding us to other
ways in which individuals and groups, that have suffered serious and
long-standing disadvantage, can be discriminated against. This would include
cases, for instance, that do not involve either overt prejudice or false
stereotyping, but do involve oppression or unfair dominance of one group by
another, or involve a denial to one group of goods that seem basic or necessary
for full participation in Canadian society.

(“R. v.
Kapp: New Directions for Section 15”
(2008-2009), 40 Ottawa L. Rev. 283, at p. 292)

[…]

[327]
We must be careful not to treat Kapp and Withler as establishing
an additional requirement on s. 15 claimants to prove that a distinction
will perpetuate prejudicial or stereotypical attitudes towards them.  Such an
approach improperly focuses attention on whether a discriminatory attitude
exists, not a discriminatory impact, contrary to Andrews, Kapp
and Withler.  In explaining prejudice in Withler, the Court said:
“[W]ithout attempting to limit the factors that may be useful in assessing a
claim of discrimination, it can be said that where the discriminatory effect is
said to be the perpetuation of disadvantage or prejudice, evidence that goes to
establishing a claimant’s historical position of disadvantage or to
demonstrating existing prejudice against the claimant group, as well as the
nature of the interest that is affected, will be considered” (para. 38).

[328]
It is the discriminatory conduct that s. 15 seeks to prevent, not the
underlying attitude or motive, as Dickson C.J. explained in Action Travail:

It is not a question
of whether this discrimination is motivated by an intentional desire to
obstruct someone’s potential, or whether it is the accidental by-product of
innocently motivated practices or systems.  If the barrier is affecting certain
groups in a disproportionately negative way, it is a signal that the practices
that lead to this adverse impact may be discriminatory. [p. 1139, citing the
Report of the Commission on Equality in Employment (1984).]

This
was reiterated in Withler, where the Court said: “[W]hether the s. 15 analysis focusses on
perpetuating disadvantage or stereotyping, the analysis involves looking at the
circumstances of members of the group and the negative impact of the law
on them” (para. 37 (emphasis added)).

[…]

[330] Requiring claimants, therefore, to prove
that a distinction perpetuates negative attitudes about them imposes a largely
irrelevant, not to mention ineffable burden.

[331] Kapp and Withler guide us,
as a result, to a flexible and contextual inquiry into whether a
distinction has the effect of perpetuating arbitrary disadvantage on the
claimant because of his or her membership in an enumerated or analogous group.  As
Withler makes clear, the contextual factors will vary from case to case
— there is  no “rigid template”:

The particular
contextual factors relevant to the substantive equality inquiry at the second
step [of the Andrews test] will vary with the nature of the case. A rigid
template risks consideration of irrelevant matters on the one hand, or
overlooking relevant considerations on the other: Kapp. Factors such as those
developed in Law — pre-existing disadvantage, correspondence with actual
characteristics, impact on other groups and the nature of the interest
affected— may be helpful. However, they need not be expressly canvassed in
every case in order to fully and properly determine whether a particular
distinction is discriminatory. . . . [Emphasis added; para. 66.]

[Emphasis in
original]

[94]        
McLachlin C.J.C. concurred in the reasons delivered
by Abella J., emphasizing that, while prejudice and stereotyping are useful
indicia, they are not determinative:

[418] Most
recently, this Court has articulated the approach in terms of two steps: (1)
Does the law create a distinction based on an enumerated or analogous ground?
(2) Does the distinction create a disadvantage by perpetuating prejudice or
false stereotyping? : Kapp, at para. 17; Withler, at para. 30. 
While the promotion or the perpetuation of prejudice, on the one hand, and
false stereotyping, on the other, are useful guides, what constitutes
discrimination requires a contextual analysis, taking into account matters such
as pre-existing disadvantage of the claimant group, the degree of
correspondence between the differential treatment and the claimant group’s reality,
the ameliorative impact or purpose of the law, and the nature of the interests
affected: Withler, at para. 38; Kapp, at para. 19.

[95]        
Given those statements from the Supreme Court of
Canada and its clarification of the more expansive approach it has adopted in
the second stage of the s. 15(1) Charter analysis, it is not plain and
obvious the NVC could not be found to violate the norm of substantive equality through
its treatment of injured Canadian Forces members and veterans in contrast with
other injured Canadian workers.  Although it may well be difficult for the
plaintiffs to demonstrate the perpetuation of prejudice or stereotyping, it is
premature at this stage of the proceeding to rule out the possibility that they
will be able to demonstrate a distinction that perpetuates disadvantage.

E. Charter – s. 7

[96]        
Section 7 of the Charter provides:

7. Everyone has the right to
life, liberty and security of the person and the right not to be deprived
thereof except in accordance with the principles of fundamental justice.

[97]        
The plaintiffs plead that:

339. Since the enactment of the New Veterans Charter, members
of the Class have been terminated in their employment and forced out of their
income source as members in the Canadian Forces, have been unable to find
meaningful employment, and have been provided with a total financial
compensation package [sic] the New Veterans Charter that is insufficient to
maintain a normal lifestyle for those of similar employment background in
Canadian society.

[…]

390…the arbitrary, sub-standard
and inadequate support and compensation schemes(s) established by the Defendant
for the Plaintiffs, their families and for the Class in the New Veterans
Charter violate s. 7 of the Canadian Charter of Rights and Freedoms in
depriving the Plaintiffs and the Class with the right to life, liberty and
security of the person in a manner that is inconsistent with the principles of
fundamental justice.

[98]        
The plaintiffs argue that the NVC deprives them of their right to
security of the person in that it:

a)     fails to
provide adequate compensation for their injuries sustained in the service of
Canada, despite assurances that they would be so compensated; and

b)    
causes them serious state imposed psychological distress resulting from
its application.

[99]        
They say that these deprivations do not accord with the principles of
fundamental justice, namely the Honour of the Crown, the government’s
obligation to fulfill its promises, the government’s fiduciary duties and the
principle that laws should not be arbitrary.

(a)      Fails to Provide Adequate Compensation

[100]     The
defendant argues that the plaintiffs seek to increase the amount of benefits
they are entitled to receive; they do not seek to eliminate a deprivation.  In
other words, they seek to impose a positive obligation on the government that
has never before been recognized under s. 7 of the Charter: Pratten
v. British Columbia (Attorney General), 2012 BCCA 480 (leave to appeal
refused [2013] S.C.C.A. No. 36) at para. 46.

[101]    
The defendant also submits that the plaintiffs have not been “deprived”
of anything.  Rather, it says the NVC confers benefits on them by way of
services, assistance and compensation.  It relies on the following statement by
McLachlin C.J.C. in Gosselin v. Québec
(Attorney General), 2002 SCC 84 at para. 81:

Even if s. 7 could be read to encompass
economic rights, a further hurdle emerges. Section 7 speaks of the right not
to be deprived of life, liberty and security of the person, except in
accordance with the principles of fundamental justice.  Nothing in the
jurisprudence thus far suggests that s. 7 places a positive obligation on the
state to ensure that each person enjoys life, liberty or security of the
person.  Rather, s. 7 has been interpreted as restricting the state’s ability
to deprive people of these.  Such a deprivation does not exist in the
case at bar.

[Emphasis in
original]

[102]     The
defendant submits it is clear that the plaintiffs seek to protect a pure
economic interest: the amount of compensation to which they are entitled if
injured in service.  It argues that there is no jurisprudence suggesting s. 7 of
the Charter encompasses economic rights or creates positive obligations
on the state to ensure each person enjoys life, liberty and security of the person. 
Rather, s. 7 protects against state interference with a person’s ability to
make essential life choices: Siemens v. Manitoba (Attorney General),
2003 SCC 3 at para 45.

[103]    
The plaintiffs acknowledge that their claim, in essence, asserts
economic rights and that s. 7 has not been extended to the protection of
economic interests, but submit the courts have left open the possibility of s.
7 being extended to embrace such rights.  In Melanson v. New Brunswick
(Attorney General), 2007 NBCA 12, Mr. Justice Robertson observed that:

[20] To date the
Supreme Court has not extended the protection afforded by s. 7 of the Charter to cases involving economic or proprietary rights.  However, so far as
economic interests are concerned, the Supreme Court has not ruled out the
possibility that, in future, s. 7 may be extended
to embrace such interests.  In Gosselin it was argued that s. 7 imposes a
positive obligation on a government to provide adequate welfare benefits to the
poor.  While the argument was rejected, the majority of the Court acknowledged
that although s. 7 had yet to be
extended to economic rights or to rights wholly unconnected with the
administration of justice, those facts did not foreclose the possibility that,
in future, s. 7 might be given a
more expansive interpretation.  However, the majority concluded that Gosselin
was not the case for advancing the law because the evidence of “actual
hardship” was wanting.

[104]     I agree
with counsel for the defendant that a scheme providing benefits cannot be said
to amount to a deprivation merely because the claimant views the benefits as
insufficient.  However, I do not agree with the defendant’s submission that s.
7 could not be interpreted in the circumstances here to encompass positive
obligations on the state.  The Supreme Court of Canada has acknowledged that
one day it may be so interpreted: Gosselin at para. 82.  It is arguable
that the unique interactions between the Crown and its armed forces create the
“special circumstances” necessary to give rise to a finding that s. 7 includes
a positive obligation to protect the security of the plaintiffs’ persons.

[105]     I also
disagree that an argument based upon s. 7 being extended to include economic
interests is bound to fail.  The plaintiffs have been injured, disabled and are
in need of adequate economic assistance as a result of their military service. 
They are in a unique relationship with the government.  As can be observed from
Melanson, the door has been left open by the courts for such an argument
to succeed.

[106]    
The Supreme Court of Canada in Chaoulli v. Québec (Attorney General),
2005 SCC 35, at para. 193, held that courts should proceed cautiously in
dealing with s. 7 Charter claims:

[193] Section 7 gives rise to some of the most difficult issues in Canadian Charter litigation.  Because s. 7 protects the most basic interests of human beings — life, liberty and
security — claimants call on the courts to adjudicate many difficult moral and
ethical issues.  It is therefore prudent, in our view, to proceed cautiously
and incrementally in applying s. 7, particularly in distilling those principles that are so vital to our
society’s conception of “principles of fundamental justice” as to be
constitutionally entrenched.

[107]     It is
inconsistent with a cautious and incremental approach to strike the plaintiff’s
s. 7 claim at this stage of the proceedings.

[108]     In my
view, it is not plain and obvious that the plaintiff’s claim that the NVC fails
to provide adequate compensation to injured Canadian Forces members and
veterans, thereby depriving them of their right to security of the person, has
no reasonable prospect of success.  The plaintiffs should be entitled to
develop their case upon a full record.

(b)      The NVC Causes Serious Psychological Stress

[109]     Section. 7
of the Charter will be engaged where an individual’s psychological
integrity is seriously harmed by an action of the state: Blencoe v. British
Columbia (Human Rights Commission), 2000 SCC 44, at para. 57.

[110]     The plaintiffs
allege that, despite the promises made to them in the form of the Social
Covenant, the government acted unilaterally to diminish the benefits they would
have otherwise received after April 1, 2006.  This legislative change occurred
during the Afghanistan war when the armed forces had no choice but to continue
serving their country and believed they would continue to receive benefits
under the Pension Act.  They say that they legitimately believed the
government would honour its Social Covenant.  The economic strain that has now
been placed upon them as a consequence of the NVC creates enormous stress and
feelings of betrayal and abandonment.

[111]     The
plaintiff, Major Mark Campbell is one example.  After 32 years of military
service, Mr. Campbell suffered the loss of both legs as well as other injuries. 
He also experienced severe mental health injuries initially caused by his
physical injuries and later perpetuated by his feelings of betrayal and
abandonment by the Canadian Forces, Veterans Affairs Canada and the government:
amended notice of civil claim para. 104.

[112]     In my
view, it is not plain and obvious that the plaintiffs’ s. 7 Charter claim
in respect of serious state imposed psychological distress will fail.

(c)      Principles of Fundamental Justice

[113]     Section 7
of the Charter provides that a person’s protected rights may not be
deprived except if such deprivation is in accordance with the principles of
fundamental justice.

[114]    
The defendant submits that the plaintiffs have not identified any
principle of fundamental justice that has been violated.  It argues that no
material facts have been pleaded in support of the claim that the deprivation
is arbitrary, noting the three-step analysis affirmed in PHS Community
Services Society v. Canada (Attorney General), 2010 BCCA 15 (affirmed 2011
SCC 44) at para. 275 for establishing arbitrariness:

                
i.         
what is the “state interest” sought to be protected;

               
ii.         
what is the relationship between the “state interest” identified and the
impugned legislation and

              
iii.         
has the claimant established that the impugned legislation bears no
relation to or is inconsistent with the state interest?

[115]     The
defendant says the plaintiffs’ use of the term “arbitrary” in their pleadings
does not meet the requirements set out in PHS Community Services. 
Specifically, there are no material facts pleaded to support the requirement
that they show the NVC bears no relation to or is inconsistent with Canada’s
interest to compensate injured Canadian Forces’ members and veterans.

[116]     The
defendant submits that upper limits on court awarded damages are by their very
nature arbitrary and that the setting of a cap is a policy decision within the
purview of Parliament that has repeatedly withstood the scrutiny of the courts:
Lee v. Dawson, 2006 BCCA 159 (leave to appeal refused [2006] S.C.C.A.
No. 192; Morrow v. Zhang, 2009 ABCA 215 (leave to appeal refused [2009]
S.C.C.A. No. 341) and Hartling v. Nova Scotia Attorney General), 2009
NSCA 130 (leave to appeal refused [2010] S.C.C.A. No. 63).

[117]     The
plaintiffs submit that the recognized obligation on the part of the government
to provide adequate compensation to its injured armed forces members and
veterans is an essential principle of fundamental justice that requires
recognition by the courts.

[118]     The
plaintiffs also submit it is a principle of fundamental justice that laws not
be arbitrary: Chaoulli, at paras. 129-131.  They argue that the NVC
arbitrarily limits their respective rights to security of the person by placing
caps on compensation for injuries and aggregating all injuries regardless of
the number of events that led to them.  They say that the NVC is inconsistent
with the objective that lies behind it, namely the government’s obligation to
adequately compensate injured Canadian Forces members and veterans.

[119]     As
examples, the plaintiffs point to the fact that Bombardier Daniel Scott
received 0% disability rating for the loss of his spleen and Master Corporal
Gavin Flett received 0% disability rating for a left femur fracture.  They say
that such treatment is arbitrary and not in accordance with the principles of
fundamental justice.

[120]     The
plaintiffs distinguish the cap imposed by the NVC with that imposed in tort law
for non-pecuniary damages.  The latter is intended to provide solace to the
injured plaintiff and is not dependent solely upon the severity of the injury: Lee
at para. 70.  In contrast, the NVC is intended to provide compensation and
services to support the ongoing survival of the injured Canadian Forces member
or veteran.

[121]     In my
view, it is not plain and obvious that the plaintiffs’ s. 7 Charter arguments
are bound to fail.  The principles of fundamental justice are shaped by the
shared assumptions upon which our system of justice is grounded.  They find
their meaning in the cases and traditions that have long detailed the basic
norms for how the state deals with its citizens: Canadian Foundation for
Children, Youth and the Law v. Canada (Attorney General), 2004 SCC 4 at
para. 8.  I am not persuaded that the basic norms by which Canada deals with
its veterans do not include adequate compensation for their injuries.

[122]     In the
circumstances, it is appropriate that they be determined by the court on their
merits taking into account the full factual context as may be developed.

F. Charter – s. 24(1)

[123]    
The plaintiffs claim:

387(g). all necessary orders pursuant to section 24(1) of the
Constitution Act, 1982 or otherwise under common law or equitable
principles required to remedy the breaches of section 15 of the Charter
affecting the Plaintiffs and members of the Class;

387(i).  all necessary orders pursuant to section 24(1) of
the Constitution Act, 1982 or otherwise under common law or equitable
principles required to remedy the breaches of section 7 of the Charter
affecting the Plaintiffs and members of the Class;

287(k). an order pursuant to
section 24(1) of the Constitution Act, 1982 or otherwise under common
law or equitable principles, that the Plaintiffs and the Class members be paid
the difference between the amount paid under the New Veterans Charter and the
amounts that would have been paid for analogous injuries in awards by the
courts in Canada or in the alternative, under workers’ compensation schemes.

[124]     Section
24(1) of the Charter provides that:

24(1)    Anyone whose rights or freedoms,
as guaranteed by this Charter, have been infringed or denied may apply to a
court of competent jurisdiction to obtain such remedy as the court considers
appropriate and just in the circumstances.

[125]     Section
24(1) is invoked as a remedy for government acts under valid legislation that
violate Charter rights: R. v. Ferguson, 2008 SCC 6 at para. 60. 
Absent conduct that is clearly wrong, in bad faith or an abuse of power, the
courts will not generally award damages for the harm suffered as a result of the
mere enactment or application of a law that is subsequently declared to be
unconstitutional.  In other words, invalidity of government action, without
something more, does not found an action in damages under s. 24(1): Mackin
v. New Brunswick (Minister of Finance): 2002 SCC 13 at para. 78.  

[126]     The
plaintiffs do not attack either the acts of a government official or of those
administering the legislation.  There is no plea of conduct that is clearly
wrong, in bad faith or an abuse of power that would justify an award of damages
under s. 24(1).  Rather the plaintiffs attack the legislation itself and
effectively seek a declaration that it is unconstitutional and of no force or
effect pursuant to s. 52 of the Constitution Act, 1982 being schedule B
to the Canada Act 1982 (UK), 1982, c. 11 (“Constitution Act, 1982”).

[127]     The
plaintiffs acknowledge that an action for damages brought under s. 24(1) of
the Charter cannot, as a general rule, be combined with an action for a
declaration of invalidity based on s. 52 of the Constitution Act, 1982. 
However, they say that the circumstances in this case are unique and that the alleged
breach of fiduciary duty and the Honour of the Crown in conjunction with the
enactment of unconstitutional legislation in the form of the NVC is the
“something more” that will warrant the court departing from the general rule.

[128]      The
plaintiffs argue further that, even though the courts are precluded from
combining retroactive remedies under s. 24(1) with s. 52 remedies in the
absence of “something more”, the courts are not precluded from awarding
prospective remedies under s. 24(1) in conjunction with s. 52 remedies: R.
v. Demers, 2004 SCC 46 at para. 63.  They submit that, in the event the NVC
is declared unconstitutional, it is possible the court will temporarily suspend
the declaration to allow Parliament time to amend it.  In such circumstances,
courts have awarded prospective remedies under s. 24(1) if the government fails
to remedy the legislation within a reasonable time.

[129]     I agree with
plaintiffs’ counsel that, at this stage of the proceeding it would be premature
to strike out the s. 24(1) remedy claim as it is not plain and obvious that it
will fail.

G. Canadian Bill of Rights and Charter s. 26

[130]    
The plaintiffs plead as follows:

371.     The Plaintiffs and the Class plead that they have
been unlawfully deprived of their causes of action arising from the injuries
they have suffered.

372.     The Plaintiffs and the Class further plead that
property rights at law have traditionally been recognized as a fundamental
freedom and that there is a right of the individual to the enjoyment of
property and the right not to be deprived thereof, or of any interest therein,
save by due process of law.

374.     The Plaintiffs and Class
also rely upon the Canadian Bill of Rights, which affirms the right of
the individual to the enjoyment of property and the right not to be deprived
thereof except by due process of law and Section 26 of the Charter which
stipulates that “The guarantee in this Charter of certain rights and freedoms
shall not be construed as denying the existence of any other rights and
freedoms that exist in Canada.”

[131]     The
plaintiffs submit that the enactment of the NVC and the discontinuation of
benefits under the Pension Act were not done in accordance with due
process.  They say that the change was “unilaterally imposed during a time of
war despite the Social Covenant”, notwithstanding the obligations of the Crown
to members and veterans of the Canadian Forces.

[132]     The
plaintiffs maintain that property rights are part of Canada’s common law.  They
note that property rights are recognized in the Bill of Rights, which
affirms the right of the individual to the enjoyment of property and the right
not to be deprived thereof except by due process of law: Harrison v.
Carswell, [1976] 2 S.C.R. 200 at 219.

[133]     The
plaintiffs further submit that these common law rights are protected under s.
26 of the Charter.

[134]     The
plaintiffs also refer to the common law rule that absent clear and unambiguous
legislative language to the contrary, courts will order compensation to owners
of property expropriated by the state.  The plaintiffs seek a declaration that
the plaintiffs and members of the class have been unlawfully deprived of their
property rights without due process of law contrary to the Bill of Rights
and s. 26 of the Charter.  The plaintiffs also seek all orders necessary
pursuant to the Bill of Rights.

[135]     The
defendant says the plaintiffs have failed to plead any material facts to
support their claims that they have been unlawfully deprived of their property
rights under the Bill of Rights and s. 26 of the Charter.  The
defendant further alleges that even if material facts were pleaded in support
of these claims, it is plain and obvious they have no reasonable prospect of
success.

[136]     With
respect to the Bill of Rights claim, the defendant relies on Authorson
v. Canada (Attorney General), 2003 SCC 39, where the Supreme Court of
Canada held that a court could not compel Parliament to change its legislative
procedures based on the Bill of Rights and that there is “no due process
right against duly enacted legislation unambiguously expropriating property
interests” (para. 63).

[137]     The
defendant argues that s. 26 of the Charter does not provide the basis
for a stand-alone cause of action.  It merely stipulates that the Charter
does not limit or interfere with any other rights that already exist.  Since
the plaintiffs have not pleaded that the Charter has been applied in a
manner that interferes with their existing rights, there is no cause of action
that can be maintained.

(a)      Bill of Rights

[138]    
Section 1 of the Bill of Rights provides:

1. It is hereby recognized and declared that in Canada there
have existed and shall continue to exist without discrimination by reason of
race, national origin, colour, religion or sex, the following human rights and
fundamental freedoms, namely,

(a) the right of the individual to
life, liberty, security of the person and enjoyment of property, and the right
not to be deprived thereof except by due process of law;

[Emphasis added.]

[139]     In Authorson,
the respondent was a disabled veteran.  He was the representative plaintiff for
a large class composed of disabled veterans of Canada’s military forces.  Their
claim related to the government’s administration of pension benefits on behalf
of those who were incapable of managing the benefits on their own.  The funds
were deposited in the government’s general account and tracked as special
purpose accounts.  The funds were rarely credited with interest even though the
government understood that interest was owed.  The government only began paying
interest in 1990 and sought to limit its liability for past interest by the
implementation a federal statute.  The impugned provision stated that no claim
could be made for or on account of interest on money held or administered by
the government prior to January 1, 1990.

[140]     The
government conceded that it owed each of the veterans a fiduciary duty, that
the funds owed to the veterans and administered by the government were rarely
credited with interest and that a full accounting was never made.  However, the
government took the position that it had made that debt unenforceable by
legislation.  The respondent had argued that several due process rights were
guaranteed by the Bill of Rights: (i) procedural rights before Parliamentary
enactment of law; (ii) procedural rights before the application of a statute to
individual circumstances; and (iii) substantive protections against
governmental expropriation of property.

[141]    
The Supreme Court of Canada considered whether the due process
protections under s. 1(a) of the Bill of Rights guarded against
the expropriation of property by passage of valid legislation.  Mr. Justice
Major, writing for the Court, rejected the argument that the respondent had the
right to due process in legislative process.  He found it is a long-standing Parliamentary
tradition that the only procedural right due any citizen with respect to
proposed legislation is that legislation will receive three readings in the
House of Commons and the Senate as well as Royal Assent.  Upon the completion
of that process, legislation within Parliament’s competence is “unassailable”
(para. 37).  Major J. continued at paras. 40 – 41:

[40] The submission that a court can compel Parliament to
change its legislative procedures based on the Bill of Rights must fail.
The Bill of Rights purports to guide the proper interpretation of every
“law of Canada”, which s. 5 of the Bill of Rights defines to mean
“an Act of the Parliament of Canada enacted before or after the coming
into force of this Act” (emphasis added).  Court interference with the
legislative process is not an interpretation of an already enacted law.

[41] Due process protections
cannot interfere with the right of the legislative branch to determine its own
procedure.  For the Bill of Rights to confer such a power would
effectively amend the Canadian constitution, which, in the preamble to the Constitution
Act, 1867, enshrines a constitution similar in principle to that of the
United Kingdom.  In the United Kingdom, no such pre-legislative procedural
rights have existed.  From that, it follows that the Bill of Rights does
not authorize such power.

[142]     Major J.
then considered the procedural rights that exist with respect to the
application of the law.  He concluded that the Bill of Rights guarantees
notice and some opportunity to contest a governmental deprivation of property
rights in an individualized, adjudicative setting — before a court or tribunal
(para. 42).  However, he noted that these rights would only arise in context of
the revocation of a veteran’s benefits when the government no longer believes
he or she is disabled.  They would not arise in circumstances where the
government legislates the elimination of such benefits (para. 44).  He drew an
analogy to a tax payer being unable to claim procedural protections against a
change in income tax rates that adversely affect him or her.

[143]     Major J.
then considered whether the Bill of Rights confers substantive
protections against the expropriation of property.  He observed that it has
long been recognized that Parliament has the right to expropriate property so
long as it makes its intention clear.  Major J. found that Parliament’s
expropriative intent as set out in the impugned legislation was clear and
unambiguous (paras. 56 – 57).  He further held there is no due process right
against legislation that unambiguously expropriates property interests (para.
63).

[144]     It is important to recall that no property rights
acquired under the Pension Act were expropriated by the entry into force
of the NVC.  The NVC simply limited the property rights that could be granted
to Canadian Forces’ members and veterans who qualified for compensation after
it came into force.

[145]     It is not clear whether the Social Covenant created
property rights for Canadian Forces’ members and veterans, present and future. 
If it did, there is no specific and unambiguous language in the NVC making it
clear that Parliament intended to eliminate those substantive property rights. 

[146]     In my view, the plaintiffs’ claim based upon the Bill
of Rights is not doomed to fail and is worthy of exploration. 

(b)      Charter

[147]    
Section 26 of the Charter provides as follows:

26. The guarantee in
this Charter of certain rights and freedoms shall not be construed as denying
the existence of any other rights or freedoms that exist in Canada.

[148]    
In Fraser Health Authority v. Jongerden, 2013 BCSC 986, the
respondent relied on ss. 2(d), 3, 7 and 26 of the Charter as well as the
general proposition that the government must consult prior to enacting
legislation in support of his position that the Public Health Act
Transitional Regulation was invalid.  The court agreed with and adopted the
Health Authority’s position that s. 26 of the Charter could not create a
right that the respondent did not already have (para. 165).  The court relied
upon an excerpt from Professor Hogg’s text Constitutional Law of Canada,
5th ed. (supp.), loose-leaf (Toronto: Carswell, 2012) at 36-46 – 36-47:

Section 26 is a cautionary
provision, included to make clear that the Charter is not to be construed as
taking away any existing undeclared rights or freedoms.  Rights or freedoms
protected by the common law or statute will continue to exist notwithstanding
the Charter.  Section 26 does not incorporate these undeclared rights and
freedoms into the Charter, or “constitutionalize” them in any other way.  They
continue to exist independently of the Charter, and receive no extra protection
from the Charter.  They differ from the rights or freedoms guaranteed in the
Charter in that, as creatures of common law or statute, the undeclared rights
can be altered or abolished by the action of the competent legislative body.  As
well, the remedy under s. 24 is not available for their enforcement. [Citations
omitted.]

[149]     Upon a
plain reading of s. 26 it is clear that the provision is a safeguard clause,
instructing that the Charter should not be construed as denying the
existence of other rights in Canada. 

[150]     In my
view, it is plain and obvious that the claim for a declaration that the
plaintiffs and members of the class have been unlawfully deprived of their
property rights without due process of law contrary to s. 26 of the Charter
fails to disclose a reasonable cause of action and is bound to fail.  That
portion of the plaintiffs’ claim is struck out.

H. Crown Liability and Proceedings Act – s. 9

[151]     The
defendant submits that s. 9 of the Crown Liability and Proceedings Act,
R.S.C. 1985, c. C-50 (“CLPA”) bars the action brought by the plaintiffs.

[152]    
Section 9 provides:

No proceedings lie where pension payable

9. No proceedings lie
against the Crown or a servant of the Crown in respect of a claim if a pension
or compensation has been paid or is payable out of the Consolidated Revenue
Fund or out of any funds administered by an agency of the Crown in respect of
the death, injury, damage or loss in respect of which the claim is made.

[153]     The
defendant says that the purpose of s. 9 is to prevent double recovery by way of
a civil action for damages where a pension or compensation has already been
paid.  The defendant submits that the “crux” of the plaintiffs’ claim is that
the quantum of compensation to which they are entitled under the NVC is
inadequate.  Their claim, the defendant submits, comes squarely within s. 9 of
the CLPA and it is therefore plain and obvious this action cannot
succeed.

[154]     The
plaintiffs submit that s. 9 of the CLPA has no application in this case
because their action flows from the enactment of the NVC, not from the
compensation received under it.  Hence, they say, this is not a case involving
potential double recovery.  They further submit that the CLPA does not
exempt pension legislation from Charter scrutiny.

[155]     The
leading case on the interpretation of s. 9 of the CLPA is Sarvanis v.
Canada, 2002 SCC 28.  The Supreme Court of Canada considered the issue of
whether s. 9 immunized the Crown from tort liability where an individual
received benefits under the Canada Pension Plan.

[156]     The
appellant in Sarvanis was an inmate.  While he was working in the prison
farm’s hay barn, he fell through a hidden trap door on the second floor.  He
was left with permanent injuries and was unable to work.  He qualified for CPP
disability benefits.  He commenced an action in tort against the Crown.  The
Crown sought summary judgment on the basis that his claim was statute-barred by
virtue of s. 9 of the CLPA.  The application was dismissed by the
Federal Court but allowed by the Federal Court of Appeal.  It was appealed to
the Supreme Court of Canada.

[157]    
Mr. Justice Iacobucci, writing for the Court, considered whether the use
of the phrase “in respect of” in s. 9 was sufficiently broad to encompass the
CPP disability benefits granted to the appellant.  He acknowledged that the
phrase “in respect of” was of broad meaning although not of “infinite reach”
(para. 22).  Looking at the context in which the phrase had been used,
Iacobucci J. found that the ordinary meaning of the words “death, injury,
damage or loss” indicates events in respect of which liability could, but for
s. 9, attach.  He stated at para. 27:

[27] In both the French and
English versions of the statute, the key is to recognize that the loss the
recovery of which is barred by the statute must be the same loss that creates
an entitlement to the relevant pension or compensation.  The enumeration of
events as clearly explicates the meaning of "perte" in the French
text as it does the meaning of "in respect of" in English.

[158]     He held
(at para. 28) that the purpose of s. 9 is the prevention of double recovery for
the same claim where the government is liable for misconduct but has already
made a payment in respect thereof.  The question to be asked is whether the
factual basis for both the payment of the “pension or compensation” and for the
action is the same.

[159]     Iacobucci
J. held that the disability benefits under the CPP did not fall within the
scope of the ordinary meaning of the words under s. 9.  CPP benefits were not
contingent on events, but rather, on specific statutory criteria (the disabled
condition of a qualified contributor who is under 65 years of age and who makes
an application).  In order for s. 9 of the CLPA to be engaged, the
eligibility for the compensation must be “death, injury, damage or loss” (para.
38).  The CPP benefits were not being paid for any of those reasons.  The
Supreme Court of Canada allowed the appeal.

[160]     The
defendant submits that the British Columbia Court of Appeal’s decision in Sulz
v. Minister of Public Safety and Solicitor General, 2006 BCCA 582 is an
example where s. 9 of the CLPA was applied to bar claims alleging breach
of fiduciary duty where the claims were made on the same facts as those in
respect of which compensation was paid.  However, that issue was not, in fact,
before the Court of Appeal, although a claim in tort brought against the
federal Crown was considered in the judgment below (reasons indexed at 2006
BCSC 99).

[161]     In Sulz,
the plaintiff was a former member of the RCMP.  She alleged that her immediate
supervisor intentionally, or negligently, harassed her to the extent that she
became so depressed she had no choice but to accept a discharge.  The trial
judge found the plaintiff’s Veteran Affairs pension was awarded on the same
factual basis as the plaintiff’s claim in tort against the federal Crown.  Both
the letter approving the plaintiff’s pension and the decision of the Veterans
Review and Appeal Board increasing the plaintiff’s award mentioned the
allegations of harassment.  The trial judge concluded the plaintiff’s
disability arose out of or was in connection with her service in the RCMP,
thereby triggering s. 9 of the CLPA (para. 98).  The provincial Crown
was found vicariously liable in the tort of negligent infliction of mental
suffering committed by the plaintiff’s superior officer.  The provincial Crown
appealed that decision, in part, on the basis that the superannuation pension
payable upon the respondent’s discharge from the RCMP was double recovery.  The
Court of Appeal held that this benefit was payable because the respondent was
discharged, not because she was injured in tort (para. 66).

[162]     The
defendant also relies on Dumont v. Canada, 2003 FCA 475 at para. 73 as
support for its argument.  In Dumont, the appellants were members of the
Canadian Forces.  Mr. Dumont had been discharged for medical reasons.  The
Minister of Veterans’ Affairs had granted him a disability pension for
depression under the Act (his disability assessed at 10%) but had
declined to extend compensation to cover his claim that he suffered from
post-traumatic stress disorder.  The appellant Mr. Drolet had also been granted
a pension under the Act for physical and psychological disabilities, his
disability assessed at 60%.  Neither appellant had sought review of the
Minister’s decision before the Veterans Review and Appeal Board.  Neither had
sought judicial review or reconsideration by the Minister.  Both alleged that
the respondent contributed to or failed to address the deterioration of their
health.  Both alleged the respondent’s employees or agents were negligent
towards them, breaching their legal obligations, their fiduciary obligations
and s. 7 of the Charter.  They appealed the trial-level decisions
staying their respective tort claims against the respondent until each had made
a formal application for indemnity under the Pension Act.  The Crown
cross-appealed on the basis that the actions should have been struck pursuant
to s. 9 of the CLPA.

[163]    
The court held that the appellants’ claims for breach of fiduciary duty
were, in essence, tort actions that were prohibited under s. 9 of the CLPA
because the damages claimed were already compensable by way of pension benefits
(para. 73).  The claims in tort and fiduciary duty were struck.  However, the Charter
claim was allowed to proceed for the following reasons:

[78]     
The appellants did not explain in any way how section 7 of the Charter
has been infringed.  However, in the event that the respondent has breached the
appellant’s rights that are guaranteed by this section, it is far from certain
that section 9 of the Act can be relied upon to exclude a fair and
appropriate remedy in keeping with the circumstances.  It is up to the judge
responsible for applying subsection 24(1) of the Charter, to assess
whether the pension that might be awarded is appropriate and fair in regard to
the circumstances, or if it would be appropriate to add further compensation.

[164]     Here, the
plaintiffs take issue with the cap placed on financial recovery under the NVC
as well as other aspects of the NVC, particularly the “Table of Disabilities”.

[165]     The
reasoning in Dumont is apposite in this case with respect to the
constitutional claim.  It is not plain and obvious that the factual basis upon
which compensation is or has been received pursuant to the NVC is the same as
the factual basis upon which compensation is claimed in this action.  The
plaintiffs’ claims are in respect of alleged breaches of their Charter
rights, s. 1 of the Bill of Rights, the Crown’s fiduciary obligations
and the Honour of the Crown.  These claims do not relate to the original
injuries they suffered in the course of service for which compensation was paid
under the NVC.

[166]     The
plaintiffs also seek general, special and aggravated damages.  Those claims similarly
relate to the failure of the government to fulfill promises.  In my view it is
not plain and obvious the claim for damages should be struck.

I. Statutory Instruments Act and the Table of Disabilities
and Instructions

[167]     The Statutory
Instruments Act provides for the examination, publication and scrutiny of
regulations and other statutory instruments:

[168]    
It provides, in salient part:

3. (1) Subject to any regulations made pursuant to paragraph 20(a), where a regulation-making authority proposes
to make a regulation, it shall cause to be forwarded to the Clerk of the Privy
Council three copies of the proposed regulation in both official languages.

(2)
On receipt by the Clerk of the Privy Council of copies of a proposed regulation
pursuant to subsection (1), the Clerk of the Privy Council, in consultation
with the Deputy Minister of Justice, shall examine the proposed regulation to
ensure that

(a) it is authorized
by the statute pursuant to which it is to be made;

(b) it does not
constitute an unusual or unexpected use of the authority pursuant to which it
is to be made;

(c) it does not
trespass unduly on existing rights and freedoms and is not, in any case,
inconsistent with the purposes and provisions of the Canadian Charter of
Rights and Freedoms and
the Canadian Bill of Rights; and

(d) the form and
draftsmanship of the proposed regulation are in accordance with established
standards.

5. (1) Subject to any regulations made pursuant to paragraph 20(b), every regulation-making authority
shall, within seven days after making a regulation, transmit copies of the
regulation in both official languages to the Clerk of the Privy Council for
registration pursuant to section 6.

(2)
One copy of each of the official language versions of each regulation that is
transmitted to the Clerk of the Privy Council pursuant to
subsection (1), other than a regulation made or approved by the Governor in
Council, shall be certified by the regulation-making authority to be a true
copy thereof.

8.
No regulation is invalid by reason
only that it was not examined in accordance with subsection 3(2), but where any statutory instrument that was
issued, made or established without having been so examined

(a) was, before it was issued, made or established, determined by the
Deputy Minister of Justice pursuant to section 4 to be one that would, if it were issued, made or established, be a
regulation, or

(b) has, since its issue, making or establishment, been determined by the
Deputy Minister of Justice pursuant to subsection 7(2) to be a regulation,

the Governor in Council, on the recommendation
of the Minister of Justice, may, notwithstanding the provisions of the Act by
or under the authority of which the instrument was or purports to have been
issued, made or established, revoke the instrument in whole or in part and
thereupon cause the regulation-making authority or other authority by which it
was issued, made or established to be notified in writing of that action.

11. (1) Subject to any regulations made
pursuant to paragraph 20(c), every regulation shall be published
in the Canada
Gazette within twenty-three days after copies
thereof are registered pursuant to section 6.

19. Every statutory instrument issued, made or established after December
31, 1971, other than an instrument the inspection of which and the obtaining of
copies of which are precluded by any regulations made pursuant to paragraph 20(d), shall stand permanently referred to
any Committee of the House of Commons, of the Senate or of both Houses of
Parliament that may be established for the purpose of reviewing and
scrutinizing statutory instruments.

[169]     At paras.
359 to 363 of the amended notice of civil claim, the plaintiffs plead that the Table
of Disabilities and instructions are statutory instruments that were not
properly registered by the clerk of the privy council, were not published in
the Canada Gazette and were not referred to a Committee of the House of
Commons, the Senate or both Houses of Parliament and thereby avoided the
scrutiny and review they were required to receive.  The plaintiffs also allege
that the Table of Disabilities and instructions are invalid because they were
not enacted as required by the statute pursuant to which they were made, they
constitute an unusual or unexpected use of the authority pursuant to which they
were made, they trespass on the plaintiffs’ existing rights and freedoms and
are inconsistent with the Charter and the Bill of Rights.

[170]     There are
several flaws with these pleadings.

[171]     First, as
the plaintiffs concede, by virtue of s. 51(2) of the NVC, the Table of
Disabilities and instructions are exempt from the application of ss. 3, 5 and
11 of the Statutory Instruments Act.

[172]     Second, by
virtue of s. 19 of the Statutory Instruments Act, the Table of
Disabilities and instructions are deemed to have been referred to a Committee
of the House of Commons, the Senate or both Houses of Parliament established
for the purpose of reviewing and scrutinizing them.  The plaintiffs argue that
s. 19 requires real scrutiny, not scrutiny that is merely deemed to have taken
place.  Nothing in the Statutory Instruments Act requires the Committee
to undertake a review of each instrument, nor does it make such a review a
prerequisite to the valid enactment of the instrument.

[173]     Third, the
plaintiffs have not pleaded any material facts to support their claim that the Table
of Disabilities and instructions are invalid because they were not enacted as
required by NVC, constitute an unusual or unexpected use of the authority
pursuant to which they were made, trespass on the plaintiffs’ existing rights
and freedoms and are inconsistent with the Charter and the Bill of
Rights.

[174]     Fourth, by
virtue of s. 8 of the Statutory Instruments Act, no regulation is
invalid by reason only that it was not examined in accordance with s. 3(2).

[175]     In my
view, it is plain and obvious that the pleadings in the amended notice of civil
claim related to the Statutory Instruments Act disclose no reasonable
cause of action and should be struck out.

J.       UN Universal Declaration of Human Rights, Article 17

[176]     The
plaintiffs concede that the Universal Declaration of Human Rights has no
binding legal effect and plead it only as “a reflection of the normative values
of Canadians”.  No claim is being made under this Declaration.

K. Canadian Human Rights Act

[177]     The
plaintiffs confirm that they are not making a claim under the Canadian Human
Rights Act and have pleaded it as part of the factual background and
legislative scheme that addresses the various rights of injured Canadian Forces
members and veterans.

Conclusion

[178]     To the
extent that the amended notice of civil claim is based upon a claim for a
declaration that the plaintiffs and members of the class have been unlawfully
deprived of their property rights without due process of law contrary to the Universal
Declaration of Human Rights and s. 26 of the Charter, it is struck
out.

[179]     To the
extent that the amended notice of civil claim is based upon a claim that the Table
of Disabilities and instructions were enacted without the required scrutiny of
Parliament, it is struck out.

[180]     To the
extent that the plaintiffs’ claim is grounded in a public law duty of care it
is struck.

[181]     The
balance of the defendant’s application is dismissed.

[182]     As there
has been mixed success, costs will be in the cause.

“Weatherill J.”