The Workers’ Compensation Commission was unsuccessful in appealing a decision of the Trial Division which had overturned a decision of one of the Commission’s internal review specialists relating to whether or not the Commission was entitled to maintain a subrogated action. The Court of Appeal found that the decision of the internal review specialist was patently unreasonable as it resulted from an inappropriate approach to statutory interpretation.

23. September 2003 0

Administrative law – Workers compensation – Subrogated actions – Administrative decisions – Statutory provisions – Use – Definition – Statutory interpretation vs. judicial interpretation – Judicial review application – Standard of review – Patent unreasonableness

Warford v. Weir’s Construction Ltd., [2003] N.J. No. 178, Newfoundland and Labrador Supreme Court – Court of Appeal, July 17, 2003, Cameron, Roberts and Welsh JJ.A.

Warford was injured on July 5, 1995 in the course of his employment as a mechanic with Weir’s Construction Ltd. A vehicle on which Warford was working rolled off the blocks and pinned him under it. Because of his injuries, Warford sought, and received, Worker’s Compensation benefits. In 1997, the Workers’ Compensation Commission, pursuant to a right of subrogation contained in section 45(8) of the Workers’ Compensation Act, commenced an action against the Weirs in the name of Warford. The Weirs then sought a ruling respecting whether the action was barred pursuant to section 44 of the Act which provided that the right to compensation provided by the Act is “instead of rights and rights of action, statutory or otherwise, to which a worker or his or her dependents are entitled against an employer…”. An internal review specialist for the Commission found that the action was not barred as it fell within section 44.1 of the Act, an exception to the bar against litigation. Section 44.1(1) read, in part:

44.1(1)   Section 44 shall not apply where the worker is injured or killed

(b)  as a result of an accident involving the use of a motor vehicle by the worker or another person, in the course of the worker’s employment.

The internal review specialist gave broad meaning to the word “use” in section 44.1(1)(b), based upon authorities dealing with the meaning of that word in the context of automobile insurance, in concluding that litigation was permitted. The Weirs sought judicial review of the decision of the internal review specialist.

The Trial Division judge concluded that the internal review specialist had approached his task in the wrong way in looking first to judicial interpretation rather than statutory interpretation. The Trial Division judge quashed the decision of the internal review specialist and ordered the matter remitted to the Commission for a determination. Warford and the Commission appealed this decision.

The Court of Appeal reviewed the decision of the Trial Division judge and noted that the standard of review to be applied to the decision of the Trial Division was one of correctness. The Court of Appeal disagreed with the Trial Judge’s determination that the appropriate standard of review when reviewing the decision of the internal review specialist was correctness. The court used a pragmatic and functional approach in holding that the appropriate standard of review was whether or not the decision of the internal review specialist was patently unreasonable.

The court then reviewed the reasons of the internal review specialist finding that it was clear he interpreted the term “use” from section 44.1 solely on the basis of insurance case law. The court held that this was not a case where the adjudicator was entitled to determine which factors are relevant to his decision and give more weight to one than another. The court noted that it appeared that the adjudicator felt compelled to apply the meaning to the term “use” based upon the case law and held that this amounted to a patently unreasonable error of law. The court cited the Supreme Court of Canada decision in Bell Express Vu Limited Partnership v. Rex (2002), 212 D.L.R. (4th) 1 as confirming that the preferred approach to statutory interpretation was that the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament. The court held that while these factors did not need to be applied in a formulaic fashion, the words of the internal review specialist himself made it clear that his patently unreasonable approach to statutory interpretation undermined completely the logic of his conclusion. In the result, the appeal was dismissed.

To stay current with the new case law and emerging legal issues in this area, subscribe here.