The Court allowed an appeal of a company that had sought redress from the Workers’ Compensation Board and the Workers’ Compensation Appeals Tribunal after it had lost considerable money over the years after being assigned an incorrect classification under the Act. The WCB and WCAT had erred in concluding that they did not have the discretion to contemplate a calculation of the Appellant’s over-assessment to a date earlier than the year in which the correction was made.

Administrative law – Decisions of administrative tribunals – Workers Compensation Boards – Industry classification – Assessment – Statutory interpretation – Judicial review – Compliance with legislation – Standard of review – Correctness

Thermo Dynamics Ltd. v. Nova Scotia (Workers’ Compensation Appeals Tribunal), [2005] N.S.J. No 475, Nova Scotia Court of Appeal, November 23, 2005, E.A. Roscoe, J.W.S. Saunders and J.E. Fichaud JJ.A.

The Appellant sought redress from the Workers’ Compensation Board and the Workers’ Compensation Appeals Tribunal, when it suspected that it had lost considerable money over the years after being assigned a faulty classification under the Workers’ Compensation Act, S.N.S. 1994-1995, c. 10 (the “Act”). The Appellant sought a refund of whatever sums had been collected through improper over-assessments. The misclassification began in 1983 and continued unknown to the Appellant until 1998.

A reclassification audit was conducted which resulted in an increase to the Appellant’s assessment rate effective January 1, 2004. This decision was appealed to a hearing officer who confirmed the classification officer’s decision. The hearing officer’s decision was appealed to the WCAT which determined that the Appellant had not been properly classified under the appropriate rating code, with the result that the Appellant’s rate was reduced, effective January 1, 2002.

The Appellant challenged this conclusion, arguing that the Board’s own failure to conduct a reclassification audit, notwithstanding the president’s repeated demands from 1998 to 2003 to investigate his complaints, entitled the Appellant to a refund of all over-assessments paid, retroactive to at least 1998. Following a hearing, the WCAT confirmed that the reclassification can be backdated to January 1, 2002, and no earlier. The decision of the WCAT was the subject of this appeal.

The Court first considered the appropriate standard of review. The Act contained a statutory right of appeal which established a significant privative barrier in that it limited appeals to questions of law and jurisdiction. This suggested that decisions concerning matters of law or jurisdiction would be accorded less deference. The Tribunal brought a high level of sophistication and expertise to the task of coding and classifying businesses for assessment purposes, and therefore its findings ought to be accorded a significant degree of deference. The purpose of this statute was to resolve and balance competing policy objectives or the interests of various constituencies which weighed in favour of a greater degree of deference. Finally, the nature of the question in this case was one of statutory interpretation in deciding first, the period of time for which an over-assessment ought to be calculated following the Appellant’s reclassification, and second, whether a discretion lay to extend the time period so as to avoid an injustice. This was a question of law.

A standard of correctness should be applied where the inquiry calls for the interpretation of statutory language that stipulates the preconditions for the exercise of the Board’s discretion. In the result, the Court applied the standard of correctness in its consideration of whether the WCAT erred in its analysis and disposition.

The Court considered the correct interpretation of section 122 of the Act. The language of section 122(2) of the Act is clear and unambiguous, and provides that any change to a classification rate as a result of a reclassification is limited to the year preceding the year in which the correction is made. As the correction here in reclassifying the Appellant’s business was made in 2003, the Board and the WCAT were correct in finding that the earliest date the overpayment could be back-dated is January 1, 2002.

Section 190 of the Act provided that the Board could, at any time, extend any prescribed time limit where, in the opinion of the Board, an injustice would otherwise result. The Tribunal found that it was limited to a strict application of section 122(2) without recourse or reference to any statutory discretion pursuant to section 190. This conclusion was incorrect and led to the Tribunal’s erroneous conclusion that the Board was, in effect, precluded from ever contemplating a calculation of the Appellant’s over-assessment to a date earlier than January 1, 2002.

The Board has a very broad discretion, if it chooses to do so, to extend any time limit prescribed in Part 1 of the Act or the Regulations. Had the legislature intended that the Board’s discretion ought to be curtailed such that it could never be applied in circumstances where section 122 was engaged, it could easily have said so. In the result, it was for the Board in this case to fully consider the entire history of the Appellant’s dealings from the time it first registered with the Board in 1983, armed with the knowledge that when undertaking such a calculation it is fully entitled to exercise its broad statutory discretion by extending time limits where, in its opinion, an injustice would otherwise result.

In the result, the matter was remitted to the Board for a rehearing.

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