Trotter v. Canada (Attorney General), 2005 FC 434

                                                                                                                                  Date: 20050401

                                                                                                                           Dockets: T-1121-04

                                                                                                                                             T-468-04

                                                                                                                        Citation: 2005 FC 434

BETWEEN:

                                                                                                                                           T-1121-04

                                                       ELMER JOHN TROTTER

                                                                                                                                            Applicant

                                                                           and

                                             ATTORNEY GENERAL OF CANADA

                                                                                                                                        Respondent

                                                                                                                                             T-468-04

                                                        NORMAN LESLIE REID

                                                                                                                                            Applicant

                                                                           and

                                             ATTORNEY GENERAL OF CANADA

                                                                                                                                        Respondent

                                                        REASONS FOR ORDER

STRAYER D.J.

INTRODUCTION

[1]                These are applications for judicial review of two decisions of the Veterans Review and Appeal Board (the Board) in which the Board refused to reconsider its conclusions on previous Entitlement Appeals. The matter in issue is entitlement of two former Royal Canadian Air Force members to compensation for time spent as a prisoner of war or in evading capture in enemy or enemy-controlled territory. The matter in dispute is as to whether they are entitled to such compensation only as of the date of their applications for it or, as they claim, retroactively to April 1, 1976, which was the date of coming into force of legislation first providing for such compensation.

FACTS

[2]                The applicant Norman Reid was serving as an aircrew member on an RCAF mission over Romania on May 7, 1944, when his plane was shot down and he landed in Serbia. He evaded capture in enemy territory for a total of 98 days and then rejoined allied forces in Italy.

[3]                Elmer John Trotter served in the RCAF in the United Kingdom, flying on Lancaster Bombers as a Special Duties Pilot and as a Pathfinder. On his 44^th mission, he was shot down over Germany and was captured. He spent 268 days as a prisoner of war. During that time, he was extensively interrogated. He was twice accused of being a spy and was placed before a firing squad, but not executed.

[4]                For many years after the Second World War there was no program for compensating prisoners of war other than those who had been prisoners of the Japanese. In 1976, Parliament enacted the Compensation for Former Prisoners of War Act, S.C. 1976, c. 95. That Act provided for payment of compensation to those who were prisoners of war of enemy powers other than Japan during the Second World War. Section 3 of the Act said:

3. A prisoner of war of another power is entitled, on application to the Commission, to compensation payable under Schedule A...

There was no specific mention as to the date from which compensation would be calculated. In 1978, Parliament amended this Act by S.C. 1978, c. 11, to provide similar compensation for "evaders" defined as members of the Canadian or Newfoundland Forces who entered or landed in enemy territory and evaded capture. Both the 1976 Act and the 1978 amendment had a coming into force provision deeming them to have come into force on April 1, 1976. It is common ground that, as long as these Acts contained the provisions for compensation for prisoners of war and evaders, the compensation in the form of a monthly allowance was paid by the Canadian Pension Commission effective April 1, 1976, regardless of when application was made by a prisoner or an evader.

[5]                This situation obtained until 1987 when these Acts were replaced by amendments to the Pension Act, R.S.C. 1985, c. 37. Amending Act, S.C. 1987, c. 45 provided for a continuing compensation scheme for prisoners of war and evaders payable as a pension. It was nevertheless still described as "compensation". The definition of "prisoner of war" was expanded to include evaders. The new subsection 71.2(4) added to the Pension Act provides as follows:

[6]                It was the view of the Board, and is maintained by the respondent, that this provision had the effect of making applicable to compensation for prisoners of war section 39 of Part III of the Pension Act. The relevant part of that section reads as follows:

39. (1) A pension awarded for disability shall be made payable from the later of

(a) the day on which application therefor was first made, and

(b) a day three years prior to the day on which the pension was awarded to the pensioner.

39. (1) Le paiement d'une pension accordée pour invalidité prend effet à partir de celle des dates suivantes qui est postérieure à l'autre :

a) la date à laquelle une demande à cette fin a été présentée en premier lieu;

b) une date précédant de trois ans la date à laquelle la pension a été accordée au pensionné.

[7]                Mr. Trotter had never been informed of the original 1976 Act although he was in communication with the Department that year in respect of another matter, some six months after the enactment of the Compensation for Former Prisoners of War Act. When he finally learned that compensation was available he applied in 1991 for it. He was awarded pension benefits effective April 9, 1991, which was the date of his application under the Pension Act. The Department of Veterans Affairs took the position that by section 39 of the Pension Act compensation was, after the amendment to the Pension Act in 1987, payable only commencing with the day of the application. Mr. Trotter took several appeals resulting in the decision of the Board which is the subject of this judicial review. The Board upheld the position of the Department of Veterans Affairs.

[8]                Mr. Reid never received any notice from the Department of Veterans Affairs that he was eligible for compensation as an evader. He happened to learn of it in the fall of 1999 from another ex-service man. He contacted the Department of Veterans Affairs and applied for compensation on November 23, 1999. Eventually, he was allowed benefits commencing November 18, 1999. He appealed the decision to limit his benefits to commencement only on the day of his application in 1999. His appeals were dismissed ending with the decision of the Board which is the subject of this judicial review.

[9]                In both cases, it was argued before the Board on behalf of the appellants that the timing for commencement of benefits prescribed by section 39 of the Pension Act should not be applied to compensation for prisoners of war and evaders. It was argued that by the Compensation for Former Prisoners of War Act and its amendments, compensation was made payable in monthly instalments commencing on April 1, 1976. It was argued that there was no clear intent stated by Parliament in 1987, when it consolidated prisoners of war compensation with pensions, that those who were up until that time entitled to the former effective April 1, 1976, once they applied for it, were no longer to be so entitled even though they had not applied before 1987 because they had never been told about the availability of such benefits. There being no express intention by Parliament to that effect, and subsection 71.2(4) of the Pensions Act being at best ambiguous, the principles of statutory interpretation should prevail. In particular provisions of the Interpretation Act, R.S.C. 1985, c. I-21, were relied upon as follows:

[10]            The Board rejected these arguments and found that section 39 of the Pension Act precluded the payment of compensation to these appellants effective at any time prior to their applications for compensation.

[11]            The applicants herein assert that the Board erred in law in deciding as it did. In essence, it is argued for the applicants that they had a vested right to compensation payable by instalment as of April 1, 1976, to which they are entitled regardless of when they made application.

ISSUES

[12]            It appears to me that the essential issues raised by this appeal are:

(1)         Did the 1976 Act, as amended in 1987, entitle applicants who otherwise met the definitions of prisoner of war or evader, to periodic payments commencing April 1, 1976 regardless of when they applied?

(2)         If the answer to (1) is "yes", then did Parliament intend, through the 1987 amendments to the Pension Act, to terminate that entitlement for future applicants and limit it to the period following a successful application?

STANDARD OF REVIEW

[13]            The essential issue here is the interpretation of statutes. I am satisfied that the standard is one of correctness as I can see no element of fact at issue and no question which is within the particular expertise of the Board.

ANALYSIS

[14]            The history of this matter suggests to me that most if not all members of Parliament participating in the enactment of the 1987 amendment to the Pension Act would have been most surprised and, I suspect, seriously concerned, if they had been told that persons in the position of the applicants in this case, if they had a chance to learn of their entitlement, would be precluded in future from receiving benefits retroactive to April 1, 1976, which they would have received had they applied prior to the 1987 Act.

[15]            The history of the passage of the 1976 Act indicates rather clearly that, in the House of Commons, one of the principal concerns by members on both sides of the House was as to the date from which former prisoners of war could start collecting monthly compensation. The Bill as originally presented provided for it to come into force on proclamation. A question was put to the sponsoring Minister as to what would be the effective date of the payments. The Minister replied "It would be hard for me to say for sure, but I suggest that the effective date for payments will be when the legislation comes into effect" (Commons Debates February 26, 1976 at 11277). There continued to be concern about this during debate and when the Bill went to Committee only one amendment was made there, to the effect that the Bill would be deemed to have come into effect on April 1, 1976, although it was not enacted until several weeks after that (see Commons Debates Hansard, April 2, 1976, at 12414). A perusal of the Committee debates indicates that it was the concern of the Committee that entitlement to payment should be effective retroactively to a date prior to actual enactment.

[16]            Similarly, when the 1978 amendments were made to extend compensation to evaders, an identical clause was inserted into the Bill to make it effective as of April 1, 1976. There would have been no point in having a coming into force date prior to the giving of Royal Assent to these Bills if the intention were not to make the compensation payable as of April 1, 1976. Section 3 of the Compensation for Former Prisoners of War Act provided, as quoted above, that compensation was payable "on application to the Commission". The sense of those words was intended to mean that no legal entitlement to compensation arose prior to an application being made. As no application could be made prior to Royal Assent to the Bill, there was no point in making the Bill come into effect some weeks prior to when an application could be made unless it was the intent of Parliament that they were conferring monthly compensation on former prisoners of war payable effective April 1, 1976, subject only to a proper application being made and accepted as proof of entitlement to that compensation. There being no indications to the contrary in these Acts, I must assume in the total context that such was the intention.

[17]            When in 1987 the Government of the day decided to repeal the Compensation for Former Prisoners of War Act and to bring its compensation scheme within the Pension Act, the Minister expressed his pleasure "to introduce legislation to this House which would be a benefit to Canadian Veterans and their families". He stated in respect of his Bill:

Bill C-100. . . will remove deficiencies that have been revealed within the existing legislation. We want our legislation to be fair and equitable to all veterans and their families, and Bill C-100 will erase injustices that have inadvertently been allowed to exist. . . . All amendments, however, are designed to improve the existing legislation for veterans and their dependants. (Commons Debates, December 14, 1987 at 11768-9).

Nowhere in these remarks do I find a statement of intention to deny former prisoners of war and evaders who had not yet applied for compensation the equivalent of some 11 years of possible benefits. I think one must therefore view with some caution the position taken by the Attorney General of Canada that such was the purpose of the 1987 amendments and, in particular, the application of subsection 39(1) of the Pension Act to the payment of compensation to former prisoners of war or evaders.

[18]            I wish to emphasize that the language of section 39(1) was not adopted as such in respect of prisoners of war and evaders compensation. It will be noted that subsection 39(1), limiting as it does payments to the date of application, by its terms applies to "a pension awarded for disability". In my view, compensation for prisoners of war is not "a pension awarded for disability". Even in the provisions adopted in 1987 by way of amendments to the Pension Act specifically applying to these persons, the new subsection 71.2(1) provides that "a prisoner of war is entitled, on application, to basic compensation." Such was the language of the 1976 Act which also said that: "a prisoner of war. . . is entitled on application to the Commission, to compensation. . . ." As I have noted, the circumstances of the passage of the 1976 Act and the provisions for a retroactive coming into force indicate that what was intended was that compensation be effective as of April 1, 1976. This was said to be payable "on application", as does subsection 71.2(1) of the Pension Act. In the context of the 1976 Act that expression "on application" made an authenticated application a condition precedent to receiving compensation, but the date of the application did not define the amount of compensation. Not only was that, I suggest, the intention of Parliament but it was the manner in which that Act was administered throughout its existence. It is true that subsection 71.2(1) which states the entitlement to compensation commences with the words "subject to subsection (4)...". Subsection (4), quoted supra, does make section 39 generally applicable to compensation for former prisoners of war. However, it is applicable "with any modifications that the circumstances require." In my view, circumstances require a different approach in the matter of entitlement to compensation for former prisoners of war and evaders.

[19]            Subsection 39(1) refers to "a pension awarded for disability...". It is apparent that a pension for disability and compensation for the fact of having been a prisoner of war or an evader during the Second World War are two distinct matters. A disability, while it must have its origin in the war, may have been obvious and diagnosed during or at the end of the War and may have been of a continuing nature. But sometimes the effects of war time service are not felt or diagnosed until years after the war. Disabilities come in varying degrees and may change over time. All of these matters require assessments through applications and in some cases, disability may not be perceived or proven for years after the war or may vary in severity over a period of time. On the other hand, payment to former prisoners of war or evaders has throughout been described as "compensation" and the criteria solely depend on certain demonstrable historical facts occurring during the war. The fact that the compensation is payable on a monthly basis may have been thought to be of a more lasting benefit to those entitled. If compensation had been payable in a lump sum it would be surprising indeed if entitlement were dependent on the date of application for it, even though it would not be payable until application was made.

[20]            I believe that by the general cross-reference in subsection 71.2(4) of the Pension Act to most sections of Part III of that Act, making them applicable to compensation, Parliament cannot be taken to have made a specific decision to reduce the compensation payable to former prisoners of war or evaders who happened not to have applied before because they did not know they were entitled to compensation. It would have been legally, if perhaps not politically, easy to so provide in the amendments if that was intended. In the circumstances, subsection 39(1) must be taken as inappropriate in reference to prisoners compensation and the qualification in section 71.2(4) of the applicability of Part III "with any modifications that the circumstances require" to prisoners' compensation must be taken to mean that subsection 39(1) is not applicable.

[21]            The language of subsection 71.2(4) being, at best, ambiguous I believe my conclusion is reinforced by paragraph 43(c) of the Interpretation Act, quoted above. That is I believe there was a right or privilege accrued to these applicants once the 1976 and 1978 legislation was passed. That was a right to apply for compensation which would have been payable on a periodic basis effective April 1, 1976. Of course, the success of an application would have depended on establishing the facts which these applicants have since done. I rely here on the decision of the Federal Court of Appeal in Esso Resources Canada Ltd. v. Canada, [1990] F.C.J. No. 340, where paragraph 43(c) of the Interpretation Act was applied. In that case, an oil producer had paid excise tax on certain natural gas liquids during the years 1983 to 1985. It was entitled by statute to apply for a refund of the tax in respect of a portion of these liquids ultimately used for tax-exempt purposes. Before it had taken any steps to apply for a refund, the statutory provisions under which the tax was payable, and which also provided for the refund of tax paid on exempt liquids, was repealed. The producers sought a refund of the taxes and was told that the refund provisions had been abolished with the tax. It was held by a Trial Judge and by the Federal Court of Appeal that the producers had an acquired right, namely the right to apply for a refund before the Act was repealed and therefore the repeal should not be construed to have affected that accrued right to apply for a refund. In the Trotter appeal before the Board this case was relied on by the applicants. The Board distinguished it by saying that the Federal Court of Appeal upheld Esso's entitlement because it "had taken legal action necessary to claim their refund. . . . 'well before the repealing legislation was enacted'". (Applicant's Record, p. 159). With respect, I can find no such indication in the decision of the Federal Court of Appeal. It observed that after the repeal of the refund law "it remained for the Minister to receive an application and to grant the refund" but that was held not to preclude Esso's entitlement to the refund. (p. 5). In the present case, I believe that Mr. Trotter and Mr. Reid had acquired a right to apply for compensation effective April 1, 1976, and section 71.2(4) and section 39 of the Pension Act should not be construed to abolish that right in the absence of clear language to that effect.

[22]            For similar reasons, I believe that the provisions of paragraph 44(f) of the Interpretation Act, quoted above, support this interpretation of the current Pension Act provisions. When the 1987 amendments were made to the Pension Act in respect of former prisoners of war or evaders, there is nothing to suggest that a provision such as subsection 71.2(4) of the Pension Act was to operate as new law. It is not necessary to so interpret the very general adoption by reference of section 39 of the Pension Act to prisoners compensation so as to repeal a former entitlement to 11 years of benefits by persons in the position of the applicants in this case. Parliament was assured that any change in substance was to be for the better and not for the worst. I therefore do not consider that section 71.2(4) should be taken to operate as new law in this respect.

[23]            Counsel for the respondent cited two decisions of this Court where retroactivity of benefits had been limited: Cadotte v. Canada [2003] F.C.J. No. 1513; and Sangster v. Canada [2002] F.C.J. No. 117. In my view these cases are clearly distinguishable. They both involved disability pensions whose coming into effect is governed by subsection 39(1) of the Pensions Act. For reasons which I have stated, I have concluded that prisoner of war compensation is distinguishable in this respect and that subsection 39(1) is not made applicable to such compensation by the general incorporation by reference of section 39 in subsection 71.2(4).

[24]            Counsel for the respondent also advised the Court that these applicants had each received certain ex gratia payments in recognition that they had lost the opportunity to apply for benefits in respect of the period prior to 1987. This is a matter beyond my jurisdiction: the real issue before me has been legal entitlement for benefits in the period 1976-87.

DISPOSITION

[25]            The applications for judicial review will therefore be granted, the decision of the Veterans Review and Appeal Board set aside and the matter referred back to the Board for reconsideration in accordance with these reasons.

                                                                                                                                 (s) "B.L. Strayer"          

Judge

                                                 FEDERAL COURT OF CANADA

                            NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKETN:                                        T-1121-04 - T-468-04

STYLE OF CAUSE:               ELMER JOHN TROTTER v. A.G. OF CANADA

NORMAN LESLIE REID v. A.G. OF CANADA

PLACE OF HEARING:                     Vancouver, British Columbia

DATE OF HEARING:                       February 23, 2005

REASONS FOR ORDER:                Strayer D.J.

DATED:                                              April 1, 2005

APPEARANCES:

Mr. Paul J. Pearlman, Q.C.                                                                           FOR THE APPLICANTS

Mr. Ward Bansley                                                                                      FOR THE RESPONDENT

SOLICITORS OF RECORD:

Fuller, Pearlman, McNeil

Victoria, British Columbia                                                                             FOR THE APPLICANTS

Mr. John H. Sims, Q.C.

Deputy Attorney General of Canada

Ottawa, Ontario                                                                                          FOR THE RESPONDENT