STATEMENT BY: H. Clifford Chadderton, Chairman, National Council of Veteran Associations

November 3, 2000 - The National Council of Veteran Associations supports the decision of the Government of Canada to appeal the ruling of Justice Brockenshire approving a class action which would require payment of interest on funds held in trust by Veterans Affairs Canada and managed on behalf of institutionalized veterans who were of diminished capacity.

The major points in respect of our support of this appeal follow:

• My colleagues in the National Council of Veteran Associations opposed this class action on the grounds that, in most cases, the beneficiaries would not be members of the veterans immediate family. The Pension Act provides payments only for disabled veterans and their family dependents.
• The Crown's appeal may be based on a precedent case of Ian Callie, now deceased. The claim for interest on funds administered on behalf of Callie was denied by the Federal Court in 1991. The negative decision was based on the principle of "set-off" in that such veterans received full hospital treatment and full pension benefits.
• The Callie decision stated that the action should be dismissed. Justice J. Joyal stated: the Government does not owe the plaintiff a fiduciary duty in a private law sense of that term. The "political trust" cases demonstrate that a mere statutory direction to officers of the Crown to administer a sum of money for the benefit of designated persons does not necessarily imply the existence of fiduciary relationship between the two parties.
• Justice Joyal stated: the Pension Act establishes a comprehensive statutory benefit scheme, which provides for the payment of pensions and allowances. The purpose of the Act is not to set up a trust fund for pensioners, but to confer benefits on members of the Canadian Forces who have given military service to Canada.
• The "set-off" principle is based on the premise that funds administered for a hospitalized veteran do not represent a normal trust arrangement. In lieu of paying interest, hospital officials provided many services to these severely disabled veterans above and beyond the provisions of the Pension Act and other legislation.
• The National Council of Veterans considered it had a responsibility to inform the public that the class action was beyond the intention of the Pension Act. Moreover, if approved, it would mean that payments, sometimes as large as $500,000 could be made to distant relatives or extended family members. In fact, one of the lawyers told the court that "we don't necessarily want the money to go to a 57th cousin, but if that's what the law says, that's where it will go."
• Veterans organizations should not be blamed for attempting to throw some light on the situation. Rather than put the taxpayer in a position of having to fork over $1.5 billion, mostly to distant relatives (many of whom never even bothered to visit the disabled, leaving the visiting to veterans organizations), we are obligated to oppose the class action.
• Presumably, the settlements - - said to amount to some $1.5 billion - - would be of little or no financial benefit to the disabled veteran.
• The Government, however, is unable to find monies for hospital beds, Merchant Seamen who served in dangerous waters, Ferry Command Pilots and other civilians who can establish needs directly related to their service in the war effort.
• The veterans would have to be hospitalized and in receipt of long-term medical care. Also, pension and allowances arising from his disability would have to have been administered on his behalf by Veterans Affairs staff before January 1, 1990 - - the date upon which the Department began to pay interest on such "trust" accounts.
• The point which the public and some of the media have missed is that the class action court case has no relevance to the purpose of the veterans disability pension legislation, which is to compensate for loss of ability to compete in the unskilled labour market and/or for the maintenance of his immediate dependents. The beneficiaries of the class action would probably be members of the veteran's extended family, most of whom, by definition, would not have been providing him with care - - hence his funds had to be administered by DVA.
• The average age of World War I veterans exceeds 100 years, while World War II veterans are in their 80's. They received full pensions, allowances and medical treatment at a cost of about $4,000 a month. If they were institutionalized after January 1, 1990, interest would be credited to their accounts. The 38-member associations of the National Council had screened their files and had been unable to find one member who is in need and would benefit.
• It seems that the payment of interest on such "trust" accounts would result in considerable valid criticism from the public when the facts are known. Moreover, in the judgement itself, Justice Brockenshire has, in my opinion, laid the groundwork for an appeal.
• Justice Brockenshire in his judgement contemplated that his decision might indeed be appealed to the Ontario Court of Appeal due to the fact that he was asserting certain legal conclusions which could be judicially reviewed or reconsidered by the higher court. It is to be noted in the "Postscript" to his Judgement at page 29, Judge Brockenshire states as follows:

  "I would expect that this decision will be carefully reviewed by the government and may well be the subject of an appellate review. If it is not overturned by an Appellate Court or rendered of no force and effect by special federal legislation specifically passed, notwithstanding the Bill of Rights, the question of damage claims and further steps in the action will have to be addressed in a case conference..."

• In analysing Justice Brockenshire's observations relevant to the Canadian Bill of Rights which he finds applicable to this case, it is the considered view of many legal counsel that the court has strained the significance of the Canadian Bill of Rights beyond its Parliamentary intention in providing remedial assistance in the Authorson class action.
• It is also of significance that Justice Brockenshire rejected the application of the Canadian Charter of Rights and Freedoms on the well known basis that the Charter does not contemplate the protection of "rights of property." It is my understanding within the legal community that the employment of the Canadian Bill of Rights and the inapplicability of the Canadian Charter of Rights and Freedoms is a potential ground for appeal which the Government may exercise in relation to this case at bar.
• Justice Brockenshire in his "Postscript" anticipates that the Government may well appeal the Judgement and that the Ontario Court of Appeal may not agree with his conclusions in this context.
• The Department of Justice counsel has submitted that the potential for "special federal legislation specifically passed notwithstanding the Bill of Rights" may provide another form of Government response to this particular judgement.