December 21, 2001 

The Honourable Ron J. Duhamel, P.C., M.P.
Minister of Veterans Affairs
House of Commons
Ottawa ON K1A 0A6

SUBJECT: Class action/Interest on trust accounts 

Dear Minister:

This has further reference to my letter to you of April 20, 2001.

Yesterday, my Communications section and I had a bit of alarm when I was contacted, in the first place, by one of the lawyers for the class action, who gave me to understand that the Ontario Court of Appeal had given its approval in regard to the judgment of the lower Court. This would have, presumably, required the Federal Government to pay interest on veterans' trust accounts back to the end of World War I.

Within minutes of the call from the class action lawyer, I began to receive media enquiries. Eventually I was able to convince the media that our press release was incorrect, and that the media report (which apparently first appeared in the Toronto Sun) dealt only with a decision of Mr. Justice Brockenshire, who has continued to deal with various motions, irrespective of the fact that the decisions of the Appellate Court in regard to the motions with which Mr. Justice Brockenshire has continued to deal would, in my opinion, be moot if the Court of Appeal holds that the original decision of the lower Court is invalid.

Possibly the only real advantage which has accrued to me in regard to this latest media story has been the opportunity to sample the views of the media.

I have stated, from the outset, that this is a "no win" situation for the Government.

Should the Court of Appeal uphold the lower Court's decision, the media is still likely to take what it considers to be the side of the veteran. As a consequence, the media stories will indicate that the Government has wronged the veteran.

Contrariwise, should the Court of Appeal nullify the decision of the lower Court, I sincerely believe that we can still expect that the media will treat the story as one in which "big government" has deprived the veteran of monies due to him.

As you are no doubt aware, we did make application as an intervenor. Although this was not granted, it did give us an opportunity to file affidavit evidence which the Chief Justice of Ontario read, and to which he gave a favourable response. We were denied intervenor status, but the Court held that we were not liable for costs.

The situation, therefore, appears to be one in which the Government might well be criticized for its handling of veterans' trust accounts, irrespective of any decision from the Ontario Court of Appeal.

Having studied this matter at great length, I came to the conclusion more than six months ago that there certainly are some cases involving veterans' trust accounts where retroactivity beyond the existing January 1, 1990 deadline in the Act could be justified.

Therefore, as I had suggested in my letter to you of April 20, there seems to be ample justification for the Department to take some action in this matter without waiting for, and without regard to, the expected decision of the Ontario Court of Appeal.

It is the proposal of NCVA that, without waiting for any further court decisions, the Department should commence looking at the files where there were (or are) considerable amounts of money which were held by the Government prior to January 1, 1990, but on which the Government should pay interest retroactively.

In my view, should your Government establish some type of review procedure, presumably based on the information on file, and set a new deadline back, for example, to January 1, 1980 and, with the establishment of such procedure, I feel relatively certain that the media would take the attitude that the Government was accepting some responsibility.

In my view, notwithstanding any decision of the Court, there are three issues which the Department will have to face.

The first of these is the matter of payment to living veterans. There should be no room for argument here, and the Department should be able to come to a decision based on the file.

The second type of case is where the veteran has died, and there is a spouse (in the meaning of the Pension Act) still alive. Such spouse might be considered eligible for interest retroactively to any new date, such as January 1, 1980.

The third category is much more complex. There is certainly evidence where the children (as defined by the Pension Act) have continued to assist in the care of a veteran who is alive, or can adduce proof that he or she took an interest in the affairs of the hospitalized, mentally incompetent veteran. This could create a third category of beneficiary, but it also leads to another rather complicated situation where the veteran may have declared a beneficiary in a will other than his spouse or what I would term his "principal dependant." This is precisely why the suggestion I am placing before you is one of administrative review.

In order to provide guidance in regard to the third category, it is obvious that some guidelines would have to be set out, and it seems to be common sense that the Department commence looking at this entire question of review and, in particular, the eligibility, if any, of persons beyond the definition of a spouse.

There may be good and sufficient reasons why the Department does not wish to deal with this proposal at this time. It would certainly be my experience, however, that the Department should avoid unwarranted criticism such as that which, in my view, would appear in the media, if and when the Appellate Court decision comes down.

Another advantage in the Government taking into consideration what might be considered as a reasonable date for retroactivity would be solved, even though the class action lawyers, should they win, would insist that any person who could establish reasonable grounds as a relative might possibly attempt to go back the year 1917.

Insofar as I am concerned (and as I have said from the start), the Department certainly has a responsibility to act in such a manner, as the taxpayer would be held liable for any large amount of money which would presumably be available and which would be beyond the scope and/or the intent and purpose of the Pension Act as we know it.

Yours sincerely,

H. Clifford Chadderton, CC, O.Ont., OStJ, CLJ, CAE, DCL, LLD
Chairman