Date: 20011218
Docket: T-590-00
Neutral citation: 2001 FCT 1399
BETWEEN:
CANADIAN HUMAN RIGHTS COMMISSION
Applicant
- and -
ATTORNEY GENERAL OF CANADA
Respondent
- and -
ROBERT CARTER
Respondent
[1] Before me are an application and cross-application for judicial review, pursuant to section 18.1 of the Federal Court Act, R.S.C. 1985, c. F-7, brought by the applicant/cross-respondent, the Canadian Human Rights Commission ("the Commission") and the respondent/cross-applicant, the Attorney General of Canada ("the Attorney General"). By order of Prothonotary Aronovitch dated June 26, 2000, the two applications were consolidated.
[2] The application and cross-application for judicial review are brought in respect of a decision of a Canadian Human Rights Tribunal ("the Tribunal") dated March 2, 1999 and revised on June 13, 2000, in which the Tribunal awarded the respondent Robert Carter ("Mr. Carter") compensation for lost wages in the sum of $15,770.
[3] The Commission's application for judicial review raises the issue of whether the Tribunal correctly held that the proper compensation period was from May 27, 1992 to September 2, 1992. The Attorney General's application for judicial review challenges the Tribunal's calculation of the compensation awarded to Mr. Carter, as well as the award of interest.
RELEVANT FACTS
[4] Mr. Carter was born on June 27, 1941 and joined the Canadian Armed Forces ("the CAF") on January 11, 1960. On October 2, 1968, he signed a Certificate of Election in which he elected to have his retirement age determined in accordance with section 15.31 of the Queen's Regulations and Orders for the Canadian Forces, issued under the authority of the National Defence Act, R.S.C. 1985, c. N-5 ("the Queen's Regulations"). Pursuant to the Queen's Regulations, the compulsory retirement age for Mr. Carter's occupation and rank was 50 years old.
[5] Mr. Carter was released from the CAF on May 27, 1992, having reached the compulsory retirement age. At the time of his release, Mr. Carter had attained the rank of Master Corporal and was employed as a Physical Education and Recreation Instructor at CFB Kingston.
[6] On his release from the CAF on May 27, 1992, Mr. Carter received severance pay in the amount of $21,014.00 and immediately began receiving a pension under the Canadian Forces Superannuation Act, R.S.C. 1985, c. C-17, in the amount of $20,989.00 per year. Between May 27, 1992 and September 2, 1992, Mr. Carter received $5,521.00 by way of pension.
[7] On August 14, 1992, a Canadian Human Rights Tribunal ruled in the case of Martin et al. v. Canadian Armed Forces (1992), 17 C.H.R.R. D/435 (C.H.R.T.) that sections 15.17 and 15.31 of the Queen's Regulations, which prescribed compulsory retirement ages for members of the CAF, did not constitute regulations for the purposes of paragraph 15(1)(b) of the Canadian Human Rights Act, R.S.C. 1985, c. H-6 ("the CHRA") as they did not specifically state that they were passed for the purposes of paragraph 15(1)(b), which reads as follows:
| 15. (1) It is not a discriminatory practice if
(b) employment of an individual is refused or terminated because that individual has not reached the minimum age, or has reached the maximum age, that applies to that employment by law or under regulations, which may be made by the Governor in Council for the purposes of this paragraph;
|
|
15. (1) Ne constituent pas des actes discriminatoires :
b) le fait de refuser ou de cesser d'employer un individu qui n'a pas atteint l'âge minimal ou qui a atteint l'âge maximal prévu, dans l'un ou dans l'autre cas, pour l'emploi en question par la loi ou les règlements que peut prendre le gouverneur en conseil pour l'application du présent alinéa; |
|
|
|
|
[8] On September 3, 1992, as a direct consequence of the tribunal's ruling in the Martin, supra decision, the Queen's Regulations prescribing a mandatory retirement age were amended to refer specifically to paragraph 15(1)(b) of the CHRA. Subsection 15.31(12) of the Queen's Regulations was made to read as follows:
| (12) This article is a regulation made for the purposes of paragraph 15(b) of the Canadian Human Rights Act. |
|
(12) Cet article est un règlement pris pour l'application de l'alinéa 15b) de la Loi canadienne sur les droits de la personne |
|
|
|
|
.
The amendment came into force on September 3, 1992.
[9] On August 25, 1993, Mr. Carter filed a complaint with the Commission against the CAF alleging discrimination on the ground of age. In his complaint, Mr. Carter alleged that on May 27, 1992, the CAF was engaging or had engaged in a discriminatory practice on the ground of age, in contravention of the CHRA. More specifically, Mr. Carter argued that the CAF discriminated against him by refusing to continue to employ him because of his age, contrary to section 7 of the CHRA.
[10] By letter dated March 17, 1994, the Commission informed the CAF of its decision to stand down Mr. Carter's complaint pending the final outcome in Martin, supra[1]. By letter dated March 17, 1999, the Commission informed the CAF of its decision to refer Mr. Carter's complaint to the Tribunal for inquiry.
The Tribunal's Decision
[11] The Tribunal's decision was rendered on March 2, 2000; however, a revised decision was released on June 13, 2000. The revised decision addressed errors in calculation only, the Tribunal's reasons remaining unchanged.
[12] Before the Tribunal, at the outset, the CAF acknowledged a prima facie case of discrimination against Mr. Carter based on the decision of the tribunal in Martin, supra, and admitted liability in that respect.
[13] Therefore, the issues before the Tribunal were limited to an assessment of Mr. Carter's damages for lost wages and the appropriate amount of compensation to which he was entitled under the CHRA. The three issues for determination by the Tribunal were the appropriate period of time for which compensation should be awarded, the calculation of damages for lost wages, and the appropriate period of interest.
[14] With respect to the issue of the compensation period, the Tribunal was of the view that the proper compensation period in the present case was that which started on May 27, 1992 and ended on September 2, 1992. In its decision, the Tribunal stated the following:
It is the view of this Tribunal that the fact that the respondent, by amending its Queen's Regulations, brought them in line with the requirement of s. 15(1)(b) of the CHRA, must be taken into consideration in the present case. The purpose of compensation is not to punish but to put the aggrieved party in the same position that it would have been in had it not been for the discriminatory practice.
The Tribunal espouses here the Respondent's view that, when the amendment to the Queen's Regulations came into force on September 3, 1992, this put an end to the discriminatory practice. There was no longer a causal or direct connection between the discriminatory practice and the compensation being sought by the complainant beyond that date. When a discriminatory practice ends, this fact should be taken into consideration in determining the period of compensation for which a person can claim damages for lost wages.
In the present case, the amendment made to the Queen's Regulations on September 3, 1992 constitutes an intervening factor which must be taken into consideration in assessing compensation for lost wages. The fact that the Respondent complied with the law should not have a neutral effect. It constitutes a novus actus which severs the link between the discriminatory practice and the damages the complainant claims for lost wages.
[15] As to the second issue, the calculation of damages for lost wages, the Tribunal assessed Mr. Carter's damages for the period extending from May 27, 1992 to September 2, 1992 and concluded that he was entitled to a sum of $15,770. With respect to the severance pay and pension income received by Mr. Carter during the compensation period, the Tribunal was of the opinion that those amounts should not be deducted from the award of damages, for the following reason:
In Cranston, the Tribunal came to the conclusion that pension income and severance pay should not be considered as earned income which can be set-off against the wages that would have been earned by the complainants. It applied the insurance exception. This Tribunal feels that there is no compelling reason to depart from this rule. [footnote omitted]
[16] With regard to the third issue, interest, the Tribunal concluded that the interest would cover the period running from May 27, 1992 up to February 11, 2000 and that the Canada Saving Bonds rate would be used.
ISSUES
[17] The first issue arises from the Commission's application for judicial review:
a) Did the Tribunal correctly hold that the proper compensation period was from May 27, 1992 to September 2, 1992?
[18] The other two issues are raised by the Attorney General's application for judicial review:
b) Did the Tribunal err in law in declining to take into account the pension income and severance pay received by Mr. Carter during the compensation period?
c) Did the Tribunal err in law in awarding interest from May 27, 1992 onwards on the compensation award?
SUBMISSIONS
The Commission's Submissions
Issue 1: Compensation period
[19] The Commission first submits that the Tribunal erred in law by finding that the amendment of September 3, 1992 to the Queen's Regulations applied to a discriminatory practice which occurred on May 27, 1992.
[20] The Commission contends that Mr. Carter's entitlement to compensation crystallized on the date of his discriminatory compulsory retirement on May 27, 1992, and that he had a vested right not only to bring a claim for damages in respect of that discriminatory practice, but also to receive compensation for a reasonable period of time for those damages which resulted directly from the discriminatory practice.
[21] The Commission contends that in the field of civil liability, the victim's rights are crystallized at the moment of the wrongdoing, and no subsequent statute can either reduce or extend them. The Commission also claims that a new enactment is not applied so as to determine the effects of facts accomplished prior to its commencement otherwise there would be positive retroactivity.
[22] Furthermore, the Commission submits that it is trite law that a statute should not be given a construction that would impair existing rights. The Commission contends that in the absence of evidence of a contrary intent, Courts do not apply new enactments in a manner that would interfere with vested rights, and that a vested right is a claim or interest that cannot be defeated without causing a grave injustice.
[23] The Commission also submits that the Tribunal erred by finding that the amendment of the Queen's Regulations on September 3, 1992, constituted an intervening factor which severed the link between the discriminatory compulsory retirement of Mr. Carter and his claim for loss of wages. The Commission argues that damages which are recoverable as a result of the discriminatory act are those which are a direct result of the act source of liability and which are reasonably foreseeable, in view of all the intervening facts (Canada (Attorney General) v. Morgan, [1992] 2 F.C. 401 (C.A.) at 414 and 416).
[24] The Commission contends that articles 15.17 and 15.31 of the Queen's Regulations were amended to nullify the Martin, supra decision and insure that future compulsory retirements would be insulated from the application of the CHRA. The Commission argues that the amendment cannot be said to have broken the chain of causation of damages stemming from an act taken under the Queen's Regulations before they were amended. Consequently, the Commission submits that the amendment is utterly irrelevant to the issue of what damages were the direct consequences of Mr. Carter's discriminatory compulsory retirement.
Issue 2: Pension income and severance pay
[25] The Commission submits that the Tribunal was correct in excluding the pension income and severance pay received by Mr. Carter from its calculation of the award for compensation.
[26] The Commission contends that the correct manner by which damages are assessed under human rights proceedings is the same as found in tort law (Canada (Attorney General) v. Morgan, [1992] 2 F.C. 401 at 414). The Commission argues that the insurance exception principle developed in tort law is relevant to the issue of assessing damages. The Commission submits that pension benefits resulting from a contributory pension plan are derived from an employee's contract of employment and are, therefore, not deductible in a calculation of loss pursuant to the application of the insurance exception (Guy v. Trizec et al., [1979] 2 S.C.R. 756 at 762).
[27] The Commission submits that in Cranston v. Canada (Department of National Defence) (1997), T.D. 1/97, the Tribunal did not treat severance pay or pension income "as earned income which can be set off against the wages that would have been earned by the Complainants" (Cranston at p. 69-70), and, in so doing, applied the insurance exception. The Commission also argues that in Martin, supra, the issue of the application of the insurance exception was not raised by the parties; therefore, the Attorney General is incorrect when he states that the Tribunal in that case "refused" to apply the insurance exception.
Issue 3: Interest
[28] The Commission agrees with the Attorney General that the Tribunal erred with respect to the appropriate period for which interest should be awarded. In that regard, the Commission submits that interest should be granted on the compensation award from the valuation date, whichever valuation date is determined to be correct, and not from May 27, 1992.
The Attorney General's Submissions
Issue 1: Compensation period
[29] The Attorney General first submits that paragraph 53(2)(c) of the CHRA empowers a tribunal to make an order compensating victims of discrimination. The Attorney General submits that the words "as a result of the discriminatory practice" in paragraph 53(2)(c) require that there be a causal relationship demonstrated between the discriminatory practice and the compensation claimed (Canada (Attorney General) v. Morgan, [1992] 2 F.C. 401 (C.A.) at 409, 414-416, 432).
[30] The Attorney General contends that with the amendment of the relevant articles of the Queen's Regulations, the discriminatory practice found by the tribunal in Martin, supra ended. Therefore, according to the Attorney General, the Tribunal correctly exercised its discretion under paragraph 53(2)(c) of the CHRA by declining to award Mr. Carter compensation beyond September 2, 1992, since as of that date, mandatory retirement from the CAF was no longer a discriminatory practice and since Mr. Carter was beyond the compulsory retirement age. The Attorney General submits that the Commission is wrong in characterizing the application of the September 3, 1992 amendment to the Queen's Regulations as a retroactive application of the law.
[31] Furthermore, the Attorney General contends that Mr. Carter does not have a vested right to two years of compensation following the discriminatory practice, but that he has a right to compensation for as long as there is a direct link between the discriminatory practice and the loss suffered. According to the Attorney General, that link ended when the Queen's Regulations were amended so as to put an end to the discriminatory practice.
Issue 2: Pension income and severance pay
[32] The Attorney General submits that the Tribunal erred in law by failing to take into account the pension income and severance pay received by Mr. Carter during the compensation period.
[33] The Attorney General points out that the goal of compensation under subsection 53(2) of the CHRA is to make whole the victim of the discriminatory practice, taking into account the principles of causality and reasonable foreseeability, and that to achieve this goal, it is commonplace to compare the victim's actual situation with what his situation would have been but for the discriminatory practice.
[34] According to the Attorney General, the Tribunal's approach of awarding Mr. Carter compensation for income, both wages and pension income, that he would have received had he stayed with the CAF until September 2, 1992 ignores the fact that Mr. Carter could not have received any pension income during the May 27, 1992 to September 2, 1992 period if he was receiving wages from the CAF. The Attorney General contends that under ss. 16-20 of the Canadian Forces Superannuation Act, a person cannot both receive a pension and accrue additional pension benefits at the same time. The Attorney General submits that by failing to deduct the pension income, the Tribunal ignored this prohibition and placed Mr. Carter in a better situation than he would have been in had he stayed in the CAF until September 2, 1992, and has given Mr. Carter both wages and pension income for the same period of time.
[35] The Attorney General argues that the Tribunal relied upon the decision in Cranston v. Canada (Department of National Defence) (1997), T.D. 1/97, 10 January 1997, in support of its ruling not to deduct Mr. Carter's pension income, but that unlike here, the tribunal in Cranston did not award any compensation for pension income lost during the compensation period and, therefore, did not run afoul of the Canadian Forces Superannuation Act.
[36] The Attorney General also argues that other human rights tribunals, including the tribunal in the Martin, supra case, have refused to apply the insurance exception and taken pension income and severance pay received during the compensation period into account (Martin, supra; Koeppel v. Canada (Department of National Defence) (1997), 32 C.H.R.R. D/107 (C.H.R.T.)).
Issue 3: Interest
[37] The Attorney General submits that the award of interest should start on the valuation date of September 2, 1992, which is the date on which the loss was calculated and is what was intended by the Tribunal. The Attorney General contends that wage losses incurred by Mr. Carter before September 2, 1992 were brought forward to that date by adding interest to the losses, and that to require CAF to pay interest on those losses on top of the interest already factored into determining their present value results in the recovery of double compensation for interest.
ANALYSIS
Issue 1: Compensation period
[38] The Tribunal's jurisdiction to assess damages for lost wages is governed by paragraph 53(2)(c) of the CHRA, which reads as follows:
| 53. (2) If at the conclusion of the inquiry the member or panel finds that the complaint is substantiated, the member or panel may, subject to section 54, make an order against the person found to be engaging or to have engaged in the discriminatory practice and include in the order any of the following terms that the member or panel considers appropriate:
(c) that the person compensate the victim for any or all of the wages that the victim was deprived of and for any expenses incurred by the victim as a result of the discriminatory practice; |
|
53. (2) À l'issue de l'instruction, le membre instructeur qui juge la plainte fondée, peut, sous réserve de l'article 54, ordonner, selon les circonstances, à la personne trouvée coupable d'un acte discriminatoire_:
c) d'indemniser la victime de la totalité, ou de la fraction des pertes de salaire et des dépenses entraînées par l'acte; |
|
|
|
|
[39] In Canada (Attorney General) v. Morgan, [1992] 2 C.F. 401 (C.A.), the Federal Court of Appeal discussed the issue of compensation in proceedings under the CHRA. Marceau J.A. made the following comments with respect to the principles applicable to the assessment of the compensation period, at pages 414-416:
This second issue relating to the amount of compensation raises three questions which concern: (a) the limitation of the compensation period; (b) the subtraction of months for the delay in filing the complaint; (c) the deduction for failure to mitigate.
(a) Reading the comments of the Chairman of the initial Tribunal and those of the Review Tribunal majority, I am afraid, I say it with respect, that there exists some confusion between the right to obtain reparation for a damage sustained and the assessment of that damage. While the particular nature of the human rights legislation - which has been said to be so basic as to be near-constitutional and in no way an extension of the law of tort (see e.g. Robichaud v. Brennan (sub nom. Robichaud v. Canada (Treasury Board), [1987] 2 S.C.R. 84, at page 89, and Bhadauria v. Board of Governors of Seneca College (sub nom. Seneca College of Applied Arts and Technology v. Bhadauria), [1981] 2 S.C.R. 181) - renders unjustifiable the importation of the limitations to the right to obtain compensation applicable in tort law, the assessment of the damages recoverable by a victim cannot be governed by different rules. In both fields, the goal is exactly the same: make the victim whole for the damage caused by the act source of liability. Any other goal would simply lead to an unjust enrichment and a parallel unjust impoverishment. The principles developed by the courts to achieve that goal in dealing with tort liability are therefore necessarily applicable. It is well known that one of those principles has been to exclude from the damages recoverable the consequences of the act that were only indirect or too remote. In my view, the minority member was perfectly right in writing (at pages D/74-D/75):
If reinstatement is purely discretionary and compensation is less so then it seems to me certain well-known accepted principles of compensatory damages should guide the Tribunal in assessing or quantifying the financial loss. These principles are quoted with approval by the Review Tribunal in the Foreman (Can. Rev. Trib.) case, supra, [Foreman v. Via Rail Canada Inc. (1980), 1 C.H.R.R. D/233] as follows at para. 7716 [D/869 of Torres, supra]:
In our view the use of the language of "compensation" by the Canadian Act implies that tribunals are to apply the principles applied by courts when awarding compensatory damages in civil legislation. The root principle of the civil law of damages is "restitutio in integrum": the injured party should be put back into the position he or she would have enjoyed had the wrong not occurred, to the extent that money is capable of doing so, subject to the injured party's obligation to take reasonable steps to mitigate his or her losses. (D/238)
In a recent case, Canada (Attorney General) v. McAlpine, supra [[1989] 3 F.C. 530], the Federal Court of Appeal, on appeal from a decision of a human rights tribunal which relied on that principle in assessing damages for lost U.I.C. benefits, commented as follows at p. 538 [para. 13, D/258]:
...the proper test must also take into account remoteness of foreseeability where the action is one of contract or tort. Only such part of the loss resulting as is reasonably foreseeable is recoverable.
The Federal Court goes on to quote with approval from Professor Cumming in the Torres case, supra [Torres v. Royalty Kitchenware Ltd. (1982), 3 C.H.R.R. D/858 (Ont. Bd. Inq.)], with respect to a cut-off point in awarding general damages, and notes the rationale quoted was followed by the Review Tribunal in DeJager v. Canada (Dept. of National Defence) (No. 2), supra [(1987), 8 C.H.R.R. D/3963], at D/3966 and D/3967, and also in other decisions where human rights tribunals have accepted the doctrine of reasonable foreseeability as a necessary component in the assessment of damages.
It follows from the interpretation I have placed on the remedial provisions of the Act the duration of the compensatory period need not coincide with the reinstatement whenever it may occur. Much less that it is automatically determined by the order for reinstatement. This is the crux of the matter on which I part company with my colleagues. I would agree that if the victim of the discriminatory act were fired from a position he actually occupied and if reinstatement were to take place soon thereafter the duration of the compensatory period would logically coincide with that happening. What we have here, on the other hand is a notional A loss of a position in which the respondent was not employed when the discriminatory act occurred.
I think one should not be too concerned by the use of various concepts in order to give effect to the simple idea that common sense required that some limits be placed upon liability for the consequences flowing from an act, absent maybe bad faith. Reference is made at times to foreseeable consequences, a test more appropriate, it seems to me, in contract law. At other times, standards such as direct consequences or reasonably closely connected consequences are mentioned. The idea is always the same: exclude consequences which appear down the chain of causality but are too remote in view of all the intervening facts. Whatever be the source of liability, common sense still applies.
It has been found, I know, that the practice developed in cases of wrongful dismissal with respect to the assessment of the lost wages was not necessarily applicable to cases of job loss attributable to discriminatory treatment. Note that, in cases of wrongful dismissal, the act for which the employer is reproached is not to have put an end to the employment but to have done so without proper notice or in contravention of the terms of a contract. The nature of the act source of liability is different, therefore the consequences flowing from it ought to be different.
In my view, the initial Tribunal and the majority members of the Review Tribunal were wrong in refusing to establish a cap or cut-off point for the period of compensation, independent of the order of reinstatement. The establishment of that cut-off point was, as it is in all such cases, a difficult exercise requiring a careful analysis of the circumstances of the case. The minority member is the only one who has gone through the exercise and I think this Court, instead of ordering a new hearing, should accept his conclusion, a conclusion that had previously been reached, in similar circumstances, in the case of DeJager v. Canada (Department of National Defence) (1987), 8 C.H.R.R. D/3963 (C.H.R. Trib.).
[40] Furthermore, MacGuigan J.A., who dissented with respect to the conclusion but was of the same opinion as the majority concerning the determination of the compensation period, stated the following, at page 432:
The appropriateness of reinstatement as a remedy cannot be taken to establish the appropriateness of the total period between the discriminatory act and the reinstatement as the correct measure of the award for wages. In my opinion, the criterion which is implicit in the Act is that the damages awarded have to flow from the discriminatory practice. Paragraph 53(2)(c) provides that the person found to have engaged in the discriminatory practice "compensate the victim, as the Tribunal may consider proper, for any or all of the wages that the victim was deprived of and for any expenses incurred by the victim as a result of the discriminatory practice" [my emphasis]. In other words, there is a clear requirement of causal connection (for, as a result of) between the wages awarded and the discrimination.
[41] It is clear from these statements that the Court of Appeal was of the opinion that the compensation period would vary depending on the circumstances of the case and that the determination of the appropriate compensation period required a careful analysis of these circumstances. In addition, the Court held that a causal connection was necessary between the discriminatory act and the compensation.
[42] With respect to the Commission's argument that the compensation period established by the Tribunal constituted a retroactive application of the Queen's Regulations and thus deprived Mr. Carter of his vested right to receive compensation, I agree entirely with the Tribunal's response to this argument, found at page 12 of its decision:
By adopting this view, the Tribunal is not applying retrospectively or retroactively a law or regulation to a situation and depriving someone of a vested right, that is, the right to receive the equivalent of two years salary for lost wages. [...]
The only vested right that the complainant can invoke in the present case is the right to obtain compensation once it has been proven that he was the victim of a discriminatory practice, which is the case here. The amount of compensation the complainant is entitled to is a different matter. What is in issue here is not Mr. Carter's right to obtain compensation but the extent of the compensation he is entitled to for lost wages in view of all the circumstances of the case. [footnote omitted]
[43] In my view, the Tribunal did not apply the Queen's Regulations retroactively. The amendment is being applied to events which occurred after September 3, 1992. Although Mr. Carter did have a vested right to obtain compensation, he did not have a vested right to a specific amount of damages or to be compensated for a specific period of time.
[44] As stated by the Court of Appeal in Morgan, supra, the determination of the compensation period requires a careful analysis of the circumstances of the case. In my opinion, the Tribunal carefully reviewed the facts and circumstances of the case at bar when deciding on an appropriate compensation period. I agree with the Tribunal's conclusion that after the amendment to the Queen's Regulations on September 3, 1992, there no longer existed a causal link between the discriminatory practice and Mr. Carter's lost wages since the discriminatory practice had ended. Therefore, as there must be a causal connection between the discriminatory practice and the compensation for lost wages, no compensation was required after September 2, 1992. In my view, the fact that the amendment allowed the CAF to release Mr. Carter as of September 3, 1992, because he had reached the compulsory retirement age, was a fact which the Tribunal was entitled to consider in the assessment of Mr. Carter's lost wages.
[45] In addition, it cannot be disputed that the purpose of compensation is to put the victim of discrimination back in the position he or she would have been in had the discriminatory practice not occurred. Had the discriminatory practice not occurred on May 27, 1992, Mr. Carter would not have been released from the CAF on that date; however, there is no doubt that he would have been released on September 3, 1992, following the amendment to the Queen's Regulations. Therefore, he would not, in the circumstances, have received wages after September 2, 1992. Consequently, I see no reason why he should be compensated for wages he would never have received.
[46] In my view, therefore, the Tribunal made no reviewable error in concluding as it did with respect to the appropriate compensation period and the amount of wages lost by Mr. Carter.
Issue 2: Pension income and severance pay
[47] The Commission argues that it was decided in Morgan, supra, that damages awarded in proceedings under the CHRA should be assessed in the same manner as in tort law and that the insurance exception developed in tort law should be applied in the case at bar.
[48] The "insurance exception", according to which benefits received for loss of wages pursuant to a private insurance policy are not deductible from an award of damages, was first recognized in Bradburn v. Great Western Ry. Co., [1874-80] All E.R. Rep. 195 (Ex. Div.). This principle has been upheld by Canadian courts, and was affirmed by the Supreme Court of Canada in Canadian Pacific Ltd. v. Gill, [1973] S.C.R. 654, Trizec Equities Ltd. v. Guy, [1979] 2 S.C.R. 756, and more recently in Ratych v. Bloomer, [1990] 1 S.C.R. 940 and Cunningham v. Wheeler, [1994] 1 S.C.R. 359.
[49] The scope of the application of the insurance exception was broadened by the Supreme Court in Ratych, supra, which dealt with the deductibility of wage benefits. McLachlin J., writing for the majority of the Court, indicated that if an employee was able to demonstrate that he or she had paid for the benefits received, therefore making it similar to a private insurance, they might not be deductible. She stated the following at page 972:
I accept that if an employee can establish that he or she has suffered a loss in exchange for obtaining wages during the time he or she could not work, the employee should be compensated for that loss. Thus in Lavigne v. Doucet the New Brunswick Court of Appeal quite rightly allowed damages for loss of accumulated sick benefits. I also accept that if an employee can establish that he or she directly paid for a policy in the nature of insurance against unemployment, equivalent to a private insurance, he or she may be able to recover the benefits of that policy, although I would leave resolution of this question for another case.
[50] The application of the insurance exception was further discussed in Cunningham, supra, where the Supreme Court examined the issue as to whether the insurance exception should apply in a situation where disability benefits were obtained not privately but pursuant to a collective bargaining agreement. Cory J., writing for the majority of the Court, stated the following at pages 403-404:
The scheme in this case can qualify as an insurance exception on the basis of the reasons of the majority in Ratych v. Bloomer, supra. In that case, McLachlin J. writing for the majority specifically limited her comments to benefits which were not in the nature of insurance or gratuitous payments in these words (at p. 983):
These comments should not be taken as extending to types of collateral benefits other than lost earnings, such as insurance paid for by the plaintiff and gratuitous payments made by third parties.
To say that the exception applies only to private insurance, where actual premiums are paid to the insurance company, would create barriers that are unfair and artificial. It would mean that top management and professionals who could well afford to purchase their own insurance would have the benefit of the insurance exception, while those who made the same provision and made relatively greater financial sacrifices to provide for the disability payments through their collective bargaining agreement would be denied the benefits of the insurance exception. This would be manifestly unfair. There is no basis for such a socially regressive distinction.
Union representation and collective bargaining are recognized as a means for working people to protect their interests. The benefits for which employees have bargained in good faith should not be sacrificed simply because the mode of payment for the disability benefit is different from that in private insurance contracts. Where evidence is adduced that an employee-plaintiff has paid in some manner for his or her benefits under a collective agreement or contract of employment, the insurance exception should apply. It would be unjust to deprive employees of the benefits which, through prudence and thrift, they have provided for themselves.
[51] With respect to the deductibility of pension benefits, this issue was addressed by the Supreme Court of Canada in Canadian Pacific, supra, and Trizec, supra. In both cases, the Court accepted that pension income should not be deducted from an award of damages. In Trizec, at page 762, the Court stated the following:
I agree with the Appeal Division that the director's fees for the years 1976 and 1977 should be deducted in making provision for loss of earnings, but I am unable to share the opinion that the pension benefits should be deducted in the manner proposed because I take the view that this contributory pension is derived from the appellant's contract with his employer and that the payments made pursuant to it are akin to payments under an insurance policy. This view is in accord with the judgment of the House of Lords in Parry v. Cleaver [[1970] A.C. 1], which was expressly approved in this Court in the reasons for judgment of Mr. Justice Spence in Canadian Pacific Ltd. v. Gill [1973] S.C.R. 654] [...]
[52] The conclusions reached by the Court in both Canadian Pacific, supra and Trizec, supra were later affirmed in Ratych, supra, where McLachlin J. made the following comments at page 970:
Another 1973 decision may be noted, although it did not deal with the question of the deductibility of wage benefits. In Canadian Pacific Ltd. v. Gill, [1973] S.C.R. 654, this Court, in dealing with a fatal accidents problem expressly approved the principles set out in Parry and held that Canada Pension Plan payments should not be deducted from the plaintiff's damages.
In 1979, this Court in Guy v. Trizec Equities Ltd., [1979] 2 S.C.R. 756, again affirmed the principles enunciated in Parry and held that payments from an employer's private pension plan should not be deducted.
[53] It is therefore clear that the insurance exception applies to pension benefits, that is, that pension benefits, whether they be payments from the Canada Pension Plan or from an employer's private pension plan, will not be deducted from an award of damages against a third party tortfeasor. The rationale for exempting the proceeds of insurance or benefits in the nature of proceeds of insurance is explained by McLachlin J. in Ratych, supra, at pages 971 to 974, in the following terms:
The House of Lords in Parry v. Cleaver held that benefits in the nature of proceeds of insurance should not be deducted from a plaintiff's damages, on the principle that the plaintiff has paid for these benefits and should not be deprived of the consideration for which he has contracted. This Court has approved the principles enunciated in Parry v. Cleaver. The plaintiff argues that the contract by which his employer paid his loss of earnings during his period of disability was the equivalent of an insurance policy to which he had contributed, and therefore should not be brought into account.
One response to this submission is that given by Lord Reid in Parry v. Cleaver - the wages paid to a person while he is off work do not differ in kind from the wages paid while he is working, with the result that we never reach the question of how we treat sums he would never have received but for the accident.
But it is argued that this is unconvincing. It must be assumed, it is submitted, that if an employee receives wages when he is not working, he has given up a quid pro quo for that benefit. In some cases, the quid pro quo is explicit, as where the contract of employment provides a certain number of sick days which the employee uses up as a consequence of the accident. In other cases, the exchange is less obvious, but, it is submitted, equally real.
I accept that if an employee can establish that he or she has suffered a loss in exchange for obtaining wages during the time he or she could not work, the employee should be compensated for that loss. Thus in Lavigne v. Doucet the New Brunswick Court of Appeal quite rightly allowed damages for loss of accumulated sick benefits. I also accept that if an employee can establish that he or she directly paid for a policy in the nature of insurance against unemployment, equivalent to a private insurance, he or she may be able to recover the benefits of that policy, although I would leave resolution of this question for another case.
The difficulty in this case is that neither a loss nor a contribution equivalent to payment of an insurance policy is established in this case. The question thus is essentially this - must the plaintiff demonstrate a loss or contribution in order to recover, or is the court permitted to assume that because he was paid his earnings throughout his absence from work, he has in fact paid a quid pro quo and consequently suffered an equivalent loss?
In my view, it is inconsistent with the principles governing the recovery of damages in tort that the court should assume that because a benefit has been conferred by a third party, the plaintiff has suffered an equivalent loss. I know of no principle which could support such an assumption. The rule remains as it has always been - a plaintiff is obliged to prove his or her loss.
The situation might be otherwise if the only inference which could be drawn from the payment of wages during the period in which the plaintiff is unable to work is that the plaintiff has given up a benefit in exchange for the wage benefit received. But this is manifestly not the case. A plaintiff may obtain the wage benefit even though he or she has only been on the job a few days and hence had contributed little or nothing to the hypothetical "pool" from which the benefits are drawn. Moreover, the provision of the benefit may have little or no relation to the employee's contribution. It may be the result of legislation. It may stem from some consideration given by the union unrelated to the plaintiff's contribution, such as settlement of past claims of other persons. It may be the result of increased profits due to windfall or the employer's sheer generosity. In short, one cannot infer simply from the fact that an employee receives a wage benefit that the employee has suffered loss or that the employee has contributed the equivalent of an insurance premium in exchange for the benefit.
This situation may be distinguished from the case where the employee can demonstrate a loss or a contribution equivalent to payment of an insurance premium or where the payment is gratuitous. In such cases, recovery of damages for loss of earnings might be entirely appropriate. Those questions, as I have observed, are not before us.
The foregoing comments rest primarily on evidentiary considerations. Approaching the problem from a substantive point of view, it may be that there is a valid distinction between cases where a person has prudently obtained and paid for personal insurance and cases where the benefits flow from the employer/employee relationship. The law has long recognized that in the first situation an exception should be made to the usual rule against double recovery. The existence of such an exception does not mean it should be extended to situations where personal prudence and deprivation are not demonstrated. In the latter case there is little to be weighed in the balance against the general policy of the law against double compensation.
[54] As McLachlin J. makes abundantly clear, the non-deductibility of insurance proceeds or benefits in the nature of insurance proceeds constitutes an exception to the rule against double recovery. In Ratych, supra, the plaintiff had been injured in a motor vehicle accident and, as a result, was unable to work for many months. During that period, however, the plaintiff received wages from his employer pursuant to the terms of his collective agreement. The plaintiff sued for negligence claiming lost wages. The issue before the Court was whether the payments made by the plaintiff's employer during the period when the plaintiff was not working, should be considered in the assessment of damages of loss of earnings. Dealing with the issue, McLachlin J., at pages 981, 983 and 984 stated the following:
The general principles underlying our system of damages suggest that a plaintiff should receive full and fair compensation, calculated to place him or her in the same position as he or she would have been had the tort not been committed, in so far as this can be achieved by a monetary award. This principle suggests that in calculating damages under the pecuniary heads, the measure of the damages should be the plaintiff's actual loss. It is implicit in this that the plaintiff should not recover unless he can demonstrate a loss, and then only to the extent of that loss. Double recovery violates this principle. It follows that where a plaintiff sustains no wage loss as a result of a tort because his employer has continued to pay his salary while he was unable to work, he should not be entitled to recover damages on that account.
[...]
In this case the plaintiff was paid his full salary during the period he was off work as a result of his injuries. The principles to which I have alluded suggest that in these circumstances his claim against the tortfeasor for loss of earnings on the ground that the plaintiff has not established a loss, should be dismissed unless a valid claim is established on the part of the employer who paid the benefits.
The employer has not advanced a claim in the nature of subrogation. Moreover, no obligation to repay the employer, moral or otherwise, is raised by the plaintiff. These considerations negate the suggestion that the doctrine of trust can properly be utilized to shift the loss to the employer and allow the plaintiff to recover in this case. Indeed, the plaintiff does not seriously contend that any sum awarded for lost earnings would be paid over to his employer.
Nor, for the reasons discussed earlier, can the payment of wages to the plaintiff be likened to the payment of proceeds of an insurance policy.
In these circumstances, the plaintiff has failed to establish a loss compensable in damages.
[55] In Cunningham, supra, McLachlin J., who dissented in part, reiterated her view concerning double recovery and the exceptions thereto. At pages 368 and 369, she stated:
The fundamental principle is that the plaintiff in an action for negligence is entitled to a sum of damages which will return the plaintiff to the position the plaintiff would have been in had the accident not occurred, in so far as money is capable of doing this. This goal was expressed in the early cases by the maxim restitutio in integrum. The plaintiff is entitled to full compensation and is not to be denied recovery of losses which he has sustained: Livingstone v. Rawyards Coal Co. (1880), 5 App. Cas. 25 (H.L.), at p. 39, per Lord Blackburn. It has been affirmed repeatedly by Canadian courts and once again in more recent times by the House of Lords: ". . . the basic rule is that it is the net consequential loss and expense which the court must measure": Hodgson v. Trapp, [1988] 3 W.L.R. 1281, at p. 1286. At the same time, the compensation must be fair to both the plaintiff and the defendant. In short, the ideal of the law in negligence cases is fully restorative but non-punitive damages. The ideal of compensation which is at the same time full and fair is met by awarding damages for all the plaintiff's actual losses, and no more. The watchword is restoration; what is required to restore the plaintiff to his or her pre-accident position. Double recovery is not permitted.
Cory J. and I agree on the basic principle of recovery in a tort action. As he states, it is simply to compensate the plaintiff as fully as money may do for the loss suffered as a result of the tortfeasor's negligence. The plaintiff is not, we both agree, generally entitled to double recovery (Cory J., at p. 396). However, Cory J. suggests that the case is governed by an exception to the general principles called the private insurance exception.
My colleague and I part company on the issue of whether the present case falls within the private insurance exception. Cory J. seems to assume that the benefits in question fall within the private insurance exception; the issue as he sees it is rather whether the private insurance exception should be maintained (at p. 400). I, on the other hand, do not question that the insurance exception (if indeed it is an exception) should be maintained. The questions which arise, as I see the matter, are the scope of the so-called insurance exception to the rule against double recovery, and whether employment plans such as those here at issue fall within that exception.
[56] In the present instance, the Tribunal based its decision not to deduct the pension benefits and severance pay on the decision in Cranston v. Canada (Department of National Defence) (1997), T.D. 1/97, where the tribunal stated the following, at page 69 of its decision:
It was argued by the Commission, and conceded by the Respondent DND [...], that the insurance exception developed in tort law (Cunningham v. Wheeler, [1994] 1 S.C.R. 359, Canadian Pacific Ltd. v. Gill, [1973] S.C.R. 654, and Workmen's Compensation Commission v. Lachance, [1973] S.C.R. 428) applies to proceedings under the CHRA. Based on the submissions made by the parties, the Tribunal has not treated pension income or severance pay as earned income which can be set-off against the wages that would have been earned by the Complainants in military positions. We have, however, included overtime and flying bonuses, where applicable, with the individual's basic salary to yield the total earned income for the period in issue.
[57] However, the Attorney General relies on similar cases where the insurance exception was not applied. In Martin, supra, the tribunal did not expressly comment on the application of the insurance exception, and the Commission is correct in asserting that it was not argued and therefore not expressly refused. Nevertheless, it appears clear from the calculation of damages that the tribunal did not apply the insurance exception.
[58] In Koeppel v. Canada (Department of National Defence) (1997), 32 C.H.R.R. D/107 (C.H.R.T.), the tribunal disputed and rejected not only the application of the insurance exception in that particular case, but the application of the insurance exception and of principles imported from tort law to any proceedings under the CHRA. In that case, the tribunal stated the following, at pages D/159 to D/162:
The decision in Cooper applies specifically to the law of torts and does not necessarily provide instruction to a tribunal applying human rights legislation. A problem does arise, however, from comments made by Marceau J.A. in Canada (Attorney General) v. Morgan (1991) 21 C.H.R.R. D/87 (F.C.A.), a leading authority on the issue of damages in human rights cases. One of the questions addressed by the court was the extent of a respondent's liability for lost wages under the CHRA. At page D/90, Marceau J.A. stated:
... I am afraid ... that there exists some confusion between the right to obtain reparation for a damage sustained and the assessment of that damage. While the particular nature of the human rights legislation - which has been said to be so basic as to be near-constitutional and in no way an extension of the law of tort ... - renders unjustifiable the importation of the limitations to the right to obtain compensation applicable in tort law, the assessment of the damages recoverable by a victim cannot be governed by different rules. In both fields, the goal is exactly the same: make the victim whole for the damage caused by the act source of liability. Any other goal would simply lead to an unjust enrichment and a parallel unjust impoverishment. The principles developed by the courts to achieve that goal in dealing with tort liability are therefore necessarily applicable. It is well known that one of those principles has been to exclude from the damages recoverable the consequences of the act that were only indirect or too remote. [Emphasis added]
The underlined portion of this comment by Marceau J.A. would seem to provide support for the position urged upon us by counsel for the complainant.
These general remarks on the nature of a remedy under the CHRA could be treated as obiter dicta since the other judges in the case rest their judgments on the view that there must be a causal relationship demonstrated between the discrimination and the damages awarded under section 53(2)(c). In the next paragraph, Marceau J.A. himself stated that "one should not be too concerned by the use of various concepts in order to give effect to the simple idea that common sense required that some limits be placed upon liability for the consequences flowing from an act, absent maybe bad faith."
In dissenting on other grounds, McGuigan J.A. took the position, at page D/106 [para. 48], that a "strict tort or contract analogy should not be employed, since what is in question is not a common-law action but a statutory remedy of a unique nature".
It should be stated in this context that the general principles which govern the choice of remedy under human rights legislation are well established. In O'Malley for example, McIntyre J. said at page 547 [C.H.R.R. D/3105, para. 24766] that the "main approach" of human rights legislation "is not to punish the discrimination, but rather to provide relief for the victims of discrimination". One cannot help but notice that the language used in the jurisprudence echoes the concerns of McLachlin J. in her dissenting judgment in the Cooper case.
The Supreme Court expressed a similar view in Canada (Treasury Board) v. Robichaud, (1987) 8 C.H.R.R. D/4326, at page D/4330 [para. 33938], where it held that the purpose of the CHRA is "to eradicate anti-social conditions without regard to the motives or intention of those who cause them". In the opinion of the Supreme Court, at page D/4331 [para. 33940], the CHRA:
... is not aimed at determining fault or punishing conduct. It is remedial. Its aim is to identify and eliminate discrimination.
The case law makes it clear that these general principles must be borne in mind by any tribunal in determining what level of compensation is appropriate. Although there are no authorities which specifically address the issue, these considerations seem to militate against importing the insurance exception into the area of human rights law. If the insurance exception can be characterized as punitive, as McLachlin J. suggested, it is out of keeping with the remedial nature of the human rights process.
The situation which presents itself in tort law is quite different than the situation which comes before us and the considerations which apply in the instance of a tortfeasor do not necessarily apply under the CHRA. The comments in O'Malley, Robichaud and many other cases hold that there is a public or a constitutional interest in providing redress to those who have suffered loss of wages as a result of discriminatory action. This makes good sense. Society as a whole has an interest in redressing discriminatory acts. However, this does not require an award against a discriminating party when the complainant has not actually suffered a loss.
In Canada (Attorney General) v. McAlpine (1989)12 C.H.R.R. D/253, a case decided before Morgan, the Federal Court of Appeal set aside an award of a Tribunal for compensation for the loss of "foregone" unemployment insurance benefits. At page D/256 [para. 5], the Court accepted the submission of the applicant that the provisions of what is now section 53 of the CHRA "provide for specific heads of compensation rather than for compensation generally".
Section 53(2)(c) only permits a tribunal to compensate a victim for "the wages that the victim was deprived of ... as a result of the discriminatory practice". The question is whether the complainant in the present case was "deprived" of that portion of her wages which was paid to her through the insurance policy from SunLife. The fundamental principle underlying all three of the judgments in Morgan is that an order compensating a complainant under the subsection should be restricted to those damages which arise directly out of the discrimination. It is significant that Marceau J.A. was concerned that an order of compensation might leave the complainant unjustly enriched.
It would appear that the courts have upheld the insurance exception in the case of torts because the defendant will be unjustly enriched if the plaintiff does not receive the extra payment. lt is difficult to see how this rationale can be used in redressing a discriminatory practice, since an order of compensation is intended to restore a complainant to the position which she would have enjoyed if she had not been subjected to discrimination. Once that has been accomplished, the purpose of the CHRA has been met and the remedies available to a complainant under section 53(2)(c) have been exhausted. A human rights tribunal is not appointed to decide civil claims between the complainant and respondent.
Even the use of the word "compensate" in section 53, rather than a word like "award", suggests that we do not have the power to put the Complainant in a better financial position than she would have enjoyed if she had worked during the period in question. If she received other compensation from insurance, especially insurance linked to wage loss, she has already received the compensation to which she is entitled and cannot ask for it a second time. In our view, this Tribunal's mandate under the subsection comes to an end once the loss has been made whole.
If we are wrong in holding that the benefits paid by SunLife reduce the amount of lost wages for the purpose of determining damages under subsection (c), that still leaves the matter within the ambit of our discretion and allows us to grant such award as we think is proper in the circumstances of the case. The parameters of subsection (c) are quite definite and give a tribunal a wide latitude in determining the quantum of damages for lost wages. The tribunal "may" make such order compensating the victim "as the Tribunal may consider proper" for "any or all" wages which the victim has lost as a result of the discriminatory action.
As McGuigan J.A. recognized in Morgan, there is nothing in the subsection which requires a tribunal to compensate the complainant for all of the wages she has lost where a tribunal feels that justice demands otherwise. After careful consideration of the evidence in this case, we are of the view that the amount which we have awarded represents fair compensation for Ms. Koeppel's claim for lost wages.
[59] In my view, the relevant question is not whether the insurance exception developed in tort law can be applied to assess compensation in proceedings under the CHRA, but rather whether the pension payments received by Mr. Carter should be considered in the calculation of his loss of earnings. In my view, the pension payments do not fall within the insurance exception and, as a result, they should be taken into account in the calculation of the loss of earnings.
[60] The purpose of subsection 53(2) of the CHRA is to make whole the victim of a discriminatory practice. In the present instance, the Tribunal concluded that Mr. Carter could and would have been released from his employment as of September 3, 1992. Consequently, the tribunal ordered that Mr. Carter be compensated for wages and pension income that he would have received between May 27 and September 2, 1992. However, it is clear that had Mr. Carter remained an employee until September 2, 1992, he would not have received pension payments prior to September 3, 1992. Pursuant to sections 16 to 20 of the Canadian Forces Superannuation Act, it is clear that Mr. Carter could not receive a pension and accrue additional pension benefits at the same time. The tribunal's failure to deduct the pension income leaves Mr. Carter in a better situation than he would have been had he remained in the CAF until September 2, 1992, since he has received wages and pension income for the same period of time, i.e. May 27 to September 2, 1992.
[61] In my view, the pension payments received by Mr. Carter cannot be assimilated to benefits in the nature of the proceeds of insurance. The circumstances of this case are entirely different from the circumstances of those cases where the Supreme Court has held that pension payments ought not to be deducted in the calculation of the loss of earnings. The decisions in those cases all deal with attempts by third party tortfeasors to obtain the benefit of contracts and/or agreements entered into by the plaintiff and his employer or insurer. That is not the case in the present matter. Here, the CAF is not attempting to obtain the benefit of a contract in the nature of insurance. In my view, this is not a case falling within the private insurance exception. Were Mr. Carter allowed to keep the pension income for the period between May 27 and September 2, 1992, he would be obtaining a double recovery.
[62] I am therefore of the view that the tribunal erred in concluding as it did that the pension income received by Mr. Carter was not to be considered in the calculation of his lost wages.
Issue 3: Interest
[63] Both parties agree that the Tribunal erred in holding that interest on the compensation award should be paid as of May 27, 1992. They both submit that interest should be granted on the compensation award from the valuation date. I agree that the Tribunal erred. Interest should run as of September 2, 1992.
CONCLUSION
[64] For the foregoing reasons, the Commission's application for judicial review shall be dismissed and the Attorney General's application for judicial review shall be allowed. The matter will be returned to the Tribunal for reconsideration in the light of these Reasons.
Marc Nadon
Judge
O T T A W A, Ontario
December 18, 2001
FEDERAL COURT OF CANADA TRIAL DIVISION
NAMES OF SOLICITORS AND SOLICITORS ON THE RECORD
COURT FILE NO.: T-590-00
STYLE OF CAUSE: Canadian Human Rights Commission v. Attorney General Of Canada & Robert Carter
PLACE OF HEARING: Ottawa, Ontario
DATE OF HEARING: June 11, 2001
REASONS FOR JUDGMENT OF The Honourable Mr. Justice Nadon
DATED: December 18, 2001
APPEARANCES:
Mr. René Duval ( 613) 943-9156
FOR APPLICANT
Mr. Brian J. Saunders (613) 957-4865
FOR RESPONDENT
SOLICITORS OF RECORD: Mr. Ian Fine (613) 943-9155 Mr. Brian J. Saunders (613) 957-4865
FOR APPLICANT FOR RESPONDENT
[1] On December 31, 1994, Tremblay-Lamer J. concluded that the Tribunal in Martin, supra had not made a reviewable error, and on March 18, 1997, the Federal Court of Appeal dismissed the Attorney General's appeal of Tremblay-Lamer J.'s decision.