[1] The applicant Dianne Marie Kent says that she stopped working on October 10, 1994 due to illness. Since that time, she has been trying to establish a claim for a disability pension under the Canada Pension Plan, R.S.C. 1985, c. C-8, so far without success. Before this Court is an application for judicial review of the most recent decision denying disability benefits, made by the Pension Appeals Board on October 28, 2003.

[2] Entitlement to a disability pension is governed by paragraph 44(1)(b) of the Canada Pension Plan. The conditions are as follows: (1) the applicant must be a contributor who has not reached sixty-five years of age and to whom no retirement pension is payable, (2) the applicant must be disabled, and (3) the applicant must have made contributions for a specified number of years before the date determined to be the commencement of the disability.

[3] It is not in dispute that Ms. Kent meets the first requirement, and would meet the third requirement if she is able to establish that she was disabled (as defined in the Canada Pension Plan) at any time from October 10, 1994, when she quit her employment, and before December 31, 1997. The main issue in Ms. Kent's case, as discussed in more detail below, is whether she had a "disability" that met the statutory conditions in paragraph 42(2)(a) of the Canada Pension Plan, which reads as follows:

42 (2) For the purposes of this Act,

42 (2) Pour l'application de la présente loi_:

(a) a person shall be considered to be disabled only if he is determined in prescribed manner to have a severe and prolonged mental or physical disability, and for the purposes of this paragraph,

a) une personne n'est considérée comme invalide que si elle est déclarée, de la manière prescrite, atteinte d'une invalidité physique ou mentale grave et prolongée, et pour l'application du présent alinéa_:

(i) a disability is severe only if by reason thereof the person in respect of whom the determination is made is incapable regularly of pursuing any substantially gainful occupation, and

(i) une invalidité n'est grave que si elle rend la personne à laquelle se rapporte la déclaration régulièrement incapable de détenir une occupation véritablement rémunératrice,

(ii) a disability is prolonged only if it is determined in prescribed manner that the disability is likely to be long continued and of indefinite duration or is likely to result in death.

(ii) une invalidité n'est prolongée que si elle est déclarée, de la manière prescrite, devoir vraisemblablement durer pendant une période longue, continue et indéfinie ou devoir entraîner vraisemblablement le décès.

[4] The statutory definition of disability has been considered in numerous decisions of this Court. Often the controversy is whether the claimed disability is sufficiently severe to meet the test in subparagraph 42(2)(a)(i). The onus is on the applicant for a disability pension to present evidence that the severity test is met.

[5] I turn now to the facts of this case. Ms. Kent worked as a nurse at the Victoria General Hospital in Halifax from August of 1987 until October 10, 1994, when she resigned due to illness. Before long, she came to believe that her condition would prevent her from working at any job. She did not try to work as a nurse or at any other job after 1994. She claims that she was unable to do so. She applied for a disability pension on August 21, 1995. At that time, she described her condition as "weakness, fatigue, chest wall pain, shortness of breath".

[6] The initial responsibility for determining entitlement to a disability pension rests with the Minister of Human Resources under subsection 60(7) of the Canada Pension Plan. In this case, the Minister determined that no disability pension was payable to Ms. Kent. The reasons are described in a letter dated September 25, 1995. The key part of the letter reads as follows:

The information in your file shows that when you applied for benefits, you had the ability to do some form of light work, suitable to your condition and limitations, on a regular basis. Thus, we cannot consider your disability to be severe and prolonged, as defined in the Canada Pension Plan legislation, and you are not eligible for benefits.

[7] As I interpret this letter, the Minister rejected Ms. Kent's application on the basis of his conclusion that Ms. Kent did not have a disability that met the severity test in subparagraph 42(2)(a)(i) of the Canada Pension Plan.

[8] Ms. Kent wrote a letter asking for a reconsideration of this decision, as was her right under paragraph 81(1)(b) of the Canada Pension Plan. In that letter, she denied that she had the ability to do light work on a regular basis. The Minister reconsidered the decision pursuant to subsection 81(2) of the Canada Pension Plan. The reconsideration resulted in no change to the decision to reject Ms. Kent's application. The letter explaining why is dated June 17, 1997, and reads in part as follows:

In your case, you may not be able to do your usual job. However, the information in your file shows that you are still able to do other work suitable to your condition on a regular basis. Since you are able to do some other type of work, we cannot consider you to be disabled as defined in the Canada Pension Plan.

[9] This decision, like the first one, focusses on the severity test in subparagraph 42(2)(a)(i) of the Canada Pension Plan.

[10] Ms. Kent had the right, under subsection 82(1) of the Canada Pension Plan, to appeal the Minister's subsection 81(2) reconsideration decision to the Review Tribunal. She did so by letter dated August 6, 1997. The appeal was heard by the Review Tribunal on January 14, 1999. It was dismissed in a decision dated March 22, 1999. The conclusion of the Review Tribunal is captured in this excerpt from the reasons:

A thorough review of Exhibit A-01 does not convey to the Tribunal the impression of a person who is incapable regularly of pursuing any substantially gainful occupation.

Upon a review of the evidence, the Tribunal finds that there is insufficient medical evidence on which to support a finding that the Appellant is incapable regularly of pursuing any substantially gainful occupation. The Appellant has fibromyalgia. She suffers from pain. She is not capable of performing physically demanding work such as that of a hospital nurse working a 12 hour shift. She is unable to commute one hour each day to work. However, the Appellant is well educated with potential transferable skills. The onus is on the Appellant to establish on a balance of probabilities that she is incapable regularly of pursuing any substantially gainful occupation. There is no evidence that she attempted a less physically demanding job closer to where she lives since October 1994. Based on insufficient evidence upon which to support a finding of a severe disability, as defined in the CPP legislation, the appeal is dismissed.

[11] By virtue of subsection 84(1) of the Canada Pension Plan, the March 22, 1999 decision of the Review Tribunal is final and binding for all purposes of the Canada Pension Plan, subject only to a rescission or amendment by the Review Tribunal under subsection 84(2) of the Canada Pension Plan on the basis of new facts, or a successful appeal to the Pension Appeals Board under section 83 of the Canada Pension Plan.

[12] An appeal to the Pension Appeals Board requires leave to appeal pursuant to section 83 of the Canada Pension Plan. Ms. Kent sought leave to appeal, but leave was denied. Ms. Kent was informed of that decision by letter dated July 28, 1999. Ms. Kent alleges that she told a government official that she did not agree with the decision denying leave, but she was not told that she could have applied to the Federal Court for judicial review of that decision. Assuming her recollection on this point is accurate, I have concluded that Ms. Kent was not prejudiced by her lack of information on this option. A review of the record indicates that if Ms. Kent had made an application for judicial review of the decision denying leave to appeal, the application would have been dismissed because the March 22, 1999 decision of the Review Tribunal discloses no error of law and was reasonably open to the Review Tribunal on the record then before it.

[13] Ms. Kent had another option available to her, which was to try and obtain a reconsideration of the decision of the Review Tribunal under subsection 84(2) of the Canada Pension Plan, which reads as follows:

84 (2) The Minister, a Review Tribunal or the Pension Appeals Board may, notwithstanding subsection (1), on new facts, rescind or amend a decision under this Act given by him, the Tribunal or the Board, as the case may be.

84 (2) Indépendamment du paragraphe (1), le ministre, un tribunal de révision ou la Commission d'appel des pensions peut, en se fondant sur des faits nouveaux, annuler ou modifier une décision qu'il a lui-même rendue ou qu'elle a elle-même rendue conformément à la présente loi.

[14] Apparently, Ms. Kent was not told about this option when she asked for advice in the summer of 1999. Rather, she was advised at that time that she could make a new application to the Minister. She did that on May 31, 2000. That second application was rejected by the Minister twice, first on October 2, 2000 and then upon reconsideration on January 12, 2001. Ms. Kent submitted a letter of appeal to the Review Tribunal.

[15] At some point before the hearing of her second appeal to the Review Tribunal, Ms. Kent was advised by a government official that she was entitled to make an application under subsection 84(2) of the Canada Pension Plan for reconsideration of the Review Tribunal's March 22, 1999 decision on the basis of new facts. Ms. Kent made a new facts application on May 23, 2002.

[16] Ms. Kent's second Review Tribunal hearing was held on July 3, 2002 and resulted, on August 22, 2002, in a decision that Ms. Kent was disabled and that her disability commenced in October 1994. There is no indication in the record that the Minister made any objection to the Review Tribunal considering itself seized of both Ms. Kent's appeal from the rejection of her second application to the Minister, and her May 23, 2002 new facts application.

[17] The August 22, 2002 reasons of the Review Tribunal contain an extensive review of the evidence. For the purposes of this appeal, it is necessary to consider only the following portions of that summary (my emphasis):

The Appellant told the Tribunal that she believes her main disabling conditions are the chronic fatigue she suffers and the depression.

In the CPP Medical Report of Dr. Wells of August 31, 2000, found on page 50 of the Hearing Case File, he notes that the Appellant suffers from fibromyalgia, chronic fatigue, thoracic outlet syndrome, irritable bowel syndrome, panic disorder with agoraphobia, major depression and hypertension.

He indicates on page 53 of his report, that the Appellant has a poor prognosis and her fibromyalgia is very unlikely to improve after 8 years. He indicates that the chronic fatigue syndrome which the Appellant suffers is her most disabling condition, and that she is incapable of any gainful employment. He indicates that he believes the Appellant is permanently disabled by a severe form of chronic fatigue and there is no chance of recovery.

In the report of Dr. Sapp of September 19, 2000 [...] he indicates on page 61:

[...]

She emotionally is quite depressed and I would recommend that she see a psychiatrist for further assessment and assistance in this regard. She certainly is not capable of returning to work due to her fibromyalgia and psychiatric condition...

[...]

The report of Dr. Wells, the Appellant's family physician, of June 14, 2001, is entered as Exhibit A-01 in this matter. In it, he indicates:

I have maintained and continue to assert that Dianne Kent is unfit for any kind of work due to her physical and psychological condition.

[18] The Review Tribunal concluded that the reports of Dr. Wells, Dr. Sapp and Ms. Donahoe referred to above met the test for new facts. Taking those reports into account, and accepting the evidence of Ms. Kent, which they found to be credible, they concluded that Ms. Kent had been suffering from depression for several years before 1997, although she did not seek professional help for that condition until 2001 because she did not recognize the problem. As to whether she had a disability that met the statutory test, the Review Tribunal concluded as follows (at page 7 of the August 22, 2002 decision):

The Tribunal finds that the medical condition of the Appellant has given rise to a severe disability in the sense that she suffers from a disability such that no reasonable employer, being aware of the Appellant's functional limitations, her inability to be reliable or regularly show up for work, because of the chronic fatigue, fibromyalgia and depression, would offer her regular substantially gainful employment. As well, these conditions have not improved since she originally went off work in October 1994 and are not likely to do so, despite regular treatment.

The Tribunal finds that the Appellant's disability is both severe and prolonged as those words are defined in the CPP.

[19] This conclusion reflects the "real world" approach to the severity test for disability, as set out by the leading authority on that point, Villani v. Canada (Attorney General) (C.A.), [2002] 1 F.C. 130, and in particular paragraph 33 of that decision, which cites with approval an influential statement from a 1988 decision of the Pension Appeals Board :

[33] The "real world" approach [to the application of the severity test] was first adopted by the [Pension Appeals] Board in Leduc, Edward v. Minister of National Health and Welfare (1988), C.E.B. & P.G.R. 8546 (P.A.B.). In that case, the Board found for the applicant on the following basis:

The Board is advised by medical authority that despite the handicaps under which the Appellant is suffering, there might exist the possibility that he might be able to pursue some unspecified form of substantially gainful employment. In an abstract and theoretical sense, this might well be true. However, the Appellant does not live in an abstract and theoretical world. He lives in a real world, people [sic] by real employers who are required to face up to the realities of commercial enterprise. The question is whether it is realistic to postulate that, given all of the Appellant's well documented difficulties, any employer would even remotely consider engaging the Appellant. This Board cannot envision any circumstances in which such might be the case. In the Board's opinion, the Appellant, Edward Leduc, is for all intents and purposes, unemployable.

[20] The Minister did not agree with this second decision of the Review Tribunal and sought leave to appeal to the Pension Appeals Board. The authority of the Pension Appeals Board is set out in subsection 83(1) of the Canada Pension Plan, which reads as follows:

83. (1) A party [...]or the Minister, if dissatisfied with a decision of a Review Tribunal made under section 82 [...] or under subsection 84(2), may, within ninety days after the day on which that decision was communicated to the party or Minister, or within such longer period as the Chairman or Vice-Chairman of the Pension Appeals Board may either before or after the expiration of those ninety days allow, apply in writing to the Chairman or Vice-Chairman for leave to appeal that decision to the Pension

Appeals Board.

83. (1) La personne qui se croit lésée par une décision du tribunal de révision rendue en application de l'article 82 - [...] - ou du paragraphe 84(2), ou [...] de même que le ministre, peuvent présenter, soit dans les quatre-vingt-dix jours suivant le jour où la décision du tribunal de révision est transmise à la personne ou au ministre, soit dans tel délai plus long qu'autorise le président ou le vice-président de la Commission d'appel des pensions avant ou après l'expiration de ces quatre-vingt-dix jours, une

demande écrite au président ou au vice-président de la Commission d'appel des pensions, afin d'obtenir la permission d'interjeter un appel de la décision du tribunal de révision auprès de la Commission.

[21] The Minister was granted leave to appeal the second decision of the Review Tribunal on a number of alternative grounds. The Minister argued among other things that the Review Tribunal erred in finding that there were new facts, and in the alternative, that the Review Tribunal erred in finding that Ms. Kent had a disability that met the statutory test. It is well established that, once leave has been granted to appeal the decision of a Review Tribunal, the Pension Appeals Board must hear the application de novo (paragraph 49 of Villani, cited above).

[22] The Pension Appeals Board heard the Minister's appeal on October 1, 2003. In a decision dated October 28, 2003, the Pension Appeals Board allowed the Minister's appeal and set aside the second decision of the Review Tribunal. In doing so, they did not consider the merits of Ms. Kent's claim. Rather, they allowed the Minister's appeal only on the basis that the Review Tribunal erred in concluding that there were new facts.

[23] Ms. Kent, representing herself, commenced an application for judicial review of the decision of the Pension Appeals Board. She argues, in essence, that the second decision of the Review Tribunal is correct in all respects and should not have been reversed.

[24] It is my view that, for the following reasons, the Pension Appeals Board erred in failing to consider the merits of Ms. Kent's claim, and in entertaining the Minister's argument that there were no new facts.

[25] For ease of reference, I reproduce subsection 84(2) of the Canada Pension Plan:

[26] This provision is an exception to subsection 84(1), which states that a decision of the Minister, the Review Tribunal or the Pension Appeals Board is final and binding, or in legal terminology, "res judicata". Subsection 84(2) must be read as containing three independent exceptions, one applying to each of the three statutory decision makers under the scheme of the Canada Pension Plan relating to the payment of benefits (the Minister, the Review Tribunal, and the Pension Appeals Board). Thus, the Minister must determine whether there are new facts that would justify a reconsideration of a prior decision of the Minister. The Review Tribunal must determine whether there are new facts that would justify a reconsideration of a prior Review

Tribunal decision. The Pension Appeals Board must determine whether there are new facts that would justify a reconsideration of a prior Pension Appeals Board decision.

[27] A decision to reconsider a prior decision based on new facts must first involve a determination of whether there are new facts. If the decision maker determines that there are no new facts, then the prior decision of that decision maker must stand. If the decision maker determines that there are new facts, then the second determination, pension entitlement, must be made on the merits, taking into account the new facts and the existing record. Conceptually, the two decisions are distinct.

[28] There has been some controversy about the correct procedure for challenging a decision of the Review Tribunal as to whether there are new facts. This Court has held that the Pension Appeals Board cannot consider an appeal from a decision of the Review Tribunal that there are no new facts. As I understand it, that is because the jurisdiction of the Pension Appeals Board is limited to appeals of decisions of the Review Tribunal on the merits, either in the first instance or upon a subsection 84(2) reconsideration. By default, the only way to challenge a decision that there are no new facts is by way of judicial review to the Federal Court: Oliveira v. Canada (Minister of Human Resources Development), 2004 FCA 136, Canada (Minister of Human Resources Development) v. Fleming, 2004 FCA 288, Canada (Minister of Human Resources Development) v. Richard, 2004 FCA 378; see also Peplinski v. Canada (T.D.), [1993] 1 F.C.222,

which deals with the parallel situation of a determination by the Minister that there are no new facts.

[29] It seems to me that, by the same reasoning, the Pension Appeals Board does not have the authority to set aside the decision of a Review Tribunal solely on the basis that the Review Tribunal was wrong to conclude that it had been presented with new facts. The only statutory decision making authority the Pension Appeals Board has, once leave to appeal a Review Tribunal decision is granted, is to consider de novo the merits of the claimant's application.

[30] Theoretically, the Minister could have commenced a separate proceeding, an application for judicial review in the Federal Court, to challenge the determination of the Review Tribunal that there were new facts. However, as the Review Tribunal went on to determine Ms. Kent's claim on the merits, the Federal Court might well have declined jurisdiction because the right of the Minister to seek leave to appeal the decision on the merits to the Pension Appeals Board would be an adequate alternative remedy: Fast v. Canada (Minister of Citizenship and Immigration) (2001), 288 N.R. 8, (2001) 41 Admin. L.R. (3d) 200 (F.C.A.); Canadian Pacific Ltd. v. Matsqui Indian Band, [1995] 1 S.C.R. 3. If the Review Tribunal was wrong to find that Ms. Kent is entitled to a disability pension, it does not matter whether they did so on the basis of new facts. But if the Review Tribunal was correct in finding that Ms. Kent is entitled to a disability pension, it would seem unreasonable to deprive Ms. Kent of that entitlement on the

rather narrow technical ground that the Review Tribunal should not have admitted the new facts that, in the result, established her entitlement.

[31] That is a sufficient basis for determining this application in favour of Ms. Kent. However, given the procedural confusion that has characterized this matter so far, it is appropriate to express my view on whether there were new facts before the Review Tribunal that would justify a reconsideration of the prior Review Tribunal decision. My view is that the Review Tribunal was correct in finding that there were new facts.

[32] At the risk of oversimplifying, it is apparent that in this case, the most important "new fact" relating to Ms. Kent's application for a disability pension is a medical opinion rendered on September 19, 2000 that, for the first time, makes a formal diagnosis of depression (a mental illness). That medical opinion also indicates that depression may have been present in 1994, but had not been diagnosed at that time for various reasons (including the fact that the efforts of the medical experts were focussed on Ms. Kent's other conditions). Indeed, the medical opinion suggests that it may be the depression that has made it difficult for Ms. Kent to recover from her other conditions.

[33] The jurisprudence of this Court has established a two step test for the determination of whether there are new facts. First, the proposed new facts must not have been discoverable, with

due diligence, prior to the first hearing. Second, the proposed new facts must be "material": Canada (Minister of Human Resources Development) v. Macdonald, 2002 FCA 48.

[34] Whether a fact was discoverable with due diligence is a question of fact. The question of materiality is a question of mixed fact and law, in the sense that it requires a provisional assessment of the importance of the proposed new facts to the merits of the claim for the disability pension. The decision of the Pension Appeals Board in Suvajac v. Minister of Human Resources Development (Appeal CP 20069, June 17, 2002) adopts the test from Dormuth v. Untereiner, [1964] S.C.R. 122, that new evidence must be practically conclusive. That test is not as stringent as it may appear. New evidence has been held to be practically conclusive if it could reasonably be expected to affect the result of the prior hearing: BC Tel v. Seabird Island Indian Band (C.A.), [2003] 1 F.C. 475. Thus, for the purposes of subsection 84(2) of the Canada Pension Plan, the materiality test is met if the proposed new facts may reasonably be expected to affect the outcome.

[35] In the context of an application to reconsider a decision relating to entitlement to benefits under the Canada Pension Plan, the test for the determination of new facts should be applied in a manner that is sufficiently flexible to balance, on the one hand, the Minister's legitimate interest in the finality of decisions and the need to encourage claimants to put all their cards on the table at the earliest reasonable opportunity, and on the other hand, the legitimate interest of claimants, who are usually self-represented, in having their claims assessed fairly, on the merits. In my

view, these considerations generally require a broad and generous approach to the determination of due diligence and materiality. This is consistent with the words of Isaac C.J. at paragraph 27 of Villani (cited above):

[27] In Canada, courts have been especially careful to apply a liberal construction to so-called "social legislation". In Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, at paragraph 36, the Supreme Court emphasized that benefits-conferring legislation ought to be interpreted in a broad and generous manner and that any doubt arising from the language of such legislation ought to be resolved in favour of the claimant.

[36] For most disabling conditions, it is reasonable to expect the claimant to present a complete picture of his or her disability at the time of the first application, or on a first appeal to the Review Tribunal or the Pension Appeals Board. However, there are some disability claims, such as those based on physical and mental conditions that are not well understood by medical practitioners, that must be assessed against the background of an evolving understanding of a claimant's condition, treatment and prognosis. It is especially important in such cases to ensure that the new facts rule is not applied in an unduly rigid manner, depriving a claimant of a fair assessment of the claim on the merits.

[37] I would allow this application for judicial review, quash the decision of the Pension Appeals Board dated October 28, 2003, and refer this matter to a differently constituted panel of the Pension Appeals Board for a new hearing, with a direction that the merits of Ms. Kent's

application for a disability pension be heard de novo based on all of the available evidence, including the new facts.

(s) "K. Sharlow"

J.A.

"I agree.

A.M. Linden J.A."

"I agree.

B. Malone J.A."

FEDERAL COURT OF APPEAL

NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET: A-582-03

STYLE OF CAUSE: DIANNE MARIE KENT v. THE ATTORNEY GENERAL OF CANADA

PLACE OF HEARING: HALIFAX, NOVA SCOTIA

DATE OF HEARING: NOVEMBER 9, 2004

REASONS FOR JUDGMENT: SHARLOW J.A.

CONCURRED IN BY: LINDEN J.A.

MALONE J.A.

DATED: DECEMBER 13, 2004

APPEARANCES:

DIANNE MARIE KENT

FOR THE APPLICANT ON HER OWN BEHALF

FLORENCE CLANCY

FOR THE RESPONDENT

SOLICITORS OF RECORD:

DIANNE MARIE KENT

TRURO, NOVA SCOTIA

FOR THE APPLICANT ON HER OWN BEHALF

MORRIS ROSENBERG,

DEPUTY ATTORNEY GENERAL OF CANADA

FOR THE RESPONDENT

Date: 20041213

Docket: A-582-03

CORAM: LINDEN J.A.

SHARLOW J.A.

MALONE J.A.

BETWEEN:

DIANNE MARIE KENT

Applicant

and

THE ATTORNEY GENERAL OF CANADA

Respondent

JUDGMENT

This application for judicial review is allowed, the decision of the Pension Appeals Board dated October 28, 2003, is quashed, and this matter is referred to a differently constituted panel of the Pension Appeals Board for a new hearing, with a direction that the merits of Ms. Kent's application for a disability pension be heard de novo based on all of the available evidence, including the new facts.

(s) "A.M. Linden"

J.A.

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