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WORKERS’ COMPENSATION - Benefits - Payment of benefits - Reduction of usual benefits - Compensability of injuries - Aggravation of pre-existing condition - Legislation - Interpretation - Civil procedure - Pleadings

Friday, April 07, 2017 @ 8:57 AM  


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Appeal by Castrillo from an order striking his statement of claim without leave to amend as disclosing no cause of action. Castrillo sought to represent a class of injured workers alleged to have been wrongfully denied the full extent of benefits to which they were entitled under the Workplace Safety and Insurance Act by the Workplace Safety and Insurance Board (WSIB) in a class proceeding. The action was pleaded in misfeasance of public office, bad faith and negligence. For his part, Castrillo sustained a shoulder injury while working as a concrete finisher and pipe layer, in October 2011. He applied for and received economic loss benefits (NEL). He qualified for an NEL award because he suffered a permanent impairment leaving him with less than a full range of motion in his shoulder. The lump sum award of six per cent was reduced by 50 per cent because of his pre-existing osteoarthritis in the injured shoulder. Castrillo appealed administratively, on the basis that the WSIB was wrong to reduce the NEL award, given that his osteoarthritis was asymptomatic prior to the work-related injury and had never before affected his shoulder’s functionality. An Appeal Resolution Officer allowed Castrillo’s appeal and restored the full NEL award without reduction. Castrillo later learned about other injured workers whose NEL awards were similarly reduced, discovering that the reductions were the result of the implementation of an internal WSIB document in which reducing costs were mandated. He commenced the present action on behalf of all workers whose NEL awards were reduced due to pre-existing conditions that were not impairments negatively impacting on their pre-accident functioning, and who had incurred expenses pursuing administrative appeals of the WSIB’s decision to reduce their NEL awards. The judge allowed the WSIB’s motion to strike the pleadings in their entirety, ruling that he had no jurisdiction over the subject matter of the action.

HELD: Appeal allowed. Castrillo’s bad faith and improper purpose pleading was adequate, but simply a part of the larger misfeasance claim. More facts could not be provided prior to document production and discovery because most would be within the WSIB’s knowledge and control. Castrillo adequately pleaded that the WSIB’s goal of reducing costs by equating pre-existing conditions with pre-existing impairment constituted a misfeasance of its mandate. The action was not a collateral attack on the WSIB’s specific determination of Castrillo’s entitlement, but rather a challenge to the legality of the WSIB’s actions across a category of benefits and a class of persons. The judge’s finding that the claims fell within the exclusive jurisdiction of the WSIB was inconsistent with his statement that a cause of action for bad faith or misfeasance could exist in appropriate circumstances. The judge erred in treating the WSIB’s motion to strike Castrillo’s claims as a summary judgment motion, where the question before him was not whether the claims could succeed, but whether they were adequately pleaded. Castrillo also adequately pleaded his alternate claim in negligence, referencing the relationships and the interactions between the WSIB and the class members in the statutory context.

Castrillo v. Ontario (Workplace Safety and Insurance Board), [2017] O.J. No. 744, Ontario Court of Appeal, A. Hoy A.C.J.O., P.D. Lauwers and M.L. Benotto JJ.A., February 13, 2017. Digest No. TLD-Apr32017013