Federal Court of Appeal clarifies test for veterans’ entitlement to disability pension benefit

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Canada June 17 2015
In the recent decision Anne Cole v Attorney General of Canada (2015 FCA 119, Ryer J.A., concurring reasons by Gauthier J.A.), the Federal Court of Appeal clarified part of the test for establishing a veteran's entitlement to a disability pension. The case also confirmed that entitlement decisions of the Veterans Review and Appeal Board (the "VRAB") that engage discrete points of law are to be reviewed by the courts on the less deferential correctness standard. Paragraph 21(2)(a) of the Pension Act states that for military service in peace time, if a veteran suffers a "disability resulting from an injury or disease or an aggravation thereof that arose out of or was directly connected with such military service, a pension shall, on application, be awarded…" Where there are both military and non-military direct causes of a condition, we know now that a veteran need only show that the military service factors were a significant, not primary, cause in order to satisfy that portion of the test for entitlement.

This decision holds significant precedential value for the VRAB and Federal Court, as there were differing approaches being taken at both levels. It will also be particularly helpful for veterans making applications in relation to mental health illnesses as the causes of these illnesses are rarely one-dimensional and straightforward.

Context

After twenty-one years of service in the Canadian Forces ("CF"), Ms. Cole was medically discharged, suffering from mental health illnesses: major depression and chronic dysthymia (a form of chronic, mild depression).

She applied for a disability pension for the claimed condition of major depression pursuant to paragraph 21(2)(a) of the Pension Act, on the basis that certain administrative and operational decisions taken by the CF affecting her had causally contributed to the major depression. Her application was denied by the Minister and twice by the VRAB for failing to demonstrate that the military service factors were the prevalent source of the major depression. Rather, personal factors, such as a family history of depression, were held to be the major contributing causes. On judicial review of the VRAB's decision, the Federal Court found that the VRAB had made no reviewable error in requiring Ms. Cole to demonstrate that military service factors were the primary cause of the disability.

On appeal, the Federal Court of Appeal found that Ms. Cole's claimed condition of major depression could be directly connected to both military and non-military (i.e.: personal) factors. The military factors included the loss of deployment opportunities. The personal factors included personality traits like suffering from chronic dysthymia. The question then was, where both military and non-military factors were present, what is the extent of the causal connection an applicant must demonstrate between the military service factors and the condition such that it can be said to be "directly connected with" military service?

The presence of non-military factors did not automatically frustrate the claim. The Court held that it is sufficient to show that military service factors were a significant, or not insignificant, factor. This finally put to rest the more onerous "primary cause" test that had been applied by the decision-makers below in this case and in many others for years.

Standard of Review

The Federal Court of Appeal held that the less deferential standard of correctness is to be applied to an interpretation of the statutory language of paragraph 21(2)(a). While the reasonableness standard of review is appropriate for assessing questions of mixed fact and law such as whether the evidence establishes that the causal standard is met, the interpretation of the legal standard of causation is a question sufficiently discrete to be analysed separately, and one which must be done correctly.

A few reasons supported this finding. Notably, the Court of Appeal found that discerning the standard of causation intended by Parliament in the phrase "arose out of or directly connected with" has implications in other areas of law so the Court, and not a tribunal like the VRAB, should determine its meaning.

As the Federal Court had applied the incorrect standard of reasonableness, the Federal Court of Appeal reviewed the VRAB's decision anew, but also found that on either standard of review, the decisions below could not stand.  

Process for Assessing Entitlement to a Disability Pension Benefit

In attempting to dispel confusion about and end the conflation of the terms in paragraph 21(2)(a) of the Pension Act, the Federal Court of Appeal clearly laid out a four-step process for establishing entitlement. An applicant must:

demonstrate that he or she has a claimed condition—an injury or disease, or an aggravation thereof;
demonstrate that the claimed condition "arose out of or was directly connected with" his or her service as a member of the CF;
establish that he or she suffers from a "disability" (a defined term in the Pension Act); and,
establish that the disability resulted from a military service-related claimed condition.
The VRAB need not proceed through the test in this order, but in the most logical fashion for the circumstances of a particular case. Failure to establish any step would invalidate a claim.

Steps 1 and 3 involve factual determinations. Identifying the existence of the claimed condition in step 1 should not be conflated with the "disability" in step 3. In both steps 2 and 4, the VRAB must apply the correct causal connection imported by the Pension Act to the facts.

Causal Connection Intended by Phrase "Directly Connected With"

At issue in this case was the VRAB's treatment of step 2. It was common ground that Ms. Cole suffered from the claimed condition of major depression, but the VRAB was not convinced that  it "arose out of or was directly connected with" her military service because the evidence did not establish that the military service was the "primary cause."

As indicated above, the Court of Appeal found that the evidence actually established that there were two direct causes of the major depression: military factors and non-military factors. The question for the Court of Appeal then became, where there are two (or more) direct factual connections, does "directly connected with" require the applicant to show that military service was the "primary" cause, or some other causal connection?

The proper approach is not to assess which of the two direct causes is the "larger" one, as would be required in the "primary cause" or "but-for" interpretation. On the primary cause test, if personal factors were 51% or more responsible for the condition, it would mean that military service factors were only 49% responsible and would defeat the claim.

Such an outcome would be incongruous with the purpose of the legislation. Parliament's intention was that the Pension Act and Veterans Review and Appeal Board Act should facilitate, rather than impede, the awarding of pensions to disabled veterans, given their sacrifice and service to the country. In light of this, the primary cause test is both incorrect and unreasonable. Thus, while it would be insufficient for pension entitlement if military factors were merely 1% directly responsible for the claimed condition, an applicant must establish only "a significant causal connection" between the claimed condition and military service.

What is a "significant" cause"? The Federal Court of Appeal described a sufficiently significant cause as one that is "less than primary" and is "not insignificant." The term cannot be defined with mathematical precision and need not be. Whether military factors exist and are a significant causal connection is a question for the VRAB to assess in any given case.

Mental Health Context

The Cole decision will be of particular interest for veterans bringing applications in relation to claimed mental health illnesses. The decision indicates an awareness of the complexity of assessing causality in cases of mental illness. For example, Gauthier J.A. made the following comment: "considering the number of multiple etiology diseases, particularly psychological and emotional disease where there is no reasonable scientific method of apportioning precisely degrees of causation, it is not possible to read into paragraph 21(2)(a) that compensation is only available if the service-related factors are the primary cause of the disease."

Main takeaways

Where there are two or more direct causes of a claimed condition, the applicant must show that military service factors were a significant cause in order to satisfy step 2 of the test.
Sections 2 and 3 of the Pension Act and Veterans Review and Appeal Board Act, which contain Parliament's intended purposive mandate for the statutes, is of considerable assistance in interpreting the legal standard of causation in paragraph 21(2)(a) of the Pension Act.
The interpretation of the phrase "arose out of or directly connected with" is an extricable question of law that must be decided correctly.
The Federal Court of Appeal cautioned against conflating the various elements of the paragraph 21(2)(a). For instance, the "claimed condition" is not the "disability", "arose out of" is not "directly connected to." The VRAB would be wise to precisely identify what steps of the test they are addressing in any given claim.