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Appeals: Confirmed Referee Decisions : #135 - March 1, 2004

Decision of the Court having jurisdiction in the Class Action attached - April 28, 2005

D E C I S I O N

1. On October 17, 2003 the Administrator denied the claim for compensation for certain family members of the deceased HCV Infected Person on the basis that the Claimants did not satisfy the criteria for entitlement required by section 3.07 of the Settlement Agreement.

2. The hearing took place on July 8, 2003 but was adjourned for receipt of written submissions, received January 19, 2004.

3. Neither party disputed the following facts:

  • the Primarily-Infected Person died on November 27, 2000;
  • the Claimants on this Appeal are twin siblings born January 27, 2003 who are children of the son of the deceased Primarily Infected Person.
  • The Claimants applied for compensation in their capacity as grandchildren born after the death of their grandparent, the Primarily Infected Person.
  • The Administrator denied the application for compensation under the 1986 – 1990 Hepatitis C Settlement Agreement upon a consideration of section 3.07 which reads as follows:

“3.07 A person claiming to be a Family Member referred to in clause (a) of the definition of Family Member in section 1.01 of a deceased HCV Infected Person must deliver to the Administrator, within two (2) years after the death of such HCV infected person or within two (2) years after the Approval Date within one (1) year of the claimant attaining his or her age of majority, whichever is the last to occur, an application prescribed by the Administrator …”

4. The Administrator adverted to clause (a) of the definition of family member in section 1.01 which reads as follows:

“Family Member” means:

(a) The Spouse, Child, Grandchild, Parent, Grandparent or Sibling of a HCV infected person.

5. The Administrator concluded that the above sections provide that the relatives of the deceased who can make a claim include only the spouse, children, grandchildren, grandparents or siblings. Further, the family members must first make their claim within the latest of the time lines listed below:

(i) two years after the death of the HCV infected person;

(ii) two years after the approval date (January 22, 2000) of the Settlement Agreement;

(iii) one year after the family member attains his/her age of majority.

6. The Administrator denied the claim for compensation because the grandchildren were neither conceived nor born at the time of the Primarily Infected Person’s death.

7. The parties agree that the sole issue on this Appeal is the meaning of the term “grandchild” which requires an interpretation of this definition under the Transfused HCV Plan (“Plan”). The Plan defines the following terms:

“Grandchild” means the Child of a Child.

“Child” includes:

(a) an adopted child;

(b) a child conceived before and born alive after his or her parent’s death; and

(c) a child to whom a person has demonstrated a settled intention to treat it as a child of his or her family;

but does not include a foster child placed in the name of an HCV Infected Person for valuable consideration.

8. Fund Counsel submits that the definition is clear that a child who is born after a parent’s death will qualify for compensation only if the child was conceived before the death of the parent. Fund counsel submits that the Administrator has applied the definition of “grandchild” so that it is similarly restricted in its application. Accordingly, a grandchild conceived before and born after a grandparent’s death qualifies for compensation, however, a grandchild both conceived and born after the grandparent’s death does not qualify for compensation.

9. Fund Counsel submits that the definition of “grandchild” should be restricted in the same manner as the definition of “child” on the basis that it is neither fair nor reasonable to treat grandchild more liberally than children in considering their eligibility for compensation under the Plan.

10. While the Plan itself is silent in respect to the interpretation of this definition, Fund Counsel points out that at common law the grandchild born after a grandparent’s death has no right of action and since the grandchild is not alive at the time of the grandparent’s death it cannot be said that the grandchild has suffered a loss.

11. Fund Counsel submitted that :

  • the common law principles as they apply to estates should be considered to make the appropriate interpretation. It is submitted that the applicable rule in estate’s law is that “heirs and next of kin are to be ascertained as at the death of the ancestor” Re Crow (1912), 2 D.L.R.103 (O.H.C.),p 2 (QL); Re Jeffrey (1922), 23O.W.N. 180; Re Hammond Estate [ 1935 ] S.C.R. 550 (S.C.C.) and Re Major (1969), 10D.L.R. (3rd) 107 (O.H.C.).
  • This rule should prevail unless the testator has given an indication in the will as to the time for ascertaining the class and the period of distribution.

12. The Claimants’ Representative disputes that the definition of “child” is restrictive but should be interpreted as having an intention to broaden the class of who could be considered to be a child. The Claimant’s Representative argues that apart from modern science, all children are conceived before the death of a parent and therefore sub clause (b) of the definition was intended to broaden the definition by including children not born while the parent was alive. It follows that the definition of “grandchild” should be interpreted broadly to include those grandchildren born after the death of a grandparent, as the definition of child under the Plan is not intended to be all-inclusive. Those included in the class should be anyone who naturally would be considered a child.

13. Alternatively, it is argued that the claimants can bring themselves under (c) of the definition of “child” as they were each intended to be treated as a child of the son of the Primarily-Infected Person and as their father is clearly the child of the Primarily Infected Person, the claimants satisfy the definition of “grandchild.” The Claimants’ Representative says that it is not appropriate to use by analogy the common law principles of estate law since the Plan is not a testamentary instrument but a settlement agreement, which is by nature a contract. The purpose of the settlement agreement was to establish who is entitled to claim and the amounts that may be claimed without the necessity of proceeding to trial. Accordingly, the common law principles as to entitlement should not apply, as there is no ambiguity interpreting the terms of the Plan.

14. It is argued that the drafters of the Plan could have stipulated that grandchildren must be born prior to the death of the Primarily-Infected Person but as they did not do so, it should not be interpreted in that fashion. Further, the agreement clearly defines the grandchild as “a child of a child” and these Claimants fall within that definition.

15. The Claimants’ Representative submits further that the settlement agreement contains no requirement to prove that the claimants experienced a loss but rather provides for compensation merely on the basis of the claimants’ status as grandchildren. This loss is real since the claimants, like those claimants who were conceived or alive at the time of the death of the Primarily-Infected person, will not have the care and companionship of the Primarily-Infected person or the benefit of coming to know him.

16. It is evident that the Plan does not expressly address the issue on this Appeal and I must seek to determine the intention of the drafters had they turned their respective minds to this issue at the time of finalizing its terms. I agree that it is useful to consider the principles of law developed in the area of the law of estates but I also agree that the interpretation of a will is an imperfect analogy to the interpretation of a Class Action Settlement Agreement. On the other hand, the strict principles of contract law that fail to take into account the fact that this particular settlement agreement is dealing with the disposition of a limited fund should not be the subject of interpretation without taking that particular characteristic into account.

17. After considering all the submissions, I conclude that the most reasonable interpretation is that had the drafters considered the question, they would not have permitted the class to be kept open indefinitely. While it is true that all grandchildren born after the death of a grandparent miss the opportunity to enjoy his or her care, guidance and companionship, at the same time neither the principles of contract law nor the principles of estate law offer any justification for leaving the class of grandchildren open indefinitely and I conclude that to be reasonable and appropriate restriction.

18. In the result I uphold the Administrator’s denial of the claim for compensation.

Dated at Edmonton, Alberta, this 1st day of March, 2004.

__________________________________

Shelley L. Miller, Q.C.
Referee

J U D I C I A L D E C I S I O N

Judge Winkler's Decision - April 28, 2005

 

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