Case: Nova Scotia (Workers’ Compensation Board) v. O’Brien, 2026 NSCA 5
Keywords: knee problems; stay pending application for leave to appeal; workers’ compensation benefits
Synopsis:
The Nova Scotia Workers’ Compensation Tribunal (“WCAT”) makes a determination (i.e., that Patricia O’Brien’s compensable injury materially contributes to ongoing knee problems). The Workers’ Compensation Board seeks leave to appeal that determination. In the meantime, the Board seeks a partial stay of the workers’ compensation benefit payment due to Ms. O’Brien. (See paras. 1-2). The Court of Appeal per Gogan J.A., dismisses the motion for stay. (See para. 3).
Importance:
The Court of Appeal helpfully summarizes the “principles guiding a stay application” at paras. 4-6. First, and importantly from a strategic perspective in Nova Scotia, “[a] notice of appeal does not stay the execution of the decision under appeal”; the decision is “presumed correct and a successful litigant is entitled to the ‘fruit of its litigation’”. (See para. 4).
Granting or not granting a stay is a matter of judicial discretion. The exercise of that discretion is governed by the “Fulton test”, pursuant to which the moving party carries the burden of showing, on a balance of probabilities,
- an arguable issue for appeal;
- irreparable harm if the stay was to be denied; and
- that the balance of convenience favours a stay. (See para. 5; Muir v. Day, 2022 NSCA 34 (CanLII) at para. 6; Fulton Insurance Agencies Ltd., v. Purdy, 1990 CanLII 2357 (NS CA)).
The Court also quoted paras. 7-8 of Muir, which indicate:
- that there is a further, “exceptional circumstances” criterion, which allows the court to grant a stay on the basis of it being “fit and just” to do so; and
- that the Fulton test imposes a “fairly heavy burden” on the party seeking a stay (i.e., because the remedy would prevent the other side from “realizing the fruits of [their] litigation pending the hearing of the appeal”).
Of further interest, the Court was applying the Fulton test in the context of a pending leave to appeal application, filed prior to the stay motion. (See para. 13).
In these circumstances, the Court of Appeal has sought to avoid “stepping into territory a panel of this Court will be traversing”. (See para. 17-18; Maynard Holdings Limited v. IForm Works Inc., 2022 NSCA 54 (CanLII), at paras. 19-27). For Gogan J.A., the “arguable issue” criterion must be “approached with caution” because it “treads very nearly identical ground to that being assessed by the panel on the question of leave”. (See para. 19). Ultimately, the Court declined to assess the question, “deferring that assessment to the panel hearing the leave application”. (See para. 19).
Regarding irreparable harm, Gogan J.A. noted the Board’s argument that “the potential inability to repay the entire amount is a sufficient basis for irreparable harm”. (See para. 20; emphasis in original). While an inability to repay may constitute irreparable harm, the Court found this was relevant but not determinative. (See para. 22; Cape Breton Development Corporation v. Nova Scotia (Workers’ Compensation Appeals Tribunal), 2008 NSCA 11 (CanLII), at para. 18 [“Devco”]).
Ultimately, the question of irreparable harm is “context driven”. Therefore, the Court considered the wider purpose of the workers’ compensation scheme and the benefits in question. In Devco, the Court of Appeal previously emphasized the distinction between workers compensation benefits and conventional damage awards, finding that such benefits are “the product of an ‘historic trade-off’ where a worker…foregoes all rights to sue an employer in return for an immediate payment regardless of fault or the employer’s ability to pay”. (See Devco at para. 21).
While the Board herein sought to distinguish Devco, Gogan J.A. found that it remains “persuasive and binding authority” and was not satisfied the Board established “irreparable harm flows from the requirement to pay Ms. O’Brien the benefits she is presently entitled to receive”. (See paras. 26, 30).
Finally, as to the balance of convenience criterion, the Court found:
- the Board’s concern was primarily financial (i.e., ‘it is only money’);
- that the everyday business of the Board is “to administer the system of benefits and seek recovery of overpayments”; and
- that the balance of convenience in this case “clearly favours Ms. O’Brien”. (See para. 33).
Counsel for the Appellant Workers’ Compensation Board of Nova Scotia: Rory Rogers, K.C. and Paula Arab, K.C.
Counsel for the Respondent Patricia O’Brien: Vanessa Nicholson and Danielle St. George
Counsel for the Respondent Workers Compensation Tribunal Appeal Board (watching brief): Alison Hickey
Counsel for GEM Health Care Group Limited (not participating): Syed Hussain
Counsel for the Respondent Attorney General of Nova Scotia (not participating): Edward Gores, K.C.
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