NEWS

Soldier Neil Dodsworth launches class action over home sale losses

09/30/2014 04:30 EDT | Updated 11/29/2014 05:59 EST
A Canadian soldier who lost more than $72,000 selling his home has launched a proposed class action lawsuit accusing the federal government of denying full compensation to dozens of military personnel who suffered large financial hits when ordered to move.

Master Warrant Officer Neil Dodsworth has spent 33 years in the Canadian Forces and has served in Somalia, Afghanistan and earthquake-ravaged Haiti. He's currently stationed at CFB Gagetown in New Brunswick.

In 2007, Dodsworth was posted to CFB Edmonton. Unable to find a spot in military housing or afford Edmonton’s soaring home prices, he and his family bought a condo row house in Morinville, a town about 35 kilometres outside the city.

A year later he was moved again, but by that time the housing market had crashed in Morinville. Dodsworth finally sold the home at a large loss, but thought he'd be fully compensated under a federal Treasury Board program called Home Equity Assistance.

He learned otherwise — on the day the family was moving.

"The movers were taking my furniture out the front door. I was on a cellphone in the back of the house and told, 'Your compensation is denied,'" Dodsworth told CBC News.

"If there's one time I wanted to curl up and cry, [it] was then."

The Home Equity Assistance program is supposed to protect Canadian Forces members against large financial losses when they are forced to sell their homes in so-called "depressed markets." The government has defined those markets as communities where real estate values drop by 20 per cent or more.

'It was a kick every time'

Dodsworth said he battled for four years for compensation beyond an initial $15,000 offered by the military, submitting documentation showing the Morinville housing market had collapsed by up to 30 per cent.

He went through adjudication, the military grievance board, an ombudsman and appealed directly to the minister of defence. Many were sympathetic, Dodsworth said, but the government remained unmoved.

"It was a kick every time. Just turning around and getting that denial stuffed in your face," he said.

"But you have to stay within the military process. That's why you wear the uniform. If you don't like something, take it up your chain of command. It's always been the way we deal with things."

Earlier this month, Dodsworth's lawyer quietly filed a class action lawsuit at the Halifax office of the Federal Court of Canada.

The statement of claim alleges that between July 2008 and January 2013 there were 118 applications to the Home Equity Assistance program for losses greater than $15,000. Just two were successful in getting full compensation.

Dan Wallace, a Halifax-based lawyer, said he suspects there are roughly 150 members of the Canadian Forces who may have been unfairly denied compensation by the Treasury Board.

Unlike most Canadians, members of the military have little choice but to accept postings ordered by superiors, he said, and the Home Equity Assistance program is supposed to protect them financially.

Defence not yet filed

"This protection that was there for them and that they thought they had with them their entire career, really wasn't worth anything," Wallace said in an interview with CBC News.

"That's one of the most unfair things about this — is they're told in recruitment documents that 'Your expenses are covered, don't worry about moving, we know it can be tough on your family, but the financial aspects are covered.'

"Unfortunately, that was not the case when Neil did suffer loss, through no fault of his own, simply by following orders."

None of the allegations have been tested in court. The federal government has not yet filed a defence and the class action has not yet been certified.

The statement of claim said the Treasury Board has denied there are any depressed markets in Canada.

Dodsworth said his family not only lost all equity in the home, the sale price didn't even cover the mortgage and he was forced to take out an emergency $21,000 bank loan.

The situation created so many financial headaches that even though he was approaching retirement, Dodsworth said he volunteered in 2011 for a tour of Afghanistan so he could earn extra pay.

"At the end of the tunnel you want to see that retirement," he said. "I'm still here in uniform because of this issue. I could have retired last year at age 55."

Simliar case

Dodsworth's case is similar to that of Maj. Marcus Brauer, a soldier at CFB Halifax. He lost $88,000 when he moved from Bon Accord, Alta., and was compensated just $15,000 even though the real estate market in the town had sunk by 23 per cent.

In his case the federal government claimed that Bon Accord, a community with its own mayor and council, should nonetheless be considered part of Edmonton where housing prices had not slumped by nearly as much.

In May, a federal court judge ruled in favour of Brauer, saying the denial of compensation had been "devastating" for the soldier and his family and the Treasury Board was being "unreasonable."

The judge ordered the Treasury Board to re-examine its decision and said it must consider Bob Accord a standalone community.

The federal government has now paid Brauer's legal fees, but four months after the ruling he’s still not seen a penny of compensation from the Treasury Board.

Last week, Treasury Board president Tony Clement told the House of Commons the federal government would obey the court ruling in the Brauer case.

"The review is underway, I am informed, and will be completed soon," he said. "Then, of course, government will consider the review and act accordingly."

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