Canada's top court on Thursday refused to review for the second time the case of a group of disabled veterans and their families seeking billions of dollars for interest on pensions kept in trust.

Up to 35,000 veterans whose pensions were managed by the federal government have been fighting to make Ottawa pay interest that accrued on a pension fund from 1918 to 1990. Those veterans were judged unable to manage their own finances as the result of a disability.

The class-action lawsuit, estimated to be worth $4.6 billion in 2005, has already made its way through the legal system, culminating in a 2003 Supreme Court of Canada ruling that Ottawa was within its rights to not pay interest due to a provision in the Veterans Affairs Act.

The veterans' lawyers expressed disappointment at the Supreme Court's decision on Thursday to dismiss an application to hear the case again based on a different argument.

"It would appear … that the lawsuit has come to a halt," said the group's lawyer, David Greenaway.

After the 2003 decision by the top court, lawyers representing the veterans and their families argued before Ontario courts that the Supreme Court decision addressed the issue of interest, but not damages owed by Ottawa for failure to invest.

In July 2007, the Ontario Court of Appeal ruled that the earlier Supreme Court decision stands, even though an Ontario court two years earlier had agreed with the veterans and their families.

But Greenaway said he hopes that the federal government might still take the moral high ground despite court rulings that Ottawa has the right to refuse to pay the interest.

"Even though the lawsuit is at an end, that doesn't mean that the government still can't do the right thing by the veterans," he said.

Ottawa has admitted to mismanaging the veterans' funds. The same year the government passed the legislation blocking claims for interest before 1990, it also decided to start paying the interest.

Most of the veterans represented in the lawsuit have died. They include Joseph Authorson who was named as the lead plaintiff. Fewer than 1,000 are still alive.