Date: 20060623
Docket: T-1899-04
Citation: 2006 FC 807
Vancouver, British Columbia, June 23, 2006
PRESENT: The Honourable Mr. Justice Kelen
BETWEEN:
KELOWNA FLIGHTCRAFT AIR CHARTER LTD.
Applicant
and
JAMES WITHERS
Respondent
REASONS FOR JUDGMENT AND JUDGMENT
[1] This is an application for judicial review of a decision of an adjudicator appointed under subsection 242(1) of the Canada Labour Code, R.S.C. 1985, c. L-2 (Code), assuming jurisdiction to hear the Respondent's complaint against his employer for unjust dismissal. This case raises the issues of whether an adjudicator under Part III, Division XIV of the Code has jurisdiction to rename an incorrectly named employer responding to a complaint of unjust dismissal.
FACTS
The parties
[2] The Applicant, Kelowna Flightcraft Air Charter Ltd. (KFAC Ltd.), is an airline operating cargo and passenger services in North America, and was incorporated in the province of British Columbiaon May 21, 1974. The evidence before the Court is that KFAC Ltd. is one of five corporations comprising the "Kelowna Flightcraft Group of Companies" (Group), including Kelowna Flightcraft Ltd. (KF Ltd.), Kelowna Flightcraft Leasing Ltd., Kelowna Flightcraft R & D Ltd. and Ontario Flightcraft Ltd.
[3] It is common ground that the Respondent was employed for six (6) years, nine (9) months by KF Ltd., a Group company, as an unlicensed aircraft maintenance engineer from June 17, 1996 until his termination on March 24, 2003.
[4] KF Ltd. is a company providing maintenance and repair services to third party aircraft owners including the Applicant. The Applicant and KF Ltd. have common ownership.
Complaint of unjust dismissal
[5] On April 30, 2003, the Respondent complained to an inspector under Part III, Division XIV, subsection 240(1) of the Code that he was unjustly dismissed. In his complaint, the Respondent named his employer as the Applicant, KFAC Ltd., and not KF Ltd., his actual employer. At a hearing convened on July 27, 2004, the Applicant moved that the adjudicator appointed under subsection 242(1) dismiss the Respondent's complaint because it was not, and had never been, the Respondent's employer. The Applicant submitted that the adjudicator had no jurisdiction to hear a complaint in respect of a named entity that had not employed a complainant. On consent of the parties, the adjudicator adjourned to decide the preliminary question of jurisdiction on written submissions from both sides.
DECISION OF THE ADJUDICATOR
[6] It is common ground between the parties that the adjudicator decided on September 23, 2004, that he had jurisdiction to hear the Respondent's unjust dismissal complaint against his employer. Neither the decision under review nor its reasons are in the record before the Court.
RELEVANT LEGISLATION
[7] The legislation relevant to this appeal is the Canada Labour Code, R.S.C. 1985, c. L-2, and the Federal Courts Rules, SOR/98-106, the relevant excerpts of which are set out in Appendix "A" following these reasons.
ISSUES
[8] Two issues are raised on this application:
1. Is the record before the Court sufficient for the Court to judicially review the adjudicator's decision?
2. In the alternative that the Court can allow the record to be amended at the hearing, did the adjudicator have the jurisdiction to find that the Applicant is estopped from objecting to the adjudicator's jurisdiction over this unjust dismissal complaint, and did the adjudicator have the jurisdiction to correct the name of the employer set out in the complaint from "Kelowna Flightcraft Air Charter Limited" to "Kelowna Flightcraft Ltd."?
STANDARD OF REVIEW
[9] The Court must decide the standard of review of an adjudicator appointed under subsection 240(1) of the Code deciding a question of jurisdiction on a pragmatic and functional analysis. As articulated by Chief Justice McLachlin for the Supreme Court of Canada in Dr. Q v. College of Physicians and Surgeons of British Columbia, [2003] 1 S.C.R. 226 at paragraph 26, four factors must be considered in this analysis:
1. the presence of a privative clause or statutory right of appeal;
2. the expertise of the tribunal relative to the reviewing court;
3. the purpose of the legislation; and
4. the nature of the question.
[10] For the first factor, subsections 243(1) and (2) are strong legislative privative clauses insulating an adjudicator's decision made under section 242 from review:
| Decisions not to be reviewed by court
243. (1) Every order of an adjudicator appointed under subsection 242(1) is final and shall not be questioned or reviewed in any court.
No review by certiorari, etc.
(2) No order shall be made, process entered or proceeding taken in any court, whether by way of injunction, certiorari, prohibition, quo warranto or otherwise, to question, review, prohibit or restrain an adjudicator in any proceedings of the adjudicator under section 242.
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Caractère définitif des décisions
243. (1) Les ordonnances de l'arbitre désigné en vertu du paragraphe 242(1) sont définitives et non susceptibles de recours judiciaires.
Interdiction de recours extraordinaires
(2) Il n'est admis aucun recours ou décision judiciaire - notamment par voie d'injonction, de certiorari, de prohibition ou de quo warranto - visant à contester, réviser, empêcher ou limiter l'action d'un arbitre exercée dans le cadre de l'article 242.
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Accordingly, this factor favours high deference to an adjudicator's decision.
[11] For the second factor, an adjudicator has specialized expertise respecting employment in the operation of federal works, undertakings or businesses, in particular hearing and adjudicating unsettled complaints of unjust dismissal in respect of which the Minister receives reports from an inspector designated under section 249. As a result, deference is owed to an adjudicator's determination of factual questions. For questions of statutory interpretation or defining the scope of an adjudicator's jurisdiction under the Code, the Court has greater expertise, and less deference is owed.
[12] The third factor is the purpose of the legislation, in this case the Code. In Dynamex Canada Inc. v. Mamona(2003), 228 D.L.R. (4th) 463 (F.C.A.) at paragraph 35, Madam Justice Sharlow held at paragraph 35 that, "the object of Part III of the Canada Labour Code is to protect individual workers and create certainty in the labour market by providing minimum labour standards and mechanisms for the efficient resolution of disputes arising from its provisions." The specific purpose of Division XIV of the Code is to provide an effective dispute resolution mechanism for unjust dismissal complaints, rather than resorting to costly litigation. The purpose of the legislation therefore favours great deference.
[13] The fourth factor is the nature of the adjudicator's decision at issue assuming jurisdiction to hear the Respondent's complaint. The disputed questions in this case are questions of law and jurisdiction, for which the Court has more expertise than the adjudicator so that no deference is due. Accordingly, such questions are reviewed on a correctness standard.
ANALYSIS
Issue No. 1: Is the record before the Court sufficient for the Court to judicially review the adjudicator's decision?
[14] The Court cannot judicially review the adjudicator's decision in this case because:
1. the Applicant did not include the adjudicator's decision in its application record, as required under Rule 309(2)(c) of the Federal Courts Rules, SOR/98-106;
2. the Applicant failed to have the record before the adjudicator transmitted to the Court, as provided for in Rule 317 of the Federal Courts Rules, and as is normal practice; and
3. at the hearing, the Applicant sought to rely on new arguments and cases not in its memorandum of fact and law, and to which the Respondent could not respond.
[15] At the hearing of this application, the Applicant, represented by new counsel, sought to provide the Court with the adjudicator's decision and other material which should have been part of the record. The Respondent, who resides in Ontario, did not appear at the hearing. He filed a memorandum of fact and law, advised the Court that he would not appear because of the costs involved in traveling to Vancouver for the hearing, and requested that the case be considered on the basis of his memorandum. Accordingly, the Respondent could not object, consent or comment on the addition of new material or upon the new arguments and cases. The Court cannot allow the record to be amended at the hearing without the consent of the Respondent, particularly where the Respondent is not in a position to respond to new arguments and cases.
[16] Nevertheless, in the alternative that the Court can allow the record to be amended at the hearing, including the reliance by the applicant upon new arguments and cases not contained in its memorandum of fact and law, the Court will decide the substantive issues raised by the applicant's new counsel.
Issue No. 2 In the alternative that the Court can allow the record to be amended at the hearing, did the adjudicator have the jurisdiction to find that the Applicant is estopped from objecting to the adjudicator's jurisdiction over this unjust dismissal complaint, and did the adjudicator have the jurisdiction to correct the name of the employer set out in the complaint from "Kelowna Flightcraft Air Charter Limited" to "Kelowna Flightcraft Ltd."?
[17] The Court will consider in the alternative, on a correctness standard of review, whether the adjudicator had the jurisdiction to find that the Applicant is estopped from objecting to the jurisdiction of the adjudicator and, in any event, whether the adjudicator had the jurisdiction to correct the name of the employer identified in the complaint. The Court will set out the relevant excerpts from the decision of the adjudicator, consider the doctrine of estoppel and waiver, and then consider whether the adjudicator, in any event, had the equitable jurisdiction to correct the name of the employer identified in the complaint.
The Adjudicator's Decision
[18] The decision of the adjudicator, which was not part of the Application Record, but which the Court is considering in the alternative, is a decision by Mr. E. Palmer, Q.C. and is dated September 23, 2004.
[19] The adjudicator's decision reads, in part, at pages 16 and 17:
... Having considered this matter, it is my view that the Complainant should be allowed to continue this case against the altered defendant, Kelowna Flightcraft Ltd.
In coming to this decision I should first note that the objection raised on behalf of Kelowna Flightcraft Air Charter Limited, Mount Hope, is entirely technical. While there is nothing intrinsically wrong with raising this type of objection, usually there is some substantial reason supporting this action other than the mere hope of success. Here there is no such underlying factors, despite argument by counsel to the contrary.
In this regard, it seems obvious that the principals for the named Respondent were well aware of what was at issue in this case, yet did not take any steps to raise the objection now before me. Rather, they participated in attempts to resolve this at an earlier stage in these proceedings. Only when counsel became involved and pointed this issue out did the named Respondent decide to raise this issue. Consequently, it is not open to them to argue they were somehow misled as to what was occurring.
Again, I cannot see the detriment to the named Respondent if the complainant's position is upheld. Indeed, quite the opposite might be the case....
...
... I believe, however, there is no question that I am vested with equitable jurisdiction to make a ruling in the form of an estoppel. This is an obvious situation where such jurisdiction should be exercised. By their earlier participation in this process without protest such constitutes a representation upon which the Complainant relied. To allow the Respondent to resile from this position at this point is patently inequitable and so I rule against them on this point.
[20] Accordingly, the adjudicator found:
1. the objection is entirely technical and there is no substantial reason supporting this objection;
2. the principals for the person named as the employer were well aware of the mistake but did not take any steps to raise any objection while they participated in the earlier stages of the adjudication to mediate the settlement;
3. there is no detriment to the named employer (because the named employer and the actual employer are owned by the same person and operate as a group of companies); and
4. the adjudicator is vested with equitable jurisdiction to make a ruling in the form of an estoppel and this is an obvious situation where the principle of estoppel applies to prevent a "patently inequitable" result.
(a) Equitable Jurisdiction
[21] The Applicant was not able to refer the Court to any authority that the adjudicator does not have equitable jurisdiction. Section 242 of the Canada Labour Code empowers the adjudicator to determine the procedure to be followed and to consider all information relating to the complaint. In paragraph 242(4)(c) of the Canada Labour Code, the adjudicator has the power to require the employer who dismissed the person to do anything that is "equitable" in order to remedy or counteract any consequence of the dismissal. While Parliament has expressly provided the adjudicator with equitable jurisdiction with respect to remedies, the Court finds that Parliament has implicitly also provided the adjudicator with equitable jurisdiction, under subsection 242(2) of the Canada Labour Code, to determine the adjudication with regard to all the evidence, information and submissions relevant to the complaint.
[22] Equity has its origins in response to the harshness of the common law. See Jeffrey Berryman's The Law of Equitable Remedies (Toronto: Irwin Law, 2000) at Chapter 1, para. A:
Most legal systems present a paradox. The very raison d'être of a legal system is to provide a just ordering and moral guidance to the citizenry. Such a goal places a premium on universality and certainty - a citizen needs to rest secure in his knowledge of the application of laws and legal principles before undertaking activities or entering into adjudication. The paradox is that slavish attention to rules and principles can itself perpetuate an injustice....
[23] In Canada, the superior courts have inherent and statutory jurisdiction in both common law and equity. The Ontario Court of Appeal in LeMesurier et al. v. Andrus (1986), 25 D.L.R. (4th) 424 (C.A.), per Grange J.A. at 432, held that "[w]hatever the original intention of the Legislature, the fusion of law and equity is now real and total." In her dissenting judgment in MacMillan Bloedel Ltd. v. Simpson, [1995] 4 S.C.R. 725, Madam Justice McLachlin (as she then was) held that Parliament may confer some powers exercised by section 96 courts on inferior courts or tribunals. She stated at paragraph 54:
... short of impairing s. 96 courts, nothing in the Constitution suggests that Parliament should not be able to clothe inferior tribunals with s. 96 powers ancillary or necessary to their functioning. Moreover, many of the complex problems created by modern society require regulation by specialized administrative agencies. Effective regulation, in turn, may require a system of internal enforcement by specialized tribunals wielding some of the powers traditionally exercised by s. 96 courts.
[24] Equity is a power within the jurisdiction contemplated by section 96 of the Constitution, and is necessary for the functioning of administrative tribunals. I am satisfied that Parliament has vested adjudicators exercising powers under Division XIV of the Canada Labour Code with express and implicit equitable jurisdiction.
(b) Doctrine of Estoppel
[25] The Respondent submits, and the Court agrees, that the Applicant has waived its right to, and is estopped from objecting to the adjudicator's jurisdiction over the complaint.
[26] In Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co., [1994] 2 S.C.R. 490, the Supreme Court of Canada held that the doctrines of waiver and estoppel are engaged where a party should not be allowed to go back on a choice where it would be unfair on the other party to do so. At paragraphs 18 to 20, Mr. Justice Major stated:
¶ 18...[T]he principle underlying both doctrines [waiver or promissory estoppel] is that a party should not be allowed to go back on a choice when it would be unfair to the other party to do so...
¶ 19 Waiver occurs where one party to a contract or to proceedings takes steps which amount to foregoing reliance on some known right or defect in the performance of the other party...
¶ 20 Waiver will be found only where the evidence demonstrates that the party waiving had (1) a full knowledge of rights; and (2) an unequivocal and conscious intention to abandon them. The creation of such a stringent test is justified since no consideration moves from the party in whose favour a waiver operates. An overly broad interpretation of waiver would undermine the requirement of contractual consideration.
[27] In the case at bar, the Applicant was obliged to object to the complaint as filed at the earliest opportunity, when it first received notice that the Respondent filed a complaint against it under subsection 240(1) of the Code. There were many opportunities prior to the adjudication for the Applicant to give notice that it objected to the complaint proceeding as filed. By failing to object at the time it was notified of the complaint, during the investigation conducted by Minister's Inspector designated under section 249 of the Canada Labour Code and during the mediation prior to adjudication, the Applicant demonstrated full knowledge of its right to object to the complaint's deficiency and an unequivocal, conscious intention to abandon that right. Further, none of the Applicant's acts were sufficient to retract that waiver. The Applicant chose not to object to the complaint and it would be unfair to the Respondent to allow the Applicant to go back on that choice.
[28] The object of the unjust dismissal provisions of the Canada Labour Code (sections 240 to 246) is to protect individual workers and provide a mechanism for the efficient resolution of disputes regarding unjust dismissal complaints.
[29] In the Applicant's memorandum of fact and law, it is stated at paragraph 6:
The Applicant and KFL are two separately incorporated legal entities. Within the Kelowna Flightcraft Group of Companies, there are also Kelowna Flightcraft Leasing Ltd., Kelowna Flightcraft R & D Ltd. and Ontario Flightcraft Ltd.
[30] The Applicant and KFL are two of five companies, within the same group of companies, owned by the same persons. It strikes the Court as legally improper for the lawyer employed by the "Group of Companies" to state that a maintenance worker for one of the Group companies, who was dismissed after six years of employment, has brought the labour complaint against the wrong company in the Group. This is particularly unfair when the Applicant participated in the labour mediation process under the Canada Labour Code leading to the adjudication of the complaint, and only raised the technical objection at the adjudication hearing. The Applicant had the legal obligation to object upon receiving notice of the complaint of alleged unjust dismissal at the earliest reasonable opportunity after the complaint was filed on April 30, 2003. Instead, the Applicant participated in a mediation process to resolve the complaint. At that point, it waived and was estopped from objecting to the complaint on the basis that it was not the employer of the Respondent.
[31] Accordingly, upon reviewing the decision of the adjudicator, the Court finds, on a standard of correctness, that the adjudicator correctly found that he was vested with equitable jurisdiction to make a ruling in the form of an estoppel, and that this case is an obvious situation where such jurisdiction should be exercised.
[32] Accordingly, the Applicant, Kelowna Flightcraft Air Charter Limited, waived its right to object that it was not the employer, and was estopped from doing so.
(b) Power to correct name of employer
[33] In the alternative that the Applicant was not estopped from objecting that it was not the employer, did the adjudicator have the power to correct the name of the employer? The Applicant submits:
1. that the adjudicator did not have that power to amend the name of the employer because that power is not expressly set out in subsection 242(2) of the Canada Labour Code.
2. that Parliament limited the powers of the adjudicator in paragraph 242(2)(c) of the Canada Labour Code to those conferred on the Canada Industrial Relations Board under three paragraphs which relate to the conduct of a hearing; and
3. that Parliament has given the Canada Industrial Relations Board extensive other powers, including the power to add a party to the proceedings at any stage of the proceedings pursuant to subsection 16(o) of the Canada Labour Code, which power was not given to the adjudicator.
[34] The Court disagrees. Parliament did not intend the adjudicator to be restricted to those powers under paragraph 16(a), (b) and (c), which relate to one aspect of the adjudication, the power to conduct the hearing, enforce the attendance of witnesses and compel evidence.
[35] As discussed above, the adjudicator has an equitable jurisdiction, which is necessary to determine the adjudication of the complaint. This equitable jurisdiction includes the power to correct the name of the employer identified in the complaint if there is no detriment to the Applicant or Kelowna Flightcraft Ltd. if the name of the employer was corrected. Both companies have the same ownership and both operate together as a Group. The case would be different if they were unrelated entities, not operating as a group and not having common ownership. The Court agrees with the finding of fact by the adjudicator that this objection is "entirely technical", and for the purpose of preventing the adjudication of this labour complaint on its merits.
Costs
[36] The Court has found that the position taken by the Applicant before the adjudicator was inequitable, and sought to prevent the adjudicator from expeditiously and fairly resolving this labour dispute. The objection by the Applicant has delayed the adjudication and caused the Respondent expense. The Applicant then brought this application for judicial review, which was deficient for the reasons set out herein. Accordingly, the Respondent is entitled to his legal costs. The amount requested by the Respondent is $1,500.00, which is reasonable.
JUDGMENT
THIS COURT ORDERS AND ADJUDGES THAT:
This application for judicial review of the decision of the adjudicator dated September 23, 2004, is dismissed with costs to the Respondent in the amount of $1,500.00.
"Michael A. Kelen"
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