Sherman v. Canada (Customs and Revenue Agency), 2006 FC 1121

 

 

 

Date: 20060919

Docket: T-1046-04

Citation: 2006 FC 1121

Ottawa, Ontario, September 19, 2006

PRESENT:     The Honourable Madam Justice Hansen

 

BETWEEN:

 

SIMONE SHERMAN

Applicant

 

and

 

 

CANADA CUSTOM REVENUE AGENCY

 

Respondent

 

 

 

REASONS FOR ORDER AND ORDER

 

Introduction

 

[1]        This proceeding stems from a long-standing dispute between the parties.  As a result of a judicial review brought by the Applicant, on February 3, 2005, the Court ordered the Respondent to “provide the Applicant with retroactive pay (with interest) dating from August 28, 2000, based on a full-time rate of pay” (Order).  The Applicant alleges that the Respondent has disobeyed the Order by withholding $18,787.30 from the retroactive pay owed to the Applicant and by refusing to pay the Applicant interest for the period between August 28, 2000 and February 25, 2003.

 

[2]        On August 22, 2005, the Court ordered the Respondent to appear before the Court to answer these allegations of contempt.  That is the matter currently before the Court.

 

Agreed Facts

[3]        The Applicant started to work for the Respondent in 1985.

 

[4]        In 1994, the Applicant left work to recover from a work-related injury and claimed workers’ compensation benefits.  She returned to work at a different position in the fall of 1995.  In January 1996, the Applicant returned to her original position working four hours per day. 

 

[5]        On August 28, 2000, the Respondent terminated the Applicant’s employment.

 

[6]        On February 25, 2003, an Independent Third Party Reviewer (ITPR) ordered the Respondent to reinstate the Applicant, effective August 28, 2000.  On February 5, 2004, the ITPR released a letter stating that the Applicant was entitled to retroactive pay and benefits calculated on the basis of full-time employment.

 

[7]        In February 2004, the Respondent paid a portion of the retroactive pay at the rate of four hours per day and withheld $18,787.30 from the after-tax payments made to the Applicant.  The sum of $18,787.30 is the amount of benefits that the workers’ compensation board (WSIB) indicated was overpaid to the Applicant.

 

[8]        On March 9, 2004, the Applicant filed a grievance concerning the deduction of the WSIB overpayment.

 

[9]        On May 24, 2004, the Applicant commenced an application seeking an order of mandamus in respect of the ITPR decision.  On February 3, 2005, the Court granted an order of mandamus requiring the Respondent to “provide the Applicant with retroactive pay (with interest) dating from August 28, 2000, based on a full-time rate of pay.”     

 

[10]      In May 2005, the Respondent refused to pay interest for the period from August 28, 2000 (the date of the Applicant’s dismissal) to February 25, 2003 (the date of the ITPR’s decision) and continued to withhold $18,787.30 from the total payable.  The Respondent provided the Applicant with interest retroactive to the date of the ITPR decision.

 

Analysis

[11]      A person who disobeys a court order is guilty of contempt: Rule 466(b) of the Federal Courts Rules, SOR/2004-283.  The party alleging the contempt has the burden of proving the contempt beyond a reasonable doubt: Rule 469.  That is, all of the essential elements of the offence of contempt must be proved beyond a reasonable doubt.  Where the alleged contempt is the disobedience of a court order, the essential elements are the existence of the court order, knowledge of the order by the alleged contemnor, and knowing disobedience of the order.

 

[12]      Certain well established principles in relation to contempt are particularly relevant to this proceeding.  First, the legitimacy of an order is an irrelevant consideration in a contempt proceeding.  An individual bound by an order must obey the order while it remains in force until it is set aside by legal processes: Canada (Human Rights Commission) v. Taylor, [1990] 3 S.C.R. 892 at para. 90. 

 

[13]      Second, a finding of contempt cannot be based on a court order that is ambiguous.  It must be clear on the face of the order what is required for compliance: Telus Mobility v. Telecommunications workers Union, 2004 F.C.A. 59 at para. 4. 

 

[14]      Finally, in Peel Financial Holdings Ltd. v. Western Delta Land Partnership, 2003 BCCA 551 at para. 18, the British Columbia Court of Appeal summarized the principles applicable to contempt and stated that if the order said to be breached is ambiguous, the alleged contemnor is entitled to the most favourable interpretation.

 

[15]      The Applicant’s position is that the Respondent is in contempt of the Order by refusing to pay her interest between August 28, 2000 and February 25, 2003.  The Applicant also takes the position that the Respondent is in contempt of the Order by only paying the Applicant a portion of her retroactive pay and withholding the rest to set off WSIB overpayments.  At the hearing, the Applicant conceded that apart from the interest and the setoff issues, the Respondent has complied with all of the other aspects of the Order.

 

[16]      The Applicant submits that there is no dispute between the parties with regard to those facts that are material to the breach of the Court Order.  The Applicant maintains that the February 3, 2005 Order is “crystal” clear.  As well, it is also clear that the Respondent has refused to pay and has not paid the interest owing from August 28, 2000 to February 3, 2003 as required by the Order.  Thus, the Respondent has disobeyed the Order and is guilty of contempt.  The Applicant also adds that the question as to how the interest ought to be calculated is not at play in this proceeding given that the Respondent’s refusal to pay any interest for the period at issue alone is sufficient to ground a finding of contempt.   

 

[17]      According to the Applicant’s interpretation of the Order, the Court ordered the Respondent to pay the Applicant’s salary and benefits retroactively to the date of her dismissal together with interest on that amount commencing on the date of dismissal.

 

[18]      The Respondent disputes that Applicant’s interpretation.  The Respondent submits that mandamus cannot issue to provide a remedy outside of the jurisdiction of the decision maker whose decision the Applicant seeks to enforce: Apotex Inc. v. Canada (Attorney General), [1994] 1 F.C. 742 (CA).  In the present case, the ITPR decision ordered the Respondent to reinstate the Applicant as of August 28, 2000 with full retroactive pay and benefits.  It did not and could not order interest.  For this reason, the Respondent argues that the Court could only have meant pre- and postjudgment interest in accordance with sections 36 and 37 of the Federal Courts Act, R.S.C. 1985, c. F-7 and by incorporation the provisions of the Ontario Courts of Justice Act, R.S.O. 1990 Chap. C.43 dealing with pre- and postjudgment interest.  The Respondent also argues that under the Ontario legislation prejudgment interest could not be awarded from the date of the dismissal.  Having made the payments in accordance with the legislation, the Respondent submits the motion should be dismissed.  The Respondent also notes that in opting to pay interest from the date of the ITPR award it chose the date most favourable to the Applicant. 

 

[19]      In response, the Respondent contends that the Applicant’s interpretation ignores the parentheses around “with interest”, that the Order does not state with interest from August 28, 2000, and that the Order does not give a start date for the interest.  Finally, the Respondent adds that even if I accept the Applicant’s interpretation, any ambiguities must be resolved in favour of the alleged contemnor. 

 

[20]      The Applicant takes the position that the Respondent is in effect arguing that because the Court lacked the jurisdiction to award interest from the date of dismissal, it could not have meant what it expressly stated.  The Applicant submits that if the Respondent was of the view that the Court did not have the jurisdiction to award interest retroactive to the date of dismissal, the Respondent should have appealed the Order.  The Applicant adds that the issue of jurisdiction is irrelevant for the purposes of a contempt motion. 

 

[21]      The Applicant characterizes the Respondent’s interpretation of the Order as patently unreasonable in that it ignores all grammatical rules and results in an interpretation that defies common sense and the plain meaning of the words used by the Court.  The Applicant advances three arguments on this point. 

 

[22]      First, the Applicant notes that the Order does not say “prejudgment interest.”  The Applicant relies on the Federal Court of Appeal decision in Cartier Men’s Shop Ltd. v. Cartier Inc., [1990] F.C.J. No. 338 for the proposition that when interpreting the order at issue, the Court should apply the ordinary common meaning to the terms instead of the technical sense of the words used. 

 

[23]      Second, even if it could be interpreted as prejudgment interest as contemplated by the Federal Courts Act and by reference to the Ontario Court of Justice Act permitting prejudgment interest to commence from the date of the cause of action arose, that date in the present case would be the date of the dismissal. 

 

[24]      Third, the Applicant submits it is arguable that the Court found that an award of interest was implicit in the ITPR remedy.  On this basis, it was open to the Court to enforce the Reviewer’s award by ordering interest retroactive to the date of dismissal, just as the Court could have awarded interest from the date of the dismissal had the ITPR set out that intention. 

 

[25]      Finally, the Applicant argues that if any confusion existed in the mind of the Respondent, then it could have requested clarification of the Order as the Court stated in Innovation and Development Partners/IDP Inc. v. Canada, [1993] F.C.J. No 515 at p. 4.

 

[26]      I reject the Respondent’s argument that the Court could only have intended “with interest” to mean pre-and postjudgment interest.  Quite apart from the fact that the Court did not use either of these terms, sections 36 and 37 of the Federal Courts Act only apply to actions.  The Order in the present case arises in the context of an application for an order of mandamus.  Thus, these references to the Federal Courts Act are not helpful in interpreting the use of the phrase “with interest” in the Order.

 

[27]      Having reached this conclusion, it is not necessary to consider the Applicant’s argument regarding the date the cause of action arose.  However, I wish to add that the Applicant’s alternative argument regarding an award of interest being implicit in the ITPR award is equally flawed.  Whether the ITPR specifically made an award of interest retroactive to the date of the dismissal or if one could conclude that such an award of interest was implicit, an order of mandamus, without more, would be sufficient to enforce payment of the interest.  A specific order of interest would be unnecessary.  As an aside, this comment should not be taken as my having accepted the Applicant’s argument that an interest award retroactive to the date of dismissal is implicit in the ITPR award.  In my view, it is not necessary to decide this point.

 

[28]      I accept the submission that the words of an order should be interpreted on the basis of their grammatical and ordinary meaning read in the context of the order.  In the present case, while the Order is clear that interest is to be paid, the parentheses surrounding the phrase “with interest” makes the Order ambiguous with respect to the date from which interest is to be calculated.  In Anne Stilman, Grammatically Correct – The Writer’s Essential Guide to Punctuation, Spelling, Style, Usage and Grammar, (Cincinnati: Writer’s Digest Books, 2004) at 144, the writer explained the function of parentheses:

 

The function of parentheses is to set off an element that “interrupts” a flow of thought significantly.  The element must be relevant enough to merit being worked in where it is, but enough of an aside to require being set off distinctly.  Text that is appropriate for parentheses is usually either an explanation, amplification or example of the topic the sentence is dealing with, or some digression that bears a relationship to a topic, but not a tight one.  If a digression, it must not be a non sequitur (something with no logical connection to anything previously said): It must have some bearing on what precedes it, and this connection should be evident to the reader.

 

[29]      In my opinion, it is unclear whether “with interest” is part of the order of retroactive pay dating from August 28, 2000 or whether “with interest” is a digression from the order of retroactive pay dating from August 28, 2000.  As the reasons for the Order are silent on the matter of the interest, they do not assist in interpreting the Order.  Given that the Order was an order of enforcement of an earlier award with which the Respondent had failed to comply, the Order read in its entirety could be reasonably interpreted as ordering enforcement of the original award together with interest from the date of the award. Arguably, it could also be interpreted as being interest from the date of the dismissal.  While in this context I prefer the former interpretation, the fact that the Order is ambiguous precludes a finding of contempt on this ground. 

 

[30]      With respect to the issue of the WSIB deduction, it is important to note that the WSIB deduction was made prior to the Applicant seeking an order of mandamus and the Applicant had pursued this matter by filing a grievance.  Further, the WSIB deduction was not addressed in the mandamus proceeding and, in fact, was being dealt with in another forum at that time.  In my view, these facts cannot and do not support a finding that the Respondent’s deduction of the WSIB overpayments constitutes a disobedience of the Court Order.

 

[31]      Having concluded that the Applicant has failed to prove beyond a reasonable doubt that the Respondent is guilty of contempt, it is not necessary to consider the issue as to whether a Crown agency may be found in contempt.

 

Conclusion

[32]      For these reasons, the motion is dismissed with costs to the Respondent.

 

 

ORDER

 

THIS COURT ORDERS that the motion is dismissed with costs to the Respondent.

 

 

 

“Dolores M. Hansen”

FEDERAL COURT

 

SOLICITORS OF RECORD

 

 

 

DOCKET:                                          T-1046-04

 

STYLE OF CAUSE:                          SIMONE SHERMAN v. CANADA CUSTOMS AND REVENUE AGENCY

 

 

 

PLACE OF HEARING:                    TORONTO, ONTARIO

 

DATE OF HEARING:                      March 27, 2006, May 24, 2006

 

REASONS FOR :                              Hansen J.

 

DATED:                                             September 19, 2006

 

 

 

APPEARANCES:

 

Steven Welchner	FOR THE APPLICANT
Chris Leafloor Joseph Cheng	FOR THE RESPONDENT

 

SOLICITORS OF RECORD:

 

Steven Welchner Ottawa, Ontario	FOR THE APPLICANT
John H. Sims, Q.C. Deputy Attorney General of Canada	FOR THE RESPONDENT