[1] This litigation arises out of the 1997 postal strike by the defendant Union. Parliament adopted back to work legislation shortly after the strike broke out. Under that legislation the Crown now sues to recover the costs said to have been incurred in the arbitration and mediation which the back to work legislation ordered. The legislation had provisions for mediation and arbitration compulsorily imposed upon both parties, that is to say Canada Post Corporation and the defendant Union.

[2] I set out below the provisions of sections 8, 10 and 15 of the Postal Services Continuation Act, 1997, S.C. 1997, c. 34, which in my view, are the critical sections for an understanding thereof.

Mediator-Arbitrator

8. (1) The Minister shall, after the coming into force of this Act, appoint a mediator-arbitrator and refer to the mediator-arbitrator all matters that, at the time of the appointment, remain in dispute between the parties in relation to the conclusion of a new collective agreement.

Duties

(2) The mediator-arbitrator shall, within ninety days after being appointed,

(a) endeavour to mediate all the matters referred to in subsection (1) and to bring about an agreement between the parties on those matters;

(b) if the mediator-arbitrator is unable to do so, hear the parties on the matter, arbitrate the matter and render a decision;

(c) ensure that any agreement or decision referred to in paragraph (a) or (b) is in appropriate contractual language so as to allow its incorporation into the collective agreement; and

(d) report to the Minister on the resolution of all such matters.

Powers

(3) The mediator-arbitrator has, with any modifications that the circumstances require,

(a) for the purposes of the mediation referred to in paragraph (2)(a), all the powers of a conciliation commissioner under section 84 of the Canada Labour Code; and

(b) for the purposes of the arbitration referred to in paragraph (2)(b), all the powers and duties of an arbitrator under sections 60 and 61 of that Act.

Technical experts(4) The mediator-arbitrator may, with the approval of the Minister, engage the services of any technical advisers or other experts or assistants that the mediator-arbitrator considers necessary.

Extension of time

(5) The time during which the mediator-arbitrator may perform the duties and exercise the powers under this section may be extended by the Minister or by mutual consent of the employer and the union.

...

Proceedings prohibited

10. No order may be made, no process may be entered into and no proceeding may be taken in court

(a) to question the appointment of the mediator-arbitrator; or

(b) to review, prohibit or restrain any proceeding or decision of the mediator-arbitrator.

...

Costs

15. All costs incurred by Her Majesty in right of Canada relating to the appointment of the mediator-arbitrator and the exercise of the mediator-arbitrator's duties under this Act are debts due to Her Majesty in right of Canada and may be recovered as such, in equal parts from the employer and the union, in any court of competent jurisdiction.

Médiateur-Arbitre

8. (1) Après l'entrée en vigueur de la présente loi, le ministre est tenu de nommer un médiateur-arbitre et de lui soumettre toutes les questions qui, au moment de sa nomination, font toujours l'objet d'un différend entre les parties en ce qui concerne la conclusion d'une nouvelle convention collective.

Obligations

(2) Dans les quatre-vingt-dix jours suivant sa nomination, le médiateur-arbitre est tenu :

a) de s'efforcer d'intervenir sur les questions visées au paragraphe (1) et d'amener les parties à se mettre d'accord;

b) s'il ne peut y arriver, d'entendre les parties et de rendre une décision arbitrale;

c) de veiller à ce que les accords ou les décisions visés aux alinéas a) ou b) soient libellés de façon à pouvoir être incorporés dans la convention collective;

d) de faire rapport au ministre lorsque toutes ces questions sont réglées.

Pouvoirs

(3) Le médiateur-arbitre a, compte tenu des adaptations nécessaires :

a) dans le cadre de la médiation visée à l'alinéa (2)a), les pouvoirs d'un commissaire-conciliateur prévus à l'article 84 du Code canadien du travail;

b) dans le cadre de l'arbitrage visé à l'alinéa (2)b), les pouvoirs d'un arbitre prévus aux articles 60 et 61 de cette loi.

Conseillers techniques

(4) Le médiateur-arbitre peut, avec l'approbation du ministre, retenir les services des conseillers techniques et autres experts ou des collaborateurs qu'il estime nécessaires.

Prorogation

(5) Le délai accordé au médiateur-arbitre pour s'acquitter des obligations prévues par le présent article peut être prorogé par le ministre ou d'un commun accord par l'employeur et le syndicat.

...

Impossibilité de recours judiciaires

10. Il n'est admis aucun recours ou décision judiciaire visant à :

a) soit contester la nomination du médiateur-arbitre;

b) soit réviser, empêcher ou limiter l'action du médiateur-arbitre, ou une décision de celui-ci.

...

Frais

15. Tous les frais que Sa Majesté du chef du Canada engage pour la nomination du médiateur-arbitre et l'acquittement par celui-ci des obligations que la présente loi lui impose sont des créances de Sa Majesté recouvrables à ce titre à parts égales auprès de l'employeur, d'une part, et du syndicat, d'autre part, devant tout tribunal compétent.

[3] In my view, these provisions are clear. The statute set out to create, and did create, a quasi-judicial independent body vested with important and compulsory powers over the parties, consistent with the status of the mediator-arbitrator conferred by the legislation was the fact that a distinguished judge, a former Chief Justice of the New Brunswick Queen's Bench, Mr. Justice Guy Richard, was appointed to act as mediator-arbitrator.

[4] The initial mediation conducted by Mr. Justice Richard was not successful and was followed immediately as the statute foresaw by arbitration. The proceedings were not rapid, they went on through the whole of 1998 and almost all of 1999, concluding in December of that year when the parties finally reached a tentative collective agreement, and the mediation and arbitration itself came to an end in February of the following year when Mr. Justice Richard incorporated that collective agreement into his final report, and it thereupon became binding upon both parties, the employer and the Union.

[5] At the beginning of his work, the arbitrator had appointed three prominent lawyers to assist him in his work. They attended all the sessions, and it was known to the parties that they attended all the sessions, and it was known to the parties that they were going to be appointed before they were appointed. Their names were submitted to the parties in advance. Their bills were, in due course, submitted by them to the arbitrator and approved by him for payment and passed on to the appropriate department of the government of Canada. The bills were paid by the Crown, which now seeks to recover them and other costs. As can be seen from section 15 of the statute, the costs of a mediation-arbitration would be divided equally between the parties. The Crown sought and successfully obtained payment from Canada Post Corporation, but the defendant Union, here, resists payment.

[6] It is, in my view, clear on a reading of the statute and from the nature and position of the person who was appointed as arbitrator that there was an intention on the part of the government and Parliament of Canada to create a quasi-judicial independent body with extensive powers to bring an end to what was a crippling labour dispute, and one of great importance to the people of Canada as a whole.

[7] The Crown had no control over the proceedings of the mediator-arbitrator. It was not a party to the mediation or the arbitration, and it had no obligation to control the way in which he carried out his mandate. Indeed, it could not do so and remain consistent with the independence of the functions which he had to fulfill.

[8] The defendant Union, as I have said, resists paying its one-half share of the costs as required by section 15 on two principal grounds.

[9] First, it says that there is no proof that the arbitrator obtained the approval of the Minister to engage the services of the lawyers as technical experts as required by subsection 8(4). There is simply no force to this argument. Mr. Justice Richard has certified in writing that he obtained the approval of the Minister before engaging the experts. There is no evidence to the contrary. The Union has known from the very outset of the appointment and has waited until many years later to raise this objection. They were given ample opportunity to do so and did not do so. In addition, Mr. Justice Richard, in submitting the bills from time to time, indicated very clearly that he approved them and that the amounts charged were consistent with the engagement of the lawyers in question.

[10] The suggestion that somehow it would have been impolitic or dangerous for the Union to impugn the arbitrator's decision to retained services of these experts falls to the ground when one learns that in fact, there were two applications made to this Court during the currency of the mediation and arbitration impugning certain of the arbitrator's actions. Those applications I need hardly add, were not successful. Clearly, if the Union had had any valid grounds to question the appointment of the experts, it both could and should have done so earlier, and not waited until now when the Crown has paid the bills and can only recover them from the parties, which it is seeking by this litigation to do.

[11] The second major ground advanced by the defendant for not paying is based upon the alleged non-compliance with section 34 of the Financial Administration Act, R.S. 1985, c. F-11, which I set out below:

Payment for work, goods and services

34. (1) No payment shall be made in respect of any part of the public service of Canada unless, in addition to any other voucher or certificate that is required, the deputy of the appropriate Minister, or another person authorized by that Minister, certifies

(a) in the case of a payment for the performance of work, the supply of goods or the rendering of services,

(i) that the work has been performed, the goods supplied or the service rendered, as the case may be, and that the price charged is according to the contract, or if not specified by the contract, is reasonable,

(ii) where, pursuant to the contract, a payment is to be made before the completion of the work, delivery of the goods or rendering of the service, as the case may be, that the payment is according to the contract, or

(iii) where, in accordance with the policies and procedures prescribed under subsection (2), payment is to be made in advance of verification, that the claim for payment is reasonable; or

(b) in the case of any other payment, that the payee is eligible for or entitled to the payment.

Marchés de fournitures, de services ou de travaux

34. (1) Tout paiement d'un secteur de l'administration publique fédérale est subordonné à la remise des pièces justificatives et à une attestation de l'adjoint ou du délégué du ministre compétent selon laquelle_:

a) en cas de fournitures, de services ou de travaux_:

(i) d'une part, les fournitures ont été livrées, les services rendus ou les travaux exécutés, d'autre part, le prix demandé est conforme au marché ou, à défaut, est raisonnable,

(ii) tout paiement anticipé est conforme au marché,

(iii) si le paiement est à effectuer antérieurement à la détermination de l'admissibilité selon les règles et méthodes prévues au paragraphe (2), la demande de paiement est raisonnable;

b) en tout autre cas, le bénéficiaire est admissible au paiement.

[12] Although it appears quite clear that the public servants whose responsibility it was in the appropriate department of the government to see to the payment of the bills in question, that they thought perhaps from bureaucratic habit, that the text of section 34 was applicable to such payments, it is my view, that it is not. In my view, the arbitrator, a Superior Court Judge, is and was, not in any way at the relevant times, a member or a part of the public service of Canada and the expenses incurred by him in the carrying out of his statutory duties under the back to work legislation do not relate to the public service of Canada.

[13] Even if I were wrong in this view, however, the evidence is, such as it is, because the defendant has not put in any serious evidence, that there was no breach of that statute. All payments were certified and approved by the arbitrator. His independence precluded any interference by the government in his manner of carrying out his work.

[14] The defendant suggests that some of the amounts charged were unreasonable, but there is absolutely no evidence of this, and the burden of showing that any payments were unreasonable clearly falls upon the defendant.

[15] There are two minor subsidiary points that were taken by the defendant's counsel in the course of argument. First, it was said that the Crown was in breach of its fiduciary duty toward the defendant. In my view, there was no fiduciary duty owed by the Crown to the defendant. Fiduciary duties only arise where a person has a discretion to exercise, and in my view, the Crown had no discretion to exercise in the payment of the bills properly approved and certified to it by Mr. Justice Richard.

[16] The second minor point is that it is said that some of the bills were for unauthorized amounts such as rental charges for space and payments to the law firms of the three main experts in respect of services rendered along the way by other members of those firms. As for the first, all the payments were approved and certified by Mr. Justice Richard. That applies to the second objection as well. In addition, it is my view that charges by junior or other members of law firms are a normal incident of the engagement of lawyers, and it would have to be shown, and has not been, that the work done by the unnamed members of these three law firms in question was so far outside the regular scope of the engagement of the solicitor as to be for that reason alone unreasonable. There has been no such showing.

[17] An order will go for payment by the defendant to the Crown of the amount claimed for with costs to be assessed. The matter of interest came up during the hearing and was not fully explored as it might have been, and I had the impression that counsel for both parties were somewhat taken aback by the question of exactly what rate of interest should be charged and how it might be authorized. I will accordingly leave open for counsel for the plaintiff in the first instance to move pursuant to Rule 369 of the Federal Court Rules, 1998, by February 9, 2004 for an order for interest, and counsel for the defendant may respond to that by February 19, 2004.

Judge

Ottawa, Ontario

January 30, 2004

FEDERAL COURT

NAMES OF SOLICITORS AND SOLICITORS ON THE RECORD

COURT FILE NO.: T-626-01

STYLE OF CAUSE: THE ATTORNEY GENERAL OF CANADA v. CANADIAN UNION OF POSTAL WORKERS

DATE OF HEARING: January 28, 2004

PLACE OF HEARING: Ottawa, Ontario

REASONS FOR ORDER OF THE HONOURABLE MR. JUSTICE HUGESSEN

DATED: January 30, 2004

APPEARANCES:

Elizabeth Richards FOR PLAINTIFF

Thomas McDougall

and Barbara Nicholls FOR DEFENDANT

SOLICITORS ON THE RECORD:

Morris A. Rosenberg

Deputy Attorney General of Canada FOR PLAINTIFF

Perley-Robertson,

Hill & McDougall FOR DEFENDANT

You are here

Canada (Attorney General) v. Canadian Union of Postal Workers, 2004 FC 153

Citations2004 FC 153

Case tabs

Citations
2004 FC 153