Scheuneman v. Canada (Human Resources Development), 2004 FC 1084

Date: 20040806

Docket: T-974-01

Citation: 2004 FC 1084

Ottawa, Ontario, this 6^th day of August, 2004

Present:           THE HONOURABLE MR. JUSTICE O'REILLY

BETWEEN:

                                                           ERIC SCHEUNEMAN

                                                                                                                                               Plaintiff

                                                                           and

                                                    HER MAJESTY THE QUEEN

                                (HUMAN RESOURCES DEVELOPMENT CANADA)

                                                                                                                                           Defendant

                                    REASONS FOR JUDGMENT AND JUDGMENT

[1]                Mr. Eric Scheuneman began receiving Canada Pension Plan (CPP) disability benefits in 1989. He was suffering from chronic fatigue syndrome. His dependent children also received benefits. In 1997, the defendant decided to review the situation and asked Mr. Scheuneman to undergo an independent medical examination. Mr. Scheuneman asked for details about the examining physician's background, credentials and publications before he would agree. He did not receive the information he felt he required and did not consent to be examined. As a result, the defendant terminated Mr. Scheuneman's benefits as of October 1, 1997.

[2]    Mr. Scheuneman asked the defendant to reconsider. The defendant affirmed the original decision.

[3]    Mr. Scheuneman then appealed to the CPP Review Tribunal. But, because he raised issues under the Canadian Charter of Rights and Freedoms, and alleged administrative errors in the handling of his file, the Tribunal lacked jurisdiction to deal with the matter. At that point, Mr. Scheuneman began this action seeking retroactive benefits, interest, compensation for any tax consequences of receiving a lump sum payment of past benefits, costs and damages. Soon thereafter, the Minister decided to reinstate Mr. Scheuneman's benefits retroactively to October 1, 1997.

[4]    Even though Mr. Scheuneman obtained the benefits he sought, he continued this action for the other forms of relief: interest, tax compensation, costs and damages. He argues that the defendant acted negligently and violated his rights under the Charter.

[5]    I can find no legal basis for Mr. Scheuneman's claim and must, therefore, dismiss this action.

I. Issues

1.    Is there a legal foundation for Mr. Scheuneman's claim either:

(a) according to the law of negligence, or

(b) under the Charter?

2.    If the answer to question one is yes, is Mr. Scheuneman entitled to damages?

[6]    As I have concluded that the answer to question one is no, it is unnecessary to consider question 2.

II. Analysis

A. Is there a legal foundation for Mr. Scheuneman's claim either:

(a) according to the law of negligence, or

(b) under the Charter?

(1) The Law of Negligence

[7]    Individuals are liable under the law of negligence if they owe another person a duty of care, they breach that duty and, as a result, they injure the other person. In this case, Mr. Scheuneman has failed to show that the respondent owed him a duty of care. Accordingly, I need not consider the other elements of the test.

[8]    A duty of care arises only where there is a close relationship between the parties and it is reasonably foreseeable that one person's conduct would harm the other person. However, even where proximity and foreseeability are established, policy considerations may prevent the courts from recognizing a duty of care in the circumstances: Just v. British Columbia, [1989] 2 S.C.R. 1228; Cooper v. Hobart, [2001] 3 S.C.R. 537.

[9]    Where a particular action falls into a category of claims that has already been recognized, courts need not decide whether the relationship between the parties creates liability for negligence or whether policy considerations should defeat it: Cooper, above. Where there is no analogous category of action, one must proceed on the basis of first principles. Here, there is no clear guidance in the case law regarding this type of action and I must, therefore, consider the relevant criteria to determine whether the defendant owed Mr. Scheuneman a duty of care.

[10]            In my view, there was a close relationship between the parties in this case. The defendant was dealing with Mr. Scheuneman on an individual basis, reviewing his particular file and his entitlement to benefits. Its decision had an obvious and direct impact on him. It was reasonably foreseeable that the defendant's decision to terminate Mr. Scheuneman's benefits would cause him harm.

[11]            I believe, however, that policy considerations prevent my recognizing a duty of care on the part of the defendant toward Mr. Scheuneman. In this context, "policy considerations" can include the courts' concern not to create a form of indeterminate liability - in other words, a novel, open-ended, potentially vast kind of legal action. In addition, the existence of alternative remedies militates against recognizing a new duty of care: Cooper, above. It is the latter consideration that causes me to conclude that the defendant does not owe Mr. Scheuneman a duty of care.

[12]            Here, alternative remedies clearly exist. To begin with, the Canada Pension Plan Act, R.S.C. 1985, c. C-8, itself provides a mechanism by which errors can be corrected (s. 66(4); see Annex "A" attached). In fact, Mr. Scheuneman benefited from this remedy when the defendant decided to reverse its earlier decision to cut off his payments. In addition, the availability of judicial review from the defendant's decision presents a sound policy reason not to recognize a duty of care on the defendant's part. Justice Stone came to the same conclusion in Comeau's Sea Foods Ltd. v. Canada (Minister of Fisheries and Oceans), [1995] 2 F.C. 467 (C.A.), affirmed, [1997] 1 S.C.R. 12. He concluded that the "availability of adequate administrative law remedies by way of judicial review is a consideration to be taken into account . . . in deciding whether the scope of prima facie duty of care should be negatived . . ." (at p. 488). In this case, any negligent conduct by the defendant would likely have provided grounds for a remedy in administrative law, whether based on an error of law, a perverse finding of fact or a violation of the duty of fairness. True, had he sought judicial review, Mr. Scheuneman would not have been entitled to all of the forms of relief he seeks here, but he would have had a reasonably expeditious means of obtaining his principal goal - payment of arrears - and his costs.

[13]            In my view, these policy considerations preclude recognition of a duty of care on the defendant's part toward persons claiming benefits under the Canada Pension Plan Act.

(2) The Charter

[14]            Mr. Scheuneman argues that the defendant breached his right to liberty and security of the person under s. 7 of the Canadian Charter of Rights and Freedoms. He cites various decisions of the Supreme Court of Canada that, he says, expand the concepts of "liberty" and "security of the person" to the point that they cover the distress he suffered when his benefits were suspended and reinstated only after considerable delay: Askov v. Her Majesty the Queen, [1990] 2 S.C.R. 1199; New Brunswick (Minister of Health and Community Services) v. G.(J.) [J.G.], [1999] 3 S.C.R. 46.

[15]            I do not read the jurisprudence cited by Mr. Scheuneman as expansively as he does. It is true that the Supreme Court has recognized that serious forms of state-imposed stress may fall within the terms of s. 7 of the Charter. In G.(J.), above, for example, the Court found that a mother's security of the person was at stake in proceedings involving the custody arrangements for her child. It held that the principles of fundamental justice required that she be represented by state-funded counsel.

[16]            With respect to "liberty", the Supreme Court has held that where the state interferes with a person's fundamental life choices, s. 7 may apply: Blencoe v. British Columbia (Human Rights Commission), [2000] 2 S.C.R. 307; Godbout v. Longueuil (City), [1997] 3 S.C.R. 844. However, it has recently stated that purely economic interests are not included in s. 7: Siemens v. Manitoba (Attorney General), [2003] 1 S.C.R. 6, 2003 SCC 3">2003 SCC 3.

[17]            In my view, Mr. Scheuneman has not shown that the defendant's actions interfered with any fundamental life choices or caused him psychological stress on a level that would breach his Charter rights. In G.(J.), supra, Lamer C.J. cautioned against expanding the scope of s. 7 too far (at para. 59):

It is clear that the right to security of the person does not protect the individual from the ordinary stresses and anxieties that a person of reasonable sensibility would suffer as a result of government action. If the right were interpreted with such broad sweep, countless government initiatives could be challenged on the ground that they infringe the right to security of the person, massively expanding the scope of judicial review, and, in the process, trivializing what it means for a right to be constitutionally protected.

[18]            I have no doubt that Mr. Scheuneman was upset when the defendant cut off his benefits and that he suffered stress as a result. But I do not consider his circumstances to be equivalent to the risk of his child being taken away (as in G.(J.)) or even involving the kind of stigma and strain suffered by a respondent to a protracted human rights claim (as in Blencoe, above, where the Supreme Court did not find a violation of s. 7). Further, Mr. Scheuneman's interests were primarily economic.

[19]            Mr. Scheuneman has not established that his rights under the Charter were violated.

III. Disposition

[20]            Mr. Scheuneman has not established a legal basis for his claim under the law of negligence or the Canadian Charter of Rights and Freedoms. Accordingly, I must dismiss this action with costs. The defendant requested costs on a solicitor client basis, but I see no grounds for ordering such costs in the circumstances.

                                                                   JUDGMENT

THIS COURT ORDERS that:

1.    The action is dismissed with costs.

                                                                                                                             "James W. O'Reilly"         

                                                                                                                                                   F.C.J.                

                                                                      Annex "A"

                                                             FEDERAL COURT

                            NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET:                                           T-974-01

STYLE OF CAUSE:               ERIC SCHEUNEMAN V. HER MAJESTY THE QUEEN

(HUMAN RESOURCES DEVELOPMENT CANADA)

PLACE OF HEARING:                     Ottawa, Ontario

DATE OF HEARING:                       Monday, February 9, 2004

REASONS FOR JUDGMENT

AND JUDGMENT BY:                     THE HONOURABLE MR. JUSTICE O'REILLY

DATED:                                              Friday, August 6, 2004

APPEARANCES BY:

Mr. Eric Scheuneman                            FOR THE PLAINTIFF/ON HIS OWN BEHALF

Mr. R. Jeff Anderson

Ms. Ramona Rothschild                         FOR THE DEFENDANT

SOLICITORS OF RECORD:

ERIC SCHEUNEMAN                        FOR THE PLAINTIFF/ON HIS OWN BEHALF       

MORRIS ROSENBERG

Deputy Attorney General of Canada      FOR THE DEFENDANT