Date: 20090608
Docket: T-2118-06
Citation: 2009 FC 625
Ottawa, Ontario, June 8,
2009
PRESENT: The Honourable Mr. Justice Phelan
BETWEEN:
STORA ENSO PUBLICATION
PAPER GmbH
& Co. KG
Plaintiff
and
HER
MAJESTY THE QUEEN
Defendant
REASONS FOR JUDGMENT AND JUDGMENT
I. INTRODUCTION
[1]
The
parties in this case have been caught in the legal equivalent of a “Perfect
Storm” of conflicting decisions of the Federal Court of Appeal and of the
Ontario Court of Appeal. The problem is not whether the Federal Court has subject-matter
jurisdiction to determine the substance of the dispute; the problem is the
method by which that jurisdiction is engaged.
II. NATURE
OF THE MATTER
[2]
The
Plaintiff commenced an action in which it challenged the Minister of National
Revenue’s refusal to repay taxes paid by a company associated with the
Plaintiff. The Plaintiff claimed that the payment was made in error and that
the Minister had no authority to decide not to repay the monies. The Plaintiff
sought orders in the nature of certiorari and mandamus and also
made claims on the basis of unjust enrichment and conversion.
[3]
The
parties had submitted an Agreed Book of Documents and a Revised Partial Agreed
Statement of Fact and Admissions. It does not appear that the basic facts are
in dispute.
[4]
When
the case came on for hearing, there were no witnesses and the matter proceeded
on the basis of argument alone.
[5]
At
the hearing, the Court - and the Defendant, for the first time - raised the
question of whether this case ought to proceed by way of Notice of Application
for Judicial Review. Rather than adjourn the matter, on consent of the parties,
the Court heard the argument on the merits of the case.
[6]
After
the hearing, the parties filed further argument on the issue of the nature of
the proceeding and whether it was necessary for the Plaintiff to first proceed
by way of judicial review of the Minister’s decision and actions.
III. NATURE
OF THE ISSUE
[7]
In
Grenier v. Canada, 2005 FCA 348, the Federal Court of Appeal held that
where the issue is the legality of a decision by a federal “board, commission
or tribunal” (of which the Minister in these circumstances is one), it must be
challenged by judicial review. Any claim for damages must await a determination
of the legality of the decision which led to the alleged damages.
[8]
The
Grenier decision was upheld and elucidated upon in Parrish &
Heimbecker Ltd. v. Canada (Minister of Agriculture and Agri-Food), 2008 FCA
362, which was issued just after the hearing of argument in this file.
[9]
The
Plaintiff, in its further submission filed after the hearing, relied on the
Ontario Court of Appeal’s decision in TeleZone Inc. v. Canada (A. G.) (2008), 94
O.R. (3d) 19 (C.A.), issued
December 24, 2008. In effect, the TeleZone decision was contrary to Grenier
not only as to the jurisdiction of the Federal Court but also how that
jurisdiction is or is not engaged.
[10]
To
add further to the debate, the Federal Court of Appeal in Manuge v. Canada,
2009 FCA 29, issued February 3, 2009, specifically disavowed the TeleZone
decision and reiterated the exclusive jurisdiction of the Federal Court in any
attack on a federal decision.
[11]
Leaves
to appeal to the Supreme Court of Canada have been filed in both TeleZone
and Manuge. The last word on this issue may yet be heard.
[12]
However,
this Court must render judgment on this case according to the law as it now
stands.
IV. ANALYSIS
[13]
As
I understand the state of the law in this area, as applicable to the Federal
Court, it is that where a party seeks to challenge the legality of a “federal
board, commission or other tribunal” decision, it must first proceed by an
application for judicial review. Any claims, including those initiated by
statement of claim, which flow from the allegedly illegal decision or action
(including claims for damages), must await the determination on legality.
[14]
The
Plaintiff relies on the failure of the Defendant to raise the issue of
jurisdiction until the last minute. While the Court has sympathy for the
Plaintiff on this point, the failure to raise the jurisdiction matter cannot
cloak the Court with jurisdiction which has not been properly engaged.
[15]
Therefore,
in respect of this case, the Plaintiff must proceed under s. 18 of the Federal
Courts Act in respect of the Minister’s refusal to refund the amounts of
withholding tax paid. While the law does not preclude the Plaintiff from
proceeding by way of statement of claim in this Court with respect to other
grounds pleaded, the jurisdiction of the Court to hear those claims depends
upon the initiation of a judical review of the Minister’s decision.
[16]
The
Federal Courts Act, s. 18.4, provides that a judicial review may be
treated and proceeded as an action. Unfortunately for the Plaintiff, there is
no provision permitting a statement of claim to proceed as a notice of
application for judicial review.
[17]
Therefore,
this Court cannot decide the matters raised in the Statement of Claim until the
Minister’s decision is the subject of judicial review. Once the Court’s
jurisdiction is properly engaged, there may be procedural steps available to
facilitate a fair, just, and expeditious resolution of the dispute.
V. CONCLUSION
[18]
The
Court will dismiss this action unless, within 30 days of the date of this
judgment, the Plaintiff seeks to obtain an extension of time to file an
Application for Judicial Review in respect of the matters pleaded in the
Statement of Claim (to the extent permissible as a matter for judicial review).
[19]
The
Court will remain seized of this case, including any motion for leave to file
an Application for Judicial Review.
[20]
Costs
shall be in the cause.
JUDGMENT
THIS COURT
ORDERS AND ADJUDGES that this matter
will be dismissed unless, within 30 days of the date of this judgment, the
Plaintiff seeks to obtain an extension of time to file an Application for
Judicial Review in respect of the matters pleaded in the Statement of Claim (to
the extent permissible as a matter for judicial review). The Court will remain
seized of this case, including any motion for leave to file an Application for
Judicial Review. Costs shall be in the cause.
“Michael
L. Phelan”
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