Date: 20090804
Docket: T-1361-07
Citation: 2009 FC 796
Ottawa, Ontario, August 4, 2009
PRESENT: The Honourable Mr. Justice Kelen
BETWEEN:
DANIEL
KING
Applicant
and
HER
MAJESTY THE QUEEN
Respondent
REASONS FOR ORDER AND ORDER
[1]
The
applicant, Daniel King, brings this motion for certification pursuant to
subsection 334.16(1) of the Federal Court Rules, SOR/98-106, seeking
that the within proceeding be certified as a class proceeding and the applicant
appointed as the representative applicant.
FACTS
[2]
The
applicant suffered a workplace injury and applied for disability pension under
the Canada Pension Plan, R.S. 1985 c. C-8 (CPP) on May 10, 1996.
[3]
The
applicant received a letter on September 12, 1996, informing him that his
application had been denied because he did not fully meet the requirements of
the CPP. The applicant sought a reconsideration of his application, which was
again denied. The applicant then filed an appeal of the denial to the Review
Tribunal. The Review Tribunal dismissed the appeal on July 24, 1998.
[4]
The
applicant appealed to the Pension Appeals Board, which allowed the appeal on November
26, 2002 and ordered that the applicant be a paid disability pension
retroactive to February 1995.
[5]
The
applicant received $109,869.49 from the respondent’s department called “Human
Resources Development Canada (HRDC)”, the aggregate of each of the monthly
benefit payments he would have received had these payments been made in a
timely manner. The applicant sought additional payment in the form of
interest. He received a letter from HRDC advising him that the Department’s
policy was not to pay interest. The applicant then sought remedial action under
subsection 66(4) of the CPP. This request was denied on July 18, 2007.
[6]
Following
this decision, the applicant commenced these proceedings for judicial review of
the decision of the Minister to refuse to pay interest or some other form of
enhanced benefit to compensate for the seven-year delay in the payment of the
disability benefits that the applicant was ultimately found entitled to
receive.
[7]
On
February 22, 2008, I stated the following legal question for determination on a
preliminary basis:
Does the decision of the Pension Appeals
Board that the applicant is entitled to a disability pension mean the initial
decision of the minister of Human Resources and Social Development denying him
a disability pension was based on “erroneous advice” within the meaning of
subsection 66(4) of the Canada Pension Plan?
[8]
Following
a hearing, this legal question was determined in the affirmative by Mr. Justice
Phelan on June 20, 2008: King v. Canada (Minister of Human Resources and Social
Development), 2008
FC 777, 330 F.T.R. 217. The respondent appealed the Order of Justice Phelan to
the Federal Court of Appeal on July 23, 2008. I denied the respondent’s motion
seeking a stay of the applicant’s application for judicial review pending this
appeal on August 27, 2008, concluding that further delaying the application was
not in the interests of justice to the public or the applicant, and that the
respondent would not suffer irreparable harm if the stay was not granted.
[9]
The
Federal Court heard this motion for certification in Ottawa on Tuesday, January 20, 2009. At the
hearing, the parties decided and the Court agreed that the Court will reserve
its decision pending the Judgment of the Federal Court of Appeal from the
Judgment of Mr. Justice Phelan on the preliminary question of law since the
Federal Court of Appeal had at that point set the date for the appeal on March
2, 2009. The
Federal Court of Appeal heard the appeal on March 2, 2009 and rendered its
judgment, reversing the decision of Justice Phelan, on April 2, 2009: King
v. Canada (Minister of Human Resources and Social Development),2009 FCA
105. Following this decision, the Court invited the parties to make
supplementary submissions, which were filed on July 10, 2009. The Court has
carefully reviewed these submissions.
ISSUES
[10]
The issue
before this Court is whether the requirements of Federal Court Rule 334.16 are
satisfied by the applicant’s motion for certification.
RELEVANT LEGISLATION
[11]
Rule
334.16(1) provides:
334.16 (1) Subject to subsection (3), a judge shall, by order,
certify a proceeding as a class proceeding if
(a) the pleadings disclose a reasonable cause of
action;
(b) there is an identifiable class of two or more
persons;
(c) the claims of the class members raise common
questions of law or fact, whether or not those common questions predominate
over questions affecting only individual members;
(d) a class proceeding is the preferable procedure
for the just and efficient resolution of the common questions of law or fact;
and
(e) there is a representative plaintiff or
applicant who
(i) would fairly and adequately represent the interests
of the class,
(ii) has prepared a plan for the proceeding that sets out
a workable method of advancing the proceeding on behalf of the class and of
notifying class members as to how the proceeding is progressing,
(iii) does not have, on the common questions of law or
fact, an interest that is in conflict with the interests of other class
members, and
(iv) provides a summary of any agreements respecting fees
and disbursements between the representative plaintiff or applicant and the
solicitor of record.
|
334.16 (1) Sous réserve du
paragraphe (3), le juge autorise une instance comme recours collectif si les
conditions suivantes sont réunies :
a) les actes de procédure révèlent une cause d’action
valable;
b) il existe un groupe identifiable formé d’au moins deux
personnes;
c) les réclamations des membres du groupe soulèvent des
points de droit ou de fait communs, que ceux-ci prédominent ou non sur ceux
qui ne concernent qu’un membre;
d) le recours collectif est le meilleur moyen de régler,
de façon juste et efficace, les points de droit ou de fait communs;
e) il existe un représentant demandeur qui:
(i) représenterait de façon équitable et adéquate les
intérêts du groupe,
(ii) a élaboré un plan qui propose une méthode efficace
pour poursuivre l’instance au nom du groupe et tenir les membres du groupe
informés de son déroulement,
(iii) n’a pas de conflit d’intérêts avec d’autres membres
du groupe en ce qui concerne les points de droit ou de fait communs,
(iv) communique un sommaire des conventions relatives aux
honoraires et débours qui sont intervenues entre lui et l’avocat inscrit au
dossier.
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[12]
Rule
334.16(2) provides:
Matters
to be considered
(2) All relevant matters shall be
considered in a determination of whether a class proceeding is the preferable
procedure for the just and efficient resolution of the common questions of
law or fact, including whether
(a) the questions of law or fact common to the
class members predominate over any questions affecting only individual
members;
(b) a significant number of the members of the
class have a valid interest in individually controlling the prosecution of
separate proceedings;
(c) the class proceeding would involve claims that
are or have been the subject of any other proceeding;
(d) other means of resolving the claims are less
practical or less efficient; and
(e) the administration of the class proceeding would create greater
difficulties than those likely to be experienced if relief were sought by
other means.
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Facteurs pris en compte
(2) Pour décider si
le recours collectif est le meilleur moyen de régler les points de droit ou
de fait communs de façon juste et efficace, tous les facteurs pertinents sont
pris en compte, notamment les suivants :
a) la prédominance des points de droit ou de fait communs
sur ceux qui ne concernent que certains membres;
b) la proportion de membres du groupe qui ont un intérêt
légitime à poursuivre des instances séparées;
c) le fait que le recours collectif porte ou non sur des
réclamations qui ont fait ou qui font l’objet d’autres instances;
d) l’aspect pratique ou l’efficacité moindres des autres
moyens de régler les réclamations;
e) les difficultés accrues engendrées par la gestion du
recours collectif par rapport à celles associées à la gestion d’autres
mesures de redressement.
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[13]
In
addition, Rule 334.18 provides:
334.18 A judge shall not
refuse to certify a proceeding as a class proceeding solely on one or more of
the following grounds:
(a) the relief claimed includes a claim for
damages that would require an individual assessment after a determination of
the common questions of law or fact;
(b) the relief claimed relates to separate
contracts involving different class members;
(c) different remedies are sought for different
class members;
(d) the precise number of class members or the
identity of each class member is not known; or
(e) the class includes a subclass whose members have claims that
raise common questions of law or fact not shared by all of the class members.
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334.18 Le juge ne peut
invoquer uniquement un ou plusieurs des motifs ci-après pour refuser
d’autoriser une instance comme recours collectif :
a) les réparations demandées comprennent une réclamation
de dommages-intérêts qui exigerait, une fois les points de droit ou de fait
communs tranchés, une évaluation individuelle;
b) les réparations demandées portent sur des contrats
distincts concernant différents membres du groupe;
c) les réparations demandées ne sont pas les mêmes pour
tous les membres du groupe;
d) le nombre exact de membres du groupe ou l’identité de
chacun est inconnu;
e) il existe au sein du groupe un sous-groupe dont les
réclamations soulèvent des points de droit ou de fait communs que ne
partagent pas tous les membres du groupe.
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[14]
Subsection
66(4) of the CPP provides:
66.
(4) Where
the Minister is satisfied that, as a result of erroneous advice or
administrative error in the administration of this Act, any person has
been denied
(a) a benefit, or portion thereof, to
which that person would have been entitled under this Act,
(b) a division of unadjusted
pensionable earnings under section 55 or 55.1, or
(c) an assignment of a retirement
pension under section 65.1,
the
Minister shall take such remedial as the Minister considers appropriate to
place the person in the position that the person would be in under this Act
had the erroneous advice not been given or the administrative error not been
made.
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66. (4) Dans le cas où le
ministre est convaincu qu’un avis erroné ou une erreur administrative
survenus dans le cadre de l’application de la présente loi a eu pour résultat
que soit refusé à cette personne, selon le cas :
a)
en tout
ou en partie, une prestation à laquelle elle aurait eu droit en vertu de la
présente loi,
b)
le
partage des gains non ajustés ouvrant droit à pension en application de
l’article 55 ou 55.1,
c)
la
cession d’une pension de retraite conformément à l’article 65.1,
le
ministre prend les mesures correctives qu’il estime indiquées pour placer al
personne en question dans la situation où cette dernière se retrouverait sous
l’autorité de la présente loi s’il n’y avait pas eu avis erroné ou erreur
administrative.
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ANALYSIS
[15]
The
purposes and standard for certifying an action as a class proceeding were
recently summarized cogently by my colleague, Justice Mactavish, in Buffalo
v. Samson Cree Nation, 2008 FC 1308. At paragraphs 28-32, Justice
Mactavish stated:
28 As the Supreme Court of Canada has observed, class actions
allow for improved access to justice for those who might otherwise be unable to
seek vindication of their rights through the traditional litigation process.
Class actions also enhance judicial economy, allowing a single action to decide
large numbers of claims involving similar issues. Finally, class actions
encourage behaviour modification on the part of those who cause harm: see Western Canadian Shopping Centres Inc. v. Dutton, [2001]2
S.C.R. 534, 2001 SCC 46, Hollick v. Toronto (City), [2001] 3 S.C.R. 158, 2001 SCC 68, and Rumley v. British Columbia, [2001] 3 S.C.R. 184, 2001 SCC
69.
29 In
the above trilogy of cases, the Supreme Court also held that an overly
restrictive approach to the application of class action certification
legislation must be avoided, so that the benefits of class actions can be fully
realized.
30 Moreover,
the Supreme Court noted in the Hollick case that:
... the certification
stage focuses on the form of the action. The question at the certification
stage is not whether the claim is likely to succeed, but whether the suit is
appropriately prosecuted as a class action. [at paragraph 16]
31 In
other words, a certification motion is a procedural matter. Its purpose is not
to determine whether the litigation can succeed, but
rather, how the litigation should proceed: see Sauer v. Canada (Attorney General), [2008] O.J. No. 3419, (S.C.J.)
at paragraph 12.
32 In a motion such
as this, the onus is on the plaintiff to establish an evidentiary basis for
certification. That is, the plaintiff must show some basis in fact for each of
the certification requirements, apart from the requirement that the pleadings
disclose a reasonable cause of action. This latter requirement is governed by
the principle that pleadings should not be struck unless it is "plain and
obvious" that no claim exists: see Hollick, at paragraph 25.
[16]
Rule
334.16(1) uses mandatory language, providing that a court shall grant certification
where all the elements of the test are met. The elements of the test are
conjunctive; if the applicant fails to meet any of the listed criteria, the
certification motion must fail: Buffalo v. Samson Cree Nation, 2008 FC
1308, per Justice Mactavish at paragraph 34. The respondent submits that the
applicant fails to meet each of the requirements of subsection 334.16(1) of the
Federal Court Rules, supra. Therefore, I will address each requirement in
turn.
a) Reasonable Cause of Action
[17]
The plaintiff
alleges three causes of action. In determining whether each discloses a
reasonable cause of action, the Court will apply the test for striking out
applications for judicial review, namely, whether the alleged cause of action
is so clearly improper as to be bereft of any possibility of success. See David
Bull Laboratories (Canada) Inc. v. Pharmacia Inc. [1995] 1 F.C. 588 (C.A.). This test for applications for
judicial review is appropriate because this proposed class action is by way of
application for judicial review as opposed to by action.
[18]
The
applicant submits that there are three reasonable causes of action in this
proposed class proceeding. The first cause of action is that the Minister’s
decision to deny the applicant his pension was based on “erroneous advice”
within the meaning of subsection 66(4) of the CPP Act because the Pension Appeals
Board expressly said that there was no new evidence which the Board relied upon
in allowing the appeal. Then, the request by the applicant for interest from
the Minister under subsection 66(4), which request was denied, gives the
applicant a cause of action to judicially review the Minister’s decision
denying him interest.
[19]
The second
cause of action alleged by the applicant is that the original decision by the
Minister denying him a pension was based on an error of law regardless of
whether the applicant appealed that decision to the Minister for
reconsideration or to the Review Board or ultimately to the Canada Pension
Appeals Board.
[20]
The third
alleged cause of action is that the applicant requested the documents relied
upon by the Minister with respect to certain medical information before the
Minister which was denied the applicant. The applicant states this is a breach
of the duty of fairness and amounts to an “administrative error” or “erroneous
advice” within the meaning of subsection 66(4) of the CPP Act. The Court will
now consider each cause of action.
(i) First cause of action
[21]
With
respect to the first cause of action, at the hearing, the respondent agreed
that Justice Phelan’s decision, if confirmed on appeal, provides that the
applicant was denied his pension on the basis of “erroneous advice” and the
applicant has a cause of action for judicial review of the Minister’s decision
denying him interest under subsection 66(4) of the CPP Act. From reading
Justice Phelan’s decision and the decision of the Pension Appeals Board, there
are two preconditions which the applicant has met for this cause of action:
1.
the
Pension Appeals Board found that the Minister was entitled to a disability
pension and that the Minister’s decision denying him of disability pension was
wrong; and
2.
the
Pension Appeals Board decision specified that its decision was not based on any
new evidence not originally before the Minster.
Following this finding by the Pension Appeals Board, the
applicant made a request to the Minister for interest under subsection 66(4) of
the CPP Act. Interest does not automatically follow the award of retroactive
disability pension payments. There must be a request to the Minister under
subsection 66(4). Accordingly, I would have been satisfied that this
application for judicial review by the applicant discloses a reasonable cause
of action in order to proceed if the Federal Court of Appeal had affirmed the
decision of Justice Phelan.
[22]
On April
2, 2009 in The Attorney General of Canada v. Daniel King, 2009 FCA 105, per Sexton
J.A., the Federal Court of Appeal allowed the appeal from Justice Phelan’s
Judgment, set aside the decision of Justice Phelan and answered in the negative
the following preliminary question of law which I had set down for
determination:
Does the decision of the Pension Appeals
Board that the Applicant is entitled to a disability pension mean that the
initial decision of the Minister of Human Resources and Social Development
denying him a disability pension was based on “erroneous advice” within the
meaning of subsection 66(4) of the Canada Pension Plan?
[23]
The
Federal Court of Appeal held that “erroneous advice”, as the term is used in subsection
66(4) of the CPP, refers to advice given by the Department of Human Resources
and Skills Development to a member of the public, and not to advice which, on
occasion, may be given to the Minister in the course of deciding whether a
pension should be awarded. Justice Sexton held at paragraph 31:
… The CPP is one of the largest social
benefit schemes in the country. The statute and its regulations are complex,
and many applicants are not represented by counsel. As such, department
officials sometimes provide summary information over the phone or in person at
local offices concerning eligibility for benefits, deadlines for filing, and so
forth. Where an official gives a member of the public incorrect information,
resulting in the denial of a benefit, the Minister may decide to provide a
remedy. This has been the situation in all previous decisions of this court and
the Federal Court relating to subsection 66(4) …
[24]
The Court
of Appeal held that if a decision of the Pension Appeal Board that overrules a decision
of the Minister, in the absence of new evidence, were to constitute proof of
erroneous advice, there would be no discretion for the Minister under
subsection 66(4), which provides that the Minister must satisfy herself that an
error has been made.
[25]
Justice
Sexton also held at paragraph 35 that in this case, it is clear that the
Pension Appeal Board had access to evidence that was not before the medical
adjudicator when the initial decision was made denying Mr. King’s disability
pension. It was also held by the Court of Appeal that the Pension Appeal Board
decision makes clear that it relied on new evidence. Accordingly, the fact that
the Minister initially held that the disability was not severe and prolonged
was not based on erroneous advice solely because the Pension Appeal Board
reversed the decision. The Pension Appeal Board had new evidence before it.
[26]
Justice
Sexton closed at paragraph 37 by finding that if Mr. King were to succeed on
this appeal, the financial impact on various government departments “might well
be substantial”. Many benefit-conferring statutes contain similar provisions to
subsection 66(4) of the CPP. Justice Sexton held that “floodgates” would be
opened under CPP and other statutes, and “… There is no indication that this was
Parliament’s intention”.
[27]
Accordingly,
in view of the Federal Court of Appeal Judgment, it is conceded by the parties
that Mr. King does not have a cause of action on the basis that the Minister’s
decision denying him his pension was “based on erroneous advice” because the
Pension Appeal Board overturned the Minister’s decision.
(ii) Second cause of action
[28]
With
respect to the second proposed cause of action, namely that the Minister erred
in law in denying the disability pension, this alleged error is a question of
mixed fact and law that would need to be determined on judicial review.
However, judicial review is barred from a person if that person has adequate
alternative remedies under the statute. Mr. King did pursue his alternative
remedies by, first seeking reconsideration by the Minister, then appealing to
the Review Board, and then appealing to the Pension Appeals Board. Following
the decision of the Pension Appeals Board if a person is dissatisfied, that
person has a right of judicial review before the Federal Court of Appeal. This
Court does not have that jurisdiction. The second cause of action is not a
cause of action that could possibly succeed. In any event, the applicant succeeded
before the Pension Appeals Board, and has no other cause of action regarding
this alleged error following the Federal Court of Appeal Judgment in this case.
[29]
Moreover,
even if the Minister is found to have erred in law in denying the disability
pension, the plaintiff would have to rely on section 66(4) for the recovery of
interest on this basis. The Federal Court of Appeal’s judgment has limited the
ambit of “erroneous advice” under section 66(4) to advice given to the public.
An error of law by the Minister in denying the plaintiff’s disability pension
is therefore excluded from this definition. Thus, even if the plaintiff
obtained a ruling from the appropriate decision-making body finding that the
Minister had erred in law in denying his pension claim, he would not have a
cause of action for recovery of interest under section 66(4) on this basis.
(iii) The third cause of action
[30]
The third
proposed cause of action, namely that the Minister did not disclose the
documents on which he relied in making the decision, does not trigger one of
the preconditions for a subsection 66(4) CPP request for interest. The failure
to provide the documents is not an “administrative error” or “erroneous advice”
upon which the Minister based his decision to deny the pension. The applicant
submits that the failure to disclose these documents was an “administrative
error.” Even if this were so, however, subsection 66(4) requires that the
denial of the pension be a result of the administrative error. Even if
the documents were disclosed, that does not mean that the disability pension applicant
would have been entitled to a pension. Accordingly, this cause of action has no
possibility of success.
Conclusion
[31]
As the
pleadings do not disclose a reasonable cause of action, the Court does not need
to consider the remaining requirements of Rule 334.16(1).
COSTS
[32]
Rule
334.39(1) provides that costs should be awarded only where the conduct of a
party unnecessarily lengthened the duration of the proceeding, or where the
conduct of a party was improper, vexatious and unnecessary or was taken through
negligence, mistake or excessive caution. At the hearing, the parties agreed
that the circumstances do not warrant an award of costs for this motion.
ORDER
THIS COURT ORDERS that:
This motion for certification
of this application for judicial review as a class action is dismissed.
“Michael A. Kelen”