Docket: T-1021-13
Citation:
2014 FC 968
[UNREVISED
ENGLISH CERTIFIED TRANSLATION]
Ottawa, Ontario, October 14, 2014
PRESENT: The Honourable Mr. Justice Beaudry
SIMPLIFIED ACTION
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BETWEEN:
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HER MAJESTY THE QUEEN IN RIGHT OF CANADA
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Plaintiff
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And
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IAN PARENTEAU
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Defendant
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JUDGMENT AND REASONS
[1]
This is a simplified action pursuant to rule 292
of the Federal Courts Rules, SOR/98-106 (the Rules), commenced by a
statement of claim dated June 7, 2013.
[2]
The plaintiff is claiming from the defendant the
amount of $18,871.32 with interest at a rate of 7.125% per year as of November
1, 1998.
[3]
Upon analysis of the documents filed and the parties’
oral and written submissions, the Court concurs with the plaintiff for the
following reasons.
I.
THE FACTS
[4]
According to an agreed statement of facts filed
by the parties on August 18, 2014, the facts in this case are as follows:
➢
On June 15, 1991, the defendant joined the
Canadian Armed Forces in the Regular Officer Training Plan (ROTP);
➢
The defendant took education and training
courses and received other financial benefits at public expense through the ROTP;
➢
On April 6, 1998, in Oromocto, New Brunswick,
the defendant signed an agreement and a promissory note acknowledging he owed
the plaintiff the amount of $23,311.24, and undertaking to pay to the plaintiff
interest on said amount at an annual rate of 7.125% as of November 1, 1998. Through
said agreement and promissory note, the defendant agreed to pay said amount in 114
instalments of $282.02;
➢
On May 6, 1998, the defendant was released from
the Canadian Armed Forces;
➢
On August 18, 1998, a net amount of $4,439.92 from
the defendant’s Canadian Forces Superannuation Plan was applied to the
repayment of the defendant’s debt;
➢
On October 19, 1998, the plaintiff accepted the
defendant’s request to defer the repayment of his debt and interest until April
1, 2010, subject to certain conditions and owing to the fact that he was still
pursuing full-time studies. Moreover, this agreement provided that the defendant
would begin repaying his debt two months after graduating, or after a change in
his full-time enrolment status, and that he would contact the Accounts Processing, Pay and Pension Directorate of
the Department of National Defence (the Department) within that time frame to
make new arrangements for the repayment of his debt;
➢
In December 2010, the defendant completed his
full-time studies;
➢
On September 23, 2011, Sheila Price, an analyst with
the Department’s revenue and collection branch, contacted the defendant to
obtain proof that he was still a full-time university student in February 2010;
➢
On September 2011, the defendant sent the Department
a copy of his last three invoices for the PhD program in political science;
➢
On October 25, 2011, the Department’s analyst
notified the defendant that since he had completed his studies in December
2010, the debt repayment was to begin in March 2011. The analyst also indicated
to the defendant that he had to immediately pay the amount of $896.40 in
interest accrued so that he could start making his monthly payments of $282.02;
➢
The defendant was given formal notice to pay the
amount that was owing via emails and letters dated November 22, 2011, January 10,
2012, March 5, 2012, April 18, 2012, April 24, 2012 and July 24, 2012, but he
never followed up;
II.
ISSUES
[5]
In an order dated December 5, 2013, Prothonotary
Morneau identified the two issues as follows:
(a) Is the plaintiff entitled to claim the amount of $18,871.32 plus interest
from the defendant owing to non-compliance with his obligations?
(b)
What is the limitation period applicable in this
case?
[6]
Before answering these questions, the Court must
deal with an objection by the plaintiff regarding the filing of an unsigned
affidavit by the defendant, served on the plaintiff on September 18, 2014.
[7]
On that date, counsel for the defendant sent a missive
to counsel for the plaintiff explaining why their client was unable to swear
the affidavit filed. They acknowledge they are aware of the timelines imposed
by the Rules, but explain that their client is on a humanitarian mission related
to the Ebola crisis in Dakar, Senegal, and will not be back until September 21,
2014. However, he was contacted and he confirmed that he agrees to the content
of the affidavit filed and as soon as he returns to Canada, he will sign the affidavit
after being sworn in.
[8]
Counsel for the plaintiff objects to the filing
of the defendant’s affidavit arguing that the prothonotary’s order dated December
5, 2013, imposes on the defendant a 30-day period before the hearing to file
his affidavit evidence. Given that the defendant has exceeded the prescribed time
limit, and that he neither requested an extension nor provided a reasonable
explanation as to why he failed to comply with the order, the Court should
reject the document.
[9]
At the hearing, counsel for the plaintiff informed
the Court that her objection now only pertains to paragraphs 16, 17, 21 and 22 of
the defendant’s affidavit.
[10]
The Court admits the affidavit as there is no
prejudice to the plaintiff and the defendant’s explanations for not filing it
earlier are reasonable. And, as noted by counsel for the defendant, the
impugned paragraphs are only four repeated paragraphs of the defence that has
already been filed with the Court.
[11]
The parties agree that should the action be
allowed, the amount is $16,907.68 plus interest at 7.125 % and the additional
indemnity provided for in article 1619 of the Civil Code of Québec.
(a) Is the plaintiff
entitled to claim the amount of $16,907.68 plus
interest from the defendant owing to non-compliance with his obligations?
A.
Plaintiff’s arguments
[12]
The plaintiff submits that when the defendant enrolled
in the ROTP program, he was required, in accordance with article 25 of the
Canadian Forces Administrative Orders (CFAOs) 9-12, and in accordance with article
9 of the CFAO 15-7, to serve 48 months of obligatory service as an officer once
he had completed his studies. Moreover, the plaintiff alleges that the defendant’s
release from the Canadian Forces prior to the expiry of the 48-period, was possible
provided that the defendant complied with the reimbursement provisions provided
for in article 15.07 of the Queen’s Regulations and Orders (QR&O).
[13]
According to the affidavit of Lynne Villeneuve,
paralegal at the Department, the defendant studied at the Canadian Military College
(CMC) and received education and training until May 1996. Subsequently, between
September 1996 and October 1999, he studied at the University of New Brunswick where he received a master’s degree in history. It was during this study period
at the University of New Brunswick that the defendant was released from the
Canadian Forces, on May 6, 1998.
[14]
According to the affidavit of Lynne Villeneuve,
the amount specified on the promissory note signed on April 6, 1998, is
incorrect as it was calculated based on the tuition fees from the prior year. In
all, the Crown allegedly paid $40,433.13 for the defendant’s academic and
military training, but has waived any claims to more than the amount specified
on the promissory note.
[15]
The plaintiff states that since the defendant’s
release occurred prior to the expiry of the obligatory service period, he
therefore owed $23,311.24, pursuant to the agreement and promissory note he
signed on April 6, 1998.
[16]
On August 18, 1998, the amount of the debt was
reduced when $4,439.92 from the defendant’s superannuation account was applied
towards repayment, in accordance with the promissory note signed on April 6,
1998.
[17]
On October 19, 1998, the plaintiff agreed to
postpone repayment of the debt and applicable interest until April1, 2010,
through an addendum. The defendant signed said document on November 14, 1998. The
addendum modified the repayment terms of the debt subject to the following
three conditions:
(1) The
defendant had to provide the plaintiff with proof of his full-time student
status every 6 months;
(2) The defendant would start repaying his debt
two months after any change in his full-time student status or upon completion
of his studies;
(3) The defendant agreed to contact the Accounts
Processing, Pay and Pension Directorate, after the above-mentioned two-month
period to [Translation] “make new arrangements for the repayment of [his] debt”;
[18]
The plaintiff alleges that the defendant was a
full-time student until December 2010 when he completed the coursework of
doctoral studies at the Université du Québec à Montréal.
[19]
As indicated in the agreed statement of fact, the
sequence of events from September 2011 to July 2012 is not in dispute. However,
the plaintiff adds that on June 23, 2014, the Canada Revenue Agency collected
the amount from a tax credit of $1,943.64 owed to the defendant and applied it
as compensation for the repayment of his debt. The principal amount and interest
now owed by the defendant is therefore $16,907.68.
B.
Defendant’s arguments
[20]
According to the defendant, the agreed-upon deadline
for repayment of the debt was postponed [Translation]
“in a firm and definitive manner until April 1, 2010”.
He alleges that the action has been prescribed from April 1, 2013, under the limitation
periods provided for in the Civil Code of Québec.
[21]
Furthermore, the defendant notes that at the
time of his release, he had completed approximately 2.5 years of obligatory
service in the Canadian Forces. He alleges that since he obtained a professorship
at the Royal Military College Saint-Jean in 2009, his 4.5 years of service
as a professor should be taken into account and applied to the remaining 48 months
of service. He notes that said position may be filled by an officer of the
Canadian Forces with a graduate degree.
[22]
The defendant also argues that he never committed
to repay [Translation] “to the plaintiff amounts other than the costs incurred for his
tuition fees”. He notes that according to article 5.01, “Annual College
Fees under Chapter 5 of QR (Canmilcols)”, the only amount provided for in the regulations
is $1,524 for each academic year.
[23]
He concludes by noting that the plaintiff never agreed
to provide him with a breakdown of the amount being claimed from him.
C.
Plaintiff’s reply
[24]
The plaintiff replies that the defendant’s contention,
that he never agreed to reimburse the plaintiff for any amounts other than the
tuition fees, is not accurate. She makes reference to the agreement signed on
April 6, 1998, as well as QR&O 15.07, which provides that the costs
incurred by the public shall be not only for fees, but also pay and allowances
paid to the defendant.
III.
ANALYSIS
Obligatory service
[25]
Annex A of CFAO 15-7, page A-2, states
that officers enrolled in the ROTP program must serve “[t]wo months service for each month of academic training with a minimum
of 36 months and a maximum of 60 months commencing
on graduation from a CMC or university”.
[26]
According to the information regarding the
defendant’s periods of study contained in the affidavit of Lynne Villeneuve, the
defendant was a student from August 26, 1991, to May 3, 1996. Despite a few interruptions
in December and in the summer, the defendant was allegedly a student for a
total of 38 months. Multiplying this amount by two yields a number greater than
60, therefore, the defendant allegedly reached the maximum period required
under Annex A of the aforementioned CFAO 5-7. He therefore should have served a
period of 60 months after graduating from the CMC.
[27]
However, the defendant was released from the
Canadian Forces on May 6, 1998, therefore, only two 2 years after completion of
his studies at the CMC. The evidence on the record shows that the defendant failed
to meet the minimum obligatory service required under the ROTP program.
[28]
As for the defendant’s argument that his
employment as professor at the Royal Military College Saint-Jean be accounted
for so as to comply with the obligatory service requirement, the Court does not
believe that this argument is valid.
[29]
In CFAO 15-7, “obligatory
service” is defined as follows:
obligatory service
means
that period of time, prescribed by the Chief of the Defence Staff (CDS),
that a member must serve after having attended a course on full-time paid
duty and during which the member shall not be released on request under
Item 4 of the Table to Article 15.01 of QR&O, unless there are special and
unforeseen circumstances.
[Emphasis added.]
[30]
This definition indicates that the service
applies to a military member and not a civilian member of the Canadian Forces. Thus,
the defendant’s employment as a professor at the Royal Military College
Saint-Jean should not be accounted for in calculating his years of obligatory
service.
Reimbursement
of the required amount
[31]
The amount claimed by the Crown includes tuition
fees and other costs. Article 5.01, “Annual College Fees under Chapter 5 of the
QR&O (Canmilcols)” refers to the tuition fees for officer cadets enrolled
in a military college. The issue here is not the ROTP program in which the
defendant was enrolled and whose terms and conditions of reimbursement were different.
[32]
In the case at bar, because the defendant’s
minimum period of obligatory service began upon graduation, in May or June
1996, more than 12 months had elapsed when he was released from the Canadian Forces
in May 1998. Accordingly, paragraph 15.07(3)(b) of the QR&O ought to
be applied in this case. However, an agreement and promissory note in
accordance with article 27 of CFAO 9-12 were signed on April 6, 1998. It
is therefore necessary to give force to the provisions of the agreement and
promissory note as they represent the commitments made by the defendant to the
plaintiff.
[33]
Under this agreement, he acknowledged that he
would be released from the Canadian Forces prior to the completion of the
period of service prescribed in accordance with QR&O article 15.07 , and
acknowledged being liable to the plaintiff for the cost of the courses and
training in the amount of $23,311.24 and interest at the rate of 7.125% per year
as of November 1, 1998. He also promised to pay the debt in 114 consecutive
monthly instalments of $282.02 from November 1, 1998, to April 1, 2008.
[34]
However, the terms of this agreement and
promissory note were amended. In letters dated October 19 and 21, 1998, the
plaintiff agreed to the postponement of the reimbursement of the debt and
provided the defendant with an addendum containing new conditions for the
change. The defendant signed the addendum on November 14, 1998, in Saint-Laurent,
Quebec. Accordingly, the defendant acknowledged as his debt to the plaintiff
the amount stipulated in the agreement and promissory note signed on April 6,
1998.
[35]
On August 18, 1998, said amount was reduced by $4,439.92
owing to the drawdown of the defendant’s superannuation account balance. The new
amount owed to the plaintiff was therefore $18,871.32.
[36]
Accordingly, the plaintiff is entitled to claim
from the defendant the amount of $18,871.32 plus interest. However, having
regard to the payment of $1,963.64 taken from the defendant’s federal tax
credit on June 23, 2014, this amount is now $16,907.68.
(b) What
is the limitation period applicable to this case?
A.
Plaintiff’s arguments
[37]
The plaintiff alleges that section 32 of the Crown
Liability and Proceedings Act, RSC, 1985, c C-50, applies in this case, therefore
the limitation period is six years. This argument is based on the fact that the
first document signed by the defendant was signed in New Brunswick, the addendum
was signed in Quebec, and the payments were made in Ontario.
[38]
The plaintiff further alleges that even if this Court
were to find that it is the three-year prescriptive period of the Civil Code
of Québec that is applicable in this case, [Translation]
“it would not start to run until March 2011, that is, two
(2) months following completion” of the defendant’s full-time studies which
is December 2010.
B.
Defendant’s arguments
[39]
The defendant submits that because he signed the
Enrolment Form and the forms for the ROTP program in Trois-Rivières, in June
1991, and the addendum in Saint-Laurent, Quebec, although the payments had to
be made in Ontario, the parties are subject to Quebec civil law and the
three-year prescriptive period specified in article 2925 of the Civil Code
of Québec is applicable.
[40]
According to the defendant, because he did not make
any voluntary payments since August 1998, the plaintiff’s claim is prescribed. He
added that the addendum signed by him in November 1998 does not constitute a
renunciation, suspension or interruption of the prescription.
[41]
He also claims that the addendum he signed in November
1998 postponed the repayment due date to April 1, 2010. Accordingly, claim is
prescribed as the plaintiff’s claim was filed in this Court on June 7, 2013, that
is, more than two months after the prescription of the claim.
IV.
ANALYSIS
[42]
The defendant cites the following cases to
support his position that the three-year prescriptive period must apply here: Boudreault
c Économats des Forces Canadiennes (Canex), [2001] RJQ
1048, JE 2001-914; Villeneuve v Canada, 2006 FC 456; Olivier
c Canada (Procureur général), 2013 QCCA 70.
[43]
Section 32 of the Crown Liability and
Proceedings Act provides as follows:
Except as otherwise provided in this Act or in
any other Act of Parliament, the laws relating to prescription and the
limitation of actions in force in a province between subject and subject apply
to any proceedings by or against the Crown in respect of any cause of action
arising in that province, and proceedings by or against the Crown in respect of
a cause of action arising otherwise than in a province shall be taken
within six years after the cause of action arose.
[Emphasis added.]
[44]
It is necessary to determine where the cause of
action arose. It is a contractual matter.
[45]
In the case at bar, the plaintiff’s claim is
based on the debt created by the agreement and the promissory note. The signing
of the agreement and promissory note took place in New Brunswick. However, the addendum
that altered the terms of the documents was signed in Saint-Laurent, Quebec. Therefore, it is the prescriptive period provided for in article 2925 of the Civil
Code of Québec that applies. The article provides as follows:
An action to enforce a
personal right or movable real right is prescribed by three years, if the
prescriptive period is not otherwise determined.
[46]
It must then be determined when to begin calculating
the prescriptive period.
[47]
According to the Court, by signing the addendum on
November 14, 1998, the defendant agreed to the terms specified and altered the
promissory note .
[48]
In the addendum, it is provided that the due
date for repayment of the debt was postponed until April 1, 2010, but the cause
of action of the plaintiff’s right of action could only begin two months after
a change in his full-time enrolment status or after graduating.
[49]
The evidence shows that the defendant only changed
his full-time student status in December 2010. The calculation of the
prescriptive period should therefore begin in March 2011. The plaintiff’s
action is dated June 7, 2013, within the three-year period provided for in article
2925 of the Civil Code of Québec.
[50]
At the suggestion of the Court, the parties agreed
that a lump-sum amount of $1,500 in costs be payable.
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