SUPREME
COURT OF CANADA
Between:
Parrish
& Heimbecker Limited
Appellant
and
Her
Majesty the Queen in Right of Canada as represented
by
the Minister of Agriculture and Agri-Food,
Attorney
General of Canada and Canadian Food Inspection Agency
Respondents
Coram: Binnie, LeBel, Deschamps, Abella, Charron, Rothstein and
Cromwell JJ.
Reasons
for Judgment:
(paras. 1 to 22)
|
Rothstein J. (Binnie, LeBel, Deschamps,
Abella, Charron and Cromwell JJ. concurring)
|
Parrish
& Heimbecker Ltd. v. Canada
(Agriculture and Agri-Food), 2010 SCC 64,
[2010] 3 S.C.R. 639
Parrish
& Heimbecker Limited Appellant
v.
Her Majesty The Queen in Right of Canada as
represented by the Minister of Agriculture and
Agri-Food, Attorney General of Canada and
Canadian Food Inspection Agency Respondents
Indexed as: Parrish & Heimbecker Ltd. v.
Canada (Agriculture and Agri-Food)
2010 SCC 64
File No.: 33006.
2010: January 20, 21; 2010: December 23.
Present: Binnie,
LeBel, Deschamps, Abella, Charron, Rothstein and Cromwell JJ.
on appeal from the federal court of appeal
Courts — Federal Court — Procedure — Plaintiff bringing action
in Federal Court against federal Crown for damages for various torts arising
from licensing decisions — Plaintiff not seeking
judicial review of licensing decisions — Whether plaintiff entitled to seek
damages by way of action without first proceeding by way of judicial review — Federal Courts Act, R.S.C.
1985, c. F-7, ss. 17 , 18 .
P&H
obtained import permits from the Canadian Food Inspection Agency (“CFIA”) to
import wheat. As P&H’s chartered vessel neared Halifax, the CFIA revoked
the permits and P&H was prohibited from offloading its cargo. The CFIA
subsequently issued a new import permit with different conditions. P&H complied, however the new conditions
rendered the wheat unacceptable to its intended customers. P&H did not seek judicial review of either
licensing decision, but initiated an action against the Crown in the Federal
Court seeking damages for various torts, and seeking to
recover the additional costs required to fulfill its sales contracts, the loss
of profit and the additional expenses incurred as a result of the new permit. The
Crown was successful in bringing a motion to strike the statement of claim on
the basis that, absent a successful challenge of the licensing decisions by way
of judicial review, the Federal Court did not have jurisdiction to hear the
matter in light of Canada v. Grenier, 2005 FCA 348, [2006] 2 F.C.R. 287.
Held:
The appeal should be allowed.
For the reasons given in Canada (Attorney
General) v. TeleZone Inc., 2010 SCC 62, [2010] 3 S.C.R. 585, the Federal
Court should have decided P&H’s claim for damages without requiring it to
first be successful on judicial review. Section 17 of the Federal Courts Act
gives the Federal Court concurrent jurisdiction over claims for damages against
the Crown. Section 18 of the Act does not derogate from this concurrent
jurisdiction. Nothing in ss. 17 or 18 of the Act requires
a plaintiff to be successful on judicial review before bringing a claim for
damages against the Crown. Bringing an application for judicial review
to invalidate the licensing decisions in this case would serve no practical
purpose, since P&H complied with the re-issued import licence and fulfilled
its contracts. The merits of the defence of statutory authority, if raised, may
be determined at trial.
Cases Cited
Applied: Canada (Attorney General) v. TeleZone Inc.,
2010 SCC 62, [2010] 3 S.C.R.
585; overruled: Canada v. Grenier, 2005
FCA 348, [2006] 2 F.C.R. 287.
Statutes and Regulations Cited
Crown Liability and Proceedings Act, R.S.C. 1985, c. C-50, s. 8 .
Federal Courts Act, R.S.C. 1985, c.
F-7, ss. 17 , 18 .
Plant Protection Act, S.C. 1990, c. 22, s. 47 .
Plant Protection Regulations, SOR/95-212,
s. 34.
APPEAL
from a judgment of the Federal Court of Appeal (Nadon, Sharlow and Pelletier JJ.A.), 2008 FCA 362, [2009] 3 F.C.R. 568, 303 D.L.R. (4th)
608, 384 N.R. 85, [2008] F.C.J. No. 1642 (QL), 2008 CarswellNat 4409,
affirming a decision of Barnes J., 2007 FC 789, [2007] F.C.J. No. 1032 (QL), 2007 CarswellNat 2112. Appeal
allowed.
Matthew G. Williams, for the appellant.
Christopher M.
Rupar, Alain Préfontaine and Bernard Letarte, for the respondents.
The
judgment of the Court was delivered by
[1]
Rothstein J. — The issue in this appeal is whether a plaintiff seeking damages
for the revocation and re-issuance of an import licence must first bring an
application for judicial review of the licensing decisions.
I. Facts
[2]
Parrish & Heimbecker Limited (“Parrish”) is
a Canadian grain trader. On October 24, 2002, Parrish obtained two import
permits from the Canadian Food Inspection Agency (“CFIA”) to import wheat from
Ukraine and Russia. Parrish chartered a vessel, the Nobility. On
November 17, 2002, the Nobility left Ukraine destined for Halifax with a
full cargo of wheat.
[3]
On December 5, 2002, as the Nobility was
nearing Halifax, the CFIA revoked Parrish’s import permits, allegedly pursuant
to s. 34 of the Plant Protection Regulations, SOR/95-212. As a
result, Parrish was prohibited from offloading its cargo.
[4]
The Nobility remained moored in the port
of Halifax for the month of December. Parrish made numerous inquiries as to why
the licences were revoked. According to Parrish, the CFIA refused to explain
the revocation and it refused to test the wheat for contaminants or otherwise
try to settle the matter.
[5]
On December 31, 2002, the CFIA issued a new
import permit with different conditions. The new permit required that the wheat
be pelletized and offloaded in Montréal and Québec. Parrish complied with the
new permit; however, the new permit conditions rendered the wheat unacceptable
to its intended customers. Parrish filled its original contracts with alternate
wheat that it had to purchase at a greater cost.
[6]
Parrish did not seek judicial review of either
licensing decision. In its statement of claim it stated that, “time
considerations meant it was entirely impractical for Parrish & Heimbecker
to address the purported revocation of the import permits through the judicial
review process” (R.R., at p. 68). Parrish further explained that it could not
wait for legal proceedings as it had to address the ongoing overtime use
charges for the Nobility and fulfill its contractual obligations with
its customers.
[7]
On December 2, 2005, Parrish initiated the
present action against the respondents (collectively the “Crown”) in the Federal Court. It seeks damages for
misfeasance in public office, unlawful interference with economic relations,
negligent misrepresentation and negligence. Parrish seeks to recover the
additional costs required to fulfill its sales contracts, the loss of profit
and the additional expenses incurred as a result of the new import permit.
[8]
Before filing a statement of defence, the Crown
brought a motion to strike Parrish’s statement of claim on the basis that the
Federal Court did not have jurisdiction to hear the matter and that the
statement of claim failed to disclose a reasonable cause of action.
II. Judicial
History
A. Federal
Court, 2006 FC 1102, 303 F.T.R. 21
[9]
Prothonotary Morneau allowed the Crown’s motion
to strike Parrish’s action. He assessed Parrish’s claims and determined that
they relied, to a large extent, on the invalidity or unlawfulness of the
decisions to revoke the licences and then issue another one (para. 22). He
concluded that the action for damages was a collateral or indirect challenge of
the decisions and was barred by the Federal Court of Appeal’s decision in Canada
v. Grenier, 2005 FCA 348, [2006] 2 F.C.R. 287, at paras. 29-30. Prothonotary
Morneau found that Parrish must first challenge the licensing decisions by way
of judicial review.
[10]
Prothonotary Morneau suspended the order
striking the action to permit Parrish to bring a motion to extend the time for
initiating an application for judicial review. Parrish’s action would be struck
if it was unsuccessful either in obtaining an extension of time or on its
application for judicial review (para. 34).
B. Federal
Court, 2007 FC 789 (CanLII)
[11]
Parrish appealed the decision of the
Prothonotary and, alternatively, sought an extension of time to file an
application for judicial review. Barnes J. decided the appeal de novo,
but reached the same conclusion as Prothonotary Morneau. Barnes J. concluded
that the present case was indistinguishable from Grenier (para. 12). He
permitted Parrish an extension of time to file its application for judicial
review, but refused to merge the application and action, as it would constitute
an “end run” around Grenier (para. 26).
C. Federal
Court of Appeal, 2008 FCA 362, [2009] 3 F.C.R. 568
[12]
Pelletier J.A. upheld the lower court decisions,
again concluding that Parrish’s claim “falls squarely within the principle
stated in Grenier” (para. 13). He upheld Barnes J.’s decision to extend
the time to file an application for judicial review and the decision not to
merge the application and the action.
[13]
Nadon J.A. concurred with Pelletier J.A. In his
view, it had not been shown that Grenier was “manifestly wrong” (para.
29). It was therefore binding authority and barred Parrish from bringing its
action without first seeking judicial review.
[14]
Sharlow J.A. dissented. She acknowledged that
Parrish’s action for damages would require an evaluation of the lawfulness of
the licensing decisions. She stated: “The question that arises in this case is
who is to determine, in the first instance, whether the exercise of statutory
authority is valid” (para. 37). Sharlow J.A. concluded that there was no
indication in the relevant statutes that this could only be completed through
judicial review. In particular, she saw s. 8 of the Crown Liability and
Proceedings Act, R.S.C. 1985, c. C-50 , which codifies the defence of
statutory authority, as evidence that the assessment of lawfulness can be done
in the course of a claim for damages (para. 39). Further, she noted that s.
18(1) of the Federal Courts Act, R.S.C. 1985, c. F-7 , gives the Federal
Court jurisdiction to grant traditional public law remedies. It does not say
that a dispute over the lawfulness of exercise of statutory authority cannot be
assessed in the course of a trial governed by the Crown Liability and
Proceedings Act (para. 44). In her view, the manifest intention of
Parliament is that claims for damages can be heard by both the Federal Court or
provincial superior courts (para. 46). She would have allowed the appeal and
allowed Parrish’s action for damages to proceed.
III. Relevant
Provisions
[15]
Plant Protection Regulations, SOR/95-212
34. (1) A
person who imports a thing under a permit shall comply with all the conditions
set out in the permit.
(2) Where the Minister determines
that it is necessary to prevent the introduction into Canada or the spread
within Canada of any pest or biological obstacle to the control of a pest, the
Minister shall amend a permit by adding, removing or amending a condition or
any information set out in the permit.
(3) The Minister may revoke a permit
issued to a person or refuse to issue any other permit to a person where the
Minister determines that the person has not complied with
(a) any
condition set out in the permit;
(b) any
provision of the Act or any regulation or order made thereunder; or
(c) any
order made by the Minister under subsection 15(3) of the Act.
(4) The Minister may revoke a permit
issued to a person or refuse to issue a permit to a person where the Minister
has reasonable grounds to believe that
(a) there
is an infestation in the country or place of origin of a thing or the country or
place from which the thing was re-shipped; or
(b) the
person has not complied with
(i) any
condition set out in the permit,
(ii) any
provision of the Act or any regulation or order made thereunder, or
(iii) any
order made by the Minister under subsection 15(3) of the Act.
(5) Where a foreign exporter has
shipped to Canada any thing that is a pest, infested or a biological obstacle
to the control of a pest or that contravenes any provision of the Act or any regulation
or order made thereunder, the Minister may revoke a permit issued to any
person, or refuse to issue a permit in respect of a thing to any person, to
import from that foreign exporter or from the country or place of origin or
reshipment until
(a) the
thing shipped or to be shipped is no longer a pest, infested or a biological
obstacle to the control of a pest;
(b) the
phytosanitary authorities in the country or place of origin or reshipment have
identified to the Minister the cause or source of the infestation that is the
subject-matter of the contravention; and
(c) the foreign exporter or
the phytosanitary authorities referred to in paragraph (b) have given a
written undertaking to comply with the provisions of the Act and all
regulations and orders made thereunder.
IV. Analysis
[16]
On the basis of Grenier, the Crown argues
that Parrish’s action is a collateral attack on its administrative decisions to
revoke the import licences and issue another one. It argues that “Parrish
cannot succeed in its claims without attacking the lawfulness or validity of
the revocation decisions” (R.F., at para. 23). According to the Crown, this
attack on the licensing decisions must first occur by way of judicial review.
[17]
For the reasons given by Binnie J. in the
companion decision of Canada (Attorney General) v. TeleZone Inc.,
2010 SCC 62, [2010] 3 S.C.R. 585, the Crown’s arguments must fail.
[18]
Unlike in TeleZone, the Federal Court’s
jurisdiction is not at issue in this appeal. Parrish brought its action in the
Federal Court. However, the correct procedure — action or application for
judicial review — is at issue. Section 17 of the Federal Courts Act
gives the Federal Court concurrent jurisdiction over claims for damages against
the Crown. Section 18 of the Federal Courts Act does not derogate from
this concurrent jurisdiction. There is nothing in ss. 17 or 18 that requires
Parrish to be successful on judicial review before bringing its claim for
damages against the Crown.
[19]
Parrish complied with the re-issued import
licence. It imported the wheat and fulfilled its contracts. Bringing an
application for judicial review to invalidate the licensing decisions would
serve no practical purpose. Parrish now brings an action in tort to recover the
additional costs of complying with the CFIA’s licensing decisions.
[20]
The Crown may seek to defend against the action
by relying on its statutory authority, under s. 47 of the Plant Protection
Act, S.C. 1990, c. 22 , and s. 34 of the Plant Protection Regulations,
to revoke or amend import permits. If it does so, the merits of this defence
will have to be determined at trial.
[21]
For the reasons given in TeleZone, the Federal
Court should have decided Parrish’s claim for damages without requiring it to
first be successful on judicial review.
V. Conclusion
[22]
I would allow the appeal with costs throughout.
Appeal
allowed with costs.
Solicitors for the
appellant: Ritch Durnford, Halifax.
Solicitor for the
respondents: Attorney General of Canada, Ottawa.