Date: 20061020
Docket: A-93-05
Citation: 2006 FCA 342
CORAM: NADON
J.A.
PELLETIER J.A.
MALONE
J.A.
BETWEEN:
ALLISON G. ABBOTT, MARGARET ABBOTT, and
MARGARET ELIZABETH McINTOSH
Appellants
and
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT
PELLETIER J.A.
[1]
The
nominal appellants represent two groups of leaseholders in Riding Mountain National Park in Manitoba. Both groups seek a
declaration that they have a right of perpetual renewal of their leases in
spite of the fact that no such term appears in the leases. Both groups claim
that the Crown unlawfully forced them (the first group) or their predecessors
in title (the second group) to surrender a lease with a right of perpetual
renewal in exchange for one with a limited right of renewal. The members of the
first group are assignees of the original leaseholders. As a condition of
granting its consent to the assignment, the Crown required surrender of the
original lease in return for another which did not contain the right of
perpetual renewal. Members of the second group are persons whose predecessors
in title (either immediately or remotely) were persons in the first group. In
other words, the members of this group were never required to surrender their
leases because the right of perpetual renewal had already been removed.
[2]
The
appellants say that the Crown's conduct was unconscionable and unjustly
enriched the Crown. While both groups allege that the Crown could not use its
right to consent to any assignment of the original leases in order to change
the terms of the lease so as to remove the right of perpetual renewal, this
argument has more immediacy for the members of the first group (since they were
the ones required to surrender their leases) than for the members of the second
group.
[3]
The
Federal Court did not pronounce itself on the merits of the appellants' claims,
dismissing them on the ground that they were statute-barred by the Manitoba
Limitations of Actions Act, C.C.S.M. 1987, c. L150 (the Act), which is the
relevant legislation by reason of section 32 of the Crown Liability and
Proceedings Act, R.S.C. 1985, c. C-50. In my view, the Federal Court
reached the right conclusion for the reasons which follow.
[4]
The
appellants sought to avoid the application of the Act by arguing that the
relief they sought, a declaration of right, was not subject to any limitation
period because it was not dependent upon the existence of a cause of action. They
cited a number of cases in support of that proposition including Kent Coal
Company Limited et al v. Northwestern Utilities Limited, [1936] 2 W.W.R.
393 (Alta. C.A.), Re Henning and City of Calgary (1974), 51 D.L.R. (3d) 762, Vic Restaurant Inc.
v. Montreal (City), [1959] S.C.R. 58 and International Brotherhood of
Electrical Workers, Local 2085 v. Winnipeg Builders' Exchange, [1967]
S.C.R. 628. These cases all stand for the proposition that a party can seek a
declaration even though its cause of action is not yet perfected. In other
words, a person does not have to wait until their rights have been infringed
before seeking a declaration. These cases do not support the proposition for
which they were cited, namely that the right to a declaration is not subject to
limitation periods because it does not depend upon the accrual of a cause of
action. Once the cause of action accrues, time begins to run, and when the
limitation period is complete, all actions, including actions for a
declaration, are barred.
[5]
The
Supreme Court has suggested that, at least in some cases, the barring of the
remedy amounts to an effective extinguishment of the right. See Markevich v.
Canada, 2003 SCC 9, [2003] 1 S.C.R. 94 at para. 41 (Markevich) where
the following appears:
…As a result,
the cause of action arose on September 16, 1986. The Minister undertook no
action in the six years after that date to effect a renewal of the limitation
period. Consequently, as of September 16, 1992, s. 32 of the CLPA barred the
Minister from collecting the respondent's 1986 federal tax debt. Limitation
periods have traditionally been understood to bar a creditor's remedy but not
his or her right to the underlying debt. In my view, this is a distinction
without a difference. For all intents and purposes, the respondent's federal
tax debt is extinguished.
[6]
To the
extent that the appellants' argument rests upon the notion that even if a
limitation period has intervened, only their remedy, not their right has been
barred, and they are therefore still entitled to a declaration of right, the
decision of the Supreme Court in Markevich undermines the foundation of
their argument.
[7]
The
appellants also argue that time has not begun to run against them because they
have not yet suffered the loss which will start the limitation clock running
against them. This argument is based on the notion that the appellants will not
suffer a loss until the Crown refuses to renew their leases. Until then, they
say, their cause of action is inchoate and does not engage the limitation
period. This argument's lack of substance can be demonstrated by inquiring as
to the basis on which the appellants claim a right of renewal of their leases. It
cannot be by virtue of their existing leases which contain no such right. If
their claim depends upon the terms of a prior lease, then their loss occurred
when they (or their predecessors in title) were forced to surrender that lease
for the one which they now enjoy. Prior to that surrender, a right to perpetual
renewal of the lease existed; following it, it did not. That was the moment at
which their loss occurred.
[8]
If the
Crown's conduct was such as to give rise to a right of redress, the loss of the
right to perpetual renewal was the last element necessary to constitute their
cause of action. In the absence of any question of discoverability, a cause of
action accrues when the last element required to support the cause of action occurs.
In J & S Hardware Ltd. v. Ed Penner Construction Ltd., [1989] S.J.
No. 569, the Court cited Halsbury's Law of England, 3rd ed., vol. 1,
p. 6:
The popular meaning of
the expression "cause of action" is that particular act on the part
of the defendant which gives the plaintiff his cause of complaint. There may,
however, be more than one good and effective cause of action arising out of the
same transaction. Strictly speaking, "every fact which is material to be
proved to entitle the plaintiff to succeed, every fact which the defendant
would have a right to traverse", forms an essential part of "the
cause of action," which "accrues" upon the happening of the
latest of such facts…
[9]
The
appellants recycle the argument that their cause of action has not yet accrued
by relying on sections 25, 26 and 30 of the Act, which deal with actions to
recover land. They say that since they will not be dispossessed of their
interest in land until the Crown refuses to renew their lease, they have not
been dispossessed. Relying on section 26 of the Act, they say that dispossession
is the element which starts the limitation period. In my view, reliance upon
these sections is misplaced because the appellants do not seek to recover
possession of land. They continue to enjoy the use and occupation of the leased
lands. Even if these provisions do apply, their argument is subject to the same
response as its earlier manifestation. The interest which the appellants have
lost is the right of renewal of their leases. They lost that right when they
(or their predecessors in title) surrendered the original lease and accepted a
lease without such right of renewal in its place. The interest of which they
have been dispossessed is the right of renewal, and that dispossession occurred
well beyond the limitation period provided in these provisions.
[10]
The
appellants' remaining argument is that the Crown cannot invoke the passage of
time, and the resulting limitation, when it acts unlawfully or it enriches
itself unjustly. The appellants argue that unjust enrichment is not caught by
the Act as the latter makes no reference to it. The appellants further argue
that since the Crown will not be enriched until it re-enters upon the leased
lands as a result of the expiry of their leases, their cause of action has not
yet arisen.
[11]
To the
extent that unjust enrichment is an equitable doctrine, giving right to
equitable relief, it is caught by paragraph 2(1)(k) of the Act which
deals with "accident, mistake or other equitable ground of relief not
hereinbefore specifically dealt with…".
[12]
The
appellants' argument, that an unlawful act committed by the Crown acting under
its administrative or executive power should not be subject to a limitation
period, is unconvincing. Noting that an ultra vires act is not made intra
vires with the passage of a limitation period, the appellants suggest that the
same principle should apply when the acts complained of are unlawful. They do
so without providing any rationale or supporting authority. More importantly,
it is far from clear, here, that the Crown was acting in an administrative or
executive capacity. In my view, the most that the appellants can allege is that
the Crown acted unlawfully in its capacity as lessor.
[13]
As a
result, I am satisfied that the Federal Court judge came to the correct
conclusion when he held that the appellants' claims were statute-barred. That
being the case, it is not necessary to deal with the substantive questions
raised by the appellants.
[14]
I would
therefore dismiss the appeal with costs.
"J.D.
Denis Pelletier"
"I
agree
M. Nadon J.A."
"I
agree
B. Malone J.A."
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