Canada v. Employee No. 1, 2005 FCA 228

Date: 20050617

Docket: A-467-04

Citation: 2005 FCA 228

CORAM:       DESJARDINS J.A.

DÉCARY J.A.

PELLETIER J.A.

BETWEEN:

                                                    HER MAJESTY THE QUEEN

                                                                                                                                            Appellant

                                                                           and

                           PERSONS WISHING TO ADOPT THE PSEUDONYMS OF

                                      EMPLOYEE No. 1, EMPLOYEE No.  2 ET AL.

                                                                                                                                      Respondents

                                      Hearing held at Montréal, Quebec, on May 30, 2005.

                                  Judgment delivered at Ottawa, Ontario, on June 17, 2005.

REASONS FOR JUDGMENT:                                                                                    DÉCARY J.A.

CONCURRED IN BY:                                                                                         DESJARDINS J.A.

                                                                                                                                 PELLETIER J.A.

Date: 20050617

Docket: A-467-04

Citation: 2005 FCA 228

CORAM:       DESJARDINS J.A.

DÉCARY J.A.

PELLETIER J.A.

BETWEEN:

                                                    HER MAJESTY THE QUEEN

                                                                                                                                            Appellant

                                                                           and

                           PERSONS WISHING TO ADOPT THE PSEUDONYMS OF

                                      EMPLOYEE No. 1, EMPLOYEE No.  2 ET AL.

                                                                                                                                      Respondents

                                                    REASONS FOR JUDGMENT

DÉCARY J.A.

[1]                   This appeal takes us back twenty years, to the time when the Canadian Security Intelligence Service (CSIS) was created.

Facts

[2]                   For the purposes of these proceedings, the 119 respondents obtained leave not to disclose their names or addresses and to be identified solely as “Persons wishing to adopt the pseudonyms Employee No. 1, Employee No. 2 et al.” up to Employee No. 119. The reasons for this anonymity are readily understandable: the respondents were all members of the Royal Canadian Mounted Police (RCMP) security services at the time they accepted the offer made in 1984 which caused them to join the ranks of CSIS.

[3]                   In the respondents' opinion, the CSIS offer of employment came with a firm commitment by CSIS, firstly, to maintain the salaries and benefits they then had at the RCMP, and secondly, to ensure that their salaries and benefits with CSIS would subsequently be based on those their former fellow employees who remained with the RCMP might eventually receive. It is the existence of this commitment, and if applicable, its nature, which are the focus of this dispute.

[4]                   It appeared that sometime in 1991 the respondents realized that the parity with their former RCMP fellow employees, which they had been promised, had not been implemented and that they had, over the years, fallen behind compared to the latters' salaries and benefits. On August 20, 1999, after a number of events which I will spare the reader of, the respondents sent a long notification through their counsel to the CSIS director, Mr. Elcock, in which they claimed an indemnity for what they said they had lost in terms of salary since 1991, and if applicable, of the corresponding retirement benefits, as well as an adjustment of their salary (a.b. vol. 2, at p. 187). There was no answer to this letter.

[5]   On May 10, 2000, the respondents filed an action in the Federal Court Registry, in which they said they claimed the following relief:

[translation]

(a)    allow the action at bar;

(b)   order the defendant to pay the group of plaintiffs the monies claimed by each of them, a total sum of $2,684,358 for all the plaintiffs; the claim of each plaintiff appears in Appendix A hereof, and the amounts will be added to until the final decision since the claims in Appendix A and the resulting total have been determined as of the date the notification was sent on August 20, 1999, and the said claims will increase from day to day over time, with interest from the date of the notification of August 20, 1999;

(c)    make an order requiring the defendant to maintain the same overall remuneration for each of the plaintiffs as their former RCMP colleagues so long as the plaintiffs are employed by CSIS, for any present or future period of employment of each of the plaintiffs still employed by CSIS;

(d)   make an order requiring the defendant to make an upward adjustment to the pension income of plaintiffs now retired, in accordance with the pension income received by their former RCMP colleagues, and maintain such adjustments as long as the plaintiffs or their beneficiaries are entitled to receive such pension income;

(e)    order the defendant to pay each plaintiff the sum of $5,000 as damages for hardship and inconvenience;

(f)    order the defendant to pay the plaintiffs the expenses they have incurred in the case at bar on a solicitor-client basis, as well as costs;

(g)    order the defendant to pay interest for the period before and after judgment;

(h)   reserve any other relief for the plaintiffs that may be required;

(i)    pursuant to Rule 153 of the Federal Court Rules, 1998, SOR/98-106, order the question of assessment of individual damages suffered by each of the plaintiffs to be referred to a judge or referee . . .

                                                                                                        [a.d. vol. 1, at pp. 18-19]

[6]        The appellant filed her defence on June 23, 2000. After challenging the validity of the respondents' arguments, she added the following:

[translation]

45.           In addition, the action at bar challenges the personnel management decisions made or omitted by the plaintiffs' employer;

46.           Therefore, the alleged decisions or omissions should have been challenged within the required deadlines by the applicants, by way of a grievance submitted pursuant to the grievance policy issued by the CSIS director in accordance with the combined effect of the definition of “grievance” contained in subsection 2(1) of the Public Service Staff Relations Act and subsection 8(2) of the Canadian Security Intelligence Service Act;

47.           In addition, as the responses to their grievances could not be referred to arbitration, the applicants could have challenged their validity on the grounds stated in subsection 18.1(4) of the Federal Court Act, by filing an application for judicial review pursuant to sections 18 and 18.1 of the Federal Court Act within the specified deadline;

48.           The grievance procedure is the only remedy which was open to the applicants;

49.           The applicants were aware of their right to file a grievance, since on March  27, 1996 some of them did in fact file a grievance with their employer seeking the bilingualism premium, as appears from a copy of a group grievance submitted in support of this defence as Exhibit SM-3;

50.           This group grievance was dismissed on May 7, 1996 and no application for judicial review was submitted to the Federal Court Trial Division to challenge its validity, as appears from the reply to this group grievance filed in support of this defence as Exhibit SM-4;

51.           Consequently, this Court lacks jurisdiction to hear the applicants' action on the merits . . .

                                                                                                           [a.d. vol. 1, pp. 39, 40]

[7]        The respondents concluded the reply filed by them on July 7, 2000 by joining issue on the question of the Federal Court's jurisdiction.

[8]        The trial eventually took place before Beaudry J. in May and June 2004. The parties filed written arguments dealing both with the validity of the respondents' substantive arguments and the Federal Court's jurisdiction. On September 7, 2004, Beaudry J. delivered his judgment (2004 FC 1221). He accepted the respondents' arguments that their notification of August 20, 1999 amounted to a grievance and that the failure to reply amounted to a dismissal of the grievance. He accepted the appellant's position, however, that the respondents should have proceeded by way of an application for judicial review, except with regard to the claim for damages; he allowed the respondents to file a motion for an extension of time to file an application for judicial review pursuant to section 18.1 of the Federal Courts Act; he directed the respondents to file an amended statement of claim containing only the following prayer for relief: [translation] “order the defendant to pay each of the plaintiffs the sum of $5,000 as damages for hardship and inconvenience, with costs”; he stayed the action as amended for the duration of the judicial review proceedings and indicated that the action would be dismissed if the motion for an extension of time were not made, or were denied, or in the event it were made and accepted, if the application for judicial review were dismissed by a final judgment.

[9]        Although Beaudry J. did not expressly say so, I assume he retained jurisdiction over the stayed action, and in the event the action is revived, he will decide the case on the basis of the evidence he had already heard, and possibly on the basis of additional evidence.

[10]      The respondents felt satisfied with the results obtained and did not appeal that part of the judgment requiring them to proceed by way of an application for judicial review on the gist of their claims, and then to proceed by way of an action on their claim for damages.

[11]      The appellant, who was satisfied with a partial victory in her argument that the respondents should have proceeded by a grievance and then by application for judicial review having been accepted, did not appeal that part of the judgment allowing the respondents to seek an extension of time in order to file an application for judicial review. At the hearing, the Court was told that an extension of time had in fact been granted by Beaudry J. in December 2004 and that the appellant had not appealed this order for an extension of time, though it was rendered a very long time after the facts giving rise to the dispute occurred. The Court was told that the application for judicial review was following its course.

[12]      However, the appellant appealed that part of the judgment by Beaudry J. which authorized the respondents to file an amended action in respect of their claim for damages and which stayed that amended action. In the appellant's submission, the question of damages can only be addressed by way of a grievance, so that the Federal Court has no jurisdiction to dispose of an action in that regard.

[13]      The appellant also appealed the ruling by Beaudry J. that the notification of August 20, 1999 constituted a third level grievance and that the failure to reply to that notification entailed an implied consent to the grievance being taken directly to the third level and amounted to a dismissal of the grievance.

[14]      Pausing there, I would note incidentally that a number of exchanges took place during the hearing between the Court and counsel and which had to do with the fate of this case if the Court accepted the appellant's arguments on the Court's jurisdiction and the respondents' arguments on the nature of the notification.

[15]      Mr. Piché, for the appellant, submitted that he was not questioning the respondents' right to claim damages if their interpretation of the agreement were eventually accepted, but he wanted to be sure that that claim would be made by way of a grievance and not by way of an action before the Federal Court. As the grievance which was the subject of the application for judicial review was not concerned with the claim for damages, he suggested that, at this stage, the best procedure would be for the respondents to file a new grievance, which would bear only on the issue of damages. That grievance should be filed before the deadline specified by the regulations, and this deadline would begin to run from the date of this Court's judgment. The grievance would be considered by the CSIS director as a third level grievance.

[16]      Mr. Béland, counsel for the respondents, explained that the respondents' intention was to recover what they felt they were entitled to, and they did not care whether this was by way of a second grievance, as Mr. Piché suggested, or by way of an action.

Applicable legislation

[17]      I set out here subsections 91(1) and 92(2) of the Public Service Staff Relations Act, R.S.C. 1985, c. P-35:

Issue

[18]      Counsel for the appellant invited the Court to rule on issues which, on paper, appear very interesting, including the possibility that a litigant could use an action for damages to challenge, generally after the deadline, a decision by the federal government, and the question regarding the employer's jurisdiction to decide a claim for damages in the course of a grievance.

[19]      However, in the Court's opinion, it is not possible in the circumstances to accept the invitation of learned counsel.

[20]      In this case, the Court's hands are bound by the actions taken by the parties in relation to the litigation.

[21]      It is not necessary for the Court to decide whether, in the circumstances, the gist of the respondents' claims had more to do with an action for breach of contract, with an application for a declaratory judgment, or with a grievance; however, as Beaudry J. accepted the appellant's arguments on this point, as the respondents did not file an appeal in relation thereto and as an application for judicial review proceeds as if it were in fact a grievance, we cannot go back over  this.

[22]      Additionally, it is not necessary for this Court either to decide whether the remedy in damages sought in the case at bar should be sought by way of a grievance rather than by way of an action. As counsel for the parties were agreed that the issue be decided by way of a grievance, I am willing to proceed according to their wishes.

[23]      In short, the debate concerning the Court's jurisdiction and the choice of the appropriate procedure seems to me to be academic, inasmuch as that each party is satisfied that the issue of damages should be decided in the framework of a new grievance which the CSIS director would hear at the third level.

[24]      In the circumstances, it would be both useless and rash to go beyond what is satisfactory to the parties. This litigation has been going on for too long to allow the parties to become bogged down in formal discussions which would have no bearing on the final disposition of the case.

[25]      Accordingly, I am prepared to assume, since counsel are satisfied with this, that the issue of damages could be decided in the case at bar by way of a new grievance which the respondent would file as soon as this judgment was rendered and which the CSIS director would hear at the third level during, or after, depending on what the parties agree, the application for judicial review already instituted.

Disposition

[26]      I would quash that part of the order by Beaudry J. allowing the respondents to file an amended action and staying the amending action until the application for judicial review was decided by final judgment.

[27]      I would add the following to the order:

[translation]

The plaintiffs may, if they so wish, file a new grievance, which will be examined by the director of the Canadian Security Intelligence Service as a third level grievance, and if that grievance is dismissed, challenge such dismissal by way of an application for judicial review.

[28]      In the circumstances, I would not award costs.

I concur.

Alice Desjardins J.A.

I concur.

     J.D. Denis Pelletier J.A.

Certified true translation

François Brunet, LLB, BCL

                                                  FEDERAL COURT OF APPEAL

                                                      SOLICITORS OF RECORD

DOCKET:                                                             A-467-04

STYLE OF CAUSE:                                            THE QUEEN v. PERSONS WISHING TO ADOPT THE PSEUDONYMS EMPLOYEE 1, ET AL.

PLACE OF HEARING:                                      Montréal, Quebec

DATE OF HEARING:                                        May 30, 2005

REASONS FOR JUDGMENT BY:                   Décary J.A.

CONCURRED IN BY:                                       Desjardins J.A.

Pelletier J.A.

DATED:                                                               June 17, 2005

APPEARANCES:

SOLICITORS OF RECORD: