St-Jacques v. Canada, 2004 FC 1272

Date: 20040916

Dockets: T-2206-03

04-T-20

Citation: 2004 FC 1272

OTTAWA, ONTARIO, THE 16TH DAY OF SEPTEMBER 2004

PRESENT: THE HONOURABLE MR. JUSTICE MARTINEAU

BETWEEN:

STEVEN ST-JACQUES

Plaintiff

- and -

HER MAJESTY THE QUEEN

Defendant

REASONS FOR ORDER AND ORDER

[1]         The plaintiff Steven St-Jacques is a fireman who has been employed by the municipality of Laval in the province of Quebec since 1999. Since at least 1997, he has also been a contributor to the employment insurance plan. On November 24, 2003 he brought an action in this Court against the defendant Her Majesty the Queen in right of Canada, claiming reimbursement of monies which he alleged he overpaid for employment insurance premiums for 1997, 1998, 1999, 2000 and 2001. The plaintiff, who also wishes to represent all contributors to the employment insurance plan in a class action, is thus claiming the sum of $1,132.48 from the defendant, plus interest.

[2]         On January 7, 2004, the defendant filed a motion to strike the plaintiff's statement of claim, on the grounds inter alia that his action disclosed no reasonable cause of action and that the decisions of a federal board, commission or other tribunal cannot be challenged by an action. In the case at bar, the premium rates are set by the Employment Insurance Commission annually. On April 23, 2004, the plaintiff filed an amended statement of claim, incorporating an application for judicial review from the Commission's decisions setting the premium rates for 1997, 1998, 1999, 2000 and 2001. The plaintiff further filed a motion for an extension of time to file his application for judicial review, as well as a motion asking that the said application for judicial review be treated and proceeded with as if it were an action.

[3]         The undersigned judge was made responsible for managing the proceeding in the plaintiff's action (docket T-2206-03). It will be recalled that this is a simplified action with a proposed class action. No motion for leave has yet been submitted to the Court. Further, the Federal Court Rules, 1998, SOR/98-106, on class actions only apply to an application for judicial review where the Court has ordered pursuant to subsection 18.4(2) of the Federal Courts Act, R.S.C. 1985, c. F-7, that this be treated and proceeded with as an action (Rule 299.11). On April 30, 2004, I issued a direction that the plaintiff's two motions concerning his application for judicial review be entered in a separate preliminary record (docket 04-T-20). The latter, and the defendant's motion to strike, were heard concurrently on September 7, 2004.

[4]         For the reasons that follow, the motion to strike appears to the Court to be valid, while the plaintiff did not persuade the Court that this was a case in which, exercising the discretion conferred by subsections 18.1(2) and (4) of the Federal Courts Act, this Court should grant an extension of time and order that the application for judicial review contained in the amended statement of claim be treated and proceeded with as if it were an action.

Motion to strike

[5]         Rule 221 authorizes the Court to strike pleadings when, taking the facts as proven, the pleading discloses no reasonable cause of action. Thus, it should be quite clear that the opposing party has no chance of success in the proceeding (Temple v. Minister of National Revenue) (2001), 214 F.T.R. 305 (F.C.T.D.); Martel v. Samson Indian Band, [1999] F.C.J. No. 374 (F.C.T.D.) (QL)). In Martel, supra, Hugessen J. noted that the disputed pleading must be interpreted in light of the context with a generous eye.

[6]         First, I note that the plaintiff's amended statement of claim is irregular on its face. The plaintiff brought an action against the Crown for reimbursement of monies allegedly overpaid. Subsequently, he filed an amended statement of claim in which he incorporated an application for judicial review into his initial action. This method of proceeding is clearly contrary to Rule 301, which provides that an application for judicial review shall be commenced by a separate notice of application in Form 301. The style of cause is also defective. In an application for judicial review, the defendant should be the Commission, not Her Majesty the Queen as is the case at present.

[7]         It should also be noted that the Court's new rules on class actions, contained in Rules 299.1 to 299.41, relied on by the plaintiff to justify these important departures from the Court Rules, do not create a separate right of action and clearly cannot be of any assistance to him at this stage. The system is clearly a procedural one, and at no time has the Court as such authorized the plaintiff's action to proceed as a class action. In the case at bar, the plaintiff himself acknowledged in his amended statement of claim that the causes of action which he has against the defendant are based, first, on paragraphs 17(2)(a) and (d) of the Federal Courts Act, and second, paragraphs 18.1(4)(a), (b), (c), (d) and (f) of that Act. The combination in the same proceeding of an action against the Crown and an application for judicial review challenging the validity of the decisions of a federal board, commission or other tribunal is improper. These two types of action are subject to different legal criteria, both in terms of substantive law and of the preparation of the record and administration of the evidence in the Court. Further, in view of the particular circumstances of the case at bar, such a combination would not serve the ends of justice. In my opinion, the most fair and economical solution possible in the matter must be for these two actions to proceed separately. Further, the application for judicial review should take precedence over the action against the Crown.

[8]         At the hearing, counsel for the plaintiff told the Court that the application for judicial review contained in the amended statement of claim was added as an alternative. Despite the plaintiff's pleadings, which clearly indicate the contrary, his counsel argued that it is superfluous and pointless to challenge the Commission's prior decisions by an application for judicial review at this time. In this connection, they relied on a number of decisions of this Court granting inmates the right to bring an action for damages for unlawful imprisonment without first requiring them to proceed by an application for judicial review (Creed v. Canada (Solicitor General), [1998] F.C.J. No. 199 (QL); Nguyen v. Canada (1997), F.T.R. 241; Shaw v. Canada, [1999] F.C.J. No. 657 (QL); Zarzour v. Canada, [2000] F.C.J. No. 2070 (QL); Szebenyi v. Canada, [1999] F.C.J. No. 1453. (QL)). The question therefore is whether the plaintiff can obtain the compensation sought against the Crown in his initial statement of claim without first having the Commission's decisions setting the premium rates quashed by an application for judicial review, as the defendant submitted.

[9]         On analysis, I do not think the precedents relied on by the plaintiff are conclusive. It appears that in those cases because of the lapse of time the setting aside of the administrative measure (transfer, segregation and so on) the legality of which the inmate was challenging was no longer possible. I understand that in such a case an application for judicial review would become moot and serve no useful purpose. For the reasons indicated below, that is not the case here. In passing, I note that in Zubi v. Canada (1993), 71 F.T.R. 168, another case involving an inmate, this Court held that when the redress sought is one of those covered by section 18, and not simply damages, the plaintiff should first file an application for judicial review, and then if he is successful bring an action for damages. That seems to me to be the case here. In any event, even if the Court confined itself to the initial statement of claim, it is clear that the claim for reimbursement of the monies paid by the plaintiff in the years in question depends on the legality of the Commission's decisions.

[10]       The plaintiff's objection essentially is that the Commission erred or acted arbitrarily in setting the premium rates, which in the circumstances were too high. The plaintiff's basic argument was that the Commission paid no attention to the recommendations, opinions, forecasts and premium rates of the Chief Actuary. Consequently, since 1997 the Employment Insurance Account surpluses have risen from $7.3 billion to $40.1 billion. In this connection, the plaintiff argued that the premiums imposed were unfair, capricious, unreasonable and oppressive, especially as Canadian taxpayers are already paying too much in taxes and assessments. These are clearly grounds for judicial review covered by section 18.1 of the Federal Courts Act.

[11]       On the other hand, this is not a case in which the plaintiff's problem has resolved itself with time. Here, the question is whether the plaintiff could have acted at the proper time by filing an application for judicial review challenging the decision setting the premium rates. The answer is yes. The principal reason relied on in support of the principle that a plaintiff could bring an action for damages, without even initiating an application for judicial review, is that it would be superfluous to initiate such an application. That assumes that the Court can be shown that the problem of this plaintiff caused by the decision given by the federal board has resolved itself because the said decision no longer has any direct effect on him. While it is understandable that this should be so in a case of a temporary loss of freedom, it certainly is not the case when a sum of money payable under a general decision, applicable to a group of individuals, was demanded and collected for a given year. Also, I do not see how such a sum of money can be recovered from the Crown without first having the decision of the Commission at issue set aside.

[12]       Section 66 of the Employment Insurance Act, S.C. 1996, c. 23, which was applicable at the time the decisions challenged by the plaintiff were made, stipulated the following process for the setting of premium rates:

[13]       This provision gives the Commission great discretion. The legislation places the Commission under no legal obligation to follow the recommendations of the Chief Actuary. Accordingly, taking the facts alleged by the plaintiff as proven, the premium rates were set by the Commission pursuant to section 66 of the Employment Insurance Act, and consequently can validly be set up against the plaintiff as long as they remain in effect and have not been cancelled. In the case at bar the plaintiff is seeking from the Crown reimbursement of part of the monies which he paid as premiums to the employment insurance plan. The monies in question are not, as the plaintiff argued, monies [TRANSLATION] "overpaid". As long as they have not been cancelled by a court, the said monies must be regarded as having been legally collected in accordance with the annual premium rate set by the Employment Insurance Commission. In this regard only the Commission, under section 66 of the Employment Insurance Act, has the power to set the premium rate which in its opinion is the most appropriate. Perhaps the premium rates are higher than what the plaintiff and other individuals (including the Chief Actuary or Auditor General) believe are sufficient rates to pay the amounts authorized to be charged to the Employment Insurance Account, but the fact remains that the amounts required from contributors under Commission decisions (confirmed by Orders of the government) were not overpaid by the contributors, including the plaintiff, but were paid in accordance with the law. Consequently, the theory of claims for overpayment and unjust enrichment relied on by the plaintiff certainly cannot apply in the case at bar.

[14]       It is apparent that in the present state of the record the plaintiff has no reasonable cause of action against the Crown under section 17 of the Federal Courts Act. In my opinion, the duty to reimburse alleged by the plaintiff can only come into being if a competent court sets aside the disputed decisions of the Commission. This can only be done through exercise of the powers this Court has under subsection 18.1(3) of the Federal Courts Act. Accordingly, the plaintiff's action against the Crown appears to the Court to be prima facie premature and inadmissible. As to the question of whether, if the decision were quashed by a competent court, the plaintiff could then claim any amount from the Crown, in my opinion that depends on a number of variables. If the premium rate set by the Commission were to be set aside, it would seem prima facie that the case should be referred back to the Commission for redetermination so that new premium rates could be set by the Commission in accordance with the directions which the Court would give in such a case. This Court has no particular expertise in setting premium rates. It is a discretionary power belonging exclusively to the Commission. Accordingly, in my opinion the Court clearly could not itself set the amount of the premium which the Commission should have set. Further, even if the Commission did not follow the recommendations of its Chief Actuary, and this could be a basis for setting aside the decisions made, I do not think that this fact by itself entails the Crown's extra-contractual liability. In all cases, fault must be proven. Until there is evidence to the contrary, good faith must be presumed (Monit International Inc. v. Canada, [2004] F.C.J. No. 59; Molaison v. Canada, [1993] F.C.J. No. 1409).

[15]       The situation at bar bears some resemblance to Tremblay v. Canada, [2004] F.C.J. No. 787 (QL). In that case the plaintiff had reached the age limit specified in the law. He was challenging his compulsory retirement and claiming compensation for loss of salary. The Federal Court of Appeal held that the plaintiff could not obtain reinstatement by bringing an action and could not obtain financial compensation by an application for judicial review. The Court referred inter alia to Lake Babine Indian Band v. William, [1996] 194 N.R. 44 (C.A.), in support of the fact that it is impossible to obtain judicial review in an action. The plaintiff in that case did not have a choice between two proceedings. He first had to obtain annulment of the decision in order to be reinstated. It was only then that, by an action, he might obtain compensation for his lost salary. The same reasoning must apply in the case at bar.

[16]       The defendant's motion to strike must accordingly be allowed, since in my opinion the plaintiff's action has no chance of success. In view of the result and the particular circumstances of the case, the defendant will be entitled to costs.

Motion for extension of time

[17]       The plaintiff argued that the deadline mentioned in subsection 18.1(2) of the Federal Courts Act is not a strict deadline and that this Court should exercise its discretion to extend the time for filing the application for judicial review contained in his amended statement of claim, for the following reasons.

(a)         Other parties have applied to the Quebec Superior Court to determine the constitutionality and legality of certain sections of the Employment Insurance Act, including the aforesaid section 66. The plaintiff expected that judgment would be rendered in that case before initiating the proceedings at bar in the Federal Court. The Superior Court did not render its judgment until November 5, 2003: Le Syndicat national des employés d'aluminium d'Arvida Inc. v. Procureur général du Canada, [2003] J.Q. No. 15801 (on appeal).

(b)         The plaintiff kept informed of progress in the case and said he was prepared and determined to represent all the contributors to the plan in the anticipated class action.

(c)         The plaintiff submitted that the plaintiff's amended simplified action is based on serious, specific, valid, persuasive grounds of national interest, in that it relies inter alia on overwhelming reports by the Auditor General and the Chief Actuary.

[18]       The plaintiff did not observe the thirty-day deadline mentioned in subsection 18.1(2) of the Federal Courts Act. It is clear that his application for an extension of time does not meet the criteria found in the case law. As Desjardins J.A. said in Tremblay, supra, the thirty-day statutory deadline is due to the need to ensure some certainty in federal government decisions. In Baska v. Neis, [2002] F.C.A. 230 (F.C.A.), the Federal Court of Appeal pointed out that a plaintiff must meet the following four tests in order to obtain an extension of time: (a) a continuing intent to pursue the application; (b) the case discloses an arguable cause of action; (c) the defendant suffers no loss if the extension is granted; (d) there is an explanation for the delay. At least three of these were not met (the first, third and fourth criteria).

[19]       As a general rule, a plaintiff must have a definite intention to file an application for judicial review within the thirty-day deadline. Further, this intention must continue until the application is filed. In the case at bar, the plaintiff's continuing intention to proceed with the action is not supported by affidavit. It has already been held by the Federal Court of Appeal that the affidavit of counsel seeking to establish a continuing intention to pursue is inadmissible for purposes of a motion for an extension (Belmonte v. Public Service Union (Longshoremen's Union), Local 375, [2004] F.C.A. 141 (F.C.A.)).

[20]       Without saying here that the plaintiff's action cannot be defended, it presents certain difficulties because of the heavy burden which the plaintiff must discharge in the circumstances. We need simply recall that section 66 of the Employment Insurance Act gives the Commission the duty of setting "the premium rate for each year at a rate that the Commission considers will, to the extent possible . . . ensure that there will be enough revenue over a business cycle to pay the amounts authorized to be charged to the Employment Insurance Account; and . . . maintain relatively stable rate levels throughout the business cycle". All things considered, and applying the pragmatic and functional method of analysis, the standard of review applicable to such a decision is that of the patently unreasonable nature of the decision. Further, I note that at the moment the specific criteria applied by the Commission for each of the years in question are not known. At this stage, therefore, it is difficult to conclude that the decisions in question were arbitrary and unreasonable without having complete knowledge of the situation.

[21]       As regards the question of suffering prejudice, I feel that allowing a contributor to challenge the Commission's decisions so late and beyond the statutory deadline (approximately seven years in the case of the first decision concerned) will inevitably create uncertainty in the government's decisions and cause the defendant serious hardship, especially as here the plaintiff also wants his application for judicial review to be treated and proceeded with like an action for purposes of a proposed class action by millions of contributors to the employment insurance plan (Lancashire v. Canada (Treasury Board), [1997] F.C.J. No. 1359 (F.C.A.) (QL)).

[22]       To justify the plaintiff's delay, his counsel alleged that the plaintiff could not have known the rates were illegal until the year after they were set or until the publication of the reports by the Auditor General or the Chief Actuary. Evidence of the date these documents were published for each of the years in question is not in the record. In any event, it was held in Caisse populaire Desjardins Maniwaki v. Canada (Attorney General), [2003] F.C.A. No. 1485, (F.C.T.D.) (QL), at paragraph 13, that an applicant's failure to understand the proper remedies available to him is not an argument which the Court can accept in an application for an extension. Further, constitutional litigation in the Quebec Superior Court has no legal impact on the case at bar since it does not directly challenge the setting of the premium rates by the Commission. Consequently, I accept the defendant's argument that waiting for the outcome of constitutional litigation in the Superior Court, and its existence, did not in any way prevent the plaintiff from seeking judicial review of the decisions in question within the specified deadlines.

[23]       For these reasons, there is no basis for the Court to exercise its discretion. The plaintiff's application for an extension must therefore be dismissed with costs.

Motion to treat application as action

[24]       In view of the conclusion I have come to above, the plaintiff's motion asking that the application for judicial review contained in his amended statement of claim be treated and proceeded with as an action must also be dismissed with costs. Moreover, I would have dismissed this motion in any event, even if I had decided to allow the plaintiff's motion for an extension of time to file an application for judicial review. It is true that subsection 18.4(2) of the Federal Courts Act gives the Court discretion to order that an application for judicial review be treated and proceeded with as if it were an action. In this connection we must consider, first, the intention of Parliament that the Court should rule promptly and by a summary procedure on applications for judicial review, and second, the particular circumstances of each case. Even accepting here that the irregularity resulting from the absence of a separate notice of application consistent with Rule 301 might eventually be corrected by the plaintiff, there is nothing to indicate that the relevant evidence of the material considered by the Commission and the circumstances surrounding the setting of the disputed premium rates could not be presented in the usual way, that is by the filing of affidavits. Accordingly, the plaintiff did not persuade the Court that this was a special case in which the Court should allow the application for judicial review, which incidentally involves several decisions, to be treated and proceeded with as an action.

ORDER

THE COURT ORDERS that:

(1)         the plaintiff's motion that the application for judicial review contained in his amended statement of claim be treated and proceeded with as an action and the plaintiff's motion for an extension of time to file an application for judicial review, made in case 04-T-20, are dismissed with costs;

(2)         the defendant's motion to strike, made in docket T-2206-03, is allowed and the plaintiff's action dismissed with costs.

Certified true translation

Suzanne M. Gauthier, C Tr, LL L

                                                             FEDERAL COURT

                                                      SOLICITORS OF RECORD

DOCKETS:                                                                 T-2206-03 and 04-T-20

STYLE OF CAUSE:                                                   STEVEN ST-JACQUES v. HER MAJESTY THE QUEEN

PLACE OF HEARING:                                             MONTRÉAL, QUEBEC

DATE OF HEARING:                                               SEPTEMBER 7, 2004

REASONS FOR ORDER AND ORDER BY:         MARTINEAU J.

DATED:                                                                      SEPTEMBER 16, 2004

APPEARANCES:

BENOÎT GAMACHE                                                                          FOR THE PLAINTIFF

DAVID BOURGOIN

CAROLE BUREAU                                                                             FOR THE DEFENDANT

LINDA MERCIER

SOLICITORS OF RECORD:

BENOÎT GAMACHE                                                                          FOR THE PLAINTIFF

DAVID BOURGOIN

BOURGOIN, SIROIS, GAMACHE

QUÉBEC, QUEBEC

MORRIS ROSENBERG                                                                      FOR THE DEFENDANT

DEPUTY ATTORNEY GENERAL OF CANADA