Docket: T-1060-11
Citation: 2012
FC 136
Ottawa, Ontario,
February 3, 2012
PRESENT: The Honourable Mr. Justice Boivin
BETWEEN:
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JEFFREY MILLER
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Applicant
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and
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MINISTER
OF LABOUR (CANADA),
MICHAEL PEARISO,
SHELDON PENNER, BRETT ROBISON, DAVID STAGG,
COLLEEN HANNAH,
THOMAS THOMSEN, PLAMEN VALCHEV, JAMIE D. BARRERA, SUSAN TAYOR, KENNETH
MEINTZER,
CARL FALCONER, SUSAN
NAGEL,
PAMELA FRY, BLAIR
MARTIN,
CRAIG MATTSON,
MARGARET KEMP,
EGON SOUVARD, ROGER
CROSS,
WILLIAM SCURR, JIM
BAKER,
LUKE YANIK, ALVIN
SLOAN,
DENISE SCHONFIELD,
JAMIE FALCONER, LISA NICHOLSON AND FIONA MALONE
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Respondents
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REASONS FOR
JUDGMENT AND JUDGMENT
[1]
This
is an application pursuant to section 18.1 of the Federal Courts Act,
RSC 1985, c F-7 for judicial review of a decision of Newton Eng, an inspector
with Human Resources and Skills Development Canada – Federal Labour Program (HRSDC),
dated May 20, 2011, to issue a Payment Order to a Director of a Corporation
(the Payment Order) against the applicant pursuant to sections 251.1 and 251.18
of the Canada Labour Code, RSC 1985, c L-2 (the Labour Code). The
applicant seeks a declaration that he tendered a valid written resignation on
December 15, 2008, and an order setting aside the Payment Order, dated May 20,
2011, and referring the matter back for re-determination in light of the
applicant’s resignation.
[2]
The
only respondent who participated in these proceedings is the Minister of Labour
(hereinafter referred to as the respondent).
Factual
Background
[3]
Corpac
Canada Ltd. (Corpac) was a commercial airline that shut down operations in June
2009. The applicant, Jeffrey Miller, became an Officer and Director of Corpac
in April 2007. The applicant claims that he attempted to resign as Officer and Director
several times. He learned in the fall of 2008 that Corpac was in financial
difficulties, but that it was continuing to meet its payroll obligations.
[4]
The
applicant states that he attended the Corpac offices to deliver his written
resignation on December 15, 2008, but the Executive Vice President and General
Manager, Mr. Roger Cross (Mr. Cross), was unavailable. The applicant states
that he left a copy of the resignation on the desk of a senior manager, Mr. Michael
Hills, who according to the applicant later called to confirm receipt of the
resignation.
[5]
Between
February and June 2009, Corpac terminated the employment of several employees.
HRSDC received twenty-six complaints from former employees for unpaid wages,
overtime, per diems, vacation pay, pay in lieu of termination, and severance
pay. The matter was assigned to an inspector, who appears based on the
Certified Tribunal Record to have worked on it for several months before it was
transferred to Mr. Newton Eng (the Inspector). A corporate search indicated
that the applicant was the sole director of Corpac.
[6]
The
Inspector contacted the applicant on January 7, 2011, and the respondent
asserts that the applicant stated he had verbally advised the general manager
of Corpac of his resignation but never filed the resignation with the Alberta
Corporate Registration System (the Registry). The Inspector sent the applicant
a letter dated January 18, 2011, indicating that $397,784.56 were owing to
former employees. Based on his preliminary findings, a Payment Order could be issued
against the applicant. The letter invited the applicant to submit information
to the Inspector to show that the conditions of section 251.18 of the Labour Code
had not been met.
[7]
The
applicant responded through counsel by letter dated February 1, 2011, disputing
that wages were owed, that recovery from Corpac was impossible, and that the
entitlement arose while the applicant was an incumbent Director. The letter
stated that the applicant had resigned on December 15, 2008, and a copy of the
resignation letter was attached. The applicant’s counsel also informed the Inspector
that section 108(2) of Alberta’s Business Corporations Act, RSA 2000, c
B-9 (the Alberta Business Act), which governed Corpac, states that a
resignation is effective once it is sent to the corporation.
[8]
Since
the resignation letter was addressed to Mr. Cross, the Inspector contacted Mr.
Cross, who confirmed in writing that he never received the resignation letter.
The Inspector advised the applicant’s counsel of Mr. Cross’ information, and of
his unfamiliarity with the Alberta Business Act. The respondent claims that the
Inspector received no further information from the applicant despite repeated
requests. The applicant asserts that his counsel was in regular contact with
the Inspector, advising him that they were still gathering information to
respond.
[9]
The
Inspector wrote to the applicant multiple times with updates regarding the
amount owing, and heard nothing in response. On April 27, 2011, the Inspector
sent the applicant and his counsel a letter noting they had not responded to
his preliminary determinations, and indicating that if further information was
not received within 15 days, a Payment Order could be issued against the applicant.
After again hearing nothing in response, the Inspector made his final
determination and issued the Payment Order against the applicant for
$408,830.63 on May 20, 2011. The applicant was served personally with the
Payment Order on May 29, 2011. In his sworn affidavit, Mr. Hugh Slocombe states
that the applicant called him on May 30, 2011, saying that he was served with
this document that gave 15 days to “do something.” Mr. Slocombe asked the
applicant to fax the document, but there is no evidence that the applicant did
so.
[10]
The
period to appeal the Payment Order ran for 15 days from that date, and
therefore expired on June 13, 2011. The applicant did not file an appeal – he
states that it was due to an oversight on the part of his counsel, who only
received the Payment Order by regular mail on June 10, 2011. Counsel requested
an extension of the appeal period, and the Inspector and the Inspector’s
supervisor both informed the applicant’s counsel that there was no provision in
the Labour Code for extending the appeal period.
Issues
[11]
Before
the merits of the decision can be considered, the Court must decide the
preliminary issue of whether to exercise its discretion to decline to hear the
application because of the failure to pursue an adequate alternative remedy.
Statutory
Provisions
[12]
The applicable provisions of the Canada Labour
Code and the Alberta Business
Corporations Act can be found in the Annex following
this decision.
Standard of
Review
[13]
The
applicant submits that the Inspector erred in law by relying solely on the fact
that the applicant was listed as a Director in the Registry. The applicant
asserts that this is a question of law outside the Inspector’s expertise, and
is therefore to be reviewed on a standard of correctness. The respondent contends
that, if the Court decides to hear the application on its merits, the Inspector’s
decision is to be reviewed on a standard of reasonableness, because the
question of whether the applicant had submitted a legally valid resignation is
a question of mixed fact and law (see Dunsmuir v New
Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190, at para 53).
[14]
The
Court agrees with the respondent that the question of whether the applicant was
a Director at the time the entitlement arose is a question of mixed fact and
law. Therefore, the standard of review of this question would be
reasonableness.
Applicant’s
Arguments
[15]
The
applicant notes that three requirements must be met for a Payment Order to be
validly issued: there must be an entitlement on the part of the employee; that
entitlement must have arisen during the incumbency of the director; and
recovery from the corporation must be impossible or unlikely (Purewal v
Ahmad, [2010] CLAD No 387, 2010 CarswellNat 5515 (WL Can) at para 11). The
applicant disputed in his response to the Inspector that the second requirement
was met, because he resigned as Director on December 15, 2008. The applicant
provided a copy of the letter of resignation to the Inspector.
[16]
The
applicant argues that, pursuant to section 108(2) of the Alberta Business
Corporations Act, which governed Corpac, the resignation was effective when
the written resignation was sent to the Corporation. The applicant submits that
it does not matter to whom the letter is given, as long as the resignation is
meaningfully communicated to the Corporation (Hart v Lefebvre (1999), 2
BLR (3d) 84, 1999 CarswellOnt 4678 (WL Can) (Ont SCJ), at para 5). The
applicant further submits that the effectiveness of the resignation was not
dependent on whether notice of the resignation had been filed with the Registry
(Netupsky v The Queen, [2003] TCJ No 30, 30 BLR (3d) 46; McCarthy v Nova Scotia, 2001 NSCA 79, 193 NSR (2d) 301). Therefore, the Inspector erred by relying
on the fact that the resignation was not filed with the Registry.
[17]
The
applicant notes that as held in Brown v Shearer (1995), 102 Man R (2d)
76, 19 BLR (2d) 54, at para 27, a director can validly resign even if it will
leave the corporation without a director. Thus, the applicant submits the fact
that he was the sole Director at the time does not render his resignation
invalid.
[18]
Regarding
the lapse of the appeal period, the applicant acknowledges that the Labour Code
does not allow for an extension of the appeal period (Re Aviation Leclerc
Inc. (1997), 144 FTR 206, 1997 CarswellNat 2402 (WL Can) (TD) [Re
Aviation Leclerc Inc.], at para 14). However, the applicant relies on the
decision in Actton Transport Ltd. v Canada (Minister of Labour), 2001
FCT 984, 211 FTR 188 (TD) [Actton Transport Ltd.], which held that
Parliament did not intend to make the statutory appeal process the exclusive
means of challenging a Payment Order. The applicant submits that, as in Actton
Transport Ltd., above, the Court should find that judicial review is
appropriate in this case.
[19]
The
applicant further submits that this is a highly exceptional set of facts, and
the manner in which the Payment Order was delivered was irregular – the Payment
Order stated that it was ‘Cc’ed’ to the applicant’s counsel, but they did not
receive it until June 10, 2011. The applicant submits that because of this
misunderstanding, the applicant is subject to a Payment Order for much more
money than he rightfully owes, and thus the Court should intervene in the
interests of fairness.
Respondent’s Arguments
[20]
First, the respondent asks the Court to disregard parts of the
affidavits submitted by the applicant. The respondent notes that judicial
reviews are generally conducted based on the record before the decision-maker,
except in relation to questions of procedural fairness or jurisdiction. The
respondent submits that the affidavits of the applicant and Mrs. Deirdre
Malone, and paragraphs 3-12 of the affidavit of Mr. Hugh Slocombe, relate to
the merits and procedure of the Inspector’s decision, and are therefore
irrelevant.
[21]
Second,
the respondent contends that the Court should exercise its discretion not to
hear this application, because the applicant did not pursue an adequate
alternative remedy. The respondent notes that, following the Supreme Court of
Canada’s decision in Canadian Pacific Ltd. v Matsqui Indian Band, [1995]
1 SCR 3, 177 NR 325 [Canadian Pacific Ltd.], the Court must consider
several factors in deciding whether to exercise its discretion and decline to
hear an application for judicial review when an alternative remedy exists.
These factors include: the convenience of the alternate remedy; the nature of
the error; the nature of the appellate body; and expeditiousness and cost of
the alternate remedy.
[22]
The
respondent asks the Court to follow its decision in Bissett v Canada (Minister of Labour), [1995] 3 FC 762, 102 FTR 172 (TD) [Bissett], which
was also in relation to a Payment Order under the Labour Code. In that
decision, Justice Rothstein reviewed the appeal process under the Labour Code,
finding: referees have broad powers on appeal; the appeal is heard de novo;
and referees can deal with the issue of whether a director was incumbent at the
relevant time. Justice Rothstein concluded that the appeal constituted an
adequate remedy, and declined to hear the application for judicial review.
[23]
The
respondent submits that the decision in Actton Transport Inc., above,
relied upon by the applicant, can be distinguished on several grounds: the
decision in Bissett, above, was not considered, nor were some of the
factors articulated in Canadian Pacific Ltd., above; the applicant in
that case challenged a legislative provision as void for uncertainty or ultra
vires; and there was evidence that the appeal would take more than a week
and would involve at least three witnesses. Thus, the respondent argues, the
application was heard in order to avoid a lengthy and costly appeal that may
have been decided pursuant to invalid legislation. The respondent submits that
the decision in Bissett, above, is more closely akin to the present application
and should be applied, rather than the decision in Actton Transport Ltd.,
above.
[24]
The
respondent emphasizes that the fact that the applicant’s counsel missed the
appeal period does not render the alternative remedy inadequate. The applicant
was personally served with the Payment Order, which indicated that he had
fifteen days to appeal. The applicant has not presented any explanation for why
the appeal period was missed beyond an assertion that it was ‘by slip’ of
counsel. The respondent submits that if missing a limitation period rendered an
alternative remedy inadequate, parties could deliberately miss limitations
periods to avoid having to pursue a statutory right of appeal (Lazar v
Canada (Attorney General), [1999] FCJ No 553, 168 FTR 11, (TD) [Lazar],
at para 18; Jones v Canada (Attorney General), 2007 FC 386, 333 FTR 1,
at para 38; Saskatchewan (Minister of Agriculture, Food and Rural
Revitalization) v Canada (Attorney General), 2006 FC 345, 289 FTR 237, at
paras 58-59).
[25]
The
respondent argues that, if the Court decides to hear the application on its
merits, the Inspector was reasonable to conclude that the applicant had not
resigned, based on the evidence presented. The respondent notes that the
Alberta Business Act creates a rebuttable presumption that a director named in
a notice filed with the Registry is the Director of a Corporation. The
respondent submits that the only evidence the applicant provided of his
resignation was a copy of the resignation letter addressed to Mr. Cross, but
Mr. Cross denied in writing having ever received the letter. Since the
applicant bore the burden of proving he had resigned, the respondent argues
that the Inspector was reasonable to conclude that the applicant was a Director
at the time the entitlements arose.
Analysis
[26]
Before
the Court can consider the application on its merits, it must first decide
whether to exercise its discretion not to hear the application, because the
applicant failed to pursue an adequate alternative remedy, specifically the
appeal under section 251.11 of the Labour Code. In the Court’s view, this was
an adequate alternative remedy, and the applicant’s failure to pursue it within
the specified appeal period does not render it inadequate. Therefore, the Court
finds that it should exercise its discretion not to hear the application, and
the application must be dismissed.
[27]
In
Canadian Pacific Ltd., above, the Supreme Court of Canada noted that the
prerogative writs are discretionary in nature, and set out the relevant factors
to consider when determining whether an applicant is precluded from seeking
judicial review because of a failure to pursue internal appeal rights. Chief
Justice Lamer stated at para 37:
[37] On the basis of the above, I conclude that a
variety of factors should be considered by courts in determining whether they
should enter into judicial review, or alternatively should require an applicant
to proceed through a statutory appeal procedure. These factors include: the
convenience of the alternative remedy, the nature of the error, and the nature
of the appellate body (i.e., its investigatory, decision-making and remedial
capacities). I do not believe that the category of factors should be closed, as
it is for courts in particular circumstances to isolate and balance the factors
which are relevant.
[28]
This
Court previously considered the adequacy of the appeal process under section
251.11 of the Labour Code in Bissett, above. In that case, the
applicants did commence appeal proceedings, but at the same time applied for
judicial review of the inspector’s decision and sought a stay of the appeal
pending judicial review. Thus, while the context of this case was different
because the applicants were not out of time to pursue the appeal, this decision
is nonetheless relevant because it analyzes the adequacy of the referee appeal
as an alternative remedy.
[29]
The
Court recalls that Justice Rothstein found that the referee’s powers are broad,
providing for a full hearing de novo. He found that the referee could
fully address the applicants’ ground of appeal – which, as in this case, was
that they were not directors at the relevant time. He also noted that time and
cost considerations favoured the appeal process over judicial review. He
concluded that this process would allow for a full consideration of the
applicants’ arguments and could provide the remedies the applicants sought.
[30]
The
Court adopts the reasoning of Justice Rothstein, and agrees with the respondent
that an appeal to a referee constitutes an adequate alternative remedy: a referee
has the power to hear all the evidence, including additional evidence that was
not presented to the inspector; a referee can confirm, vary or rescind a
Payment Order, and award costs. As Justice Rothstein found, the factors of time
and cost favour the appeal to a referee. Finally, the Court also agrees with
the respondent that the error alleged by the applicant – that the Inspector
wrongly concluded he was a Director at the relevant time – could have been
adequately addressed by a referee on appeal.
[31]
The
applicant does not directly dispute the adequacy of the appeal process; rather,
he suggests that because the appeal period lapsed, and therefore this remedy is
no longer available to him, he is entitled to seek judicial review. In support
of this argument, the applicant seeks to rely on Actton Transport Ltd.,
above, in which Justice O’Keefe decided to hear an application for judicial
review before the applicant pursued an appeal to a referee. The Court agrees
with the respondent, however, that this case can be distinguished: Justice
O’Keefe agreed to hear the application in order to resolve a dispute over a
legislative definition, so that the parties would not have to go through a
lengthy appeal, which would ultimately be quashed if the definition were found
to be invalid. The circumstances of that decision are far different from the
one under review, and it does in no way stand for the proposition that judicial
review is available where an applicant fails to file an appeal within the
prescribed period.
[32]
As
the respondent submits, the failure to pursue an alternative remedy within a
limitation period does not render that remedy inadequate. The British Columbia
Court of Appeal addressed this issue in Adams v British Columbia (Workers’
Compensation Board) (1989), 42 BCLR (2d) 228, 18 ACWS (3d) 256 (BCCA), and
held at para 4:
[4] The decision by the commissioners was a medical
decision. Accordingly, the appellant then had the right to elect within 90 days
to have the decision reviewed by a medical review panel pursuant to s. 58 of
the Act. She did not avail herself of that right and the time has now expired.
It would not be appropriate to exercise the powers granted by the Judicial
Review Procedure Act, R.S.B.C. 1979, c. 209, in these circumstances, thereby indirectly
circumventing the effect of the time limitation, no satisfactory explanation
having been given as to why the election was not made.
[33]
This
reasoning has later been applied in cases of this Court, for instance in Lazar,
above, at para 18:
[18] …the fact that an applicant is out of time to
exercise a statutory right of appeal to an administrative tribunal or, for that
matter, to a court, does not necessarily render the remedy inadequate: Adams
v. British Columbia (Workers’ Compensation Board) (1989), 42 B.C.L.R. (2d)
228 (B.C. C.A.). It would surely be anomalous if, by the simple expedient of
failing to appeal in time, an applicant were able to avoid having to use a
statutory right of appeal before invoking the Court’s supervisory jurisdiction.
[34]
The
decision in Re Aviation Leclerc Inc., above, although cited by the
applicant, supports this conclusion. The facts of that case are somewhat
similar to this application: the applicant failed to file an appeal of the Payment
Order, because of an erroneous belief that the corporation’s trustee should
have received the Payment Order. When the Payment Order was filed with this
Court, the applicant made a motion for revocation of the judgment enforcing the
order. The Court denied the motion, and stated at paras 10 and 14:
[10] It is clear from the applicant’s argument that
he is vigorously challenging the merits of Mr. Bissonnette’s claim. It is also
clear that he wants to obtain a revocation of the judgment so as to be able to
challenge this claim in the Federal Court. In my opinion, that is not possible
since this Court has no jurisdiction as to the issue of the validity of Mr.
Bissonnette’s claim…
[14] The purpose of registration of the payment
order is to allow its execution. Unfortunately for the applicant, the appeal
period has expired and he cannot obtain an extension of the time for appeal
since the Code does not allow for an extension. Counsel for the applicant
argued that his client would be wronged if the motion for revocation were not
allowed, since he had not had an opportunity to be heard. In my opinion, there
is no merit in this submission since the applicant received a copy of the
payment order issued against him and was notified that he had 15 days in which
to appeal this order. He did not do so. That is why the applicant finds himself
with a payment order that has become enforceable against him. In my view of the
clear provisions in the Code, I am unable to grant the revocation requested by
the applicant.
[35]
Similarly,
the Court finds that the applicant was personally served with the Payment
Order, which clearly stated that he had fifteen (15) days to appeal (Certified Record,
Tab 3). For reasons that remain ambiguous and unsupported by the evidence, the
period lapsed before an appeal had been filed. While Mr. Slocombe asked the
applicant to fax the document, there is no evidence that the applicant did so
and the applicant’s affidavit is silent regarding the phone call between the
applicant and applicant’s counsel on May 30, 2011. The fact of the matter is
that Mr. Miller was notified of the Payment Order in the amount of $408,830.63
and the evidence is clear that he knew he had fifteen (15) days “to do
something”. (Affidavit of Hugh Slocombe, Applicant’s record, p 53).
[36]
The
applicant argued that because of an unusual set of circumstances, and how long
it took for the applicant’s lawyer to receive the Payment Order, the Court
should exercise its discretion to avoid unfairness. However, pursuant to
section 251.1(3) of the Labour Code, the Inspector was only obligated to serve
the Payment Order on the applicant – the Court cannot find any legal obligation
to send it to the applicant’s lawyer. The evidence is that the applicant
received the Payment Order on May 29, 2011, and was asked to fax it to his
lawyer on May 30, 2011. Again, there is no evidence that the Payment Order was
indeed faxed to the applicant’s lawyer and the applicant has not provided any
explanation why he did not do so.
[37]
As
a result, however meritorious the applicant’s appeal may have been, the Payment
Order is now enforceable against the applicant, and he cannot seek from this
Court what he failed to seek through the appropriate process under the Labour Code.
[38]
Despite
able argument from counsel for the applicant, the Court is not satisfied, on
the basis of the material before it, that the circumstances of this case are
exceptional as to warrant exercising its discretion to consider the application
for judicial review on its merits.
[39]
Therefore,
the application is dismissed.
JUDGMENT
THIS
COURT’S JUDGMENT is that the
application for judicial review is dismissed with costs.
“Richard
Boivin”
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