Docket:
T-744-13
Citation: 2014 FC 66
[UNREVISED ENGLISH CERTIFIED TRANSLATION]
Ottawa, Ontario, January 21,
2014
PRESENT: The Honourable Mr. Justice Scott
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BETWEEN:
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SYLVAIN ABEL, MARTIN ASSELIN, MARIE-CLAUDE ASSELIN, YAN AUDET,
STÉPHANE AYLWIN, RICHARD BACON, BENOIT BEAUSÉJOUR, JEAN BEAUSÉJOUR, CLAUDE
BÉLAND, DANIEL BÉLAND, GEORGE CLAVEAU JR., JAMES COOPER, STEVE COSSETTE,
ANDRÉ CÔTÉ, CHANTAL COUTURE, LÉON DEBLOIS, BRUNO DELISLE, JEAN DÉSAULNIERS,
JEAN-ROCK DESCHESNES, RÉAL DESPINS, BENOIT BÉLANGER, ALAIN BELLEY, NORMAND
BERGERON, MARIO BERTRAND, STEPHAN BILODEAU, SYLVAIN BILODEAU, DANIEL BLAIS,
MICHEL BLAIS, LINDA BOISVERT, MARTIN BOIVIN, LAURIER BONNEAU, PAUL BORDELEAU,
GUY BOUCHARD, JACQUES BOUCHARD, DANIEL BOUDREAULT, CHANTAL BOULANGER, JEAN
BOUSQUET, MARTIN BOUTIN, RICHARD BRETON, DANY BRODEUR, CÉLINE DROLET, DOMINIC
DUFOUR, ÉRIC DUFOUR, LOUIS DUMONT, GILLES FAFARD, JÉRÉMI FERRON, DANIEL
FORTIER, DOMINIQUE FORTIN, GILLES FORTIN, GASTON FOURNIER, ROLAND FRANCOEUR,
FRANÇOIS HARVEY, DENIS FRAPPIER, JEAN-MARIE FRASER, RENÉ FRASER, LINE GAGNÉ,
MARTIAL GAGNÉ, RICHARD GAGNÉ, FERNAND GAGNON, MARCEL GAGNON, RENÉ GAGNON,
SYLVAIN GAGNON, SYLVAIN GARCEAU, JACQUES GARNEAU, RAYMONDE GÉLINAS, ALAIN
GILBERT, DENIS GONNEVILLE, BERNARD GRENIER, DANY GRENIER, NANCY GRENIER,
ROLAND GROLEAU, ANDRÉ GRONDIN, JEAN-CLAUDE HARVEY, MARTIN HARVEY, RENÉ
HARVEY, YVES HARVEY, RICHARD HAYES, NORMAND ISABELLE, PIERRE JACOB, CLAUDE
LABONTÉ, JEAN LACHANCE, DENIS LALANCETTE, DENIS LALANCETTE, MICHEL LAMBERT,
JULIEN LAMPRON, MICHEL LANGEVIN, TOUSSAINT LAPOINTE, MARC LAPOINTE, MICHEL
LAROCHE, SYLVAIN LAROUCHE, DENISE AYOTTE, GUY LAVERGNE, JOCELYN LEFEBVRE,
MARC LEFEBVRE, JACQUES LEMAY, NORMAND LESIEUR, ANDRÉ MARTIN, PATRICK
MARTINEAU, RÉAL MÉNARD, DENIS MERCIER, FRANCIS METCALFE, LUCIE MONGRAIN,
DANIEL MONGRAIN, MICHEL MOREAU, JEAN-PIERRE MORIN, MARIO MUNGER, GLEN NATALE,
SYLVAIN NERON, LOUIS-MARIE OUELLET, ÉRIC PARADIS, YVAN PARADIS, CLERMONT
PERRON, MARC-ANDRÉ QUIRION, CÉLINE RACINE, JOCELYN RICARD, GISÈLE ROLLIN,
HEIDI SAVARD, PIERRE SAVOIE, JOEL SCATLAND, DANY SÉGUIN, JULIE SIMARD, CAROL
SIMONEAU, MICHEL ST-AMANT, FERNAND ST-AMAUD, GUY ST-LOUIS, DANIEL ST-PIERRE,
RÉJEAN TAILLON, GUY TARDIF, PATRICK THIBEAULT, ALAIN TREMBLAY, JOHANNE
TREMBLAY, JEAN-PIERRE TREMBLAY, LANGIS TREMBLAY, MARCEL TREMBLAY, NOEL
TREMBLAY, DANY TURCOTTE, JULES-AIMÉ TURCOTTE, LUC TURCOTTE, RÉGIS TURCOTTE,
CAMIL TURGEON, LUC VAUGEOIS, MICHEL VEILLETTE, GUY VENNES, JACQUES VINCENT,
MICHEL VINCENT, MICHEL VINCENT JR.
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Applicants
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and
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DENIS ASSELIN, JEAN ASSELIN AND NATHALIE ASSELIN, IN THEIR
CAPACITY AS DIRECTORS OF TRANSPORT ASSELIN LTÉE
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Respondents
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REASONS FOR JUDGMENT AND JUDGMENT
I. Introduction
[1]
Sylvain Abel et al. (the applicants) have filed
the present application for judicial review under section 18.1 of the Federal
Courts Act, RSC 1985, c F-7 [the FCA], regarding the decision of a referee
dated March 27, 2013, pursuant to section 251.12 of the Canada
Labour Code, RSC 1985, c L-2 [the CLC], rescinding a payment order in
the amount of $279,328.41 issued by an inspector (the inspector) of the federal
Labour Program of Human Resources and Skills Development Canada [HRSDC], on the ground that it was prescribed.
[2]
For the following reasons, the Court allows the
application for judicial review.
II. The
facts
[3]
Transport Asselin Ltée (Transport Asselin), a
company incorporated under Part 1A of the Companies Act, RSQ, c
C-38 [the CA], was the applicants’ employer. Since Transport Asselin carried
out interprovincial road transportation, it met the definition of a federal
undertaking under paragraphs 2(b) and 167(a) and (c)
of the CLC.
[4]
Transport Asselin made an assignment of its
property on August 25, 2005, at which point the employment relationship
between the applicants and their employer was terminated. In the days following
the assignment, the applicants filed a complaint with the Labour Program in
order to recover the sums owed to them under Part III of the CLC. The
respondents submit that neither the applicants nor the inspector informed them
of the existence of this complaint (see the respondents’ record, page 93,
paragraph 40).
[5]
However, on August 31, 2005, an HRSDC inspector contacted Transport Asselin in order
to obtain a breakdown of the amounts owed to each employee in wages, vacation
pay, notice and severance pay.
[6]
The liquidation of Transport Asselin’s assets
was not finalized until November 18, 2009.
[7]
On or around December 21, 2010, the
inspector informed the respondents that he was conducting an investigation to
determine whether anything was owed to the employees of Transport Asselin under
Part III of the CLC.
[8]
On or around January 10, 2011, the
inspector informed the respondents of the results of his investigation. He
concluded that the respondents, as the employer’s directors, were [translation] “personally, jointly and
severally liable for the wages and other amounts” owed to the employees, in the
amount of $698,069.71. In response to the respondents’ arguments and
objections, the inspector revised the amount owed on January 25, 2012, and
set the total amount owed to the applicants at $279,328.41.
[9]
On March 6, 2012, the respondents were
served with a payment order in this amount. Arguing that it was prescribed, the
respondents challenged the payment order before a referee, after paying the
amount requested to the Receiver General for Canada.
[10]
The respondents submit that the wage recovery
relief provided under section 251.18 of the CLC, which governs the
liability of directors, is subject to the three-year prescriptive period
provided under article 2925 of the Civil Code of Québec [the CCQ].
The respondents argue that the provincial law in the matter of prescription compensates
for Parliament’s silence on this matter. Since the three-year prescriptive
period began on August 25, 2005, the date on which bankruptcy was
declared, the payment order issued in March 2012 is prescribed.
[11]
On March 27, 2013, the referee rendered his
decision. He rescinded the payment order since he agreed with the respondents’
arguments that the applicants’ claim was prescribed.
III. Legislation
[12]
The statutory provisions applicable in this case
are reproduced in the annex to this judgment.
IV.
Issue and standard of review
A. Issue
•
Did the referee err in fact and in law in holding
that the payment order issued by the inspector on January 12, 2012, under
section 251.18 of the CLC was prescribed?
B. Standard
of review
[13]
The applicants allege that when it comes to
interpreting the labour standards enacted in Part III of the CLC or adjudicating
the appeal of a payment order, the applicable standard of review is
reasonableness as the decision-maker acts within the scope of his or her
jurisdiction. However, the question of whether provincial enactments apply to supplement
a federal enactment is a matter in which the referee has no expertise. This is
moreover a question of general law that is of central importance to the legal
system as a whole. Consequently, the referee’s decision in this regard should
be reviewed on a standard of correctness.
[14]
The respondents submit that the referee had to
dispose of the issue of prescription in light of the purpose of Part III of
the CLC and the liability of directors under this statue. The respondents argue
that this is a question of mixed fact and law and that the applicable standard
of review is therefore reasonableness. They add that if the Court applied a
standard of correctness, the Court should nonetheless not interfere with the referee’s
decision.
[15]
The Supreme Court, in Alberta (Information
and Privacy Commissioner) v Alberta Teachers’ Association, 2011 SCC 61 [Alberta
Teachers] at paragraph 34, writes as follows:
. . .
unless the situation is exceptional, and we have not seen such a situation
since Dunsmuir, the interpretation by the tribunal of “its own statute
or statutes closely connected to its function, with which it will have
particular familiarity” should be presumed to be a question of statutory
interpretation subject to deference on judicial review.
[16]
The Court agrees with the parties’ position that
it must show deference to the referee’s conclusions regarding the
interpretation of the provisions of the CLC. In those cases, the standard of
reasonableness applies.
[13] Regarding
the referee’s conclusions on the application of provincial enactments, the
Court is of the opinion that the applicable standard of review is that of
correctness. In fact, Dunsmuir v New Brunswick, 2008 SCC 9 [Dunsmuir],
at paragraph 60, instructs as follows:
. . . courts
must also continue to substitute their own view of the correct answer where the
question at issue is one of general law “that is both of central importance to
the legal system as a whole and outside the adjudicator’s specialized area of
expertise” (Toronto (City) v. C.U.P.E., at para. 62, per LeBel
J.).
V. Positions of the parties
A. Position of the applicants
[17]
The applicants allege that wage recovery
complaints made under Part III of the CLC are not prescribed by an express
period. Consequently, Labour Program inspectors may recover the amounts owed to
employees at any time. They refer to, among other things, Delaware Nation v
Logan, 2005 FC 1702, at paragraphs 24 to 26, in which Justice Phelan
concluded that the fact that Parliament had established a limitation period for
specific matters, but not a more general limitation period suggests that it deliberately
refrained from doing so, and it is not the Court’s function to compensate for
Parliament’s choice by enacting a prescriptive period.
[18]
The applicants point out that the CLC provides
for 90 days to file a complaint for unjust dismissal. In their opinion,
this is an example of Parliament’s explicit choice, yet no limitation period is
provided for wage recovery complaints. The applicants refer to Erb Transport
Ltd v Smytkiewicz, [2008] CLAD No 154, where the referee writes as follows
at paragraph 45:
Had parliament
intended such complaints to be made in writing in order to be valid, it would
have expressed that intention with the same clear language provided in section
240 (1) for unjust dismissal claims, which it has chosen not to.
[19]
This reasoning could apply to Parliament’s
choice not to establish a limitation period for Part III, since the time
limits for other remedies have been expressly provided for in the CLC.
[20]
The applicants also submit that the inspector
appointed by the Minister to enforce the CLC’s wage recovery provisions has
both investigative and decision-making power. Following his or her
investigation, the inspector makes a decision. In some circumstances, the
inspector may issue a payment order that, according to the applicants, [translation] “has all the essential
features of a decision since it disposes of the merits of a proceeding brought
by an employee to have his or her rights recognized under Part III of the
Code” (see the applicants’ record, page 152, para 36).
[21]
The applicants argue that filing a complaint
with the Labour Program is the equivalent of exercising a remedy. Since the
complaint was filed in the days following the employer’s bankruptcy, nothing in
the CLC obliged the inspector to limit the length of his investigation or his
deliberation. The applicants argue therefore that if the Court concluded that a
limitation period applied, the limitation period was interrupted by the filing
of their complaint with the Labour Program. Consequently, the payment order issued
by the inspector is not prescribed.
[22]
Lastly, the applicants argue that the referee misunderstood
the grounds of the remedy provided for employees under Part III of the CLC
and, consequently, the scope of his own jurisdiction.
B. Position
of the respondents
[23]
In the respondents’ opinion, it was reasonable
for the referee to have maintained that the jus commune of Quebec is a
supplementary source of law to federal legislation, given the omission of a
limitation period in the CLC. The respondents support this position by arguing
that public order and stable legal relationships between persons require that
claims not be made irrespective of the time. The respondents also submit that
the liability of directors, for the payment of wages, flows from a statutory
provision and cannot, therefore, be indefinite.
[24]
They submit, moreover, that Parliament codified
the suppletive nature of provincial law. The respondents refer here to
section 8.1 of the Interpretation Act, LRC 1985, c I-21, which
specifies as follows:
Both the common law
and the civil law are equally authoritative and recognized sources of the law
of property and civil rights in Canada and, unless otherwise provided by law,
if in interpreting an enactment it is necessary to refer to a province’s rules,
principles or concepts forming part of the law of property and civil rights,
reference must be made to the rules, principles and concepts in force in the
province at the time the enactment is being applied.
[25]
The respondents also rely on the FCA, particularly
section 39, which stipulates that the laws relating to prescription and
the limitation of actions in force in a province between subject and subject
apply to any proceedings in the Federal Court of Appeal or the Federal Court in
respect of any cause of action arising in that province.
[26]
The respondents refer to, among other things, Syndicat
des travailleurs et travailleuses des Postes c Société canadienne des Postes,
2010 CanLII 46539, at paragraphs 51 to 56, in which the arbitrator wrote
the following:
[translation]
In the absence of a
limitation period in the collective agreement or the Canada Labour Code,
the jus commune of the province of Quebec is a suppletive source of law
to the collective agreement. This was recognized by the Supreme Court in Isidore
Garon ltée v. Tremblay; Fillion et Frères (1976) inc. v. Syndicat national des
employés de garage du Québec inc., (2006) 1 SCR 27. [See para 52.]
[27]
The respondents also rely on a decision of the
Supreme Court of British Columbia, In the Matter of Western Express Air
Lines Inc., 2006 BCSC 1267, which ruled that the company’s incorporating
statute overlapped with the CLC and that these enactments therefore work
together and complement each other. In that case, the Court wrote as follows:
22. In my view s.251.18 of the Code constitutes a basic
statement of the extent to which directors may come under a liability to
employees for various amounts. It contains no time period for giving notice of
a claim. By contrast s.119 CBCA includes within it a number of rights
and protections available to directors that are not contained in the Code.
It places on employees of CBCA corporations the relatively minor
obligation to file Proofs of Claim within six months, a requirement on which
the Code is silent.
23. In my view the statutory provisions are overlapping and not
contradictory and hence the six month limitation period in the CBCA applies.
[28]
The respondents submit that the Court must apply
this reasoning to the facts in the present matter, arguing that section 96
of the CA, the enactment under which Transport Asselin was incorporated, does
not provide for a prescriptive period for claims against directors for unpaid
wages, which is why the prescriptive period in article 2925 of the CCQ has
been applied in the case law.
[29]
The respondents submit that the applicants’
argument that the payment order issued by the inspector is an administrative
decision and not a remedy was not raised before the referee, nor did the
inspector mention it in his report. The respondents argue that if this Court
concludes that it was an administrative decision, the period for challenging
the validity of a payment order and to warrant the remedy, in the shape of a
rescission of the order, is limited by the principles of natural justice and the
duty of fairness. The respondents rely on Blencoe v British Columbia (Human
Rights Commission), 2000 SCC 44, in which the Supreme Court sanctioned the
idea that the duty of fairness could be breached as a result of an unreasonable
or inordinate delay.
[30]
The respondents claim to have been severely
prejudiced by a delay they describe as being [translation]
“inordinate” and [translation] “unreasonable”.
They also allege that they could not have foreseen receiving a claim after all
that time. The inspector’s decision allegedly left them confused, worried and
stressed.
[31]
The respondents submit that the referee’s
decision to rescind the payment order was reasonable and that the Court does
not have to intervene in these circumstances.
VI. Analysis
[32]
Section 251.1 of the CLC provides
employees with a mechanism for being paid wages or other amounts they are
entitled to, stipulating as follows:
251.1 (1) Where an inspector finds that an employer has not paid an
employee wages or other amounts to which the employee is entitled under this
Part, the inspector may issue a written payment order to the employer, or,
subject to section 251.18, to a director of a corporation referred to in that
section, ordering the employer or director to pay the amount in question, and
the inspector shall send a copy of any such payment order to the employee at
the employee’s latest known address.
(2) Where an inspector concludes that a complaint of
non-payment of wages or other amounts to which an employee is entitled under
this Part is unfounded, the inspector shall so notify the complainant in
writing.
[33]
On reading this
provision, it is clear that to assert one’s right to unpaid wages or other
amounts, employees must file a complaint with HRSDC, which will appoint an
inspector. If, following an investigation, the inspector determines that the
complaint is well-founded, the inspector issues a payment order. The payment
order constitutes an order issued by an inspector with investigative powers. If
appealed, the order may be referred to adjudication and ultimately be enforced
by this Court under subsection 244(1) of the CLC.
[34]
The federal regime established by the CLC differs
from Quebec’s provincial labour standards regime. In contrast to the Commission
des normes du travail, which goes before the courts to recover unpaid wages
(see section 98 of the Act Respecting Labour Standards, QLR, c
N-1.1), HRSDC does not institute proceedings before the ordinary courts of law.
HRSDC inspectors have all the powers of a person appointed as a commissioner
under the Inquiries Act, RSC 1985, c I-11 (see subsection 248(1) of
the CLC). The remedies provided under Part III of the CLC are therefore
exercised before public servants appointed for this purpose. As pointed out by
Justice Sharlow in Dynamex Canada Inc v Mamona, 2003 FCA 248, at
paragraph 32, “[a] review of Part III also discloses another objective,
which is to facilitate the efficient resolution of disputes arising from its
provisions”.
[35]
Since wage recovery appeals under Part III of
the CLC are first brought before an inspector, the Court agrees with the applicants’
position that the payment order is a [translation]
“decision [that] disposes of the merits of a proceeding brought by an employee
to have his or her rights recognized under Part III of the Code”. In
short, it is a statutory procedure. It must be remembered that the courts have
held that, generally speaking, an applicant must use statutory procedures
before going to the ordinary courts of law (see Canadian Pacific Ltd v
Matsqui Indian Band, [1995] 1 S.C.R. 3, at paras 33 to 38).
[36]
The remedy provided under section 251.1 of
Part III of the CLC is initiated by the filing of a complaint (see
section 251.1 of the CLC), in response to which a decision is made by an
inspector. If the decision is appealed, it is brought before a referee
appointed by the Minister (see section 251.12 of the CLC). The next step
is a hearing before the referee should either of the parties wish to challenge
the payment order made against it.
[37]
In short, the Court notes that the applicants’
complaint that initiated the remedy was filed but a few days following the
bankruptcy, in accordance with the CLC. In these circumstances, the remedy was
exercised pursuant to the provisions of the CLC and cannot be prescribed.
[38]
Since the decision of the Federal Court of
Appeal in St-Hilaire v Canada (Attorney General), 2001 FCA 63 [St-Hilaire],
it has been trite law that the CCQ applies in a suppletive manner when
the Court has to deal with a private law issue arising in Quebec (see St Hilaire,
above, at para 50). Moreover, section 39 of the FCA clarifies that, except
as expressly provided by any other Act, the laws relating to prescription and
the limitation of actions in force in a province between subject and subject
apply to any proceedings in the Federal Court if the cause of action arose in
that province.
[39]
Moreover, in Gingras v Canada, [1994] 2 FC
734, the Court set out the procedure to be followed by the Court before
importing the prescriptive or limitation period enacted by a provincial
enactment. First, the Court has to verify whether the applicable federal
statute provides for a limitation period. In the absence of a specific period,
as in the present matter, given that the CLC did not enact one for the remedy
provided under section 251.1, the Court has to rely on the general prescriptive
or limitation period applicable in the province in which the cause of action
arose.
[40]
In the matter at bar, if one applies the
provisions of the CCQ on prescription, the parties have acknowledged that the prescriptive
period began when the company declared bankruptcy, since it has been clearly
established in the case law that assignment in bankruptcy terminates the
relationship between an employer and its employees. The remedy provided under
section 251.1 of the CLC was therefore available as of that point. The
employees therefore had three years following the assignment to file a
complaint (see article 2925 CCQ).
[41]
What actually happened is that they filed their
complaint a few days after the bankruptcy, thus interrupting the prescriptive
period under article 2892 of the CCQ, which defines interruption as the
filing of a judicial demand or the serving of a notice in cases of arbitration.
[42]
In the opinion of the Court, the application of
this Civil Code rule regarding prescription should also entail the application
of the Civil Code principles regarding the interruption of prescription, but
without making the procedural rules subject to these principles.
[43]
In filing their complaint, the applicants clearly
filed a demand under Part III of the CLC. This demand was properly brought
before the inspector because it met the conditions of the CLC.
[44]
In Leesona c Consolidated Textile Mills,
[1978] 2 S.C.R. 2 at page 10, the Supreme Court held as follows:
It is clear that, in
s. 38 of the Federal Court Act, the reference to provincial “laws
relating to prescription” does not include procedural rules. It cannot have
been intended that, in respect of prescription, the filing and service of the
proceedings in the Federal Court would be governed by the Quebec Code of
Civil Procedure mentioned in art. 2224 rather than by the Rules of the
Federal Court.
[45]
Today, article 2224 is article 2892 of
the CCQ, which specifies that the filing of a judicial demand before the expiry
of the prescriptive period constitutes a civil interruption. In the second
paragraph of this article, requests for arbitration are equated with judicial
demands as long as the object of the dispute to be submitted is described. In
all cases, the interruption of prescription is subject to the serving of an
action. It seems abnormal to us, however, to require the present complaint to
have been served in accordance with the time limits set out in the Code of Civil
Procedure to interrupt prescription as the CLC, under which the remedy is
sought, does not contain such a requirement. For this reason, it is our opinion
that, by analogy with the decision in Leesona, above, it is preferable
here to refer to the mechanism for exercising the CLC remedy to determine
whether the filing of the complaint interrupted the prescription period under
article 2892 of the CCQ. Moreover, the result of article 2892 not
being available to interrupt prescription would be actual, serious harm as the
great majority of demands made under the CLC would become prescribed, given the
time it takes to process these files.
[46]
In the matter at bar, the inspector, after
contacting the bankrupt’s accountant in the days after the complaint was filed,
saw fit to wait for payment of all the amounts payable to the employees under
the bankruptcy before investigating. The CLC does not prescribe when an
investigation should be held and how long it should take.
[47]
The Court, while sympathetic to the respondents’
argument that they were not informed of the filing of the complaint,
nonetheless wishes to emphasize that even though they were not formally advised
of the complaint until 2010, they must have known that the employees had not
received all of the money owed to them. In fact, they received the final
statement of receipts and disbursements from the trustee on November 18,
2009, and the final dividend statement on November 27, 2009, and both
statements indicate that the workers were still owed money.
[48]
It was unreasonable for the referee to declare
that the inspector’s payment order was prescribed when the filing of the
complaint interrupted the prescription (see articles 2892 and 2896 of the
CCQ).
[49]
The Court can also not subscribe to the
respondents’ argument that the time taken to make the decision was unreasonable
and inordinate. The delay between when the complaint was filed and when the
payment order was made “was not so inordinate or inexcusable as to amount to an
abuse of process” (see Blencoe, above, at para 132). Moreover, at it was established in Blencoe, “[t]here
must be more than merely a lengthy delay for an abuse of process; the delay
must have caused actual prejudice of such magnitude that the public’s sense of
decency and fairness is affected” (see para 133). The respondents have
failed to demonstrate that they suffered prejudice of such magnitude.
[50]
For these reasons, it is the
Court’s view that the referee’s conclusions do not fall
within “a range of possible, acceptable outcomes which are defensible in
respect of the facts and law” (see Dunsmuir, above, at para 47) and
therefore justify the intervention of this Court; the Court also finds that the
referee’s interpretation of how the CCQ applies should also have taken
into account the possibility of an interruption under article 2892 of that
same code.
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