SUPREME
COURT OF CANADA
Between:
Attorney
General of Canada
Appellant
and
TeleZone
Inc.
Respondent
Coram: Binnie, LeBel, Deschamps, Abella, Charron, Rothstein and
Cromwell JJ.
Reasons for
Judgment:
(paras. 1 to 81)
|
Binnie J. (LeBel, Deschamps, Abella, Charron, Rothstein
and Cromwell JJ. concurring)
|
Canada (Attorney General) v. TeleZone Inc., 2010 SCC 62,
[2010] 3 S.C.R. 585
Attorney
General of Canada Appellant
v.
TeleZone
Inc. Respondent
Indexed as: Canada (Attorney
General) v. TeleZone Inc.
2010 SCC 62
File No.: 33041.
2010: January 20, 21;
2010: December 23.
Present: Binnie, LeBel, Deschamps, Abella, Charron,
Rothstein and Cromwell JJ.
on appeal from
the court of appeal for ontario
Courts
— Jurisdiction — Provincial superior courts — Action brought against federal
Crown in Ontario Superior Court of Justice seeking damages for breach of
contract, negligence and unjust enrichment arising from decision rejecting
application for telecommunications licence — Whether plaintiff entitled to
proceed by way of action in Ontario Superior Court of Justice without first
proceeding by way of judicial review in Federal Court — Federal Courts Act,
R.S.C. 1985, c. F-7, ss. 17 , 18 ; Crown Liability and Proceedings Act,
R.S.C. 1985, c. C-50, s. 21 .
In 1995,
Industry Canada issued a call for personal communication services licence
applications, and released the policy statement within which potential service
providers could shape their applications. The statement provided that Industry
Canada would grant up to six licences on the basis of criteria it set out. T
submitted an application, but when Industry Canada announced its decision,
there were only four successful applicants and T was not among them. T filed
an action against the Federal Crown in the Ontario Superior Court of Justice
for breach of contract, negligence and unjust enrichment, and sought
compensation for claimed losses of $250 million. It claimed that it was
an express or implied term of the policy statement that Industry Canada would
only issue fewer than six licences if fewer than six applications met the
criteria. Since its application satisfied all the criteria, it says, Industry
Canada must have considered other undisclosed factors when it rejected T’s
application. The Attorney General of Canada, relying on Canada v. Grenier,
2005 FCA 348, [2006] 2 F.C.R. 287, challenged the jurisdiction of the Superior
Court on the ground that the claim constituted a collateral attack on the
decision, which is barred by the grant to the Federal Court, by s. 18 of
the Federal Courts Act , of exclusive judicial review jurisdiction in
relation to decisions of all federal boards, commissions or other tribunals.
The Superior Court dismissed the objection on the ground that it was not plain
and obvious that the claim would fail. The Court of Appeal upheld the
decision, holding that Grenier was wrongly decided. In that court’s view
s. 17 of the Federal Courts Act and s. 21 of the Crown
Liability and Proceedings Act conferred concurrent jurisdiction on the
superior courts and the Federal Court for claims against the Crown, and
s. 18 of the Federal Courts Act did not remove relief by way of an
award of damages from the jurisdiction of superior courts.
Held:
The appeal should be dismissed.
This
appeal is fundamentally about access to justice. People who claim to be injured
by government action should have whatever redress the legal system permits
through procedures that minimize unnecessary costs and complexity. The Court’s
approach should be practical and pragmatic with that objective in mind.
Acceptance of Grenier would tend to undermine the effectiveness of the Federal
Courts Act reforms of the early 1990s by retaining in the Federal Court
exclusive jurisdiction over a key element of many causes of action proceeding
in the provincial courts despite Parliament’s promise to give plaintiffs a
choice of forum and to make provincial superior courts available to litigants
“in all cases in which relief is claimed against the [federal] Crown” except as
otherwise provided.
Apart from
constitutional limitations, none of which are relevant here, Parliament may by
statute transfer jurisdiction from the superior courts to other adjudicative
bodies including the Federal Court. However, any derogation from the
jurisdiction of the provincial superior courts (in favour of the Federal Court
or otherwise) requires clear and explicit statutory language. Nothing in the Federal
Courts Act satisfies this test. The explicit grant to the provincial
superior courts of concurrent jurisdiction in claims against the Crown in
s. 17 of that Act (as well as s. 21 of the Crown Liability and
Proceedings Act ) directly refutes the Attorney General’s argument. The
grant of exclusive jurisdiction to judicially review federal decision makers in
s. 18 is best understood as a reservation or subtraction from the more
comprehensive grant of concurrent jurisdiction in s. 17 “in all cases in
which relief is claimed against the [federal] Crown”. This reservation or
subtraction is expressed in s. 18 of the Federal Courts Act in
terms of particular remedies. All the remedies listed are traditional
administrative law remedies and do not include awards of damages. If a
claimant seeks compensation, he or she cannot get it on judicial review, but
must file an action.
The Federal
Courts Act contains other internal evidence that Parliament could not have
intended judicial review to have the gatekeeper function envisaged by Grenier.
Section 18.1(2) imposes a 30-day limitation for judicial review
applications. A 30-day cut off for a damages claimant would be unrealistic, as
the facts necessary to ground a civil cause of action may not emerge until
after 30 days have passed, and the claimant may not be in a position to apply
for judicial review within the limitation period. While the 30‑day limit
can be extended, the extension is discretionary and would subordinate the fate
of a civil suit brought in a superior court to the discretion of a Federal
Court judge ruling upon a request for an extension of time for reasons that
have to do with public law concerns, not civil damages. Moreover, the grant of
judicial review is itself discretionary and may be denied even if the applicant
establishes valid grounds for the court’s intervention. This does not align
well with the paradigm of a common law action for damages where, if the
elements of the claim are established, compensation ought generally to follow
as a matter of course. Further, s. 8 of the Crown Liability and
Proceedings Act , which codifies the defence of statutory authority, is
evidence that Parliament envisaged that the lawfulness of administrative
decisions could be assessed by the provincial superior court in the course of
adjudicating a claim for damages.
The Grenier
approach cannot be justified by the rule against collateral attacks. T’s claim
is not an attempt to invalidate or render inoperative the Minister’s decision;
rather, the decision and the financial losses allegedly consequent to it
constitute the very foundation of the damages claim. In any event, given the
statutory grant of concurrent jurisdiction in s. 17 of the Federal
Courts Act , Parliament has stated that provincial superior courts possess
the concurrent necessary jurisdiction to dispose of the whole of a claim and
this includes any attack on the validity of the Minister’s decision where this
issue is essential to the cause of action and where adjudicating the matter is
a necessary step in disposing of the claim. While the doctrine of collateral
attack may be raised by the Crown in the provincial superior court as a
defence, the possible availability of the defence is not an argument against
provincial superior court jurisdiction. Similarly, while it may be open to the
Crown, by way of defence, to argue that the government decision maker was
acting under statutory authority which precludes compensation for consequent
losses, this is not a matter of jurisdiction and can be dealt with as well by
the provincial superior court as by the Federal Court.
It is true
that the provincial superior courts and the Federal Court have a residual
discretion to stay a damages claim if, in its essential character, it is a
claim for judicial review with only a thin pretence to a private wrong.
However, where a plaintiff’s pleading alleges the elements of a private cause
of action, the provincial superior court should not in general decline
jurisdiction on the basis that the claim looks like a case that could be
pursued on judicial review. If the plaintiff has pleaded a valid cause of
action for damages, he or she should generally be allowed to pursue it.
Here,
T’s claim as pleaded is dominated by private law considerations. It is not
attempting to nullify or set aside the decision to issue licences. Nor does it
seek to deprive the decision of any legal effect. T’s causes of action in
contract, tort and equity are predicated on the finality of that decision
excluding it from participation in the telecommunications market. The Ontario
Superior Court of Justice has jurisdiction over the parties and the subject
matter, and has the power to grant the remedy of damages. There is nothing in
the Federal Courts Act to prevent the Ontario Superior Court from
adjudicating T’s claim.
Cases Cited
Overruled: Canada v. Grenier, 2005 FCA 348,
[2006] 2 F.C.R. 287; referred to: Canada (Attorney General) v. McArthur,
2010 SCC 63, [2010] 3 S.C.R. 626; Little Sisters Book and Art Emporium v. Canada
(Commissioner of Customs and Revenue),
2007 SCC 2, [2007] 1 S.C.R. 38; The Queen in right of Canada v.
Saskatchewan Wheat Pool, [1983] 1 S.C.R. 205; Agricultural Research
Institute of Ontario v. Campbell‑High (2002), 58 O.R. (3d) 321, leave
to appeal refused, [2003] 1 S.C.R. vii; Ryan v. Victoria (City), [1999]
1 S.C.R. 201; Miazga v. Kvello Estate, 2009 SCC
51, [2009] 3 S.C.R. 339; Cooper v. Hobart, 2001 SCC 79,
[2001] 3 S.C.R. 537; Edwards v. Law Society of Upper Canada, 2001 SCC
80, [2001] 3 S.C.R. 562; Holland v. Saskatchewan, 2008 SCC 42, [2008] 2
S.C.R. 551; R. v. Consolidated Maybrun Mines Ltd.,
[1998] 1 S.C.R. 706; Hinton v. Canada (Minister of
Citizenship and Immigration), 2008 FCA 215, [2009] 1 F.C.R. 476; Parrish & Heimbecker Ltd. v. Canada
(Minister of Agriculture and Agri-Food), 2008 FCA 362, [2009] 3 F.C.R. 568,
rev’d 2010 SCC 64, [2010] 3 S.C.R. 639; Donovan v. Canada (Attorney General),
2008 NLCA 8, 273 Nfld. & P.E.I.R. 116; Lidstone v. Canada (Minister of
Canadian Heritage), 2008 PESCTD 6, 286 Nfld. & P.E.I.R. 244; River
Valley Poultry Farm Ltd. v. Canada (Attorney General), 2009 ONCA 326, 95
O.R. (3d) 1; Los Angeles Salad Co. v. Canadian Food Inspection Agency,
2009 BCSC 109, 92 B.C.L.R. (4th) 379; Leroux v. Canada Revenue Agency,
2010 BCSC 865, 2010 D.T.C. 5123; Fantasy Construction Ltd., Re, 2007
ABCA 335, 89 Alta. L.R. (4th) 93; Genge v. Canada (Attorney General),
2007 NLCA 60, 270 Nfld. & P.E.I.R. 182; Gestion Complexe Cousineau (1989) Inc.
v. Canada (Minister of Public Works and Government Services), [1995] 2 F.C.
694; Irving Shipbuilding Inc. v. Canada (Attorney General), 2009 FCA
116, 314 D.L.R. (4th) 340, leave to appeal refused, [2009] 3 S.C.R. vii; Martel
Building Ltd. v. Canada, 2000 SCC 60, [2000] 2 S.C.R. 860; R. v. Al Klippert Ltd., [1998] 1
S.C.R. 737; Ordon Estate v. Grail, [1998] 3
S.C.R. 437; Pringle v. Fraser, [1972] S.C.R. 821; Canada (Human
Rights Commission) v. Canadian Liberty Net, [1998] 1 S.C.R. 626; Peacock v. Bell (1667), 1 Wms.
Saund. 73, 85 E.R. 84; Mills v. The Queen, [1986] 1
S.C.R. 863; R. v. Morgentaler (1984), 41 C.R.
(3d) 262; R. v. Rahey,
[1987] 1 S.C.R. 588; R. v. 974649 Ontario Inc., 2001 SCC 81, [2001] 3
S.C.R. 575; R. v. Conway,
2010 SCC 22, [2010] 1 S.C.R. 765; Attorney General of Canada v. Law
Society of British Columbia, [1982] 2 S.C.R. 307; Canada Labour Relations Board v. Paul
L’Anglais Inc., [1983] 1 S.C.R. 147; Canada (Citizenship and Immigration) v.
Khosa, 2009 SCC 12, [2009] 1 S.C.R. 339; Harelkin v. University of Regina,
[1979] 2 S.C.R. 561; Immeubles Port Louis Ltée v. Lafontaine (Village),
[1991] 1 S.C.R. 326; Wilson v. The Queen, [1983] 2 S.C.R. 594; Garland v.
Consumers’ Gas Co., 2004 SCC 25, [2004] 1 S.C.R. 629; R. v. Litchfield, [1993] 4 S.C.R. 333; Toronto
(City) v. C.U.P.E., Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77; Tock v. St. John’s Metropolitan Area
Board, [1989] 2 S.C.R. 1181; City of Manchester v. Farnworth, [1930]
A.C. 171; Sutherland v.
Canada (Attorney General), 2002 BCCA 416, [2002] 10 W.W.R. 1, leave to
appeal refused, [2003] 1 S.C.R. xi (sub nom. Jones v. Attorney General of
Canada); Lake v. St. John’s (City), 2000 NFCA 48, 192 Nfld. &
P.E.I.R. 84; Neuman v. Parkland (County), 2004 ABPC 58, 36 Alta. L.R.
(4th) 161; Danco v. Thunder Bay (City) (2000), 13 M.P.L.R. (3d) 130; Landry
v. Moncton (City), 2008 NBCA 32, 329 N.B.R. (2d) 212; Roy v. Kensington and Chelsea and
Westminster Family Practitioner Committee, [1992] 1 A.C. 624.
Statutes and Regulations Cited
Civil Code of Québec, R.S.Q., c. C-1991.
Constitution Act, 1867, ss. 96 ,
101 .
Corrections and Conditional Release Act,
S.C. 1992, c. 20 .
Crown Liability and Proceedings Act,
R.S.C. 1985, c. C-50, ss. 3 , 8 , 21 .
Federal Court Act , S.C. 1970-71-72,
c. 1.
Federal Courts Act, R.S.C. 1985,
c. F-7, ss. 2(1) “federal board, commission or other tribunal”, 17,
18, 18.1, 18.4, 39, 50(1).
Radiocommunication Act, R.S.C. 1985,
c. R-2 .
Authors Cited
Brown, Donald J. M., and
John M. Evans. Judicial Review of Administrative Action in Canada.
Toronto: Canvasback, 1998 (loose-leaf updated July 2010).
Canada. House of Commons. Minutes of Proceedings and Evidence of the Legislative Committee
on Bill C-38, No. 1, 2nd Sess., 34th Parl., November 23, 1989,
pp. 14-15.
Canada. House of Commons Debates,
2nd Sess., 28th Parl., March 25, 1970, pp. 5470-71.
Canada. House of Commons Debates,
2nd Sess., 34th Parl., November 1, 1989, p. 5414.
Craig, Paul P. Administrative Law,
6th ed. London: Sweet & Maxwell, 2008.
Hogg, Peter W., and Patrick J. Monahan. Liability of the Crown, 3rd ed. Scarborough, Ont.:
Carswell, 2000.
Horsman, Karen, and Gareth Morley, eds. Government
Liability: Law and Practice. Aurora, Ont.: Cartwright Law Group, 2007
(loose-leaf updated 2010).
Mullan, David J. “Administrative Law
Update — 2008-2009”, prepared for the Continuing Legal Education conference, Administrative
Law Conference—2009. Vancouver: The Continuing Legal Education Society of
British Columbia, 2009.
Woolf, Harry, Jeffrey Jowell and Andrew Le Sueur. De Smith’s
Judicial Review, 6th ed. London: Sweet & Maxwell, 2007.
APPEAL from a judgment of the Ontario Court of
Appeal (Laskin, Borins and Feldman
JJ.A.), 2008 ONCA 892, 94 O.R. (3d) 19,
303 D.L.R. (4th) 626, 245 O.A.C. 91, 86 Admin L.R. (4th) 163, 40 C.E.L.R. (3d)
183, [2008] O.J. No. 5291 (QL), 2008
CarswellOnt 7826, affirming a decision of Morawetz J. (2007), 88 O.R. (3d) 173, [2007] O.J.
No. 4766 (QL), 2007 CarswellOnt 7847. Appeal dismissed.
Christopher M. Rupar, Alain Préfontaine and Bernard Letarte, for the appellant.
Peter F. C. Howard, Patrick J. Monahan, Eliot N. Kolers
and Nicholas McHaffie, for the respondent.
The judgment of the Court was
delivered by
[1]
Binnie J. — TeleZone Inc. claims it was wronged by the decision of the
Minister of Industry Canada that rejected its application for a licence to
provide telecommunications services. It seeks compensation in the Ontario
Superior Court of Justice against the Federal Crown for its claimed losses of
$250 million. It pleads breach of contract, negligence, and, in the
alternative, unjust enrichment arising out of monies it had thrown away on the
application.
[2]
The Attorney General challenges the jurisdiction
of the Superior Court to proceed with the claim for compensation unless and
until TeleZone obtains from the Federal Court of Canada an order quashing the
Minister’s decision. TeleZone’s claim, he says, constitutes an impermissible
collateral attack on the Minister’s order. Such a collateral attack is barred,
he argues, by the grant to the Federal Court of exclusive judicial
review jurisdiction in relation to decisions of all federal boards, commissions
or other tribunals — Federal Courts Act, R.S.C. 1985, c. F-7, s. 18 .
The Attorney General relies on a line of cases in the Federal Court of Appeal
to this effect, giving particular prominence to Canada v. Grenier, 2005
FCA 348, [2006] 2 F.C.R. 287, hence the “Grenier principle”.
[3]
The definition of “federal board, commission or
other tribunal” in the Act is sweeping. It means “any body, person or persons
having, exercising or purporting to exercise jurisdiction or powers conferred
by or under an Act of Parliament or by or under an order made pursuant to a
prerogative of the Crown” (s. 2), with certain exceptions, not relevant here,
e.g., decisions of Tax Court judges. The federal decision makers that are
included run the gamut from the Prime Minister and major boards and agencies to
the local border guard and customs official and everybody in between. The Grenier
principle would shield the Crown from private law damages involving any of
these people or entities in respect of losses caused by unlawful government
decision making without first passing through the Federal Court. Such a
bottleneck was manifestly not the intention of Parliament when it enacted the
judicial review provisions of the Federal Courts Act .
[4]
The Grenier principle would undermine s.
17 of the same Act granting concurrent jurisdiction to the provincial superior
courts “in all cases in which relief is claimed against the Crown” as well as
the grant of concurrent jurisdiction to the superior courts in s. 21 of the Crown
Liability and Proceedings Act, R.S.C. 1985, c. C-50 , to deal with tort
claims. A central issue in some (but not all) damages claims against the
federal Crown will be the “lawfulness” of the government decision said to have
caused the loss. Grenier would deny the provincial superior courts the
jurisdiction to deal with that central issue in a damages claim pending before
them. Adoption of the Grenier principle would relegate the provincial
superior courts in such matters to a subordinate and contingent jurisdiction —
not concurrent, i.e., subordinate to the Federal Court’s decision on judicial
review and contingent on the Federal Court being willing to grant a
discretionary order on judicial review in favour of the plaintiff.
[5]
The Ontario Court of Appeal rejected the Attorney
General’s position, and in my respectful opinion, it was correct to do so. Grenier
is based on what, in my respectful view, is an exaggerated view of the legal
effect of the grant of judicial review jurisdiction to the Federal Court in s.
18 of the Federal Courts Act , which is best understood as a reservation
or subtraction from the more comprehensive grant of concurrent jurisdiction in
s. 17 “in all cases in which relief is claimed against the [federal] Crown”.
The arguments of the Attorney General, lacking any support in the express
statutory language of s. 18 , are necessarily based on suggested inferences and
implications, but it is well established that inferences and implications are
not enough to oust the jurisdiction of the provincial superior courts.
[6]
In the present case, the Ontario Superior Court
has jurisdiction over the parties, the subject matter and the remedies sought
by TeleZone. That jurisdiction includes the authority to determine every legal
and factual element necessary for the granting or withholding of the remedies
sought unless such authority is taken away by statute. The Federal Courts
Act does not, by clear and direct statutory language, oust the jurisdiction
of the provincial superior courts to deal with these common law and equitable
claims, including the potential “unlawfulness” of government orders. That
being the case, the Superior Court has jurisdiction to proceed. The Ontario
Superior Court ((2007), 88 O.R. (3d) 173) and the Ontario Court of Appeal (2008
ONCA 892, 94 O.R. (3d) 19) so held. I agree. I would dismiss the appeal.
I. Facts
[7]
The alleged faults of the Minister of Industry
Canada in dealing with the application under the Radiocommunication Act,
R.S.C. 1985, c. R-2 , are detailed in the amended Statement of Claim. For
present purposes, we must take TeleZone’s allegations as capable of proof.
[8]
TeleZone was created in 1992 with the ultimate
goal of obtaining a licence to provide personal communication services (“PCS”)
— essentially a cell phone network. In December 1992, as a preliminary step
toward this goal, TeleZone obtained a licence to provide personal cordless
telephone service. Between 1993 and 1995, TeleZone alleges that it kept
Industry Canada appraised of its efforts to raise capital and acquire the necessary
expertise to provide PCS services. TeleZone says that Industry Canada
encouraged it to continue these efforts.
[9]
In June 1995, Industry Canada issued a call for
PCS licence applications (the “Call”), and released a document setting out the
policy and procedural framework within which potential service providers could
shape their applications (the “Policy Statement”). The Policy Statement
provided that Industry Canada would grant up to six PCS licences on the basis
of criteria it set out. TeleZone alleges that Industry Canada promoted a
general policy in favour of awarding more rather than fewer licences to
encourage competition and consumer choice. TeleZone governed itself
accordingly.
[10]
Article 9.1 of the Call created a three-step
application process: (1) expressions of interest by potential service
providers; (2) detailed applications by potential service providers; and (3)
the announcement and awarding of PCS licences by Industry Canada. Articles 9.4
to 9.5.6 set out the criteria that would be used to evaluate the applications.
The Call did not explicitly reserve to Industry Canada the right to consider
additional factors. TeleZone alleges that Industry Canada was prohibited from
considering any criteria beyond the factors set out in the Call.
[11]
In September 1995, TeleZone submitted its
detailed application for a PCS licence to Industry Canada, which was prepared,
it says, at a cost of approximately $20 million. In December 1995, Industry
Canada announced its decision regarding the PCS licence applications. There
were only four successful applicants. TeleZone was not among them.
[12]
The amended statement of claim pleads that it
was either an express or implied term of the Policy Statement that Industry
Canada would only issue fewer than six licences if fewer than six applications
met the criteria (para. 12). TeleZone says that its application satisfied all
the criteria in the Call. Accordingly, it says, the Minister must have
considered factors other than those in the Call when it rejected TeleZone’s
application (para. 17). These other factors were not disclosed to TeleZone.
[13]
On the contractual branch of its case, TeleZone
argues that the tendering process gave rise to a tendering contract (Contract
A) which imposed an obligation on Industry Canada to act in accordance with the
Call and the Policy Statement and to treat all applicants fairly and in good
faith in awarding the PCS licences (R.F., at para. 133). TeleZone submits that
the Crown breached “Contract A” by (1) granting fewer licences than it
represented would be awarded; (2) not adhering to the requirements of the Call
including the listed criteria (para. 134); and (3) failing to conform to a duty
of care and a duty to act in good faith (para. 135).
[14]
In its amended statement of claim, TeleZone does
not seek to impugn the Minister’s decision to award the licences. TeleZone does
not seek a licence for itself or to remove licences from the successful
applicants; it simply seeks damages. Accordingly, TeleZone submits that whether
or not the licences were validly issued to the other applicants is irrelevant
because under the Call and Policy Statement, there was still room for two more
PCS licences and TeleZone only takes issue with the conduct of the Crown vis-à-vis
TeleZone itself (para. 136).
II. Judicial
History
A. Ontario
Superior Court of Justice (Morawetz J.) (2007), 88 O.R. (3d) 173
[15]
On a preliminary motion to dismiss TeleZone’s
action for want of jurisdiction, the Attorney General argued that TeleZone must
first have the Minister’s order quashed on judicial review in the Federal Court
as a condition precedent to a civil suit against the Crown. TeleZone countered
that its claim is based on causes of action that are distinct from an
application for judicial review. It does not seek to set aside the licences.
It seeks damages for negligence, breach of contract, or unjust enrichment.
Morawetz J. dismissed the objection because, in his view, it was not plain and
obvious that TeleZone’s claim in the Superior Court would fail.
B. Ontario Court
of Appeal (Laskin, Borins and Feldman JJ.A.), 2008 ONCA 892, 94 O.R. (3d) 19
[16]
Borins J.A., writing for a unanimous court, held
that s. 17 of the Federal Courts Act and s. 21 of the Crown Liability
and Proceedings Act conferred concurrent jurisdiction on the superior
courts and the Federal Court for claims against the Crown. The Ontario
Superior Court, as a court of general and inherent jurisdiction, may entertain
any cause of action in the absence of legislation or an arbitration agreement
to the contrary. Section 18 of the Federal Courts Act removed from the
superior courts’ jurisdiction the prerogative writs and extraordinary remedies
listed (para. 94). Since the relief sought by TeleZone (damages) is not listed
in s. 18 , he concluded that the Superior Court continues to have jurisdiction.
The appeal was dismissed.
III. Relevant
Enactments
[17]
Constitution Act, 1867
101. The Parliament of Canada may, notwithstanding anything in this Act,
from Time to Time provide for the Constitution, Maintenance, and Organization
of a General Court of Appeal for Canada, and for the Establishment of any
additional Courts for the better Administration of the Laws of Canada.
Federal Courts Act, R.S.C. 1985, c. F-7
2. (1) . . .
“federal
board, commission or other tribunal” means any body, person or persons having,
exercising or purporting to exercise jurisdiction or powers conferred by or
under an Act of Parliament or by or under an order made pursuant to a
prerogative of the Crown, other than the Tax Court of Canada or any of its
judges, any such body constituted or established by or under a law of a
province or any such person or persons appointed under or in accordance with a
law of a province or under section 96 of the Constitution Act, 1867 ;
17. (1)
[Relief against the Crown] Except as otherwise provided in this Act or any
other Act of Parliament, the Federal Court has concurrent original jurisdiction
in all cases in which relief is claimed against the Crown.
(2) [Cases] Without restricting the
generality of subsection (1), the Federal Court has concurrent original
jurisdiction, except as otherwise provided, in all cases in which
. . .
(b) the
claim arises out of a contract entered into by or on behalf of the Crown;
. . .
(d) the
claim is for damages under the Crown Liability and Proceedings Act .
(5) [Relief in favour of Crown or against
officer] The Federal Court has concurrent original jurisdiction
. . .
(b) in
proceedings in which relief is sought against any person for anything done or
omitted to be done in the performance of the duties of that person as an
officer, servant or agent of the Crown.
18. (1)
[Extraordinary remedies, federal tribunals] Subject to section 28, the Federal
Court has exclusive original jurisdiction
(a) to
issue an injunction, writ of certiorari, writ of prohibition, writ of mandamus
or writ of quo warranto, or grant declaratory relief, against any
federal board, commission or other tribunal; and
(b) to
hear and determine any application or other proceeding for relief in the nature
of relief contemplated by paragraph (a), including any proceeding
brought against the Attorney General of Canada, to obtain relief against a
federal board, commission or other tribunal.
. . .
(3) [Remedies to be obtained on
application] The remedies provided for in subsections (1) and (2) may be
obtained only on an application for judicial review made under section 18.1.
18.1 (1)
[Application for judicial review] An application for judicial review may be
made by the Attorney General of Canada or by anyone directly affected by the
matter in respect of which relief is sought.
(2) [Time limitation] An application for
judicial review in respect of a decision or an order of a federal board,
commission or other tribunal shall be made within 30 days after the time the
decision or order was first communicated by the federal board, commission or
other tribunal to the office of the Deputy Attorney General of Canada or to the
party directly affected by it, or within any further time that a judge of the
Federal Court may fix or allow before or after the end of those 30 days.
(3) [Powers of Federal Court] On an
application for judicial review, the Federal Court may
(a) order
a federal board, commission or other tribunal to do any act or thing it has
unlawfully failed or refused to do or has unreasonably delayed in doing; or
(b) declare
invalid or unlawful, or quash, set aside or set aside and refer back for
determination in accordance with such directions as it considers to be
appropriate, prohibit or restrain, a decision, order, act or proceeding of a
federal board, commission or other tribunal.
18.4 (1)
[Hearings in summary way] Subject to subsection (2), an application or
reference to the Federal Court under any of sections 18.1 to 18.3 shall be
heard and determined without delay and in a summary way.
(2) [Exception] The Federal Court may, if
it considers it appropriate, direct that an application for judicial review be
treated and proceeded with as an action.
Crown Liability and Proceedings Act, R.S.C. 1985, c. C-50
3.
[Liability] The Crown is liable for the damages for which, if it were a person,
it would be liable
(a) in
the Province of Quebec, in respect of
(i) the
damage caused by the fault of a servant of the Crown, or
(ii) the
damage resulting from the act of a thing in the custody of or owned by the
Crown or by the fault of the Crown as custodian or owner; and
(b) in
any other province, in respect of
(i) a
tort committed by a servant of the Crown, or
(ii) a
breach of duty attaching to the ownership, occupation, possession or control of
property.
8. [Saving in
respect of prerogative and statutory powers] Nothing in sections 3 to 7 makes
the Crown liable in respect of anything done or omitted in the exercise of any
power or authority that, if those sections had not been passed, would have been
exercisable by virtue of the prerogative of the Crown, or any power or
authority conferred on the Crown by any statute, and, in particular, but
without restricting the generality of the foregoing, nothing in those sections
makes the Crown liable in respect of anything done or omitted in the exercise
of any power or authority exercisable by the Crown, whether in time of peace or
of war, for the purpose of the defence of Canada or of training, or maintaining
the efficiency of, the Canadian Forces.
21.
(1) [Concurrent
jurisdiction of provincial court] In all cases where a
claim is made against the Crown, except where the Federal Court has exclusive
jurisdiction with respect to it, the superior court of the province in which
the claim arises has concurrent jurisdiction with respect to the subject-matter
of the claim.
IV. Analysis
[18]
This appeal is fundamentally about access to
justice. People who claim to be injured by government action should have
whatever redress the legal system permits through procedures that minimize
unnecessary cost and complexity. The Court’s approach should be practical and
pragmatic with that objective in mind.
[19]
If a claimant seeks to set aside the order of a
federal decision maker, it will have to proceed by judicial review, as the Grenier
court held. However, if the claimant is content to let the order stand and
instead seeks compensation for alleged losses (as here), there is no principled
reason why it should be forced to detour to the Federal Court for the extra
step of a judicial review application (itself sometimes a costly undertaking)
when that is not the relief it seeks. Access to justice requires that the
claimant be permitted to pursue its chosen remedy directly and, to the greatest
extent possible, without procedural detours.
[20]
The Attorney General argues that a detour to the
Federal Court is necessary because the damages action represents a “collateral
attack” prohibited by “inferences” derived from s. 18 of the Federal Courts
Act . His argument, in a nutshell, is:
Simply
pleading damages, or some other remedy that is not available by way of judicial
review in the Federal Court, should not be accepted as a means to bypass the
intention of Parliament that review of federal administrative decisions must
take place in the Federal Court.
(A.G. Factum,
at para. 4)
[21]
The Attorney General accepts that judicial
review is not required “for all proceedings that in any manner involve a
decision or conduct of a federal board, commission or tribunal” (para. 29).
However, the detour is required for claims that engage, directly or indirectly,
the “validity and unlawfulness” of such decisions (para. 2). “Lawfulness” is a
broad term. The Attorney General uses “invalid” and “unlawful” conjunctively
(e.g., at para. 49). He seems to use the term “unlawful” to cover virtually
any government order that could lay the basis for a finding of fault in the
private law sense although he excludes such bureaucratic actions as providing
erroneous information, performing a “physical task or activity” negligently, or
breaching a duty to warn (Factum, at para. 50).
[22]
The Attorney General’s concern is that
permitting different damages claims to proceed in different provinces before a
variety of superior court judges arising out of the same or related federal
government decisions would re-introduce the spectre of inconsistency and
uncertainty across Canada which the enactment of the Federal Courts Act was
designed to alleviate. However, this concern must have been considered by
Parliament when it granted concurrent jurisdiction in all cases in which relief
is claimed against the federal Crown to the superior courts. Undoubtedly, the
juxtaposition of ss. 17 and 18 of the Federal Courts Act creates a
certain amount of subject matter overlap with respect to holding the federal
government to account for its decision making. This degree of overlap is
inherent in the legislative scheme designed to provide claimants with
“convenience” and “a choice of forum” in the provincial courts (see statement
of the Minister of Justice in Parliament, House of Commons Debates, 2nd
Sess., 34th Parl., November 1, 1989, at p. 5414, reproduced below, at para.
58).
[23]
I do not interpret Parliament’s intent, as
expressed in the text, context and purposes of the Federal Courts Act ,
to require an awkward and duplicative two-court procedure with respect to all
damages claims that directly or indirectly challenge the validity or lawfulness
of federal decisions. Such an outcome would have to be compelled by clear and
explicit statutory language. Neither the Federal Courts Act nor the Crown
Liability and Proceedings Act do so, in my opinion. With respect, not only
is such language absent, but the reasonable inferences from both statutes,
especially the concurrent jurisdiction in all cases where relief is claimed
against the Crown granted to the provincial superior courts, leads to the
opposite conclusion.
A. The
Nature of Judicial Review
[24]
The Attorney General correctly points to “the
substantive differences between public law and private law principles” (Factum,
at para. 6). Judicial review is directed at the legality, reasonableness, and
fairness of the procedures employed and actions taken by government decision
makers. It is designed to enforce the rule of law and adherence to the
Constitution. Its overall objective is good governance. These public purposes
are fundamentally different from those underlying contract and tort cases or
causes of action under the Civil Code of Québec, R.S.Q., c. C-1991, and
their adjunct remedies, which are primarily designed to right private wrongs
with compensation or other relief.
[25]
Not all invalid government decisions result in
financial losses to private persons or entities. Not all financial losses that
do occur will lay the basis for a private cause of action. Subordinate
legislative and adjudicative functions do not in general attract potential
government liability for damages. For practical purposes, the real concern
here is with executive decisions by Ministers and civil servants causing losses
that may or may not be excused by statutory authority.
[26]
The focus of judicial review is to quash invalid
government decisions — or require government to act or prohibit it from acting
— by a speedy process. A bookstore, for example, will have a greater interest
in getting its foreign books through Canada Customs — despite ill-founded
allegations of obscenity — than in collecting compensation for the trifling
profit lost on each book denied entry (Little Sisters Book and Art Emporium
v. Canada (Commissioner of Customs and Revenue), 2007 SCC 2, [2007] 1
S.C.R. 38). Thus s. 18.1 of the Federal Courts Act establishes a
summary procedure with a 30-day time limit. There is no pre-hearing discovery,
apart from what can be learned through affidavits and cross-examination. The
applications judge hears no viva voce evidence. Damages are not
available. Judicial review suits the litigant who wishes to strike quickly and
directly at the action (or inaction) it complains about. A damages claimant,
on the other hand, will often be unaware of the nature or extent of its losses
in a 30-day time frame, and may need pre-trial discovery to either make its
case or find out it has none.
[27]
The question must therefore be asked: What is
the practical benefit to a litigant who wants compensation rather than a
reversal of a government decision to undergo the Grenier two-court
procedure? TeleZone, for example, would acquire no practical benefit from a
judicial review application. Its primary complaint is for damages arising from
the breach of an alleged tendering contract. It no longer seeks the benefit of
the contract (or the PCS licence). It seeks compensation for substantial
costs thrown away and lost profits. The Crown does not argue that the
tendering contract (if it was made) was ultra vires, or that the alleged
breach (if it occurred) was mandated by statutory authority. The argument,
instead, is that TeleZone’s claim constitutes a collateral attack on the
ministerial order under the Radiocommunication Act that failed to award
it a PCS licence. But in TeleZone’s circumstances, judicial review of the
Minister’s decision would not address the claimed harm and would seem to offer
little except added cost and delay.
[28]
Negligence is also alleged by TeleZone. Tort
liability, of course, is based on fault, not invalidity. As the Court made
clear many years ago in The Queen in Right of Canada v. Saskatchewan Wheat
Pool, [1983] 1 S.C.R. 205, at pp. 222-25, breach of a statute is neither
necessary nor is it sufficient to ground a private cause of action. It is not
necessary because a government decision that is perfectly valid may
nevertheless give rise to liability in contract (Agricultural Research
Institute of Ontario v. Campbell-High (2002), 58 O.R. (3d) 321 (C.A.),
leave to appeal refused, [2003] 1 S.C.R. vii) or tort (Ryan v. Victoria
(City), [1999] 1 S.C.R. 201).
[29]
Nor is a breach of statutory power necessarily
sufficient. Many losses caused by government decision making do not give rise
to any cause of action known to the law. As the Attorney General correctly
points out, “[e]ven if a discretionary decision of a federal board, commission
or tribunal has been declared invalid or unlawful, that in itself does not
create a cause of action in tort or under the Quebec regime of civil liability”
(Factum, at para. 28).
[30]
In Miazga v. Kvello Estate, 2009
SCC 51, [2009] 3 S.C.R. 339, Charron J. wrote that “[a] person accused of
a criminal offence enjoys a private right of action when a prosecutor acts
maliciously in fraud of his or her prosecutorial duties with the result that
the accused suffers damage. However, the civil tort of malicious
prosecution is not an after-the-fact judicial review of a Crown’s exercise of
prosecutorial discretion” (para. 7 (emphasis added)). H. Woolf, J. Jowell
and A. Le Sueur point out in De Smith’s Judicial Review (6th ed.
2007), that “[u]nlawfulness (in the judicial review sense) and negligence are
conceptually distinct” (pp. 924-25). Put another way, while Crown liability in
tort and the validity of an underlying administrative decision may generate
some overlapping considerations, they present distinct and separate justiciable
issues.
[31]
The main difficulty in suing government for
losses arising out of statutory decisions is often not the public law aspects
of the decision but the need to identify a viable private cause of action, and
thereafter to meet such special defences as statutory authority. In Cooper
v. Hobart, 2001 SCC 79, [2001] 3 S.C.R. 537, for example, it was alleged
that the conduct of the Registrar of mortgage brokers contributed significantly
to the loss of some claimant investors, but it was held that there was
insufficient proximity between the Registrar and the claimants to give rise to
a duty of care. See also Edwards v. Law Society of Upper Canada, 2001
SCC 80, [2001] 3 S.C.R. 562; Holland v. Saskatchewan, 2008 SCC 42,
[2008] 2 S.C.R. 551, at para. 8.
[32]
The enactment of the Federal Court Act ,
S.C. 1970-71-72, c. 1, and the subsequent amendments in 1990 were designed to
enhance government accountability as well as to promote access to justice. The
legislation should be interpreted in such a way as to promote those
objectives. The Grenier approach does not do so, in my respectful
opinion, as will now be discussed.
B. The
Grenier Case
[33]
The shadow of the Grenier case perhaps
extends beyond what was intended by the Grenier court itself.
[34]
Grenier did not
concern a conflict between the Federal Court and a provincial superior court.
It concerned which of two alternative Federal Court modes of procedure should
be pursued by an inmate of a federal penitentiary. He complained of the
adverse effects of administrative segregation for 14 days pursuant to the Corrections
and Conditional Release Act, S.C. 1992, c. 20 . The inmate did not seek
judicial review of the decision of the head of the institution to place him in
administrative segregation. Instead, after waiting three years, he brought an
action for damages against the federal Crown under s. 17 of the Federal
Courts Act . At trial, the administrative segregation was found to be
arbitrary. He was awarded $5,000 in compensatory and exemplary damages.
[35]
On appeal, the Attorney General objected that
the inmate should have sought judicial review of his administrative segregation
under s. 18 of the Act before bringing his action for damages under s. 17 of
the Act. The argument, in essence, was that the Federal Courts Act has
several procedural doors and the inmate had tried to enter the wrong one. He
knocked on s. 17 whereas he should have gone through s. 18 . The Federal Court
of Appeal agreed, taking the view that “Parliament assigned the exercise of
reviewing the lawfulness of the decisions of federal agencies to a single
court, the Federal Court. This review must be exercised under section 18 ,
and only by filing an application for judicial review” (para. 24 (emphasis
added)). The court reasoned that even within the same court, the s. 17 action
for damages constituted an impermissible collateral attack on the decision of
the prison authority (paras. 32-33) because the trial court “had to review the
lawfulness of the institutional head’s decision . . . and set it
aside” (para. 34), which could only be done under s. 18 of the same Act. It
was thought that the judicial review jurisdiction of the Federal Court, with
its unique statutory procedure, must be protected from erosion. Such a conclusion,
in the Grenier court’s view, was consistent with R. v. Consolidated
Maybrun Mines Ltd., [1998] 1 S.C.R. 706.
[36]
Moreover, according to the Grenier court,
it made no difference that the administrative segregation Mr. Grenier
complained of had long since been served. “[A] decision of a federal agency,
such as the one by the institutional head in this case”, the court reasoned,
“retains its legal force and authority, and remains juridically operative and
legally effective so long as it has not been invalidated” (para. 19).
Accordingly, the prison order, even in its afterlife, was still a complete
answer to the s. 17 damages action.
[37]
More recently, the Federal Court of Appeal
itself seems to be losing some enthusiasm for Grenier’s “separate silos”
approach. In Hinton v. Canada (Minister of Citizenship and Immigration),
2008 FCA 215, [2009] 1 F.C.R. 476, the court allowed an application for
judicial review to be converted into an action for damages which was also
certified as a class action, Sexton J.A. commenting that “[s]ometimes, such as
the case at bar, it may prove too cumbersome to initiate a separate action for
damages either concurrently with, or subsequent to, an application for judicial
review” (para. 50).
[38]
More recently in Parrish & Heimbecker
Ltd. v. Canada (Minister of Agriculture and Agri-Food), 2008 FCA 362,
[2009] 3 F.C.R. 568 (which, on appeal, was heard concurrently in this Court
with the present appeal), Sharlow J.A., dissenting, took the view that “the Grenier
principle was developed without taking into account certain aspects of the
statutory scheme governing federal Crown litigation [including the Crown
Liability and Proceedings Act ] that in my view cast doubt on the Grenier
analysis” (para. 41).
[39]
At the same time, some provincial courts have
accepted the Grenier approach: see, e.g., Donovan v. Canada
(Attorney General), 2008 NLCA 8, 273 Nfld. & P.E.I.R. 116; Lidstone
v. Canada (Minister of Canadian Heritage), 2008 PESCTD 6, 286 Nfld. &
P.E.I.R. 244. Most provincial courts, however, have either not followed Grenier
or distinguished it: see, e.g., River Valley Poultry Farm Ltd. v. Canada
(Attorney General), 2009 ONCA 326, 95 O.R. (3d) 1, at para. 30; Los
Angeles Salad Co. v. Canadian Food Inspection Agency, 2009 BCSC 109, 92
B.C.L.R. (4th) 379, at para. 24; Leroux v. Canada Revenue Agency, 2010
BCSC 865, 2010 D.T.C. 5123, at para. 54; see also Fantasy Construction Ltd.,
Re, 2007 ABCA 335, 89 Alta. L.R. (4th) 93, at para. 43; Genge
v. Canada (Attorney General), 2007 NLCA 60, 270 Nfld. & P.E.I.R. 182,
at para. 34.
C. The
Attorney General’s Expansive View of the Grenier Decision
[40]
According to the Attorney General, Grenier
denied the jurisdiction of either the Federal Court or a provincial
superior court to proceed to adjudicate a damages claim without first passing
through the “unique” judicial review procedure set out in s. 18 of the Federal
Courts Act if the “lawfulness” of an administrative decision or order is in
issue. The Attorney General uses the expression “invalidity or lawfulness”
which, he points out, may extend even to contract claims. He cites Gestion
Complexe Cousineau (1989) Inc. v. Canada (Minister of Public Works and
Government Services), [1995] 2 F.C. 694, at pp. 703-6, where the Federal
Court of Appeal concluded that the exercise by a Minister of a statutory power
to seek tenders and to enter into contracts for the lease of land by the Crown
could be subject to judicial review. See also Irving Shipbuilding Inc. v.
Canada (Attorney General), 2009 FCA 116, 314 D.L.R. (4th) 340, at
paras. 21-25, leave to appeal refused, [2009] 3 S.C.R. vii. However, in this
Court’s decision in Martel Building Ltd. v. Canada, 2000 SCC 60, [2000]
2 S.C.R. 860, a tendering case, although in the end the claim was dismissed,
there was no suggestion in the judgment that judicial review was a necessary
preliminary step to the recovery of contract damages against the Crown.
[41]
Moreover, I do not think the Attorney General’s
position is supported by Consolidated Maybrun or its companion case of R.
v. Al Klippert Ltd., [1998] 1 S.C.R. 737. Those cases dealt with the
narrow issue of whether a person facing penal charges for failing to comply
with an administrative order can challenge the validity of the order by way of
defence despite failure to take advantage of the appeal process provided for by
the law under which the order was issued. In both cases, the Court paid close
attention to the regulatory statute under which an order is made and concluded
that to permit such a defence “would encourage conduct contrary to the
[regulatory] Act’s objectives and would tend to undermine its effectiveness” (Consolidated
Maybrun, at para. 60). These cases thus stand for a rather nuanced view of
where collateral attack is (or is not) permissible. The outcome largely
depends on the court’s view of the statute under which an order is made “and
must be answered in light of the legislature’s intention as to the appropriate
forum” for resolving the dispute (Consolidated Maybrun, at para. 52).
In my respectful view, having regard to these policy considerations, it would
be adherence to the Grenier approach that “would tend to undermine [the]
effectiveness” of the Federal Courts Act reforms which had as one of
their objectives making the provincial superior courts an equally “appropriate
forum” for resolving in an efficient way financial claims against the federal
Crown.
D. The
Jurisdiction of the Provincial Superior Courts
[42]
What is required, at this point of the
discussion, is to remind ourselves of the rule that any derogation from the
jurisdiction of the provincial superior courts (in favour of the Federal Court
or otherwise) requires clear and explicit statutory language: “[The] ouster of
jurisdiction from the provincial superior courts in favour of vesting exclusive
jurisdiction in a statutory court . . . requires clear and explicit
statutory wording to this effect”: Ordon Estate v. Grail, [1998] 3
S.C.R. 437, at para. 46; see also Pringle v. Fraser, [1972] S.C.R. 821,
at p. 826; Canada (Human Rights Commission) v. Canadian Liberty Net,
[1998] 1 S.C.R. 626, at para. 38. The Attorney General’s argument rests too
heavily on what he sees as the negative implications to be read into s. 18 .
[43]
The oft-repeated incantation of the common law
is that “nothing shall be intended to be out of the jurisdiction of a Superior
Court, but that which specially appears to be so; and, on the contrary, nothing
shall be intended to be within the jurisdiction of an Inferior Court but that
which is so expressly alleged”: Peacock v. Bell (1667), 1 Wms. Saund.
73, 85 E.R. 84, at pp. 87-88. In contrast, the jurisdiction of the
Federal Court is purely statutory.
[44]
The term “jurisdiction” simply is shorthand for
the collection of attributes that enables a court or tribunal to issue an
enforceable order or judgment. A court has jurisdiction if its authority
extends to “the person and the subject matter in question and, in addition, has
authority to make the order sought”: Mills v. The Queen, [1986]
1 S.C.R. 863, per McIntyre J., at p. 960, quoting Brooke J.A. in R.
v. Morgentaler (1984), 41 C.R. (3d) 262, at p. 271, and per Lamer
J., dissenting, at p. 890; see also R. v. Rahey, [1987] 1 S.C.R. 588, at
p. 603; R. v. 974649 Ontario Inc., 2001 SCC 81, [2001] 3 S.C.R. 575, at
para. 15; R. v. Conway, 2010 SCC 22, [2010] 1 S.C.R. 765. The Attorney
General does not deny that the Superior Court possesses in personam jurisdiction
over the parties, or dispute the Superior Court’s authority to award damages.
The dispute centres on subject matter jurisdiction.
[45]
It is true that apart from constitutional
limitations (see, e.g., Attorney General of Canada v. Law Society of British
Columbia, [1982] 2 S.C.R. 307, and cases under s. 96 of the Constitution
Act, 1867 , which are not relevant here), Parliament may by statute transfer
jurisdiction from the superior courts to other adjudicative bodies including
the Federal Court. It did so, for example, with respect to the judicial review
of federal decision makers: Canada Labour Relations Board v. Paul L’Anglais
Inc., [1983] 1 S.C.R. 147, at p. 154. However, the onus lies here on the
Attorney General to establish the existence and extent of such a transfer of
jurisdiction in statutory terms that are clear, explicit and unambiguous.
[46]
Nothing in the Federal Courts Act
satisfies this test. Indeed, as mentioned, the explicit grant to the
provincial superior courts of concurrent jurisdiction in claims against the
Crown in s. 17 of that Act (as well as s. 21 of the Crown Liability and
Proceedings Act ) directly refutes it. As Sharlow J.A., dissenting, pointed
out in Parrish & Heimbecker Ltd. (appeal allowed and judgment
released concurrently herewith, 2010 SCC 64, [2010] 3 S.C.R. 639), s. 8 of the Crown
Liability and Proceedings Act , which codifies the defence of statutory
authority, is evidence that Parliament envisaged that the assessment of
lawfulness would be made by the provincial superior court in the course of
adjudicating a claim for damages (para. 39).
E. Claimed
“Inferences” From Section 18 of the Federal Courts Act
[47]
An application for judicial review under the Federal
Courts Act combines an allegation that a federal authority has acted
contrary to the substantive principles of public law, along with a claim for
one of the kinds of relief listed in s. 18(1) . It is only this procedure that
is in the exclusive jurisdiction of the Federal Court. As the Court recently
observed in Canada (Citizenship and Immigration) v. Khosa, 2009 SCC 12,
[2009] 1 S.C.R. 339, “[t]he genesis of the Federal Courts Act lies in
Parliament’s decision in 1971 to remove from the superior courts of the
provinces the jurisdiction over prerogative writs, declarations, and
injunctions against federal boards, commissions and other tribunals” (para.
34). Section 18 does not say that a dispute over the lawfulness of
exercise of statutory authority cannot be assessed in the course of a trial
governed by the Crown Liability and Proceedings Act brought in the
provincial superior court or pursuant to s. 17 of the Federal Courts Act
itself.
[48]
The Attorney General argues that a “remedies”
oriented approach, similar to the view adopted by the Ontario Court of Appeal
in this case, results in “a rigid, formalistic and literal interpretation” of
s. 18 (Factum, at para. 66) and gives insufficient weight to context and, in
particular, to the intention of Parliament. I agree that the context and
Parliamentary purpose are essential to a proper interpretation of s. 18, but I
do not think a broad and contextual approach assists the Attorney General’s
argument.
(i)
The Parliamentary Context
[49]
The Parliamentary debates in 1971 took place in
the context of the enormous growth of federal regulatory regimes, the perceived
need for a “national perspective” on judicial review, and a concern about
inconsistent supervision of federal public bodies by various provincial
superior courts across the country (see D. J. M. Brown and J. M. Evans, Judicial
Review of Administrative Action in Canada (loose-leaf), at para. 2:4100).
Thus, Parliament radically transformed the old Exchequer Court into a new
Federal Court and crafted a new procedure which resulted in the Federal Court’s
supervisory jurisdiction over federal decision makers.
[50]
The Minister of Justice in 1970 emphasized that
Parliament’s concern was supervision (not compensation) and in particular its
concern was about fragmented judicial review of federal adjudicative
tribunals. One provincial superior court might uphold as valid an important
decision, e.g., by the National Energy Board, which a superior court in a
different province might decide to quash. Thus:
This multiple supervision [by the provincial courts], with a lack of
consistent jurisprudence and application, can work serious hardship not only on
the boards and commissions but on those who appear before them. . . . It is
for this reason . . . that the conclusion was reached that this superintending
jurisdiction should be vested in a single court that enjoyed the same nation
wide jurisdiction as the federal boards, commissions and tribunals themselves.
The bill is therefore designed to create a single and uniform basis of
superintending jurisdiction in relation to federal boards and commissions and
to place them on the same footing in this regard as provincial boards and
commissions.
(House of Commons Debates,
2nd Sess., 28th Parl. March 25, 1970, at pp. 5470-71; see also A.G. Factum, at
para. 79; Khosa, at para. 34.)
However,
the very broad statutory definition in s. 2 of “federal board, commission or
other tribunal” goes well beyond what are usually thought of as “boards and
commissions” and its very breadth belatedly (and perhaps unintentionally)
precipitated the Grenier controversy about how to prioritize the
overlapping subject matter shared by judicial review and the trial of common
law claims for compensation based on fault. The grant of concurrent
jurisdiction in s. 17 does not negate the possibility of inconsistency, but
Parliament has agreed to live with the possibility in the interest of easier
access to justice.
(ii)
The Statutory Text
[51]
The grant of exclusive jurisdiction to
judicially review federal decision makers is found in s. 18 of the Federal
Courts Act and is expressed in terms of particular remedies:
18. (1)
Subject to section 28, the Federal Court has exclusive original
jurisdiction
(a) to issue an injunction,
writ of certiorari, writ of prohibition, writ of mandamus or writ
of quo warranto, or grant declaratory relief, against any federal board,
commission or other tribunal; and
(b) to hear and determine any
application or other proceeding for relief in the nature of relief contemplated
by paragraph (a), including any proceeding brought against the Attorney
General of Canada, to obtain relief against a federal board, commission or
other tribunal.
. . .
(3) The remedies provided for in
subsections (1) and (2) may be obtained only on an application for judicial
review made under section 18.1.
[52]
All of the remedies listed in s. 18(1)(a)
are traditional administrative law remedies, including the four prerogative
writs — certiorari, prohibition, mandamus and quo warranto
— and declaratory and injunctive relief in the administrative law context.
Section 18 does not include an award of damages. If a claimant seeks
compensation, he or she cannot get it on judicial review. By the same token,
the plaintiff in a damages action is not entitled to add a supplementary claim
for a declaration or injunction to prevent the government from acting on a
decision said to be tainted by illegality. That is the domain of the Federal
Court.
(iii) Reading
the Act as a Whole
[53]
There is much internal evidence in ss. 18 and
18.1 of the Federal Courts Act to indicate that Parliament could not
have intended judicial review to have the gatekeeper function envisaged by Grenier.
[54]
As mentioned, the 30-day limitation period for
judicial review applications under s. 18.1(2) of the Federal Courts Act is
one such indication. Such a short limitation is consistent with a quick and
summary judicial review procedure — but not a damages action. TeleZone’s
action in Ontario would have a six-year limitation. A 30-day cut off for a
damages claimant would be unrealistic. The claimant may not be in a position to
apply for judicial review within the limitation period. The facts necessary to
ground a civil cause of action may not emerge until after 30 days have passed.
[55]
The 30-day limit can be extended by order of a
Federal Court judge (s. 18.1(2) ) but
the extension is discretionary, and would subordinate the fate of a civil suit
brought in a superior court to the discretion of a Federal Court judge ruling
upon a request for an extension of time for reasons that have to do with public
law concerns, not civil damages. In practical terms, the effect of the Grenier
argument would be to impose a discretionary limitation period (determined by
the Federal Court) on actions for damages against the Crown in a provincial
superior court, an outcome which, in my opinion, Parliament cannot have
intended. Apart from anything else, it undermines s. 39 of the Federal
Courts Act , which provides that, ordinarily, claims against the
Crown in the Federal Court are subject to the limitation period applicable
“between subject and subject” in the province where the claim arose, or six
years in respect of a “cause of action arising otherwise than in a province”.
[56]
As recently affirmed in Khosa, the grant
of relief on judicial review is in its nature discretionary and may be denied
even if the applicant establishes valid grounds for the court’s intervention:
. . . the language of s. 18.1 generally sets
out threshold grounds which permit but do not require the court to grant
relief. Whether or not the court should exercise its discretion in favour of
the application will depend on the court’s appreciation of the respective roles
of the courts and the administration as well as the “circumstances of each
case”. [para. 36]
See
also Harelkin v. University of Regina, [1979] 2 S.C.R. 561, at pp.
592-93; Immeubles Port Louis Ltée v. Lafontaine (Village), [1991] 1
S.C.R. 326, at p. 372. Such an approach does not align well with the paradigm
of a common law action for damages where, if the elements of the claim are
established, compensation ought generally to follow as a matter of course. In
judicial review, “the discretionary nature of the courts’ supervisory
jurisdiction reflects the fact that unlike private law, its orientation is not,
and never has been, directed exclusively to vindicating the rights of
individuals” (Brown and Evans, at para. 3:1100).
(iv) The
1990 Amendments to the Federal Courts Act
[57]
The current version of s. 17 of the Federal
Courts Act , which only came into force on February 1, 1992, allows parties
to institute civil claims against the Federal Crown in the superior courts of
the provinces. For ease of reference, I repeat the operative language:
17. (1) Except as otherwise provided in this Act
or any other Act of Parliament, the Federal Court has concurrent original
jurisdiction in all cases in which relief is claimed against the
Crown.
The
grant of jurisdiction is thus framed in terms of relief, i.e.,“all cases
in which relief is claimed” except as otherwise provided. Section 18(1)
otherwise provides in relation to the specific forms of relief listed therein.
Section 18(3) of the Act expressly provides that remedies in the nature of
judicial review “may be obtained only on an application for judicial review
made under section 18.1 ”. The Federal Courts Act lists no other
relevant exclusions from s. 17 , and we have not been referred to any other Act
of Parliament having a bearing on this subject.
[58]
As the Minister of Justice stated in 1989 before
the Legislation Committee examining Bill C-38, which resulted in, among other
changes, today’s version of s. 17 :
[W]e have made
provision in the bill whereby ordinary common law and civil law actions for
relief against the federal Crown, which are presently the exclusive
jurisdiction of the Federal Court, may also be heard by provincial courts.
Such provision acknowledges the fact that the Federal Court possesses no
unique expertise in areas of ordinary contract and tort law. [The Minister
here went on to describe the practical jurisdictional and procedural problems
created by the Federal Court’s prior exclusive jurisdiction over federal
authorities.]
(Minutes of Proceedings and
Evidence of the Legislative Committee on Bill C-38, No. 1, 2nd Sess.,
34th Parl., November 23, 1989, at pp. 14-15)
On
second reading of the Bill, the Minister again emphasized that the purpose of
the amendments was to allow the plaintiffs to sue the federal Crown in either
the provincial superior courts or the Federal Court:
For example, a person should be able to sue the Crown in a
suitably convenient court for breach of contract to purchase goods or for
negligent driving by a Crown employee that causes injuries to another
motorist. At the moment, such actions can only be brought in the Federal
Court. However, it is not as available as provincial courts.
. . .
Moreover, for both citizen and lawyer alike, provincial courts,
including their procedures and personnel, are much more familiar.
Therefore, the Federal Court is often not the most convenient one
for the private litigant. With this in mind, the government has proposed
that both the provincial courts and the Federal Court share jurisdiction with
respect to such actions, thereby generally giving a plaintiff a choice of
forum. [Emphasis added.]
(House of Commons Debates,
2nd Sess., 34th Parl., November 1, 1989, at p. 5414)
[59]
The effect of the argument of the Attorney
General, if accepted, would be to undermine the purpose and intended effect of
the 1990 amendment by retaining in the Federal Court exclusive jurisdiction
over a key element of many causes of action proceeding in the provincial courts
despite the promise to give plaintiffs a “choice of forum” and to make
available relief in the provincial superior courts that may be more “familiar”
to litigants.
F. The
Doctrine of Collateral Attack
[60]
The Attorney General contends that to permit
TeleZone to proceed with its claim in the provincial superior court in the
absence of prior judicial review would be to allow an impermissible “collateral
attack” on the Minister’s decision. The Court has described a collateral
attack as
an attack made in proceedings other
than those whose specific object is the reversal, variation, or nullification
of the order or judgment.
(Wilson v. The Queen, [1983]
2 S.C.R. 594, at p. 599)
[61]
The rule is a judicial creation (which must
therefore yield to a contrary legislative enactment) based on general
considerations related to the administration of justice, as explained in Garland
v. Consumers’ Gas Co., 2004 SCC 25, [2004] 1 S.C.R. 629, at para. 72:
The fundamental policy behind the rule
against collateral attack is to “maintain the rule of law and to preserve the
repute of the administration of justice” (R. v. Litchfield, [1993] 4
S.C.R. 333, at p. 349). The idea is that if a party could avoid the
consequences of an order issued against it by going to another forum, this
would undermine the integrity of the justice system. Consequently, the
doctrine is intended to prevent a party from circumventing the effect of a
decision rendered against it. [Emphasis added.]
[62]
In R. v. Litchfield, [1993] 4 S.C.R. 333,
the criminal case referred to in Garland, the Court declined to apply
the rule against collateral attack. In Garland itself, class action
plaintiffs brought a claim against a gas company seeking restitution on the
grounds of unjust enrichment of late payment penalties previously approved by
the Ontario Energy Board. In its defence, the gas company argued that the claim
for restitution was a collateral attack on the Board’s order. The defence
failed.
[63]
I do not think the Attorney General’s collateral
attack argument can succeed on this appeal for three reasons. Firstly, as
Borins J.A. pointed out in his scholarly judgment, the doctrine of collateral
attack may be raised by the Attorney General in the provincial superior court
as a defence if he or she believes that, in the particular circumstances, to do
so is appropriate. However, the possible availability of the defence is not an
argument against provincial superior court jurisdiction. Nor does it justify
inserting the Federal Court into every claim for damages predicated on an
allegation that the government’s decision that caused the loss was “invalid or
unlawful”.
[64]
Secondly, TeleZone is not seeking to “avoid the
consequences of [the ministerial] order issued against it” (Garland, at
para. 72). On the contrary, the ministerial order and the financial losses
allegedly consequent on that order constitute the foundation of the damages
claim. This was the result in Garland itself, where Iacobucci J. held
for the Court:
Based on a plain reading of this rule, the
doctrine of collateral attack does not apply in this case because here the
specific object of the appellant’s action is not to invalidate or render
inoperative the Board’s orders, but rather to recover money that was
illegally collected by the respondent as a result of Board orders.
Consequently, the collateral attack doctrine does not apply. [Emphasis added; para.
71.]
[65]
Similarly in Toronto (City) v. C.U.P.E.,
Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77, Arbour J. declined to apply the
collateral attack doctrine in a case arising out of a grievance arbitration
where CUPE sought to challenge the underlying facts of a conviction of one of
its members for sexual assault. Arbour J. reasoned that the Union’s argument
was “an implicit attack on the correctness of the factual basis of the
decision, not a contest about whether that decision has legal force, as clearly
it does” (para. 34).
[66]
Thirdly, the Attorney General’s argument fails
even if one takes a more expansive view of the doctrine of collateral attack,
as does Professor David Mullan:
The cause of action [in Garland]
depended necessarily on establishing the invalidity of the Board’s order on
which the utility was relying in collecting interest. If the order had been
valid, there would have been no cause of action. This was in every sense a
collateral attack on the Board’s orders. Collateral attack is not and never
has been confined to situations where the challenge is by way of resistance to
the enforcement of an order. It is also implicated in situations where
someone, in asserting a civil claim for monetary or other relief, needs to
attack a law or order that the defendant is advancing as justification for the
actions on which the plaintiff’s claim is based. . . . [Emphasis added.]
(D. J. Mullan, “Administrative Law
Update — 2008-2009”, prepared for the Continuing Legal Education
conference, Administrative Law Conference—2009, October 2009, at
p. 1.1.22.)
In
Professor Mullan’s view, the Court in Garland should have taken what he
sees as the more principled route of applying the factors in Consolidated
Maybrun to determine whether the collateral attack was of a permissible
variety. In that case, as set out in the judgment of L’Heureux-Dubé J., the
appropriate factors to apply in determining whether the Court is confronted
with an impermissible collateral attack on an administrative order are (1) the
wording of the statute from which the power to issue the order derives; (2) the
purpose of the legislation; (3) the availability of an appeal; (4) the nature
of the collateral attack in light of the tribunal’s expertise and raison
d’être (including whether “the legislature intended to confer jurisdiction
to hear and determine the question raised”); and (5) the penalty on a
conviction for failing to comply with the order (paras. 45, 50-51 and 62).
These factors have also been applied in the civil context; see, generally, K.
Horsman and G. Morley, eds., Government Liability: Law and Practice
(loose-leaf), at p. 11-9.
[67]
Judicial doctrine necessarily yields to a
contrary statutory enactment. Accepting, as Professor Mullan puts it, at p.
1.1.22, that the rule against collateral attack may be “implicated in
situations where someone, in asserting a civil claim for monetary or other
relief, needs to attack a law or order that the defendant is advancing as
justification for the actions on which the plaintiff’s claim is based”, the s.
17 statutory grant of concurrent jurisdiction again defeats the Attorney
General’s submission. This is because the claimant’s “need to attack a law or
order” is essential to its cause of action, and adjudication of that allegation
(even if raised by way of reply) is a necessary step in disposing of the
claim. Parliament has stated that provincial superior courts possess the
concurrent necessary jurisdiction to dispose of the whole of such a claim, not
just part of it.
[68]
In summary, I agree with Borins J.A. that the Grenier
approach cannot be justified by the rule against collateral attack.
G. The
Defence of Statutory Authority
[69]
It would also be open to the Crown, by way of
defence to a damages action, to argue that the government decision maker was
acting under a statutory authority which precludes compensation for consequent
losses. This, again, is a matter of defence, not jurisdiction. It is a hurdle
facing any claimant. Governments make discretionary decisions all the time
which will inflict losses on people or businesses without conferring any cause
of action known to the law.
[70]
In a case of nuisance, for example, the claimant
property owner may have all the elements of a good common law action in nuisance
yet be defeated by the defence that the government was authorized to do what it
did and that collateral damage to the claimant was an inevitable result of the
authority so provided. See, e.g., P. W. Hogg and P. J. Monahan, Liability
of the Crown (3rd ed. 2000), at p. 139, and Horsman and Morley, at p. 6-41.
[71]
However, as stated earlier, the defence of
“statutory authority” will not always provide a complete answer to a damages
claim. In some cases, the outcome may depend on whether the statute either
explicitly or implicitly authorized the act that caused the harm. In Tock
v. St. John’s Metropolitan Area Board, [1989] 2 S.C.R. 1181, Sopinka J.
pointed out, referring to the dictum of Viscount Dunedin in City of
Manchester v. Farnworth, [1930] A.C. 171 (H.L.), that there may be
“alternate methods of carrying out the work [that would have avoided the loss].
The mere fact that one is considerably less expensive will not avail. If only
one method is practically feasible, it must be established that it was
practically impossible to avoid the nuisance” (p. 1226). Reference should also
be made to the qualifying observation of what is “practically impossible” made
by Viscount Dunedin and quoted by Sopinka J., at p. 1224:
The onus of proving that the result is
inevitable is on those who wish to escape liability for nuisance, but the
criterion of inevitability is not what is theoretically possible but what is
possible according to the state of scientific knowledge at the time, having
also in view a certain common sense appreciation, which cannot be rigidly
defined, of practical feasibility in view of situation and of expense.
[Emphasis added.]
This
caveat, also quoted by Wilson J., at p. 1213 of Tock, was the subject of
some disagreement on the Court, an issue that need not detain us. The issue of
statutory authority does not go to the jurisdiction of the provincial superior
courts. That is all that needs to be decided here.
[72]
It is sufficient to say that it is always open
to the Crown to argue the defence of statutory authority; see, e.g., in s. 8 of
the Crown Liability and Proceedings Act :
Nothing in
sections 3 to 7 makes the Crown liable in respect of anything done or omitted
in the exercise of any power or authority that, if those sections had not been
passed, would have been exercisable by virtue of the prerogative of the Crown,
or any power or authority conferred on the Crown by any
statute . . . .
The
defence of statutory authority is regularly interpreted and applied by the
provincial superior courts: see, e.g., Sutherland v. Canada (Attorney
General), 2002 BCCA 416, [2002] 10 W.W.R. 1, leave to appeal refused,
[2003] 1 S.C.R. xi (sub nom. Jones v. Attorney General of Canada); Lake
v. St. John’s (City), 2000 NFCA 48, 192 Nfld. & P.E.I.R. 84; Neuman
v. Parkland (County), 2004 ABPC 58, 36 Alta. L.R. (4th) 161; Danco v.
Thunder Bay (City) (2000), 13 M.P.L.R. (3d) 130 (Ont. S.C.J.); Landry v.
Moncton (City), 2008 NBCA 32, 329 N.B.R. (2d) 212.
[73]
I give an example. In Ryan v. Victoria
(City), the “inevitable result” defence was tested in a claim for damages
arising out of road works. Mr. Ryan, a motorcyclist, sued the municipality and
a railway for negligence and nuisance after he was injured while crossing
tracks in an urban area. The front wheel of the plaintiff's motorcycle got
caught in the flangeway gap of the rail whose width was at the upper end of the
allowed range set by the applicable regulation. The defence argued statutory
authority. Writing for a unanimous Court, Major J. noted that “[s]tatutory authority
provides, at best, a narrow defence to nuisance” (para. 54), and rejected it on
the facts of the case.
[74]
For present purposes, we need go no further than
to repeat that “statutory authority” is an argument that goes to defence, not
jurisdiction. If the provincial superior court (or the Federal Court under s.
17 ) finds that the government has a good defence based on statutory authority,
it will simply dismiss the claimant’s action.
H. The
Concern About “Artful Pleading”
[75]
The Crown contends that TeleZone’s argument
would risk putting judicial review of federal decision makers back in the
provincial superior courts dressed up as damages claims. On this view the
“artful pleader” will forum-shop by the way the case is framed. Of course,
“artful pleaders” exist and they will formulate a claim in a way that best
suits their clients’ interests. However, no amount of artful pleading in a
damages case will succeed in setting aside the order said to have harmed the
claimant or enjoin its enforcement. Such relief is not available in the
provincial superior court. The claimant must, as here, be content to take its
money (if successful) and walk away leaving the order standing.
[76]
Where a plaintiff’s pleading alleges the
elements of a private cause of action, I think the provincial superior court
should not in general decline jurisdiction on the basis that the claim looks
like a case that should be pursued on judicial review. If the plaintiff has a
valid cause of action for damages, he or she is normally entitled to pursue
it.
[77]
In the U.K., a similar position has been
expressed by the House of Lords in Roy v. Kensington and Chelsea and
Westminster Family Practitioner Committee, [1992] 1 A.C. 624, per
Lord Bridge, at pp. 628-29:
. . . where
a litigant asserts his entitlement to a subsisting right in private law,
whether by way of claim or defence, the circumstance that the existence and
extent of the private right asserted may incidentally involve the examination
of a public law issue cannot prevent the litigant from seeking to establish his
right by action commenced by writ or originating summons, any more than it can
prevent him from setting up his private law right in proceedings brought
against him.
It
is generally true here, as it is in the U.K., that a plaintiff is not required
to bring an application for judicial review so long as private rights are
legitimately engaged by the action. Under the English authorities, as in
Canada, there is a special concern where the availability of judicial review
depends on special leave, or is restricted by an abbreviated limitation period,
or where the relief available on judicial review is discretionary (Roy, per
Lord Lowry, at p. 654). See also P. P. Craig, Administrative Law (6th
ed. 2008), at p. 869. These considerations echo the concerns already canvassed
in rejecting the Grenier approach.
[78]
To this discussion, I would add a minor caveat.
There is always a residual discretion in the inherent jurisdiction of the
provincial superior court (as well as in the Federal Court under s. 50(1) of
its Act), to stay the damages claim because in its essential character, it is a
claim for judicial review with only a thin pretence to a private wrong.
Generally speaking the fundamental issue will always be whether the claimant
has pleaded a reasonable private cause of action for damages. If so, he or she
should generally be allowed to get on with it.
I. Application
to the Facts
[79]
TeleZone is not attempting to nullify or set
aside the Minister’s order. Its case is that the Minister, in deciding not to
issue a licence to TeleZone, acted in breach of his contractual and equitable
duties or in breach of a duty of care. TeleZone does not say that the
Minister’s decision should be quashed. On the contrary, TeleZone’s causes of
action in contract, tort and equity are predicated on the finality of that
decision excluding TeleZone from participation in the telecommunications
market, thereby (it says) causing it financial loss. Nor does TeleZone seek to
deprive the Minister’s decision of any legal effect. It does not challenge the
licences issued to its competitors. It does not seek to undo what was done.
It complains about what was not done, namely fulfilment by Industry
Canada of its alleged contractual and equitable duties and its duty of care
towards TeleZone itself.
[80]
To the extent that TeleZone’s claim can be
characterized as a collateral attack on the Minister’s order (i.e., because the
order failed to include TeleZone), I conclude, for the reasons discussed, that
the grant of concurrent jurisdiction to determine claims against the Crown to
the provincial superior courts negates any inference the Crown seeks to draw
that Parliament intended the detour to the Federal Court advocated by Grenier.
The TeleZone claim as pleaded is dominated by private law considerations. In a
different case, on different facts, the Attorney General is free to raise
“collateral attack” as a defence and the superior court will consider and deal
with it.
V. Disposition
[81]
The Superior Court of Ontario has jurisdiction
over the parties and the subject matter, and has the power to grant the remedy
of damages. There is nothing in the Federal Courts Act to prevent the
Ontario Superior Court from adjudicating this claim. I would dismiss the appeal
with costs.
Appeal
dismissed with costs.
Solicitor for the
appellant: Attorney General of Canada, Ottawa.
Solicitors for the
respondent: Stikeman Elliott, Toronto.