Dockets: T-455-16
T-456-16
Citation:
2017 FC 121
Ottawa, Ontario, January 31, 2017
PRESENT: The
Honourable Mr. Justice Barnes
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PROPOSED
CLASS PROCEEDINGS
AND PROPOSED SIMPLIFIED ACTION
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Docket: T-455-16
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BETWEEN:
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CHRISTOPHER
JOHN WHALING
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Plaintiff
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and
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ATTORNEY
GENERAL OF CANADA
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Defendant
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Docket: T-456-16
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AND BETWEEN:
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WILLIAM WEI LIN
LIANG
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Plaintiff
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and
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ATTORNEY
GENERAL OF CANADA
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Defendant
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JUDGMENT AND REASONS
[1]
The Defendant, the Attorney General of Canada,
brings two motions to strike the Statements of Claim filed in the two
proceedings styled above. These reasons are intended to apply to both motions
and will accordingly be filed in T-456-16 and T-455-16.
[2]
The Plaintiffs in these two proceedings,
Christopher John Whaling and William Wei Lin Liang, brought their respective
claims in the form of proposed class actions. Each Statement of Claim asserts
a cause of action alleging a breach of section 11 of the Canadian Charter of Rights and Freedoms, Part
I of the Constitution Act, 1982, being Schedule B to the Canada
Act 1982 (UK), 1982, c 11 [Charter] and seeking damages pursuant to section 24(1) of
the Charter. The proposed classes of claimants are those federal
inmates whose rights to accelerated parole review were removed by the retrospective
application of the Abolition of Early Parole Act, SC 2011, c 11. It is
common ground that the attempt by Parliament to apply this legislative change
retrospectively was ultimately held to be unconstitutional because, in Mr.
Whaling’s case, it violated the section 11(h) Charter rights of three
already sentenced inmates not to be punished again for the same offence. In
other words, the retrospective application of the law represented a prohibited
form of double jeopardy: see Canada (Attorney General) v Whaling, 2014
SCC 20, [2014] 1 S.C.R. 392 [Whaling]. In the case of Mr. Liang, the Charter
violation was found to arise under section 11(i) which extends to a guilty
person the benefit of lesser punishment in the face of a legislative change
occurring between the dates of the commission of the offence and sentencing:
see Liang v Canada (Attorney General), 2014 BCCA 190, 355 BCAC 238 [Liang].
[3]
Notwithstanding the prior determination of these
Charter breaches, the Defendant moves to strike these actions under Rule
221(1)(a) of the Federal Courts Rules, SOR/98-106, on the basis
that the Statements of Claim disclose no reasonable cause of action. In
particular, the Defendant says that the asserted claims cannot succeed in the
face of Parliamentary (or legislative) immunity for the consequences flowing
from the passage of unconstitutional legislation. The present pleadings, it is
argued, are insufficient to overcome this significant legal obstacle. The
Defendant also asserts that these actions are statute barred and should be
struck based on estoppel and abuse of process principles.
[4]
The Plaintiffs have responded to these challenges
by filing amended Statements of Claim offering
further support for their proposed causes of action. They say their new allegations
are sufficient to survive a motion to strike. The key passage in the proposed
amended Statements of Claim said to support the proceedings moving ahead is paragraph 9
and, in particular, the added underlined allegations:
9.
As set out by the Record of Proceedings in Parliament, this repeal was
intended to be prospective affecting only those subsequently convicted or
sentenced but shortly before the Federal election because of the case Earl
Jones in Quebec, a large white collar criminal fraudster and the extensive
media notoriety his case engendered, the legislation introduced provided by
virtue of s.10(1) that the repeal be applied retrospectively or retroactively
in order to ensure that this particular individual and inevitably others
already eligible for APR would have it taken away retroactively, in furtherance
of the Conservative Party of Canada’s “Tough on Crime” election campaign
agenda. The Defendant acted recklessly, in a grossly negligent manner, in bad
faith and/or in abuse of its power by proposing, pursuing and passing a bill in
to law which it knew or ought to have known was unconstitutional and would
infringe the rights of those to whom it applied, and did so motivated by
political self-interest.
[5]
The Plaintiffs’ theory of liability emerged with
some additional clarity during oral argument in response to arguments put
forward by counsel for the Defendant and questions from the Court. To the Defendant’s
argument that the proposed pleadings, as written, fail to distinguish between
the conduct of the executive and legislative branches of government, the
Plaintiffs assert that both should be treated, in this context at least, as a
single entity. This is so, they say, because the executive branch knowingly
and wrongfully proposed an unconstitutional legislative provision to Parliament
and forced its will by whipping the vote in both Houses. The argument is that
the Court should, at this early stage, entertain a cause of action based on
practical political realities and ignore the de jure separation of
responsibilities. For that point, the Plaintiffs rely on the general
references in Mackin v New Brunswick, 2002 SCC 13, [2002] 1 S.C.R. 405 [Mackin]
to “governmental action”, “the government of New Brunswick” and “the government and its representatives” without any
seeming regard for the separation of law-making functions in the context of a
claim to Charter damages arising from the passage of unconstitutional
legislation.
[6]
The Plaintiffs also rely on other passages in Mackin,
above, suggesting a low threshold for government liability for damages for the
passage of unconstitutional legislation, such as where conduct is “clearly wrong” or “negligent.”
I.
General Principles
[7]
The general principles that apply to a motion to
strike in a case like this are not in dispute.
[8]
In Blackshear v Canada, 2013 FC 590, [2013]
FCJ No 613 (QL), Prothonotary Roger Lafrenière discussed the approach
to be taken to motions to strike for disclosing no reasonable cause of action:
[3] On a motion to strike a pleading
on the grounds that it does not disclose a reasonable cause of action, those
allegations that are capable of being proved must be taken as true: Hunt v
Carey Canada Inc [1990] 2 S.C.R. 959. This rule does not apply, however, to
allegations based on assumptions and speculation: Operation Dismantle Inc v
The Queen (1985), 18 DLR (4th) 481 (SCC) at 486-487 and 490-491. The
Statement of Claim should also be read generously with allowance for
inadequacies due to drafting deficiencies. However, the Court need not accept
at face value bare allegations, factual allegations which may be regarded as
scandalous, frivolous or vexatious, or legal submissions dressed up as factual
allegations.
[9]
In Henry v British Columbia (Attorney
General), 2015 SCC 24, [2015] 2 S.C.R. 214 [Henry], the Court dealt
with a challenge to a pleading that advanced a claim to Charter damages
arising from allegations of prosecutorial misconduct. As in this case, the
Crown moved to strike the claim on the basis of its assertion of immunity. The
underlying question involved the scope of the immunity. The Court described
the need for adequate pleadings in such a context in the following passage:
[43] When a heightened per se
liability threshold has been imposed, this will have consequences at the
pleadings stage. To survive a motion to strike, a claimant must plead
sufficient facts to disclose a reasonable cause of action: see R. v.
Imperial Tobacco Canada Ltd., 2011 SCC 42, [2011] 3 S.C.R. 45. If the
alleged Charter violation occurs in a context where courts have imposed
a heightened per se liability threshold, the claimant must particularize
facts that, if proven, would be sufficient to establish that the state conduct
met the required threshold of gravity. The failure to do so will be fatal to
the claim. With these principles in mind, I turn to the applicable threshold
for wrongful non-disclosure by prosecutors.
[10]
The requirement for pleading sufficient material
facts to support a viable theory of liability was also discussed in Mancuso
v Canada (National Health and Welfare), 2015 FCA 227, [2015] FCJ No 1245
(QL). There the Court was faced with a Crown motion to strike a Statement of
Claim seeking to recover, in part, Charter damages arising from the
passage of ostensibly unconstitutional legislation. The Court upheld the
underlying decision striking the pleading in its entirety on the following
basis:
[16] It is fundamental to the trial
process that a plaintiff plead material facts in sufficient detail to support
the claim and relief sought. As the judge noted “pleadings play an important
role in providing notice and defining the issues to be tried and that the Court
and opposing parties cannot be left to speculate as to how the facts might be
variously arranged to support various causes of action.”
[17] The latter part of this
requirement – sufficient material facts – is the foundation of a proper
pleading. If a court allowed parties to plead bald allegations of fact, or mere
conclusory statements of law, the pleadings would fail to perform their role in
identifying the issues. The proper pleading of a statement of claim is
necessary for a defendant to prepare a statement of defence. Material facts
frame the discovery process and allow counsel to advise their clients, to
prepare their case and to map a trial strategy. Importantly, the pleadings
establish the parameters of relevancy of evidence at discovery and trial.
[18] There is no bright line between
material facts and bald allegations, nor between pleadings of material facts
and the prohibition on pleading of evidence. They are points on a continuum,
and it is the responsibility of a motions judge, looking at the pleadings as a
whole, to ensure that the pleadings define the issues with sufficient precision
to make the pre-trial and trial proceedings both manageable and fair.
[19] What constitutes a material fact
is determined in light of the cause of action and the damages sought to be
recovered. The plaintiff must plead, in summary form but with sufficient
detail, the constituent elements of each cause of action or legal ground
raised. The pleading must tell the defendant who, when, where, how and what
gave rise to its liability.
[20] The requirement of material facts
is embodied in the rules of practice of the Federal Courts and others: see Federal
Courts Rules, Rule 174; Alta. Reg. 124/2010, s. 13.6; B.C. Reg. 168/2009,
s. 3-1(2); N.S. Civ. Pro. Rules, s. 14.04; R.R.O. 1990, Reg. 194, s. 25.06.
While the contours of what constitutes material facts are assessed by a motions
judge in light of the causes of action pleaded and the damages sought, the
requirement for adequate material facts to be pleaded is mandatory. Plaintiffs
cannot file inadequate pleadings and rely on a defendant to request
particulars, nor can they supplement insufficient pleadings to make them
sufficient through particulars: AstraZeneca Canada Inc. v. Novopharm Limited,
2010 FCA 112.
…
[26] A properly pleaded tort claim
identifies the particular nominate tort alleged and sets out the material facts
needed to satisfy the elements of that tort. As the judge pointed out, while
the appellants assert various torts including misfeasance in public office,
they do not link particular conduct to the elements of the tort. For example,
the tort of misfeasance in public office requires a pleading of a particular
state of mind by a public official – deliberate, specific conduct which the
official knows to be inconsistent with their legal obligations: Odhavji
Estate v. Woodhouse, 2003 SCC 69; St. John's Port Authority v. Adventure
Tours Inc., 2011 FCA 198; Merchant Law Group v. Canada Revenue Agency,
2010 FCA 184. The statement of claim in this case does not meet that standard.
[27] The bald assertion of a conclusion
is not a pleading of material fact. The judge properly struck many of the
paragraphs underlying the tort claims on the basis that without more, these
were conclusory statements. He also found that the allegations of bad faith and
abuse of power comprised a set of statements or conclusions and did not meet
the standard of pleading described in Merchant Law at paras. 34-35.
[28] The judge assessed the allegations
of tortious conduct in the implementation and enforcement of the Regulations
against these principles and concluded that the appropriateness of the
enforcement measures could only be assessed in the light of the facts and
context of a particular action or series of actions. What was pleaded, however,
was a general practice, with no specific instances, leaving it unclear as to
whether the conduct was “something mandated by the Act or the Regulations, or
conduct set out in some administrative policy of directive, or whether they are
referring to what individual officials have chosen to do” (Reasons for Decision
at para. 106).
G. Damages
[29] Relying on Mackin and Ward,
the judge correctly dismissed the claim for relief under sections 24(1) of the Constitution
Act, 1982: Mackin v. New Brunswick (Minister of Finance); Rice v. New
Brunswick, [2002] 1 S.C.R. 405, 2002 SCC 13; Vancouver (City) v. Ward,
[2010] 2 S.C.R. 28, 2010 SCC 27; Henry v. British Columbia (Attorney
General), 2015 SCC 24. As a general rule, damages are not available from
harm arising from the application of a law which is subsequently found to be
unconstitutional, without more. The plaintiffs pleaded that the respondents’ conduct
was “clearly wrong, in bad faith or an abuse of power” – one of the elements
typically required in order to found a damages claim under section 24(1) of the
Charter – but failed to supply material facts on the question of how the Regulations
and their enforcement constitute serious error, bad faith or abuse so as to
trigger an entitlement to Charter damages. They also fail to give any
particulars of any conduct that would support a damages claim.
Also see Merchant Law Group v Canada
Revenue Agency, 2010 FCA 184 at paras 34 and 40, 321 DLR (4th) 301.
II.
Application of Legal Principles to this Case
[11]
I turn now to the application of the above legal
principles to the pleadings in this case.
[12]
The Plaintiffs’ allegations of recklessness, bad
faith and abuse of power appear to be unobjectionable and arguably address the
issue of Parliamentary immunity discussed in Mackin, above, at
para 78. These allegations are, however, insufficient on their own to
defeat a motion to strike. It is well established in the jurisprudence that
such conclusory pronouncements must be supported by the assertion of material
facts. That is where the pleadings come up short.
[13]
The Plaintiffs maintain that the requisite
material facts are found in the reference to the “proposing,
pursuing and passing a bill in to law which [the Defendant] knew or ought to
have known was unconstitutional and would infringe the rights of those to whom
it applied, and did so motivated by political self-interest.”
[14]
The question that remains is whether the above
statement is one of material fact or simply another unsupported conclusion. In
my view, it is the latter and, in any event, it is insufficient to inform the
Defendant of the case to be met. Broken down, the amended plea is simply a
factually unsupported allegation that the Defendant passed into law a statutory
amendment that it knew or ought to have known was unconstitutional. The added
assertion of a political motivation adds nothing of legal significance because
all legislative initiatives are the creatures of political motives in some form.
What is entirely absent from the pleading is any assertion of material fact
that would tend to establish the liability threshold necessary to obtain Charter
damages for the passage of unconstitutional legislation.
[15]
I accept the Plaintiffs’ point that no
bright-line test for grounding liability in cases like this emerges from the
decision in Mackin, above. What does emerge from the majority judgment
are some general impressions coupled with considerable uncertainty about where
the boundaries of the limited immunity for legislative action begin and end. At
various places in the judgment the Court indicates that legislative immunity
for Charter damages may not be available for the exercise of
governmental action that is “clearly wrong,” “in bad faith,” “an abuse of
power,” “negligent,” brought with an “unreasonable attitude” or for “ulterior motives,” or “with
knowledge of … unconstitutionality,” or that fails to “respect the ‘established and indisputable’ laws that define
the constitutional rights of individuals.” Whether the test is
subjective, objective or something in between is left unanswered.
[16]
What is also lacking from the judgment in Mackin,
above, is any discussion of the principles of justiciability that typically
guide any judicial intrusion into the business of Parliament. In Friends of
the Earth v Canada, 2008 FC 1183, [2009] 3 FCR 201, I observed that the
courts are often ill-equipped to second-guess the public policy considerations or
motivations that inform the legislative process:
[24] The parties do not disagree about
the principles of justiciability but only in their application in these
proceedings. They agree, for instance, that even a largely political question
can be judicially reviewed if it “possesses a sufficient legal component to
warrant a decision by a court”: see Reference Re Canada Assistance Plain
(B.C.), [1991] 2 S.C.R. 525 at para. 27, 83 D.L.R. (4th) 297. The
disagreement here is whether the questions raised by these applications contain
a sufficient legal component to permit judicial review. The problem, of course,
is that “few share any precise sense of where the boundary between political
and legal questions should be drawn”: see Lorne M. Sossin, Boundaries of
Judicial Review: The Law of Justiciability in Canada (Scarborough:
Carswell, 1999) at p. 133.
[25] One of the guiding principles of
justiciability is that all of the branches of government must be sensitive to
the separation of function within Canada’s constitutional matrix so as not to
inappropriately intrude into the spheres reserved to the other branches: see Doucett-Boudreau
v. Nova Scotia (Minister of Education), 2003 SCC 62, [2003] 3 S.C.R. 3 at
paras. 33 to 36 and C.U.P.E. v. Canada (Minister of Health), 2004 FC
1334 at para. 39, 244 D.L.R. (4th) 175. Generally a court will not involve
itself in the review of the actions or decisions of the executive or
legislative branches where the subject matter of the dispute is either
inappropriate for judicial involvement or where the court lacks the capacity to
properly resolved [sic] it. These concerns are well expressed in Boundaries
of Judicial Review: The Law of Justiciability in Canada, above, at pp. 4
and 5:
Appropriateness not only includes
both normative and positive elements, but also reflects an appreciation for
both the capacities and legitimacy of judicial decision-making. Tom Cromwell
(now Mr. Justice Cromwell of the Nova Scotia of Appeal) summarized this
approach to justiciability in the following terms:
The justiciability
of a matter refers to its being suitable for determination by a court.
Justiciability involves the subject matter of the question, the manner of its
presentation and the appropriateness of judicial adjudication in light of these
factors. This appropriateness may be determined according to both
institutional and constitutional standards. It includes both the question of
the adequacy of judicial machinery for the task as well as the legitimacy of
using it.
While it is helpful to develop
the criteria for a determination of justiciability, including factors such as
institutional capacity and institutional legitimacy, it is necessary to leave
the content of justiciability open-ended. We cannot state all the reasons why a
matter may be non-justiciable. While justiciability will contain a diverse and
shifting set of issues, in the final analysis, all one can assert with
confidence is that there will always be, and always should be, a boundary
between what courts should and should not decide, and further, that this
boundary should correspond to predictable and coherent principles. As Galligan
concludes, “Non-justiciability means no more and no less than that a matter is
unsuitable for adjudication.”
[Footnotes omitted.] [Emphasis in
original.]
[17]
On the basis of the above concerns one is left
to wonder how a court is to discern the institutional motivations or knowledge
of Parliament when it passes legislation and whether a court should ever
attempt such an exercise. Would some awareness that a Bill is constitutionally
vulnerable be enough to ground a claim to Charter damages or must there
be evidence of institutional negligence, willful blindness or bad faith? In the
context of a search for Parliamentary intent these are questions that are not
readily amenable to or appropriate for judicial determination and, in my view,
are not justiciable. Indeed, it is apparent from the judgment in Whaling,
above, that the Court had real difficulty in ascertaining a Parliamentary
purpose from the Hansard comments of individual members of Parliament: see paras
66-68.
[18]
It may be that a prima facie claim to section
24(1) Charter damages ought to be available in the face of an ex post
facto judicial determination of unconstitutionality. This would leave the
availability of Charter damages in cases like this to a judicial
assessment of the functional considerations discussed in the following passage
from Vancouver (City) v Ward, 2010 SCC 27, [2010] 2 S.C.R. 28 [Ward]:
[4] ….The first step in the inquiry
is to establish that a Charter right has been breached. The second step
is to show why damages are a just and appropriate remedy, having regard to
whether they would fulfill one or more of the related functions of
compensation, vindication of the right, and/or deterrence of future breaches. At
the third step, the state has the opportunity to demonstrate, if it can, that
countervailing factors defeat the functional considerations that support a
damage award and render damages inappropriate or unjust. The final step is to
assess the quantum of the damages.
[19]
This is the approach to section 24(1) that was
adopted by the minority in Henry, above, where the Charter breach
arose from prosecutorial non-disclosure and where proof of intent was said to
be unnecessary.
[20]
Another possible approach would maintain a per
se liability threshold but based on the objective standard of what
Parliament ought to have known about the constitutionality of its legislation. This
was essentially the approach adopted by the majority in Henry, above,
where either actual or imputed prosecutorial knowledge of the facts
constituting a Charter breach were said to be sufficient to support a
claim to section 24(1) damages.
[21]
There is arguably no overriding rationale for
denying compensation to a person whose liberty interests have been infringed by
the passage of manifestly unconstitutional legislation. While Ward,
above, identified a legitimate concern about a “chill”
on the “exercise of policy-making discretion,” the
prospect of such a recovery might also serve to reinforce the constitutional
obligations of the executive and legislative branches and thereby check any
tendency to overreach. In fact, in Mackin, above, the Court
acknowledged the need to find “a balance between the
protection of constitutional rights and the need for effective government”:
see para 79.
[22]
These same competing interests were very
recently considered in Ernst v Alberta, 2017 SCC 1, [2017] SCJ No 1 (QL)
[Ernst]. There, too, the matter came before the Court on a Crown motion
to strike a claim for Charter damages based on a statutory immunity
provision. Writing for the majority, Justice Thomas Cromwell observed at
paragraph 27 that the remedy of Charter damages is “limited to situations in which it is ‘appropriate and just’
because it serves one or more of the compensatory, vindicatory and deterrent
purposes which support that choice of remedy.” One of the fundamental
concerns of the majority was the need to preserve effective governance – a
point that was countered by Chief Justice Beverley McLachlin who, in
dissent, noted, at paragraph 169, the salutary value of Charter damages
as a means of enhancing good governance.
[23]
The division in thinking at the Supreme Court on
the availability of Charter damages in the face of common law and
statutory immunities protecting state actors appears to be quite profound. In
a recent web-based article by Jeff Beedell, Matthew Estabrooks and John J Wilson
of Gowling WLG,
the split evidenced by the opinions expressed in Ernst, above, was
described in the following way:
It is unlikely that the question of whether
and to what extent Charter damages are available under the Ward
analysis as a remedy available for the actions of administrative tribunals has
been finally settled by a divided Court. While the reasons of Justice Cromwell
and Justice Abella, read together, reflect a majority decision that Charter
damages are (likely) not an appropriate and just remedy in these circumstances,
the three sets of reasons delivered in Ernst form a kind of continuum
between the opposing values of “good governance” (meaning the independence and
impartiality of adjudicators/regulators) and the need to ensure that Charter
breaches are meaningfully redressed. It remains to be seen where along that
continuum the Court will next go.
[24]
In the face of the above-noted jurisprudence,
one can reasonably ask whether the functions of vindication and deterrence are
adequately recognized by a bare declaration of invalidity, particularly when
the harm occasioned by the passage of unconstitutional legislation results in
the loss of one’s physical freedom – that being “the
most severe deprivation of liberty known to our law”: see Liang,
above, at para 44, citing R v Wigglesworth, [1987] 2 S.C.R. 541
at 562, 45 DLR (4th) 235.
[25]
All of this is not to say that any theory of
liability need be entertained. For example, the theory expounded by the
Plaintiffs in oral argument for a blending of the executive and legislative
functions has, in this case at least, no prospect for success. That is so
because the legislation that is the subject of this action was proposed and
passed into law by a minority government with the support of members of the
opposition.
In short, the vote was not whipped or coerced by the executive branch acting
abusively or in bad faith. And even then there remains a clear dichotomy “between the executive and Parliament” that the courts
are obliged to accept: see Canada v Courtoreille, 2016 FCA 311 at
para 54, [2016] FCJ No 1389 (QL). Finally, there is nothing in the
proposed Statements of Claim that articulates the Plaintiffs’ newly advanced
theory of liability.
[26]
As discussed above, the Statements of Claim as
presently constituted fail to meet the legal requirements set out in Henry,
above, and, on that basis, they are struck out in their entirety.
[27]
What remains for determination is whether the
Court should permit the Plaintiffs to amend their pleadings and to propose a
fresh theory of liability that might be viable. The test for granting leave to
amend is whether the defect in the pleading is potentially curable: see Simon
v Canada, 2011 FCA 6 at para 8, [2011] FCJ No 32 (QL).
[28]
Notwithstanding the fatal flaws in the present
Statements of Claim, I am mindful of the admonition in Henry, above,
that the boundaries for accessing Charter damages, particularly in cases
like this one, are in the early stages of judicial development and should not
be unduly stifled:
[35] Charter damages are a powerful
tool that can provide a meaningful response to rights violations. They also
represent an evolving area of the law that must be allowed to “develop
incrementally”: Ward, at para. 21. When defining the circumstances in
which a Charter damages award would be appropriate and just, courts must
therefore be careful not to stifle the emergence and development of this important
remedy.
Also see Ward, above, at paragraph 18,
cautioning against unduly constraining the broad discretion afforded by section
24(1), and Canada v Hislop, 2007 SCC 10, [2007] 1 S.C.R. 429, at
paragraph 103, referring to the need to allow for the evolution of the relevant
jurisprudence.
[29]
Given the uncertain boundaries that surround
legislative immunity as discussed in Mackin, above, and Henry,
above, I am not, at this point, able to say with confidence that no arguably viable
claim to Charter damages could ever be pleaded in the circumstances of
this case. For that reason, the Statements of Claim are struck but with leave
to refile.
[30]
I would add that the Defendant’s limitations
defence is not a barrier to this case going forward. The proposed class actions
involve federal inmates incarcerated in prisons across Canada. The fact that
both representative Plaintiffs were, at the material times, serving their
custodial sentences in British Columbia does not dictate that British Columbia
limitation periods apply to their claims or that other provincial limitation
periods would apply to the claims of the proposed members of the class.
[31]
It seems quite obvious to me that the causes of
action the Plaintiffs seek to advance are not ones that arise in the province
where any particular class member was held at the time of the passage of the
impugned legislation or thereafter. Rather, these are causes of action that
arose “otherwise than in a province” as
contemplated by section 39(2) of the Federal Courts Act, RSC, 1985,
c F-7. They are, therefore, subject to a six-year limitation period.
[32]
The rationale for uniformity of treatment in
situations like this was well articulated in Markevich v Canada, 2003
SCC 9, [2003] 1 S.C.R. 94, in the following passage:
38 Section 32 applies provincial
limitation laws to proceedings in respect of a cause of action arising in a
province, and a six-year limitation period to those which arise otherwise
than in a province. The motions judge, at para. 59, would have found that the
cause of action arose otherwise than in a province. The Court of Appeal
applied the provincial limitation provision and so, implicitly at least, found that
the cause of action arose in a province. In this appeal, the matter is of no
particular consequence, because in either case the limitation period runs for
six years from the date upon which the cause of action arose. Nonetheless, I
conclude that the appellant’s cause of action arose otherwise than in a
province, and hence that the six-year limitation period provided by s. 32
applies.
39 Tax debts created under the ITA
arise pursuant to federal legislation and create rights and duties between
the federal Crown and residents of Canada or those who have earned income
within Canada. The debt may arise from income earned in a combination of
provinces or in a foreign jurisdiction. The debt is owed to the federal Crown,
which is not located in any particular province and does not assume a
provincial locale in its assessment of taxes. Consequently, on a plain reading
of s. 32, the cause of action in this case arose “otherwise than in a province”.
40 A purposive reading of s. 32
supports this finding. If the cause of action were found to arise in a
province, the limitation period applicable to the federal Crown’s collection of
tax debts could vary considerably depending upon the province in which the
income was earned and its limitation periods. In addition to the
administrative difficulties that potentially arise from having to determine the
specific portions of tax debts that arise in different provinces, the
differential application of limitation periods to Canadian taxpayers could
impair the equitable collection of taxes. Disparities amongst provincial
limitation periods could foreseeably lead to more stringent tax collection in
some provinces and more lenient collection in others. The Court can only
presume that in providing for a limitation period of six years to apply to
proceedings in respect of a cause of action arising otherwise than in a
province, Parliament intended for limitation provisions to apply uniformly
throughout the country with regard to proceedings of the kind at issue in this
appeal.
[Emphasis added.]
[33]
For the above reasons and particularly because
the proposed class actions are brought in response to Parliamentary action,
pursuant to unconstitutional federal legislation and for the loss of a right
guaranteed by federal legislation, the claims can only be purposively seen to
arise “otherwise than in a province”. That
being so, even if the earliest possible date is chosen for the causes of action
to arise, being the date the impugned legislation came into force, the
Plaintiffs and other members of the proposed classes are not statute barred.
[34]
I also reject the Defendant’s contention, at least
at this early stage, that the actions should be struck on the basis of estoppel
or abuse of process principles. This argument is based on the point that a
party is required to put all of its case forward when it brings a claim for relief
and cannot litigate a cause of action on a piecemeal basis. Here it is argued
that the two representative Plaintiffs should have coupled their respective
claims to Charter damages with their earlier challenges to the
constitutionality of the subject legislation and should not be permitted to seek
damages in these subsequent actions.
[35]
Although I accept that the technical
requirements for establishing cause of action estoppel are present – at least
insofar as the representative Plaintiffs are concerned – I do not agree that
the defence should be applied to these cases.
[36]
The Court always has a residual discretion in
the application of estoppel or abuse of process defences – a discretion that
must be exercised with a view to ensuring that the requirements of justice are
met and that the Court’s processes are not abused: see Danyluk v Ainsworth
Technologies Inc, 2001 SCC 44 at para 33, [2001] 2 S.C.R. 460.
[37]
If these actions are reconstituted with proper
pleadings and ultimately certified as class proceedings, it would be inappropriate
to bar them on the basis of these defences. First and foremost, the members of
the proposed classes should not be prejudiced by the litigation conduct of the
representative Plaintiffs. In that sense, there is an absence of privity among
the interested parties and it would be unfair to the proposed class members at
this stage of the actions to bar their access to relief from the Court.
[38]
I am also mindful of the practical difficulties
faced by the representative Plaintiffs in bringing their initial constitutional
challenges. These included limitations on legal aid funding, the need for an
early determination of the constitutionality issue and the corresponding risk
of delay from including the damages claim in the first instance. These are all
matters that dictate that the persons affected by the unconstitutional removal
of access to earlier parole ought not be deprived of the opportunity to seek
monetary relief on the basis of estoppel or abuse of process.
[39]
For the foregoing reasons, the Defendant’s
motions to strike are allowed subject to the Plaintiffs’ rights to amend their
pleadings and refile. Having regard to the divided success of these motions
and to the nature of the proceedings on behalf of the proposed classes, no
costs are awarded.
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