Docket: T-81-17
Citation:
2017 FC 536
Ottawa, Ontario, May 31, 2017
PRESENT: The
Honourable Madam Justice Strickland
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BETWEEN:
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ELIZABETH
BERNARD
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Applicant
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and
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MINISTER OF
NATIONAL REVENUE
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Respondent
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JUDGMENT AND REASONS
[1]
This is an appeal, brought by the Applicant
pursuant to Rules 51 and 369 of the Federal Court Rules, SOR/98-106
(“Rules”), of the Order of Prothonotary Tabib, dated April 21, 2017, wherein
she stayed the Applicant’s application for judicial review until July 1, 2017.
[2]
Discretionary orders of prothonotaries should
only be interfered with when such decisions are incorrect in law or are based
on a palpable and overriding error in regard to the facts (Hospira
Healthcare Corporation v Kennedy Institute of Rheumatology, 2016 FCA 215 at
paras 64 and 79, application for leave to appeal to the Supreme Court of Canada
filed on December 9, 2016 in 2016 CarswellNat 7112 (WL)).
[3]
On January 18, 2017 the Applicant filed an
application for judicial review of the December 19, 2016 decision of the
Minister of National Revenue (“Minister”) to waive the reporting requirements
for all labour organizations and labour trusts, pursuant to s 149.01 of the Income
Tax Act, RSC, 1985, c 1 (5th Supp) (“ITA”), for fiscal periods starting in
2017.
[4]
Section 149.01 came into force on December 30,
2015 and requires such entities to provide information returns to the Canada
Revenue Agency (“CRA”), including detailed financial information, failure to
comply being an offence pursuant to s 239 (2.31)). Pursuant to s 149.01(4),
information contained in the information return shall be made available to the
public by the Minister, including by publication on the department’s website. Pursuant
to s 220 (2.1), the Minister has the discretion to waive the requirement to
file prescribed forms or information.
[5]
The Applicant is an employee in a unionized
workplace who pays union dues to a labour organization subject to s 149.01 of
the ITA.
[6]
On February 7, 2017, the Respondent brought a
motion seeking to strike out the application for judicial review and to suspend
all further steps in the litigation until the motion was addressed.
Alternatively, that the matter be held in abeyance pending the passing of Bill
C-4, subsequent to which the matter would be moot. This was because s 149.01
and s 239(2.31) would be repealed by Bill C-4 which, at the time of the motion,
was on second reading before the Senate.
[7]
The motion to strike raised a number of grounds,
lack of standing, mootness and abuse of process. The Prothonotary did not accept
these grounds but granted the alternate relief. She concluded that, although at
that time the matter could not be declared moot, Parliament had expressed a
clear intention to repeal s 149.01 and, given the legislation’s progress, it
was reasonable to believe that this would occur by July 1, 2017. Even in the
absence of the challenged waiver by the Minister, the earliest any union or
trust would be required to report pursuant to s 149.01 is July 1, 2017. The
Prothonotary concluded that staying the application until that date struck the
appropriate balance between avoiding needless expenditure of funds and
resources in the very likely event that the matter may become moot before the
waiver truly takes effect, and ensuring that in the event the legislation to
repeal the reporting requirement stalls or fails, the judicial review can
proceed without delay.
[8]
On April 12, 2017, the Senate passed Bill C-4,
with amendments, with the result that it was returned to the House of Commons
to consider the amendments.
[9]
The Applicant submits that the failure to
consider a required element of a legal test, or similar error in principle, can
be characterized as an error of law and subject to a standard of correctness (Housen
v Nikolaisen, 2002 SCC 33 at para 36). She asserts that there is no
evidence that the Prothonotary considered or applied the Apotex Inc v
Astrazeneca Canada Inc, 2003 FCT 149 (“Apotex”) test for applying s
50(1) of the Federal Courts Act, RSC, 1985, c F-7, which provision permits
the Court to stay a proceeding. Nor did the Respondent provide evidence or
argument to establish that the continuance of the action would work an
injustice because it would be oppressive or vexatious or would be an abuse of
process or that a stay would not cause an injustice to the Applicant.
Accordingly, the Respondent failed to meet its burden of proof.
[10]
The Applicant also submits that the Prothonotary
inappropriately deferred to the convenience of the Minister. Delaying the
matter on the possibility of legislative change is an error in principle and an
improper exercise of the Prothonotary’s discretion. Further, that it is the role
of the Court to hear and decide a citizen’s challenge, not to facilitate a
decision-maker’s obvious attempts to immunize her decision from judicial
oversight. The Court must apply the law as it currently exists. Staying a
proceeding while Parliament considers legislative changes is tantamount to
allowing the intrusion by the legislative branch upon matters entrusted to the
judicial branch. Further, even if the matter becomes moot the Court retains
the discretion to determine the matter (Borowski v Canada (Attorney General),
[1989] 1 S.C.R. 342). It was procedurally unfair for the Prothonotary to presume that
the matter would not proceed without giving the parties the opportunity to be
heard on this point.
[11]
For its part, the Respondent submits that the
Prothonotary properly determined that a stay of proceedings to July 1, 2017
would be in the interests of justice when both chambers of Parliament have
clearly spoken in favour of the repeal. The Prothonotary balanced the cost to
the justice system against the prejudice a stay might create to the Applicant
and her right to pursue her application. This balance was struck by selecting
a date before which no return can have become due, July 1, 2017, even if there
had been no waiver. The Prothonotary took into account the expenditure of public
funds necessary to carry on with the litigation of a matter that will very
likely become moot and balanced it against the Applicant’s lack of prejudice
when no return can possibly have become due. This approach is in keeping with
the applicable guiding principles (Coote v Lawyers’ Professional Indemnity
Company, 2013 FCA 143 at paras 8-11) (“Coote”)).
[12]
Having considered the Applicant’s submissions,
including those made in reply, as well as the submissions of the Respondent, I
am not persuaded that the Prothonotary erred in law.
[13]
In an application for judicial review, the Court
may, pursuant to s 18.2 of the Federal Courts Act, make any interim
order that it considers appropriate pending the final disposition of the
application. Pursuant to s 50(1)(b), the Court may, in its discretion, stay
any proceeding or matter where it is in the interest of justice to do so. And,
as set out in Rule 3, the Rules are to be interpreted and applied so as to
secure the just, most expeditious and least expensive determination of every
proceeding on its merits.
[14]
In Coote, the Federal Court of Appeal, in
the context of staying of appeals, found that the Court had jurisdiction to effect
a stay based on s 50 of the Federal Courts Act and its plenary jurisdiction to
manage and regulate its own proceedings. Further, that the three-part test in RJR-MacDonald
Inc v Canada (Attorney General), [1994] 1 S.C.R. 311 had no application. Rather,
in that circumstance the Court need only determine whether a stay is in the
interest of justice (Mylan Pharmaceuticals ULC v AstraZeneca Canada, Inc.,
2011 FCA 312 at paras 3-14 (“Mylan”); Federal Courts Act s 50(1)(b))
and stated:
[11] As explained in Mylan, there is
a difference between this Court issuing a stay to enjoin another body from
exercising its jurisdiction and this Court issuing a stay to refrain from
exercising its own jurisdiction in a pending appeal. The RJR-MacDonald
test, a test suitable for injunctive relief, applies to the former. With
respect to the latter,
…we are exercising a jurisdiction
that is not unlike scheduling or adjourning a matter. Broad discretionary
considerations come to bear in decisions such as these. There is a public
interest consideration – the need for proceedings to move fairly and with due
dispatch – but this is qualitatively different from the public interest
considerations that apply when we forbid another body from doing what
Parliament says it can do. As a result, the demanding tests prescribed in
RJR-MacDonald do not apply here.
(Mylan, supra at paragraph 5.)
[15]
And, whether the Court would issue a stay to
refrain from exercising its own jurisdiction over a pending appeal depended on
the factual circumstances as guided by certain principles, including Rule 3. Additional
principles guide the Court in the exercise of its plenary jurisdiction to
manage and regulate proceedings. As long as no party is unfairly prejudiced
and it is in the interest of justice, the Court should exercise its discretion
against the wasteful use of judicial resources (Coote at paras 8-13;
also see Mylan at paras 5-14).
[16]
The Applicant asserts that the test for a stay
under s 50(1)(b) is whether, in all of the circumstances, the interests of
justice support the application being delayed (Mylan, at para 14). She
also asserts, however, that the applicable test is found in Apotex where
this Court, in the context of s 50(1)(a), stated:
[13] The jurisprudence of this Court which
has considered subsection 50(1) of the Act is to the following effect:
i) The power to stay should be
exercised sparingly and a stay will only be ordered in the clearest of cases;
ii) In order to justify a stay two
conditions must be met, one positive and one negative. They are that:
a) The defendant must satisfy the
Court that the continuance of the action would work an injustice because it
would be oppressive or vexatious to the defendant or would otherwise be an
abuse of process; and
b) The stay must not cause an
injustice to the plaintiff.
The burden of proof is on the
defendant to establish both conditions.
iii) Where there are fundamental
jurisdictional reasons for bringing an action in both a provincial superior
court and the Federal Court of Canada, a stay of the Federal Court proceedings
is not appropriate.
See: Varnam v. Canada (Minister of National
Health and Welfare) et al. (1987), 12 F.T.R. 34 (T.D.); Figgie International
Inc. v. Citywide Machine Wholesale Inc. (1993), 50 C.P.R. (3d) 89 (F.C.T.D.).
[17]
However, the 2003 decision of Apotex was
not mentioned by the Federal Court of Appeal in Coote. In addition, Apotex
concerned the granting of a stay under s 50(1)(a) on the basis that the
proceeding was already before another court. That is not the situation in this
case. Accordingly, I am not persuaded that the Prothonotary erred in law by
failing to consider the “test” set out in Apotex.
[18]
In any event, the Prothonotary recognized that
it was very likely that by July 1, 2017 Bill C-4 would have been passed,
thereby repealing s 149.01 of the ITA.
[19]
She also recognized the significance of the date
July 1, 2017 being that, even in the absence of the challenged waiver by the
Minister, this was the earliest possible date that any union or trust would be
required to report pursuant to s 149.01. This is significant because the
Applicant could not suffer any prejudice prior to July 1, 2017. If the subject
provisions are repealed on or before that date, with or without the waiver
there will be no information reported and that information will not be made
public. Thus, on a practical level, the Applicant cannot be prejudiced by the
stay as she will not be deprived of this information.
[20]
The Prothonotary also recognized that there was
a balance to be struck between avoiding needless expenditure of public funds
and resources in the very likely event that matter may become moot before the
waiver has any practical effect and ensuring, if the repealed legislation is
delayed or fails, that the matter can proceed without undue delay.
[21]
The Prothonotary considered the factual
circumstance in the context of the appropriate guiding principles. In my view,
although her reasons were brief, it is apparent that she applied the approach described
by the Federal Court of Appeal in Coote.
[22]
As to the Applicant’s submission that it was
procedurally unfair for the Prothonotary to presume that the matter would not
proceed even if it is rendered moot by the repealing of the subject provisions,
this is not a basis upon which the Order can be appealed. Nor was there anything
preventing the Applicant from making that argument when appearing before the
Prothonotary and addressing the mootness ground nor precluding her from
bringing a motion to that effect if the repeal is effected by July 1, 2017.
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