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It’s 2011 and the superior courts are open for business

Trials & Tribulations
|Written By Margaret L. Waddell
It’s 2011 and the superior courts are open for business

Before we get down to business, I would like to take a moment to wish all of Canadian Lawyer’s online readers a very happy new year; and as your new civil litigation columnist, I would also like to extend my sincere thanks for what I hope will be your ongoing readership of these monthly postings. Over the year, I will identify and discuss current topics that I hope will pique your interest and perhaps ignite some commentary or debate. Suggested topics for future articles, or other criticisms (constructive or otherwise) are always welcome.

For my inaugural piece I have fastened upon a bit of good news that may have flown under your radar during the pre-holiday rush and bustle.

On Dec. 23, 2010, the Supreme Court of Canada confirmed its commitment to ensuring the public has effective and meaningful access to justice through the civil court system. In a sextet of decisions — Canada (Attorney General) v. TeleZone Inc.; Canadian Food Inspection Agency v. Professional Institute of the Public Service of Canada; Manuge v. Canada; Nu-Pharm Inc. v. Canada (Attorney General); Parrish & Heimbecker Ltd. v. Canada (Agriculture and Agri-Food); and Canada (Attorney General) v. McArthur — the court confirmed the right of a party to proceed directly by way of civil action in a provincial superior court without first pursuing judicial review of a federal tribunal’s acts through the Federal Court.

The good news — the superior courts are open for business and that’s where damages claims asserted against the Crown should be litigated. There is no need to jump through unnecessary and burdensome procedural hoops to get there.

The ratio of these cases is neatly summarized by Justice Ian Binnie in TeleZone: “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.”

In this commentary I intend to focus on the lead case, TeleZone, and the class action, Manuge. In both, the Supreme Court emphasizes the key policy objective of access to justice through the application of a practical and pragmatic approach to the case.

This “let’s get on with deciding the merits” attitude is a trend the Ontario courts have been embracing for years, and that has particularly come to the fore through the development and maturation of class action jurisprudence. An earlier example of the same theme was articulated by the Court of Appeal over 15 years ago in Cencourse Project Inc. (Re), where Justice Allan Austin rejected the argument of a regional assessment commissioner that the appellant had chosen the “wrong route” for its appeal under the Assessment Act, and acknowledged that if the matter is going to inevitably end up in court, the parties should not have to pass through extraneous layers to get there, if a more direct route is available.

“In the final analysis, every complaint, or almost every complaint, by a taxpayer is going to be that his or her assessment is too high. In most cases, it is far more convenient to appeal using the procedure laid down in s. 40 of the Act, although occasionally it will be obvious that the matter is going to end up in court and as a result it would expedite matters if one were to start there. But there is, or should be, no magic in the particular route chosen. Disputing one’s assessment should not be turned into a game of snakes and ladders,” states the Cencourse ruling.

The TeleZone appeal

TeleZone brought an action for damages against the Crown in the Ontario Superior Court after it was unsuccessful in its application for a personal communication services licence. The foundation of the claim was the losses arising as a consequence of the order made. The Crown challenged the Superior Court’s jurisdiction, arguing that the Federal Court had exclusive judicial review jurisdiction in respect of all matters involving the decisions of federal boards, commissions, and other tribunals. The Ontario Superior Court and the Court of Appeal disagreed. So, too, did the Supreme Court.

The Crown relied upon a 2005 decision of the Federal Court of Appeal, Canada v. Grenier, in support of its argument that TeleZone’s claim was an impermissible collateral attack on the validity or legality of the minister’s order, and that s. 18 of the Federal Courts Act granted exclusive jurisdiction to the Federal Court to judicially review all decisions of all federal boards, tribunals, or commissions.

A damages claim could, it argued, only proceed if the order was first quashed on judicial review. The Grenier principle disregards the preceding section of the act and s. 21 of the Crown Liability and Proceedings Act, both of which grant concurrent jurisdiction to provincial superior courts “in all cases in which relief is claimed against the Crown.”

The Crown’s argument also gave insufficient weight to the general rule of law that any derogation from the provincial courts’ jurisdiction requires clear and explicit statutory language, and relied upon implications or inferences that it would have had read into the language of s. 18 of the Federal Courts Act.

Binnie roundly rejected the Crown’s argument right from the outset of his reasons for decision, emphasizing that the judicial review provisions of the act were never intended to create such a procedural “bottleneck.”

He confirmed that the provincial court has jurisdiction to determine “every legal and factual issue element necessary for the granting or withholding of the remedies sought . . . including the potential ‘unlawfulness’ of government orders.”

In other words, it is not necessary for a party who claims to have been damaged by a decision of a federal board, tribunal, or commission to first seek to have that decision overturned or set aside on a judicial review. Rather, the aggrieved party can let the decision stand, and seek compensation for the losses arising therefrom.

Binnie concluded there is no principled reason for the claimant to be forced into the procedural detour of a judicial review before being permitted to pursue their chosen remedy.

The Manuge appeal

Dennis Manuge was a member of the Canadian Forces until he was involuntarily released because of disabling injuries. For 24 months following his release, Manuge received long-term disability benefits and a disability pension, but the amount he received in under the disability pension was deducted from the total amount payable under the forces’ long-term disability plan. Manuge sought to commence a class action in Federal Court, and challenged the fact the deductions to which he was subjected were not universally applied to all persons receiving Canadian Forces disability benefits.

Similar to TeleZone, the Crown argued Manuge was obliged first to seek judicial review of the impugned section of the disability plan. It argued this was no more than a case of “artful pleading” and the damages claim was really incidental to the essential nature of the claim.

It argued that effectively Manuge was seeking a judicial review of the provisions of the disability plan, therefore the action should be stayed pending a judicial review.

In TeleZone, the SCC confirmed there is a residual discretion inherent in the provincial superior courts and under s. 50(1) of the Federal Courts Act to stay an action when its essential character is a claim for judicial review, and there is only a “thin pretence” of a claim in respect of a private wrong. The Crown argued that this was precisely such a case.

The Supreme Court disagreed with the Crown’s characterization of the claim, and declined to grant a stay. It concluded the Federal Court had jurisdiction to hear the damages claim. In her reasons, Justice Rosalie Abella accepted the findings of the Federal Court on the certification motion that the claim asserted reasonable causes of action under s. 15(1) of the Charter of Rights and Freedoms, for declaratory relief and for damages, and concluded that the existence of such reasonable causes of action rebutted the Crown’s argument that the claim disclosed “only a thin pretence to a private wrong.”

Similar to the general attitude expressed in TeleZone, the overarching message in Manuge is, given that the Federal Court found the case was suitable for certification as a class action, the parties should get on with litigating the merits. Taking a diversionary route through the judicial review process would do nothing to advance the parties’ positions, regardless of the outcome of such a proceeding.

Conclusion

The Supreme Court ended 2010 with a strong and clear expression of its views on access to justice. It does not and will not look with favour on arguments from the Crown that seek to derail the judicial process by throwing up unnecessary and burdensome procedural roadblocks and detours. The message it is sending to the parties is this: the courts are open for business and litigants should be getting on with arguing the merits of their cases, and not wasting valuable and limited judicial resources on unnecessary attacks on the courts’ jurisdiction.

The theme for 2011: On your mark, get set . . . LITIGATE!

Margaret L. Waddell is a senior partner at Paliare Roland Rosenberg Rothstein LLP in Toronto. She has a varied advocacy practice including a broad range of complex commercial and shareholder litigation, professional liability cases, class actions, and appellate advocacy. She can be reached at marg.waddell@paliareroland.com. Her Trials & Tribulations column will be appearing monthly on canadianlawyermag.com.

  • Daniel Schwartz
    Having followed the Telezone litigation for quite some time now, I found your column to be a thoughtful and precise summary of how the Supreme Court got it right: litigants should not be hampered by procedural and jurisdictional attacks. They should have their day in Court.

    I'm looking forward to your next column.
  • Roger Townshend
    We should not lose sight of the factor that an application for judicial review can proceed much more quickly and efficiently than an action for damages. Where a key issue in dispute can be resolved in this way, it could be in the interests of all parties to do so. Far from being just an extra step, this could save everyone's resources. If the judicial review failed, the matter would go no further. In some cases, such as a judicial review of a decision about entitlement to a benefit (such as Manuge appears to be) if the judicial review succeeded, the main remedy would automatically flow from from the judicial review without need for further litigation.

    What is beneath the surface in these cases is whether or not the 30-day limitation for federal judicial review is fair or appropriate. My view is that it not, and that attention should be directed to that, rather than finding creative ways to try to circumvent it.

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