BETWEEN:
Plaintiff
and
in Right of Canada as Represented by the
MINISTER OF AGRICULTURE AND AGRI-FOOD,
THE ATTORNEY GENERAL OF CANADA
and
THE CANADIAN FOOD INSPECTION AGENCY
REASONS FOR ORDER
PROTHONOTARY MORNEAU:
Introduction
[1] Does the action claiming damages commenced by the plaintiff in December 2005 against the defendants amount to an indirect challenge of the decisions made by the responsible minister in December 2002 to revoke Permits to Import wheat and to issue to the plaintiff almost one month thereafter a new permit providing for new conditions?
[2] If this question be answered in the affirmative, the motion of the defendants will be granted in its essential aspects and the action of the plaintiff will not proceed for the time being and will be struck out or suspended until said decisions of December 2002 are possibly declared invalid or unlawful by way of a judicial review proceeding to be commenced by the plaintiff should it be granted an extension of time therefor.
The motion under review and the relevant factual context
The motion
[3] In this case, the defendants are thus moving to strike the action as stated in the statement of claim of the plaintiff (the statement of claim) and to dismiss the action against them pursuant to paragraph 221(1)a) of the Federal Court Rules (the Rules) on the ground that this Court lacks jurisdiction to hear said action and therefore that the statement of claim does not evince any reasonable cause of action.
[4] As to the criteria applicable to motions to strike, the following extract of Hodgson et al. v. Ermineskin Indian Band et al. (2000), 180 F.T.R. 285, at page 289 (affirmed on appeal: 267 N.R. 143; leave to appeal to the Supreme Court of Canada denied: 276 N.R. 193), shows that if it is alleged, pursuant to that paragraph, that there is a lack of jurisdiction or no cause of action, it is only in clear and obvious cases that the Court will grant the motion. This extract reminds us that, when jurisdiction is in issue, evidence may be offered:
[9] I agree that a motion to strike under rule 221(1)(a) [previously rule 419(1)(a)] on the ground that the Court lacks jurisdiction is different from other motions to strike under that subrule. In the case of a motion to strike because of lack of jurisdiction, an applicant may adduce evidence to support the claimed lack of jurisdiction. In other cases, an applicant must accept everything that is pleaded as being true (see MIL Davie Inc. v. Société d’exploitation et de développement d’Hibernie ltée (1998), 226 N.R. 369 (F.C.A.), discussed in Sgayias, Kinnear, Rennie, Saunders, Federal Court Practice 2000, at pages 506-507).
[10] ... The “plain and obvious” test applies to the striking out of pleadings for lack of jurisdiction in the same manner as it applies to the striking out of any pleading on the ground that it evinces no reasonable cause of action. The lack of jurisdiction must be “plain and obvious” to justify a striking out of pleadings at this preliminary stage.
[5] There is thus no problem if Casey McCawley’s affidavit of 15 May 2006 is left in the plaintiff’s record in reply concerning the motion under examination. In any event, I am of the opinion that this affidavit has no impact on the fundamental issues raised by this case.
Factual context
[6] The plaintiff was, during all the relevant periods, a grain merchant.
[7] The defendant Her Majesty the Queen (the Queen) is represented by the Minister of Agriculture and Agri-Food (the Minister). The latter, through the Canadian Food Inspection Agency (the Agency, or CFIA), is responsible for the administration and the enforcement of the Plant Protection Act, S.C. 1990, c. 22 and of the Plant Protection Regulations, SOR/95-212 (the Regulations) and more specifically the provisions of those instruments that relate to the propagation of parasites in Canada.
[8] On October 24, 2002, the Agency issued to the plaintiff two Permits to Import wheat from Ukraine.
[9] On November 17, 2002, the M/V "Nobility" thus left Ukraine for Halifax with a cargo of wheat aboard.
[10] On or about December 5, 2002, as the ship was nearing her destination point, the Agency revoked, apparently pursuant to section 34 of the Regulations, the Permits to Import issued on October 24, 2002. In addition, this Court understands that, as a result of this very decision, the plaintiff was prohibited from offloading the cargo of wheat aboard the “Nobility”.
[11] Owing to this decision of December 5, 2002, which stayed in force during the following days, the “Nobility” remained moored in the port of Halifax for the whole month of December 2002 and the Agency, according to the plaintiff, refused without reasons a host of measures that the plaintiff claims to have suggested in order to settle the problem. Here is a fairly good summary of the events that occurred during that period that is set out by the defendants at paragraph 5 of their written submissions:
5. Consequently, from the time of its arrival in Halifax, on December 6, 2002 and the remainder of December, 2002, the M/V “Nobility” was moored in Halifax and not permitted to offload its cargo of wheat. During this time, the Plaintiff states that it made numerous inquiries of the CFIA as to why the Permits to Import were revoked. The Plaintiff also states that the CFIA refused to test the wheat, refused to provide a report or other documents suggesting the wheat on board the M/V “Nobility” was contaminated, “refused” to allow the discharge of the vessel, refused to issue new import permits or confirm that the prior permits were in fact valid and in effect.
(Citations omitted)
[12] On December 31, 2002, the Agency is said to have decided to issue to the plaintiff a new Permit to Import that included a number of conditions, providing, inter alia, that the wheat undergo a specific treatment; namely: “... the wheat had to be pelletized and that it had to be offloaded in Québec and Montréal ”. Tired of resisting, the plaintiff is said to have observed the conditions of this new permit.
[13] The decision of the Agency to revoke the permits on December 5, 2002 and its decision of December 31, 2002 to issue a new permit imposing conditions on the plaintiff were not then challenged by way of a judicial review proceeding.
[14] As to the revocation of these permits, the plaintiff states at paragraph 13 of the statement of claim that time was too short and that it was thus not practical to challenge that revocation by way of judicial review. The plaintiff states as follows:
Further as known to the Defendants, time considerations meant it was entirely impractical for Parrish & Heimbecker to address the purported revocation of the import permits through the judicial review process.
[15] At paragraphs 11 and 12 of his affidavit, Casey McCawley further explains why it was decided not to seek judicial review:
11. That in January, 2003, it was decided by Parrish & Heimbecker Ltd. to refrain from seeking judicial review of the decision of the Canadian Food Inspection Agency to cancel the Import Permit on December 5, 2003 [rather 2002], as Parrish & Heimbecker could not wait for the legal proceedings to work their way through. We had to stop the ongoing charges with respect to the overtime use of the M/V “Nobility”, and fulfill our existing contractual commitments to our customers through other means. In hind sight, it does appear, based upon the facts as set out above that the damages suffered by Parrish & Heimbecker Limited as a result of the actions of the Canadian Food Inspection Agency were crystallized and complete for the most part in January, 2003, and finalized in April, 2003 with the completion of Parrish & Heimbecker’s ongoing obligations to its customers;
12. That this Affidavit is being put forward to fairly set forth the circumstances which led to the decision not to seek a judicial review in January, 2003 of the decision to cancel the Import Permit and, further, the basis for my ongoing opinion that that process would have been of no utility in reducing the loss suffered by Parrish & Heimbecker Limited. This Affidavit is not intended to provide a complete and detailed history of the dealings between Parrish & Heimbecker Limited and the Canadian Food Inspection Agency between December 5, 2003 [2002] and April, 2003; nor is it intended to provide support in all material respects, of the allegations in the Statement of Claim on file herein.
[16] On December 2, 2005, the plaintiff commenced the action for damages challenged herein.
Analysis
[17] The fashion in which the plaintiff has structured the statement of claim and the insertion of the submissions made at paragraphs 13 to 18 reveal clearly that, on the one hand, the revocation of the Permits that occurred on December 5, 2002 and the concomitant refusal to allow the offloading of the cargo and, on the other hand, this issuance on December 31, 2002 of a conditional permit imposing a specific treatment of the cargo are the measures or acts (those words are closer to the language of the plaintiff couched in terms of civil liability) that constitute the subject-matter, the cornerstone of the wrongful acts addressed by the plaintiff at those paragraphs.
[18] On the same plane, it is to be noted that the plaintiff states at paragraph 13 of the statement of claim that:
... the purported revocation of the import permits on December 5, 2005 [rather 2002] and the refusal of the Defendants to allow the discharge of the “Nobility” was illegal.
(My emphasis.)
[19] At paragraph 14 of the statement of claim, the plaintiff repeats the following:
... the purported revocation of the original import permits, the ongoing refusal to allow the discharge of the cargo ex “Nobility”, and on December 31, 2002 the imposition of the condition that the Ukrainian wheat must undergo a pelletization treatment acceptable to the CFIA was illegal and/or entirely unreasonable.
(My emphasis.)
[20] Having described as illegal or unreasonable those acts, the plaintiff, at paragraphs 15 to 18 of the statement of claim, essentially alleges that they also give rise to a range of delicts; more specifically, to summarize, it is alleged that they:
a) were “an unlawful interference with economic relations” between the Plaintiff and its customers (paragraph 15 of the statement of claim);
b) were “a misfeasance of public office” (paragraph 16 of the statement of claim);
c) negated their own representations and that “said representations were known or ought to have been known as false” (paragraph 17 of the statement of claim);
d) were “negligent and/or failed to act in a manner consistent with the duty owed” by them to the Plaintiff (paragraph 18 of the statement of claim).
[21] Then, at paragraph 19 of the statement of claim, the plaintiff thus claims general, special and punitive damages, the amount of which is nowhere stated in the statement of claim.
[22] However, this whole series of delicts and the relevant damages that are the basis of the relief ultimately claimed by the plaintiff depend to a large extent on the invalidity or unlawfulness – as suggested by the extracts given hereinabove of paragraphs 13 and 14 of the statement of claim – of the revocation of the permits and of the issuance of the new permit. In my view, it is clear that the alleged invalidity or unlawfulness of these decisions are at the heart of the claimed damages. (For examples of cases where the courts have made similar pronouncements in actions for damages, see Canada c. Capobianco, [2005] J.Q. no 1155, a decision of the Court of appeal of Quebec, and Dhalla v. Canada (Minister of Citizenship and Immigration), [2006] F.C.J. No. 132, a decision of this Court).
[23] It is true, as is argued forcefully by the plaintiff that, to prove the various heads of damages set out at paragraphs 15 to 18 of the statement of claim, the plaintiff will have to do more than show the invalidity or unlawfulness of the decisions in issue. However, it is difficult to imagine that the setting aside of these decisions does not constitute the point of departure or an essential element of the examination of the alleged heads of damages.
[24] In this respect, it is to be noted, as was done by the Court of Appeal in The Queen v. Grenier, 2005 FCA 348 (Grenier), at paragraph 39, that section 18.1 of the Federal Courts Act, R.S. 1985, c. F-7, as amended (the Act), and more specifically subsection 18.1(4), sets out the circumstances in which a Court may grant relief with respect to a decision; those are relevant to the examination of the merits of an action claiming damages, like the one in this case. The Court made the following comments:
[39] In judicial review matters, subsection 18.1(4) of the Federal Courts Act, and more particularly paragraphs (c) and (d), state that the reviewing judge may declare invalid or unlawful a decision that erred in law or, inter alia, a decision based on an erroneous finding of fact made in a perverse or capricious manner. Subsections 18.1(1) to (4) read as follows:
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18.1 (1) 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.
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18.1 (1) Une demande de contrôle judiciaire peut être présentée par le procureur général du Canada ou par quiconque est directement touché par l’objet de la demande.
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(2) 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.
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(2) Les demandes de contrôle judiciaire sont à présenter dans les trente jours qui suivent la première communication, par l’office fédéral, de sa décision ou de son ordonnance au bureau du sous-procureur général du Canada ou à la partie concernée, ou dans le délai supplémentaire qu’un juge de la Cour fédérale peut, avant ou après l’expiration de ces trente jours, fixer ou accorder.
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(3) On an application for judicial review, the Federal Court may |
(3) Sur présentation d’une demande de contrôle judiciaire, la Cour fédérale peut : |
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(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 |
a) ordonner à l’office fédéral en cause d’accomplir tout acte qu’il a illégalement omis ou refusé d’accomplir ou dont il a retardé l’exécution de manière déraisonnable; |
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(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.
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b) déclarer nul ou illégal, ou annuler, ou infirmer et renvoyer pour jugement conformément aux instructions qu’elle estime appropriées, ou prohiber ou encore restreindre toute décision, ordonnance, procédure ou tout autre acte de l’office fédéral.
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(4) The Federal Court may grant relief under subsection (3) if it is satisfied that the federal board, commission or other tribunal |
(4) Les mesures prévues au paragraph (3) sont prises si la Cour fédérale est convaincue que l’office fédéral, selon le cas : |
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(a) acted without jurisdiction, acted beyond its jurisdiction or refused to exercise its jurisdiction; |
a) a agi sans compétence, outrepassé celle-ci ou refusé de l’exercer; |
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(b) failed to observe a principle of natural justice, procedural fairness or other procedure that it was required by law to observe; |
b) n’a pas observé un principe de justice naturelle ou d’équité procédurale ou toute autre procédure qu’il était légalement tenu de respecter; |
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(c) erred in law in making a decision or an order, whether or not the error appears on the face of the record; |
c) a rendu une décision ou une ordonnance entachée d’une erreur de droit, que celle-ci soit manifeste ou non au vu du dossier; |
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(d) based its decision or order on an erroneous finding of fact that it made in a perverse or capricious manner or without regard for the material before it; |
d) a rendu une décision ou une ordonnance fondée sur une conclusion de fait erronée, tirée de façon abusive ou arbitraire ou sans tenir compte des éléments dont il dispose; |
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(e) acted, or failed to act, by reason of fraud or perjured evidence; or |
e) a agi ou omis d’agir en raison d’une fraude ou de faux témoignages; |
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(f) acted in any other way that was contrary to law.
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f) a agi de toute autre façon contraire à la loi.
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(My emphasis.) |
[25] No doubt also that the revocation of permits and the issuance of a new permit are "decisions" (hereinafter the Decisions) made by the minister, who acted as a "federal board" within the meaning of sections 2 and 18 of the Act.
[26] It can thus be seen that the action claiming damages of the plaintiff, although it does not seek the setting aside of these Decisions, nevertheless amounts to a collateral or indirect challenge thereof.
[27] Now, as was very clearly explained by the Federal Court of Appeal in April 2004 in Canada c. Tremblay, [2004] 4 F.C.R. 165 (leave to appeal to the Supreme Court of Canada denied December 16, 2004 [2004] S.C.C.A. No. 307) (Tremblay), and subsequently in October 2005 in Grenier, whenever the Court is asked to set aside, or declare the unlawfulness of, a decision, this is a challenge that must first be mounted exclusively by way of an application for judicial review before this Court.
[28] This step-by-step approach cannot be by-passed in the name of a tangible and pragmatic approach that may have been expressly or implicitly recognized in the past since, as was mentioned by the Federal Court of Appeal in Grenier, at paragraphs 18 and 19, a decision still continues to be effective as long as it has not been set aside. Now, in the light of principles such as that of the proper functioning of the legal system (see Tremblay, at paragraph 22) and that of finality of decisions (see Grenier, at paragraphs 20 et seq.), it is not possible to ignore a decision of a federal board and let expire the statutory time limit and then, often a few years later, as in this case and as in Tremblay and Grenier, challenge it by way of an action claiming damages against the Crown pursuant to section 17 of the Act.
[29] As the Federal Court of Appeal has recently observed, such an approach amounts to an application for judicial review in disguise; in other words, the action claiming damages amounts to a collateral or indirect challenge of the decision in issue.
[30] In my view, that is exactly what the plaintiff is seeking to do through this action. As can be seen from the statement of claim, it is clear and obvious that it is first and foremost challenging, albeit indirectly, these Decisions.
[31] The invalidity or unlawfulness (see the wording of paragraph 18.1(3)b) of the Act) of the Decisions will have to be obtained first and foremost by the plaintiff seeking judicial review, after, of course, having been granted an extension of the statutory time limit. Judicial review cannot be by-passed; this is especially true since, as was noted by the Federal Court of Appeal in Grenier, at paragraph 61, not only the invalidity of a decision, in itself, does not necessarily give rise to a finding of fault or negligence but, conversely, the lawfulness of such a decision [TRANSLATION] « excludes any finding of negligence ».
[32] In addition, as opposed to what is argued by the plaintiff, I am of the view that this step‑by-step approach propounded in Tremblay and Grenier does not amount or cannot be described as an additional layer of protection from a ruling of civil liability against the federal Crown. When a civil action is properly commenced against the Crown, the same principles governing liability will apply, just like before.
[33] On the other hand, I am also of the view that the holdings of the Federal Court of Appeal must not be rejected and that the action and the indirect challenge that is concomitant thereto must not be allowed to proceed on the ground that, if an application for judicial review had been filed in the days following December 5, 2002, it would not have resulted in tangible and effective relief for the plaintiff. In this respect, it must be noted that this Court can act very rapidly whenever circumstances warrant. Secondly, the fact that the practical effect of a decision may vanish rapidly, as was probably the case in this matter, is no longer a ground warranting the by‑passing of a judicial review.
[34] As to the final outcome of the action for damages of the plaintiff, it seems to me that the proper approach is the one defined by the Federal Court of Appeal in Tremblay, at paragraph 34, and it must be acknowledged that the plaintiff’s action cannot be struck out at this stage, as long as the plaintiff has not exhausted, if such is its intention, the remedy set out in paragraph 18.1(2) of the Act with respect to the Decisions, that is, a motion for an extension of time, and then the one provided for by section 18 of the Act, that is, an application for judicial review, if leave is granted. Should it be successful in both proceedings, the plaintiff would then be able to pursue the action claiming damages that it has already commenced. Its action claiming damages should, therefore, be suspended so as to enable it, if possible, to pursue its monetary claim in due time. If, otherwise, the plaintiff is denied an extension, or if it succeeds but its application for judicial
review is dismissed, it will be unable to pursue its action. The striking out will take effect without further proceedings or formalities if the application for extension of time is dismissed or, should it be allowed, if the application for judicial review is dismissed by final judgment.
“Richard Morneau”
Prothonotary
Montréal, Québec
September 15, 2006
Certified true translation
François Brunet, LLB, BCL
FEDERAL COURT
SOLICITORS OF RECORD
DOCKET: T-2140-05
STYLE OF CAUSE: PARRISH & HEIMBECKER LIMITED v. HER MAJESTY THE QUEEN, in Right of Canada as Represented by the MINISTER OF AGRICULTURE AND AGRI-FOOD, THE ATTORNEY GENERAL OF CANADA and THE CANADIAN FOOD INSPECTION AGENCY
PLACE OF HEARING: Halifax (Nova Scotia)
DATE OF HEARING: August 23, 2006
REASONS FOR ORDER BY: Prothonotary Morneau
APPEARANCES:
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Peter D. Darling
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FOR THE PLAINTIFF |
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Kathleen McManus
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FOR THE DEFENDANTS |
SOLICITORS OF RECORD:
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Huestis Ritch Halifax, Nova Scotia |
FOR THE PLAINTIFF |
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John H. Sims, c.r. Deputy Attorney General of Canada |
FOR THE DEFENDANTS |