A Christmas Gift for Administrative Lawyers

December 30 update: OK, so this does seem like one of those topics only a confirmed law geek could love. But the Post (again) thinks the importance of the Court of Appeal’s decision to the general public is worth underlining in today’s editorial.

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The Ontario Court of Appeal, on December 24, released its long-awaited decision in the companion cases of Telezone v. Canada, G-Civil v. Canada, Fielding Chemical Technologies v. Canada, and McArthur v. Canada. Each of the four cases concerned a challenge to the jurisdiction of the Ontario Superior Court to hear a suit in contract or tort against the federal government, on the basis that the plaintiffs must first seek judicial review in Federal Court of the government’s underlying conduct.

In the lower Ontario courts, the federal government had argued – twice successfully, twice unsuccessfully – that the plaintiffs’ actions were necessarily a collateral attack on the validity of the government’s decisions. The argument was based on a decision by the Federal Court of Appeal in 2005, in Grenier v. Canada, which had thrown out an tort claim by a federal imate in respect of his disciplinary and administrative segregation by the prison. According to the FCA in Grenier, as the inmate had never challenged the validity of the decision by way of judicial review, he was precluded from seeking damages resulting from the segregation. The decision remained “legally effective” until invalidated. Moreover, permitting actions for damages in respect of the effects of the decision would lead to “a dysfunctional dismemberment of federal administrative law” as the lawfulness of federal decisions would be challenged both in Federal Court and in provincial superior courts.

It is ironic, then, that the Ontario Court of Appeal refused to follow Grenier – even referring to it several times as “wrongly decided” – in part because of the same policy concerns of avoiding “split or multiple proceedings in different forums” and the concomitant waste of judicial resources. A decision can be correct (or at least unchallenged) in an administrative law sense, but nonetheless give rise to damages in private law. Requiring that the plaintiff always challenge the decision first by way of judicial review, in its view, would be highly inefficient, as well as unfair.

I found it striking that the Ontario Court of Appeal cast its reasoning so broadly. Rather than merely distinguish Grenier on the facts – as had the motions judge in Telezone, for example – it seemed to go so far as to say that no action in contract or tort could ever be a collateral attack on the government decision. The Court also placed great reliance on the Federal Courts Act, which assigns exclusive jurisdiction to the Federal Court to hear applications for judicial review of Federal government actions, but expressly preserves the concurrent jurisdiction of the provincial superior courts for claims in contract or tort against the federal Crown. The Court concluded that the concurrent jurisdiction for claims against the federal Crown indicates that the provincial superior courts should be free to render judgment and award damages without requiring prior judicial review.

To play devil’s advocate for a moment, however: What if one of the essential elements of the private law claim against the Crown is the illegality (or lack of legal justification) of the government action? For example, in the absence of a successful judicial review application, can a plaintiff bring an action for negligent misrepresentation against the Crown for incorrect information allegedly supplied by its agents in respect of the transfer and renewal of a fishing licence? On the one hand, the plaintiff does not seek to challenge the decision denying him a licence. On the other hand, in the absence of a right to the licence, can the defendant establish any damage? The Newfoundland Supreme Court, Trial Division, in Perrot v. Canada, agreed with Grenier, holding that the plaintiff was out of luck.¹

Arguably a more nuanced approach is truer to principle: in some cases a private law claim will entail a collateral attack, whereas in others it will not, depending on the particular facts (see for example the decision of the Newfoundland Court of Appeal in Canada v. Genge). But the Ontario Court viewed that as a principled muddle leading, in practice, to a Dickensian nightmare à la Jarndyce v. Jarndyce, the claimants bounced from court to court in search of relief.

This seems such a characteristically Canadian dispute, bringing to mind the old chestnut about whether the elephant is a federal or provincial responsibility. As such, I’m sure we haven’t heard the end of it. Supreme Court of Canada, anyone?

(And a tip of the hat to today’s National Post for thinking this story was worth covering!)

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¹  (January 2 update:) The Newfoundland Court of Appeal disagreed, reversing Perrot on appeal, yet affirmed the result in two companion cases with very similar facts, Duffett v. Canada and Donovan v. Canada.