Beginning of the End for Canada v Grenier?

This month the Supreme Court of Canada (“SCC”) will be hearing the appeal of Manuge v Canada, [2009] 1 FCR 416. This case will be of interest to patrons of the Federal Court because it raises significant procedural issues. In particular, the SCC will have to determine whether the Federal Court has jurisdiction to hear Mr. Manuge’s action for damages against the Crown.

Upon his release from the Canadian Forces, Mr. Manuge qualified for a long-term disability pension under a mandatory disability plan created by s. 39 of the National Defence Act, RSC, 1985, c N-5. He filed an action for damages against the Crown with the Federal Court, challenging the lawfulness and constitutional validity of the disability plan. He claimed that the plan infringed his right to equality under s. 15 of the Charter because it deducted a portion of his pension, leaving him with 59% of the income he was earning while in the employ of the Canadian Forces. As well, the Crown failed to fulfill its obligations under public law, breached its fiduciary duty to Mr. Manuge, acted in bad faith and was unjustly enriched by its conduct. Mr. Manuge subsequently amended his action and requested that it be certified as a class action. The Crown objected to him proceeding by way of action under s. 17 of the Federal Courts Act, RSC, 1985, c F-7 [Federal Courts Act], and to the certification of this action as a class action. Citing Canada v Grenier, 2005 FCA 348 [Grenier], the Crown argued that Mr. Manuge should have applied for judicial review pursuant to s. 18 of the Federal Courts Act.

The Leading Precedent in this Area of Law

In Grenier, the issue was whether an inmate could challenge an administrative decision by the head of the penitentiary through an action for damages instead of judicial review. Pursuant to ss. 18, 18.1 and 28 of the Federal Courts Act, it was held that judicial review must be used to challenge the decision of a federal administrative body. Under ss. 18 and 28, the Federal Court has exclusive jurisdiction over those particular matters. In contrast, s. 17(1)(d) gives the Federal Court concurrent jurisdiction with the provincial courts over claims under the Crown Liability and Proceedings Act, RSC 1985, c C-50. Writing for the Federal Court of Appeal, Letourneau J.A. held that the lawfulness of decisions of federal administrative bodies cannot be reviewed through an action in damages because it would allow a remedy under s. 17. To do so would ignore legislative intent that an action for damages should proceed only by way of judicial review. Allowing a remedy by way of an action for damages would result in the duplicity of jurisdiction, something that Parliament tried to avoid by granting exclusive jurisdiction to the Federal Court through the enactment of s. 18.

At the Federal Court, Barnes J. distinguished the case at hand from Grenier. In his claim, Mr. Manuge challenged s. 24 of Part III(B) of Insurance Policy SISIP 901102 (“SISIP”). Barnes J. held that s. 24(a)(iv) of the SISIP did not result in a decision of a federal administrative body, but was a government policy. Since Grenier did not apply, Mr. Manuge could proceed by way of an action for damages. Even if judicial review was required under the circumstances, Barnes J. held that Mr. Manuge would not have to start his proceedings over. The latter would be converted into an action. To the dismay of the Federal Court of Appeal, Barnes J. went even further. He held that this “action” should be a class action. This particular portion of the decision struck me as being odd and unnecessary because of Barnes J.’s uncertainty regarding the proper procedure to be followed. According to s. 18.4(2) of the Federal Courts Act, he could exercise his discretion to convert a proceeding by way of judicial review into an action. However, Mr. Manuge instituted proceedings by way of an action. In what can only be described as generosity to Mr. Manuge, Barnes J. treated the action for damages as an application for judicial review.

At the Federal Court of Appeal, Letourneau J.A. overturned the lower court’s decision. He decided the matter consistent with his decision in Grenier. The disability plan was a decision of a federal administrative body (which consisted of the Minister and Chief of Defense Staff), and thus judicial review was warranted. Letourneau J.A. explained that even if the disability plan was a policy, the decisions made by the administrative body in the implementation of that policy would still be subject to judicial review.

Disrupting Organization or the Beginnings of Reorganization?

Bearing in mind that there a few appeals in front of the SCC that deal with the Grenier decision, Letourneau J.A. discusses the ensuing chaos associated with overturning the latter. First, legislative intent that there be segregated jurisdiction between the federal and provincial courts will be frustrated. Parliament assigned the federal courts the unique role of reviewing the lawfulness of federal administrative body decisions. If Mr. Manuge is allowed to proceed with his action for damages, then a decision that should properly be subjected to judicial review will essentially fall under s. 17. As mentioned earlier, there is shared jurisdiction between the provincial and federal courts under that section.

Part of me believes that if Mr. Manuge is successful, then he will be opening up Pandora’s box, and the neat segregation of jurisdiction  between the courts will erode. The drawbacks are manifold – litigants will begin to wage collateral attacks, the certainty that comes with a limited appeal period of federal administrative body decisions will be eliminated, and the efficiency of administrative bodies will be reduced. At the same time, I can appreciate the litigant’s frustration of having to start all over if the incorrect procedure is followed. The complexity of individual legal problems can make it difficult to determine the proper procedure, or as illustrated in other appeals currently before the SCC, the proper court.

One such appeal, TeleZone Inc v Attorney General (Canada), 2008 ONCA 892, originates from the Ontario Court of Appeal. The four appeals that were decided in that decision involved actions for damages for false imprisonment, breach of Charter rights, breach of contract, tort and misfeasance in public office. Like in Mr. Manuge’s case, the Crown argued that Grenier applied to all four appeals because a federal administrative body decision was somehow involved. This argument was held to be a stretch in two of the appeals.

These cases illustrate the need to formulate a clear delineation in order to distinguish between a case that primarily deals with a federal administrative decision and that which tangentially deals with the latter. The worthy goal of segregating jurisdiction must not be used to improperly determine the court or legal procedural to be used in the circumstances.

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