End Canada v Grenier!

The Supreme Court of Canada (“SCC”) will hear a series of seven appeals later this week to clarify a mess of case law that has grown around the juicy-sounding doctrine of collateral attack. (Coincidentally, “24” premieres this week, though I do not expect Jack Bauer to have any involvement in this particular saga.) The fact that the SCC has set aside two days to hear the cases says something, perhaps, about the importance of the issue, as well as the sharp divergence in opinions between courts of appeal. At the end of the day, the SCC should take the opportunity to overturn Canada v Grenier, 2005 FCA 348 [Grenier] and reject the implications of the Crown’s draconian view of the principles in these cases.

In a post last week, my colleague Christine Kellowan reviewed one of the cases in these appeals, and gave a good summary of the Federal Court of Appeal’s (“FCA”) decision in Grenier. At the root of all of the appeals now before the SCC is whether Grenier was correctly decided. Unsurprisingly, the FCA’s answer is yes. Even more unsurprising in light of the fact that the judge giving the answer was the same judge who decided Grenier in the first place. The Ontario Court of Appeal, on the other hand, did not much care for the FCA’s reasoning, and found that it was not binding in any event.

At issue is the reach of ss. 18 and 18.1 of the Federal Courts Act, RSC, 1985, c F-7 [Federal Court Act], which together give the Federal Court exclusive jurisdiction to grant prerogative writs (such as certiorari, prohibition and mandamus) or other declaratory relief against “any federal board, commission or tribunal.” In each of the cases before the SCC, the plaintiffs are seeking damages from the Crown as a result of such a decision. For instance, in TeleZone Inc v Attorney General (Canada), 2008 ONCA 892 [TeleZone], Telezone is seeking damages from Industry Canada for allegedly breaching a contract that was created when it issued a call for applications for telecommunications licenses. The company is not seeking to have the original decision changed, and is not asking the court to compel Industry Canada to issue a license. This is important, as it influences whether s. 18 applies in this case.

Collateral Attaaaaaacccckkkkkkkk!!!
The Crown’s response in each action has been to rely on Grenier to argue that any time the success of an action depends on a finding that a federal board’s decision was invalid or unlawful, the plaintiff must first apply to the Federal Court to determine that preliminary issue. This is where the doctrine of collateral attack comes in. If a plaintiff is trying to nullify or alter a final decision in a proceeding outside of one specifically for that purpose, that is considered a collateral attack. Here, the Crown contends that the plaintiffs are indirectly challenging the decisions of federal boards or tribunals, and therefore ss. 18 and 18.1 require them to do so in Federal Court. (The SCC has discussed the doctrine of collateral attack, albeit in the criminal context, in Toronto (City) v CUPE, Local 79, [2003] 3 SCR 77.)

In the criminal context, the collateral attack doctrine makes some amount of sense. If a decision is issued that leads to the prospect of criminal prosecution (for instance, disobeying an administrative order requiring a site cleanup for environmental reasons), then that decision should be challenged by way of judicial review; if the challenge is successful, then the basis of the prosecution will disappear. But those considerations do not apply in the civil context, especially where the plaintiff is seeking damages and not any judicial review remedy. In that context, there are many reasons to reject the Crown’s argument; Borins J.A. effectively summarized them in his judgment in the TeleZone case, which dealt with four of the seven appeals at issue:

[I]f generally accepted, Grenier’s insistence that actions in provincial superior courts against the Crown are precluded without a prior application for judicial review would have far reaching implications with respect to principles of Crown liability. In particular, the Crown’s position as based on Grenier, would require split or multiple proceedings in different forums, waste scarce judicial resources, impose huge additional costs on plaintiffs, and subject every tort and contract claim against the Crown to a draconian 30-day limitation period.

I am sure this passage will feature prominently in the respondents’ arguments this week. The most troubling implication of the Crown’s argument is the 30-day limitation period, which arises by virtue of s. 18.1 of the Federal Courts Act. That is an awfully short time to allow for the bringing of an action, especially when the damage from the decision may not be immediately apparent. In the case of an action for misfeasance in public office or other tort claims, the facts surrounding the decision may not be immediately available, and the plaintiff may not know within 30 days that an action exists. Provincial limitations statutes generally correct for this by using a discoverability rule – the limitation period does not start to run until the claim has been discovered. But s. 18.1 of the Federal Courts Act starts the limitations clock as soon as the decision is issued.

The section does allow a judge discretion to extend the time for the bringing of an action, but you can be sure that the Crown would fight any attempt to use that discretion, which provides yet another avenue of appeal, bogging down the court system and increasing costs for litigants. If the SCC endorses the approach taken in Grenier, this will surely lead to another raft of case law on when it is appropriate to exercise the discretion allowed by s. 18.1, and possibly lead to more tortuous five-part tests along the lines of Des Champs v Conseil des écoles séparées catholiques de langue française de Prescott-Russell, [1999] 3 SCR 281, where Binnie J. attempted to set out the conditions under which a special six-month limitation period would apply to actions by public authorities.

Happily, as Borins J. makes clear, it does not have to be this way. If s. 18 is read as conferring exclusive jurisdiction over particular remedies, then there is no problem. Since the section gives the Federal Court “exclusive original jurisdiction…to issue an injunction, writ of certiorari, writ of prohibition, writ of mandamus or writ of quo warranto, or grant declaratory relief” against federal boards, and “to hear and determine any application or other proceeding for relief in the nature of” those remedies, such a reading is not particularly creative. Damages are not available in an application for judicial review, and so s. 18 should not apply to an action for damages.

A plaintiff seeking damages as a result of a decision by a federal actor, but who is not challenging the legal force of that decision, should be able to bring an action in superior court within whatever limitation period applies generally in the province. There are no reasons of interpretation or policy that support such a short limitation period, or that support the highly technical reading of s. 18 advocated in Grenier. The SCC should see fit to stop the madness and set the record straight.