Reasons for Judgment — Rothstein J. (Binnie, LeBel, Deschamps, Abella, Charron and Cromwell JJ. concurring)
Rothstein J. — The issue in this appeal is whether a plaintiff seeking damages for the revocation and re-issuance of an import licence must first bring an application for judicial review of the licensing decisions.
I. Facts
Parrish & Heimbecker Limited (“Parrish”) is a Canadian grain trader. On October 24, 2002, Parrish obtained two import permits from the Canadian Food Inspection Agency (“CFIA”) to import wheat from Ukraine and Russia. Parrish chartered a vessel, the Nobility. On November 17, 2002, the Nobility left Ukraine destined for Halifax with a full cargo of wheat.
On December 5, 2002, as the Nobility was nearing Halifax, the CFIA revoked Parrish’s import permits, allegedly pursuant to s. 34 of the Plant Protection Regulations, SOR/95-212. As a result, Parrish was prohibited from offloading its cargo.
The Nobility remained moored in the port of Halifax for the month of December. Parrish made numerous inquiries as to why the licences were revoked. According to Parrish, the CFIA refused to explain the revocation and it refused to test the wheat for contaminants or otherwise try to settle the matter.
On December 31, 2002, the CFIA issued a new import permit with different conditions. The new permit required that the wheat be pelletized and offloaded in Montréal and Québec. Parrish complied with the new permit; however, the new permit conditions rendered the wheat unacceptable to its intended customers. Parrish filled its original contracts with alternate wheat that it had to purchase at a greater cost.
Parrish did not seek judicial review of either licensing decision. In its statement of claim it stated that, “time considerations meant it was entirely impractical for Parrish & Heimbecker to address the purported revocation of the import permits through the judicial review process” (R.R., at p. 68). Parrish further explained that it could not wait for legal proceedings as it had to address the ongoing overtime use charges for the Nobility and fulfill its contractual obligations with its customers.
On December 2, 2005, Parrish initiated the present action against the respondents (collectively the “Crown”) in the Federal Court. It seeks damages for misfeasance in public office, unlawful interference with economic relations, negligent misrepresentation and negligence. Parrish seeks to recover the additional costs required to fulfill its sales contracts, the loss of profit and the additional expenses incurred as a result of the new import permit.
Before filing a statement of defence, the Crown brought a motion to strike Parrish’s statement of claim on the basis that the Federal Court did not have jurisdiction to hear the matter and that the statement of claim failed to disclose a reasonable cause of action.
II. Judicial History
A. Federal Court, 2006 FC 1102, 303 F.T.R. 21
Prothonotary Morneau allowed the Crown’s motion to strike Parrish’s action. He assessed Parrish’s claims and determined that they relied, to a large extent, on the invalidity or unlawfulness of the decisions to revoke the licences and then issue another one (para. 22). He concluded that the action for damages was a collateral or indirect challenge of the decisions and was barred by the Federal Court of Appeal’s decision in Canada v. Grenier, 2005 FCA 348, [2006] 2 F.C.R. 287, at paras. 29-30. Prothonotary Morneau found that Parrish must first challenge the licensing decisions by way of judicial review.
Prothonotary Morneau suspended the order striking the action to permit Parrish to bring a motion to extend the time for initiating an application for judicial review. Parrish’s action would be struck if it was unsuccessful either in obtaining an extension of time or on its application for judicial review (para. 34).
B. Federal Court, 2007 FC 789 (CanLII)
Parrish appealed the decision of the Prothonotary and, alternatively, sought an extension of time to file an application for judicial review. Barnes J. decided the appeal de novo, but reached the same conclusion as Prothonotary Morneau. Barnes J. concluded that the present case was indistinguishable from Grenier (para. 12). He permitted Parrish an extension of time to file its application for judicial review, but refused to merge the application and action, as it would constitute an “end run” around Grenier (para. 26).
C. Federal Court of Appeal, 2008 FCA 362, [2009] 3 F.C.R. 568
Pelletier J.A. upheld the lower court decisions, again concluding that Parrish’s claim “falls squarely within the principle stated in Grenier” (para. 13). He upheld Barnes J.’s decision to extend the time to file an application for judicial review and the decision not to merge the application and the action.
Nadon J.A. concurred with Pelletier J.A. In his view, it had not been shown that Grenier was “manifestly wrong” (para. 29). It was therefore binding authority and barred Parrish from bringing its action without first seeking judicial review.
Sharlow J.A. dissented. She acknowledged that Parrish’s action for damages would require an evaluation of the lawfulness of the licensing decisions. She stated: “The question that arises in this case is who is to determine, in the first instance, whether the exercise of statutory authority is valid” (para. 37). Sharlow J.A. concluded that there was no indication in the relevant statutes that this could only be completed through judicial review. In particular, she saw s. 8 of the Crown Liability and Proceedings Act , R.S.C. 1985, c. C-50 , which codifies the defence of statutory authority, as evidence that the assessment of lawfulness can be done in the course of a claim for damages (para. 39). Further, she noted that s. 18(1) of the Federal Courts Act , R.S.C. 1985, c. F-7 , gives the Federal Court jurisdiction to grant traditional public law remedies. It does not say that a dispute over the lawfulness of exercise of statutory authority cannot be assessed in the course of a trial governed by the Crown Liability and Proceedings Act (para. 44). In her view, the manifest intention of Parliament is that claims for damages can be heard by both the Federal Court or provincial superior courts (para. 46). She would have allowed the appeal and allowed Parrish’s action for damages to proceed.
III. Relevant Provisions
Plant Protection Regulations, SOR/95-212
34. (1) A person who imports a thing under a permit shall comply with all the conditions set out in the permit.
(2) Where the Minister determines that it is necessary to prevent the introduction into Canada or the spread within Canada of any pest or biological obstacle to the control of a pest, the Minister shall amend a permit by adding, removing or amending a condition or any information set out in the permit.
(3) The Minister may revoke a permit issued to a person or refuse to issue any other permit to a person where the Minister determines that the person has not complied with
(a) any condition set out in the permit;
(b) any provision of the Act or any regulation or order made thereunder; or
(c) any order made by the Minister under subsection 15(3) of the Act.
(4) The Minister may revoke a permit issued to a person or refuse to issue a permit to a person where the Minister has reasonable grounds to believe that
(a) there is an infestation in the country or place of origin of a thing or the country or place from which the thing was re-shipped; or
(b) the person has not complied with
(i) any condition set out in the permit,
(ii) any provision of the Act or any regulation or order made thereunder, or
(iii) any order made by the Minister under subsection 15(3) of the Act.
(5) Where a foreign exporter has shipped to Canada any thing that is a pest, infested or a biological obstacle to the control of a pest or that contravenes any provision of the Act or any regulation or order made thereunder, the Minister may revoke a permit issued to any person, or refuse to issue a permit in respect of a thing to any person, to import from that foreign exporter or from the country or place of origin or reshipment until
(a) the thing shipped or to be shipped is no longer a pest, infested or a biological obstacle to the control of a pest;
(b) the phytosanitary authorities in the country or place of origin or reshipment have identified to the Minister the cause or source of the infestation that is the subject-matter of the contravention; and
(c) the foreign exporter or the phytosanitary authorities referred to in paragraph (b) have given a written undertaking to comply with the provisions of the Act and all regulations and orders made thereunder.
IV. Analysis
On the basis of Grenier, the Crown argues that Parrish’s action is a collateral attack on its administrative decisions to revoke the import licences and issue another one. It argues that “Parrish cannot succeed in its claims without attacking the lawfulness or validity of the revocation decisions” (R.F., at para. 23). According to the Crown, this attack on the licensing decisions must first occur by way of judicial review.
For the reasons given by Binnie J. in the companion decision of Canada (Attorney General) v. TeleZone Inc., 2010 SCC 62, [2010] 3 S.C.R. 585, the Crown’s arguments must fail.
Unlike in TeleZone, the Federal Court’s jurisdiction is not at issue in this appeal. Parrish brought its action in the Federal Court. However, the correct procedure — action or application for judicial review — is at issue. Section 17 of the Federal Courts Act gives the Federal Court concurrent jurisdiction over claims for damages against the Crown. Section 18 of the Federal Courts Act does not derogate from this concurrent jurisdiction. There is nothing in ss. 17 or 18 that requires Parrish to be successful on judicial review before bringing its claim for damages against the Crown.
Parrish complied with the re-issued import licence. It imported the wheat and fulfilled its contracts. Bringing an application for judicial review to invalidate the licensing decisions would serve no practical purpose. Parrish now brings an action in tort to recover the additional costs of complying with the CFIA’s licensing decisions.
The Crown may seek to defend against the action by relying on its statutory authority, under s. 47 of the Plant Protection Act , S.C. 1990, c. 22 , and s. 34 of the Plant Protection Regulations, to revoke or amend import permits. If it does so, the merits of this defence will have to be determined at trial.
For the reasons given in TeleZone, the Federal Court should have decided Parrish’s claim for damages without requiring it to first be successful on judicial review.
V. Conclusion
I would allow the appeal with costs throughout.
Cases cited
- 2006 FC 1102 2006 FC 1102 para 22 ¶ 8, ¶ 9
- Canada v. Grenier 2005 FCA 348 paras 29-30, para 12, para 26, para 13, para 29, para 37, para 39, para 44, para 46 ¶ 9, ¶ 11, ¶ 12, ¶ 13, ¶ 14, ¶ 16
- 2007 FC 789 2007 FC 789 ¶ 10
- 2008 FCA 362 2008 FCA 362 ¶ 11
- R.F. R.F., at para. 23 para 23 ¶ 16
- Canada (Attorney General) v. TeleZone Inc. 2010 SCC 62 ¶ 17