[1995] 3 F.C. 762
T-1910-95
Ronald J. Bissett and Stephen E. Stapleton (Applicants)
v.
The Minister of Labour and Helayne R. Hauw (Respondents)
and
T-1649-95
Carlo Cimetta, Andreino Sartor and Kerry Tully (Applicants)
v.
Helayne R. Hauw and The Minister of Labour (Respondents)
Indexed as: Bissett v. Canada (Minister of Labour) (T.D.)
Trial Division, Rothstein J.—Toronto, September 18; Ottawa, October 11, 1995.
Administrative law — Statutory appeals — Labour relations — Applying relevant criteria (convenience, nature of error, tribunal), appeal to referee under Canada Labour Code from inspector’s payment orders under Code, s. 251.1 adequate alternative to judicial review — Jurisdictional questions or matters of natural justice within appellate authority of referee along with other questions relating to merits of decision under appeal.
Labour relations — Appeal to referee under Canada Labour Code from inspector’s payment orders issued pursuant to Code, s. 251.1 adequate alternative to judicial review — Jurisdictional questions or matters of natural justice within appellate authority of referee along with other questions relating to merits of decision under appeal.
When STN Inc. was placed in receivership in July, 1995, the interim receiver advised the employees that their employment was terminated. About two weeks later, an inspector under the Canada Labour Code issued payment orders to the applicants pursuant to subsection 251.1(1) of the Code. The payment orders provided that the applicants, former directors of STN who resigned prior to the terminations, were liable jointly and severally for wages of employees of STN in the amount of $567,120.51. The applicants commenced appeal proceedings and, as required by the Code, arranged for payment of the sum to the Minister of Labour. The applicants also brought applications in this Court seeking writs of certiorari quashing the payment orders. The respondents then brought motions seeking stays of the proceedings in this Court, and the applicants brought a cross-motion seeking stays of proceedings before the referee. The issue was whether a statutory appeal to a referee under the Code was an adequate alternative to judicial review.
Held, the cross-applications to stay proceedings before the referee should be dismissed and judicial review not undertaken.
The applicable principles were set forth in the recent Supreme Court of Canada case of Canadian Pacific Ltd. v. Matsqui Indian Band: (1) judicial review is a discretionary remedy; (2) judicial review is available where there is no adequate alternative remedy (the adequacy being determined in relation to convenience, nature of the error, and the nature of the appellate body); (3) a statutory appeal may be adequate even when the issues involve questions of jurisdiction including questions of natural justice.
(1) Adequacy of the referee alternative. The referee’s broad powers allow him to fully deal with the applicants’ appeals in terms of process and remedy and in this sense, an appeal to the referee is an adequate alternative to judicial review. Even though the applicants portray the issue as one of simply determining the dates of their resignations, there is some doubt that the question of the directors’ liability can be dealt with as a simple discreet preliminary issue even if it is ultimately determined to be a question of jurisdiction. Some evidence will be necessary, at least as to the exact date of their resignations. Considerations of time and cost favour the referee process. If the payment orders were made without adherence to the rules of natural justice, the referee may, in a much more convenient way than judicial review, confirm, rescind or vary the payment orders based on the evidence of the applicants and such other evidence as is tendered.
(2) Institutional Independence—Reasonable apprehension of bias. The question of the institutional independence of the referee goes to the constitutional validity of the referee provisions of the Canada Labour Code. However, the applicants failed to comply with the requirement of section 57 of the Federal Court Act to give notice to the federal and provincial Attorneys General. The question is premature: further evidence as to the nature of referee appointments, the basis of remuneration and other relationships, if any, between the referee, the Minister and the inspector would be necessary in order that a decision as to the institutional independence of the referee be an informed one.
(3) Constitutional challenge based on Constitution Act, 1867, s. 96 The applicants argue, based on the Supreme Court of Canada’s decision in Crevier v. Attorney General of Quebec et al. that the referee does not have the authority to review decisions of inspectors for jurisdictional error as such role is reserved to judges appointed by the Governor General under section 96 of the Constitution Act, 1867. There would be no point in granting the applicants leave to comply with section 57 of the Federal Court Act in respect of this issue when such leave was not granted for the institutional independence—bias argument. Nevertheless, Crevier could be distinguished as an attempt by the Legislature of Quebec to establish a court which was outside its legislative competence. Jurisdictional questions or matters of natural justice were within the appellate authority of the referee along with other quesions that related to the merits of the decision being appealed.
On the basis of the material before the Court and the arguments made, an appeal to the referee constitutes an adequate alternative remedy to judicial review in the circumstances of this case.
STATUTES AND REGULATIONS JUDICIALLY CONSIDERED
Canada Labour Code, R.S.C., 1985, c. L-2, ss. 251.1(1) (as enacted by S.C. 1993, c. 42, s. 37), 251.11 (as enacted idem), 251.12 (as enacted idem).
Constitution Act, 1867, 30 & 31 Vict., c. 3 (U.K.) (as am. by Canada Act 1982, 1982, c. 11 (U.K.), Schedule to the Constitution Act, 1982, Item 1) [R.S.C., 1985, Appendix II, No. 5], s. 96.
Federal Court Act, R.S.C., 1985, c. F-7, s. 57 (as am. by S.C. 1990, c. 8, s. 19).
Indian Act, R.S.C., 1985, c. I-5.
Interpretation Act, R.S.C., 1985, c. I-21, s. 2(1).
Professional Code, R.S.Q. 1977, c. C-26.
CASES JUDICIALLY CONSIDERED
APPLIED:
Canadian Pacific Ltd. v. Matsqui Indian Band, [1995] 1 S.C.R. 3; Harelkin v. University of Regina, [1979] 2 S.C.R. 561; (1979), 96 D.L.R. (3d) 14; [1979] 3 W.W.R. 676; 26 N.R. 364.
DISTINGUISHED:
Crevier v. Attorney General of Quebec et al., [1981] 2 S.C.R. 220; (1981), 127 D.L.R. (3d) 1; 38 N.R. 541.
REFERRED TO:
Chrysler Canada Ltd. v. Canada (Competition Tribunal), [1992] 2 S.C.R. 394; (1992), 92 D.L.R. (4th) 609; 42 C.P.R. (3d) 353; 138 N.R. 321.
APPLICATIONS to stay proceedings in this Court and cross-applications to stay proceedings before a referee under the Canada Labour Code, the issue being whether a statutory appeal to a referee under the Code is an adequate alternative to judicial review. The cross-applications and the judicial reviews are dismissed.
COUNSEL:
Andrew J. Reddon for applicants in T-1910-95.
Clifton P. Prophet and Susan J. Stamm for applicants in T-1649-95.
Peter M. Southey and Gina M. Scarcella for respondents.
SOLICITORS:
McCarthy Tétrault, Toronto, for applicants in T-1910-95.
Gowling, Strathy & Henderson, Toronto, for applicants in T-1649-95.
Deputy Attorney General of Canada for respondents.
The following are the reasons for order rendered in English by
Rothstein J.: The issue in these proceedings is whether a statutory appeal to a referee under the Canada Labour Code, R.S.C., 1985, c. L-2, is an adequate alternative to judicial review.
FACTS
The applications and cross-applications in Court files T-1649-95 and T-1910-95 were heard together. The applicants in both files had been directors of STN Incorporated.[1] On July 4, 1995 an interim receiver of STN was appointed by order of the Ontario Court (General Division) and on July 5, 1995 the interim receiver advised the employees that their employment with STN was terminated.
On July 18, 1995, Helayne R. Hauw, an inspector under the Canada Labour Code issued payment orders to the applicants pursuant to subsection 251.1(1) [as enacted by S.C. 1993, c. 42, s. 37] of the Code. The payment orders provided inter alia, that the applicants were liable jointly and severally for wages of employees of STN in the amount of $567,120.51.
The applicants say they were not given notice or an opportunity to be heard before Ms. Hauw issued payment orders to them. They also say that they resigned before the employees were terminated by the interim receiver and are therefore not liable for the wages of the employees.
Under the Canada Labour Code, if the applicants wish to challenge the payment orders they may commence an appeal to a referee within 15 days of having been served with the orders. It is a requirement to the bringing of an appeal that the directors pay to the Minister of Labour the amount indicated in the payment orders. Section 251.11 [as enacted idem] of the Canada Labour Code provides:
251.11 (1) A person who is affected by a payment order or a notice of unfounded complaint may appeal the inspector’s decision to the Minister, in writing, within fifteen days after service of the order, the copy of the order, or the notice.
(2) An employer or a director of a corporation may not appeal from a payment order unless the employer or director pays to the Minister the amount indicated in the payment order, subject to, in the case of a director, the maximum amount of the director’s liability under section 251.18.
The applicants did commence appeal proceedings and did arrange for payment of the sum of $567,120.51 to the Minister of Labour. (The Court is therefore not confronted in this case with the situation of an applicant that could not pay to the Minister the amount indicated in a payment order.) The applicants also brought applications in this Court seeking writs of certiorari quashing the payment orders.
In early September 1995, the respondents brought motions seeking stays of the proceedings in this Court. This was followed by cross-motions by the applicants seeking stays of proceedings before the referee. It is these stay motions which give rise to this decision.
APPLICABLE LAW
At the outset there was some controversy over the applicable law. In the course of argument, however, counsel agreed that the governing principles were those set forth in the recent Supreme Court of Canada case, Canadian Pacific Ltd. v. Matsqui Indian Band, [1995] 1 S.C.R. 3. In his reasons, Lamer C.J. for the majority, provides guidance for cases such as the one at bar. I summarize the relevant principles as follows:
1. While a party may have a right to seek judicial review in the Federal Court Trial Division, there is no requirement for the Court to undertake judicial review. Judges of the Federal Court Trial Division have discretion in determining whether judicial reviews should be undertaken.
2. The adequate alternative remedy principle as enunciated in Harelkin v. University of Regina, [1979] 2 S.C.R. 561, is affirmed. Courts should consider a variety of factors in deciding whether a statutory appeal procedure is an adequate alternative remedy or whether judicial review should be undertaken. At page 31 of Canadian Pacific Ltd. v. Matsqui Indian Band the Chief Justice states:
… I conclude that a variety of factors should be considered by courts in determining whether they should enter into judicial review, or alternatively should require an applicant to proceed through a statutory appeal procedure. These factors include: the convenience of the alternative remedy, the nature of the error, and the nature of the appellate body (i.e., its investigatory, decision-making and remedial capacities). I do not believe that the category of factors should be closed, as it is for courts in particular circumstances to isolate and balance the factors which are relevant.
3. A statutory appeal tribunal may constitute an adequate alternative remedy even when the issues involve questions of jurisdiction including questions of natural justice.
APPLICANTS’ ARGUMENTS
I have considered the submissions of counsel as to convenience, nature of the error and nature of the appeal body. Counsel have not submitted any other factors as being relevant in this case. Counsel for the applicants say that the issues involved here are preliminary and discreet and that it would be inconvenient to embroil them in a wide-ranging, complex process including the calling of evidence. They say they can never be compensated for their time and the total costs. They say the errors here are jurisdictional and that there is a strong prima facie case that they have been committed. As to the nature of the appeal body, the applicants say that the referee does not have security of tenure, security of remuneration or independence from the executive and is therefore not institutionally independent, giving rise to a reasonable apprehension of bias. The applicants also say that Parliament does not have the authority to establish an appeal to a referee under the Canada Labour Code because such provisions contravene section 96 of the Constitution Act, 1867, 30& 31 Vict., c. 3 (U.K.) [(as am. by Canada Act 1982, 1982, c. 11 (U.K.), Schedule to the Constitution Act, 1982, Item I) [R.S.C., 1985, Appendix II, No. 5]].
ANALYSIS
Convenience, nature of the error and nature of the tribunal (except for the issue of institutional independence and reasonable apprehension of bias) are all matters which, at least in this case, are interrelated.
The appointment of, procedure before, and jurisdiction of the referee under the Canada Labour Code is set out in section 251.12 [as enacted idem] of the Code:
251.12 (1) On receipt of an appeal, the Minister shall appoint any person that the Minister considers appropriate as a referee to hear and adjudicate on the appeal, and shall provide that person with
(a) the payment order or the notice of unfounded complaint; and
(b) the document that the appellant has submitted to the Minister under subsection 251.11(1).
(2) A referee to whom an appeal has been referred by the Minister
(a) may summon and enforce the attendance of witnesses and compel them to give oral or written evidence on oath and to produce such documents and things as the referee deems necessary to deciding the appeal;
(b) may administer oaths and solemn affirmations;
(c) may receive and accept such evidence and information on oath, affidavit or otherwise as the referee sees fit, whether or not admissible in a court of law;
(d) may determine the procedure to be followed, but shall give full opportunity to the parties to the appeal to present evidence and make submissions to the referee, and shall consider the information relating to the appeal; and
(e) may make a party to the appeal any person who, or any group that, in the referee’s opinion, has substantially the same interest as one of the parties and could be affected by the decision.
(3) The referee shall consider an appeal and render a decision within such time as the Governor in Council may, by regulation, prescribe.
(4) The referee may make any order that is necessary to give effect to the referee’s decision and, without limiting the generality of the foregoing, the referee may, by order,
(a) confirm, rescind or vary, in whole or in part, the payment order or the notice of unfounded complaint;
(b) direct payment to any specified person of any money held in trust by the Receiver General that relates to the appeal; and
(c) award costs in the proceedings.
(5) The referee shall send a copy of the decision, and of the reasons therefor, to each party to the appeal and to the Minister.
(6) The referee’s order is final and shall not be questioned or reviewed in any court.
(7) No order shall be made, process entered or proceeding taken in any court, whether by way of injunction, certiorari, prohibition, quo warranto or otherwise, to question, review, prohibit or restrain a referee in any proceedings of the referee under this section.
(1) Adequacy of the Referee Alternative
It is apparent that the powers of a referee are broad. The appeal is not just a judicial review of the order being challenged. The appeal provides for a full hearing de novo. The referee may confirm, rescind or vary payment orders in whole or in part, may order payment of monies held to any specified person and may award costs. Certainly it is apparent the referee may fully deal with the applicants’ appeals in terms of process and remedy and in this sense, the referee is an adequate alternative to judicial review.
However, the applicants say that it is the very breadth of the appeal process before the referee that makes that forum inconvenient. This argument is based on their assertions that the issues in the appeals are discreet. Without in any way purporting to adjudicate on the merits of the issues, I am not satisfied on the material before me that this is the case.
The applicants say they were not directors at the relevant time and therefore the referee does not have jurisdiction to issue payment orders against them. The applicants portray the issue as one of simply determining the dates of their resignations. The respondents say that the dates of resignation of some of the applicants are in doubt and that in respect of at least the vacation pay portion of the wages owed to employees, vacation pay liability was incurred before the dates of the directors’ resignations.
As I have said, it is not for me to adjudicate this dispute. Suffice it to say, even if I accept that the applicants have a strong prima facie case, I have been satisfied that the respondents’ position is not obviously frivolous or vexatious and that it will have to be considered. Further, I have some doubt that the question of the directors’ liability can be dealt with as a simple discreet preliminary issue even if it is ultimately determined to be a question of jurisdiction. It appears that some evidence will be necessary, at least as to the exact date of resignations. The broad powers of the referee will enable the referee to consider all relevant matters and make a decision which can provide the remedy the applicants seek if it is found that they are entitled to such remedy. This could include not only the return of the amount paid to the Minister of Labour but also costs. Considerations of time and cost, in my opinion, favour the referee process.
If the payment orders were made without adherence to the rules of natural justice (assuming such rules are applicable) the applicants will have the opportunity to tell the referee what they were precluded from saying to the inspector who made the payment orders. The referee may confirm, rescind or vary the payment orders based on the evidence of the applicants and such other evidence as is tendered. This appears to me to be a more efficient way in which to deal with the matter than through judicial review which, if the applicants are successful, would involve remitting the matter back to an inspector for redetermination.
(2) Institutional Independence—Reasonable Apprehension of Bias
I now turn to the question of institutional independence and reasonable apprehension of bias. The applicants’ argument is not based on the particular individuals or circumstances involved, but on the scheme of the legislation. They say that the inspector is appointed by the Minister of Labour, as is the referee. In their view, this brings into question the referee’s institutional independence. They also say that there is a question of the referee’s lack of security of tenure and financial security.
While I cannot say that Parliament could never establish a scheme that might run afoul of the principle of institutional independence, that is not a question of whether a referee in a specific case is an adequate alternative to judicial review, having regard to the type of considerations suggested by Lamer C.J. in Matsqui. It is an argument that goes to the constitutional validity of the referee provisions of the Canada Labour Code. Applicants’ counsel suggested that it was not necessary to deal with the question of institutional independence and apprehension of bias in the legislation by way of a constitutional challenge. However, unlike Canadian Pacific Ltd. v. Matsqui Indian Band, where the relevant provisions were contained in what amounted to regulations,[2] See Canadian Pacific Ltd. v. Matsqui Indian Band, at pp. 17-18. By-laws made by an which, as subordinate legislation, could be challenged under ordinary common law principles of ultra vires, here the provisions in issue are contained in primary legislation, the Canada Labour Code. To challenge the validity of a provision of the Canada Labour Code, counsel for the applicants would have to have complied with section 57 of the Federal Court Act, R.S.C., 1985, c. F-7 [as am. by S.C. 1990, c. 8, s. 19] by giving notice to federal and provincial Attorneys General. This was not done. Counsel for the applicants did ask for an opportunity to comply. For the reasons I shall give, I do not think that granting time to comply with section 57 would serve a useful purpose.
Counsel for the respondents submitted:
1. There is no evidence as to the lack of security of tenure, security of remuneration or inappropriate administrative control upon which the Court could consider the issue of reasonable apprehension of bias.
2. The arguments relating to reasonable apprehension of bias are premature.
3. On the merits, it has not been established that the referee is not institutionally independent.
On the issues of lack of evidence and prematurity, Sopinka J. wrote for a majority of the judges who expressed an opinion on this point (but not a majority of the Court) in Canadian Pacific Ltd. v. Matsqui Indian Band, at page 68:
… I would defer application of the test so that the reasonable person will have the benefit of knowing how the tribunal operates in actual practice. That the principles of natural justice are flexible and must be viewed in their contextual setting has become almost a trite observation.
And at pages 71-72, he stated:
Case law has thus tended to consider the institutional bias question after the tribunal has been appointed and/or actually rendered judgment. That institutional independence must be considered “objectively” does not preclude considering the operation of a legislative scheme which creates an administrative tribunal, but only vaguely or partly sets out the three Valente elements, as in this appeal, where the taxation by-laws in issue are silent with regard to details relating to tenure and remuneration. It is not safe to form final conclusions as to the workings of this institution on the wording of the by-laws alone. Knowledge of the operational reality of these missing elements may very well provide a significantly richer context for objective consideration of the institution and its relationships. Otherwise, the administrative law hypothetical “right-minded person” is right-minded, but uninformed.
The Canada Labour Code is silent on the issues of tenure and remuneration. Before me, a September 12, 1995 letter of the referee’s appointment was tendered. The letter also only vaguely deals with these issues. The letter states, in part:
Dear Mr. Dissanayake:
Further to your telephone conversation with Mr. P. Lépine of this Branch, I wish to confirm that the Minister of Labour, the Honourable Lucienne Robillard, has appointed you Referee to hear the above-noted wage recovery appeals.
Enclosed you will find relevant documentation pertaining to this case and guidelines concerning your remuneration and expenses.
The guidelines concerning remuneration and expenses were not put into evidence.
It is apparent to me, as it was to Sopinka J. in Matsqui, that it is not appropriate to form a final conclusion at this early stage as to the institutional independence of the referee on the basis only of a consideration of the Canada Labour Code and the appointment letter. Further evidence as to the nature of referee appointments, the basis of remuneration and other relationships, if any, between the referee, the Minister and the inspector would be necessary in order that a decision as to institutional independence be an informed one. Because of the absence of such evidence at this stage, it would be premature to decide the question of institutional independence and reasonable apprehension of bias on these motions.
I do not think that granting time for compliance with section 57 of the Federal Court Act would serve a useful purpose because there is an absence of evidence on the issue of institutional independence and consideration of the matter is therefore premature. Indeed, it would only result in further delay. I therefore decline to deal with this constitutional challenge to the referee provisions of the Canada Labour Code on these motions.
(3) Constitutional Challenge Based on Section 96 of the Constitution Act, 1867
Finally, the applicants argue that the referee does not have the authority to review decisions of inspectors for jurisdictional error as such role is reserved to judges appointed by the Governor General under section 96 of the Constitution Act, 1867:
96. The Governor General shall appoint the Judges of the Superior, District, and County Courts in each Province, except those of the Courts of Probate in Nova Scotia and New Brunswick.
The applicants rely on Crevier v. Attorney General of Quebec et al., [1981] 2 S.C.R. 220.
Again, there has not been compliance with section 57 of the Federal Court Act. There would be no point in granting the applicants’ leave to comply for purposes of this argument when such leave was not granted for the institutional independence—bias argument. However, I think some comments on the Crevier decision may provide some guidance.
Initially, I would observe that it is by no means certain that section 96 limits the power of Parliament to create appeal tribunals. See Chrysler Canada Ltd. v. Canada (Competition Tribunal), [1992] 2 S.C.R. 394, at page 415.
In any event, Crevier dealt with an unusual statutory scheme whereby, in the view of the Supreme Court of Canada, the province of Quebec attempted to establish a court which was beyond its legislative competence under the Constitution Act, 1867. In Crevier, a professional tribunal was established composed of six provincial court judges designated by the Chief Judge of Quebec to hear appeals from disciplinary boards. The judicial composition of the professional tribunal effectively created a parallel provincial court system with separate and distinct authority from the regular provincial court. The Supreme Court held that the professional tribunal was not an integral part of the administrative scheme under the Professional Code, R.S.Q. 1977, c. C-26, but rather, that it sat on top of the scheme in a wholly supervisory capacity. As such, the Supreme Court viewed the Professional Code as an attempt by the Legislature of Quebec to establish a court which was outside its legislative competence.
The more usual legislative scheme is to establish tribunals to perform specified functions as deemed appropriate by Parliament or a legislature. They are not normally composed solely of judges. In the course of their decision-making role, questions of law or jurisdiction may arise which are incidental to the decisions the tribunal makes. This would include a question, as in Canadian Pacific Ltd. v. Matsqui Indian Band, of whether land is or is not within a reserve for assessment and taxation purposes, whether a person has been denied natural justice as in the Harelkin case, or whether persons served with payment orders were directors at the relevant time for purposes of determining their liability for wages under the Canada Labour Code. The role of the referee in the case of the Code is part of the overall administrative scheme envisaged by the legislation. The referee hears appeals on all relevant questions relating to directors’ liability. The referee is not required to be a judge of an established court. Jurisdictional questions or matters of natural justice may, in a particular case, be raised as grounds of appeal. Such questions are within the appellate authority of the referee along with other questions that relate to the merits of the decision being appealed. Crevier has no application to this case.
CONCLUSION
On the basis of the material before me and the arguments made, I conclude that a referee constitutes an adequate alternative remedy to judicial review in the circumstances of this case. Of course the referee should deal with the appeals before him in the most efficient and expeditious manner consistent with fairness. But it will be for the referee to determine the procedure to be followed in the proceedings.
This is therefore not a case in which the Court should undertake judicial review. The applications to stay proceedings before the referee are dismissed. The judicial reviews are dismissed.