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Federal Finance - Financial Administration Act (Cda). Canada (Attorney General) v. St-Onge [overpayments by the Crown]
In Canada (Attorney General) v. St-Onge (Fed CA, 2024) the Federal Court of Appeal allowed a JR, here from "a decision of the Federal Public Sector Labour Relations and Employment Board (Board) allowing a grievance" where "the respondent’s employer, the National Research Council of Canada, sought to recover amounts it mistakenly paid to the respondent ... by withholding a portion of her salary".
Here the court considers the remedial overpayment potential for the situation under "subsection 155(3) of the Financial Administration Act" ['Recovery of over-payment']:[24] In light of this, at the hearing of the application, we asked the parties to identify the cause of action, suggesting that a claim for breach of contract against the respondent seemed inapt since the respondent does not appear to have breached the collective agreement. We sought supplementary written submissions regarding the cause of action and the operation of subsection 155(3) of the Financial Administration Act.
[25] The parties agree that subsection 155(3) provides the Receiver General with a mechanism to recover an overpayment, but disagree as to its effect.
[26] The respondent says there can be no overpayment without a cause of action—"“[s]omething must make the overpayment an overpayment”": Respondent’s Further Written Submissions at 3. She submits that the cause of action is the common law claim of restitution for money paid under a mistake of fact, and that all of the elements of that cause of action arose in Ontario.
[27] The applicant’s submission regarding the cause of action is not as clear as it might be. On the one hand, it describes subsection 155(3) as "“not a cause of action in itself”" and instead the cause of action is the set of facts referred to in subsection 155(3) as needed for its exercise: Applicant’s Further Written Submissions at paras. 11, 14.
[28] On the other hand, the applicant suggests that subsection 155(3) authorizes the federal Crown to recover the overpayment, such that the elements of a cause of action for restitution in common law are neither relevant nor engaged: Applicant’s Further Written Submissions at para. 16. Specifically, the applicant asserts that "“none of the relevant facts underlying the exercise of ss. 155(3) of the [Financial Administration Act] were in any way affected by the province in which the [r]espondent worked”". Rather, "“[t]he overpayment…was a misapplication of the [c]ollective [a]greement”" which "“comprehensively defines the [r]espondent’s pay and provides the very basis for determining the existence of the overpayment”": Applicant’s Further Written Submissions at para. 18; Applicant’s Reply at para. 1. That appears to be an argument that the exercise of the right under subsection 155(3) is the cause of action.
[29] Put another way, or as I understand the applicant’s position, absent subsection 155(3), the applicant would have been required to initiate an action to establish that the respondent was indebted to her employer. However, the federal Crown’s authority to exercise its right under that provision depends only on there being an overpayment, and no common law cause of action is necessary to establish it.
[30] Courts should generally respect Parliament’s intention that administrative decision-makers decide the matters entrusted to them: Vavilov at para. 142. That principle applies here. Each party takes a different position on the nature of the cause of action—a common law action for restitution or an action to enforce the exercise of a statutory right to recover an overpayment. I have not been persuaded that only one is possible such that the result before the Board is inevitable.
[31] Accordingly, I would grant the application for judicial review, and remit the matter to the Board for redetermination. To apply section 32 of the Crown Liability and Proceedings Act, the Board must decide on the relevant cause of action, identify its constituent elements and decide whether they all arise in a province. As the applicant did not seek costs, I would award none. . Ontario Addiction Treatment Centres v. Canada (Attorney General)
In Ontario Addiction Treatment Centres v. Canada (Attorney General) (Fed CA, 2023) the Federal Court of Appeal considered an appeal from a JR of a refusal to grant a "request for remission of tax under subsection 23(2) of the (SS: federal) Financial Administration Act":[2] For relief under subsection 23(2), the taxpayer must show that “collection… or… enforcement… [would be] unreasonable, unjust or…otherwise [not] in the public interest”. Multiple factors, sometimes subjective and impressionistic, fall to be considered. The decision, based on these factors, is highly discretionary. As a result, it is often said that relief under the subsection is unusual or extraordinary.
[3] Using the terminology of Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, [2019] 4 S.C.R. 653, decisions of this sort are relatively unconstrained: the Minister has a discretion of sweeping ambit based on wide criteria. Thus, courts conducting reasonableness review rarely set aside these decisions: Fink v. Canada (Attorney General), 2019 FCA 276, [2019] D.T.C. 5127; Escape Trailer Industries Inc. v. Canada (Attorney General), 2020 FCA 54, 86 Admin. L.R. (6th) 1. In practical terms, normally only a fundamental misreading or misapplication of subsection 23(2), irrationality, or bad faith on the part of the Minister will lead to relief.
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[9] We also agree with the Federal Court’s conclusion and its reasons at paras. 81-89 on the issue of procedural fairness. In the context of remissions under subsection 23(2), the level of procedural fairness is relatively low: Desgagnés Transarctik Inc. v. Canada (Attorney General), 2014 FCA 14, 454 N.R. 381; Waycobah First Nation v. Canada (Attorney General), 2011 FCA 191, 421 N.R. 193. In this case, the Appellant made full submissions in support of its position. The Minister considered those submissions. Nothing in the circumstances of this case suggests that the Minister had to seek further information, documents or submissions from the Appellant.
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