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Limitations - Geographic Jurisdiction. Canada (Attorney General) v. St-Onge [adoption of provincial law]
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 federal Crown Liability and Proceedings Act [CLPA (Cda)], s.32 - which adopts some provincial Crown liability-related laws (including some limitations law) for it's own purposes - and further, whether the limitations cause-of-action arose in Ontario:[3] Before the Board, the parties agreed that section 32 of the Crown Liability and Proceedings Act, R.S.C. 1985, c. C-50, applied to the employer’s action to collect the overpayment, but disagreed as to how it applied.
[4] Section 32 provides as follows:"Provincial laws applicable "
"Règles applicables "
"32 Except as otherwise provided in this Act or in any other Act of Parliament, the laws relating to prescription and the limitation of actions in force in a province between subject and subject apply to any proceedings by or against the Crown in respect of any cause of action arising in that province, and proceedings by or against the Crown in respect of a cause of action arising otherwise than in a province shall be taken within six years after the cause of action arose. "
"32"" Sauf disposition contraire de la présente loi ou de toute autre loi fédérale, les règles de droit en matière de prescription qui, dans une province, régissent les rapports entre particuliers s’appliquent lors des poursuites auxquelles l’État est partie pour tout fait générateur survenu dans la province. Lorsque ce dernier survient ailleurs que dans une province, la procédure se prescrit par six ans." [5] In her grievance, the respondent argued that Ontario’s two-year limitation period applied because the cause of action arose in Ontario and the employer’s claim to the overpayment was therefore statute-barred. In contrast, the applicant argued that the federal six-year limitation period applied because the cause of action arose "“otherwise than in a"" province”". In support of its position, the applicant relied principally on Markevich v. Canada, 2003 SCC 9 [Markevich] and Dansou v. Canada Revenue Agency, 2020 FPSLREB 100 [Dansou].
[6] Markevich concerned proceedings to collect taxes owing under the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.). In that case, after finding that section 32 of the Crown Liability and Proceedings Act was sufficiently broad to apply to statutory collection procedures under the Income Tax Act, the Supreme Court had to determine whether the cause of action on the federal tax debt arose in a province or otherwise than in a province.
[7] The Supreme Court observed that tax debts arise under federal legislation, create rights and duties between the federal Crown and residents of Canada or those who earn income within Canada, and are owed to the federal Crown which is not located in any particular province and does not assume a provincial locale in its assessment of taxes: Markevich at paras. 39-40. In its view, "“on a plain reading of s. 32, the cause of action ""in [""Markevich""] arose ‘otherwise than in a province’”" and "“[a] purposive reading of s. 32 support[ed] this finding”" because Parliament "“intended for limitation provisions to apply uniformly throughout the country with regard to proceedings of the kind at issue in [that] appeal”": Markevich at paras. 39-40. The Supreme Court thus decided that an action to collect tax debts under the Income Tax Act arose otherwise than in a province so the provincial limitation period did not apply: Markevich at para. 41.
[8] Dansou concerned an overpayment to a unionized employee. There, too, the Board sought "“to locate the ‘cause of action’”" and determined that it arose otherwise than in Quebec, where the grievor lived and worked: Dansou at para. 30. The Board characterized the cause of action as "“involv[ing] pay and the calculation of the salary level”", observing that "“[t]he calculation is performed by the CRA, which conducts its operations across Canada…[and] is headquartered in Ottawa. The pay calculation is carried out based on the collective agreement, which applies across the country”": Dansou at para. 30.
[9] Notwithstanding those decisions, the Board agreed with the respondent in this case, allowed her grievance, and ordered the employer to stop payroll deductions to recover the overpayment and to repay the respondent amounts previously deducted. The applicant now seeks judicial review of that decision.
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[18] ... I agree the Board’s decision is unreasonable.
[19] A cause of action arises in a province only where all the relevant elements of that cause of action occurred in the same province: Canada v. Maritime Group (Canada) Inc., 1995 CanLII 3513 (FCA), [1995] 3 F.C. 124, 185 N.R. 104 (F.C.A.) at 129; Apotex Inc. v. Astrazeneca Canada Inc., 2017 FCA 9 at para. 114, leave to appeal to SCC refused, 37478 (1 June 2017) [Apotex]; Sanofi-Aventis v. Apotex Inc., 2013 FCA 186 at para. 105; Canada (Attorney General) v. Liang, 2018 FCA 39 at para. 19.
[20] Here, the Board failed to identify the relevant cause of action, despite the parties’ written submissions to the Board on this point.
[21] In particular, the respondent submitted that there were two possible causes of action to recover the overpayment—breach of contract or unjust enrichment — but regardless, all of the essential facts occurred in Ontario, so the cause of action arose in Ontario: Written Submissions of the Grievors (Limitations Period Issue) at para. 22, Applicant’s Record at 174.
[22] Although the applicant did not use the phrase "“cause of action”", it analogized the circumstances in this case to those in Markevich, submitting that a salary overpayment that is made contrary to the terms of a national collective agreement gave rise to a federal debt that can be collected under a federal statutory procedure — subsection 155(3) of the Financial Administration Act.
[23] While we must review the Board’s reasons in light of the history and context of the proceedings giving rise to those reasons, the reasons must also "“meaningfully grapple with [the] key issues”": Vavilov at paras. 94, 128. Here, the Board concluded that where the cause of action in question arose was determinative, but it made no effort to identify the precise cause of action, and thus proceeded otherwise than as required by the very jurisprudence it cited, including Markevich and Apotex.
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[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.
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