In Quebec, Article 165 of the Code of Civil Procedure
(“Code”) provides the courts of that province with a mechanism, at a preliminary stage,
to put an end to actions that are bound to fail. In a recent Supreme
Court of Canada decision (Canada (Attorney General) v. Confederation des
syndicats nationaux, 2014 SCC 49), the court ruled that judges must be cautious in exercising this
power: although the proper of administration
of justice requires that the court’s resources not be expended on actions that
are bound to fail, the cardinal principle of access to justice requires that
the power be used sparingly, where it is clear that an action has no reasonable
chance of success.
In this case, the court agreed that an action brought by the Confederation des syndicats
nationaux and the Federation des travailleurs et travailleuses du Quebec
(referred to collectively as the “Unions”) was bound to fail, finding that the application of the doctrine
of stare decisis was fatal to it. A previous decision of the
Supreme Court of Canada had settled the law on the legal issues that the action
raised. That previous decision deprived the Unions’ motion to institute
proceedings of any legal basis.
The Code
The motion was based on an article in the Code which was designed to avoid a trial where an action has no basis in law, even if the facts in support of it are admitted. The court held that the Code "favoured the sound and effective management of judicial resources", i.e. the power of the courts to dismiss actions at a preliminary stage and held that the tool “is a valuable housekeeping measure essential to effective and fair litigation. It unclutters the proceedings, weeding out the hopeless claims and ensuring that those that have some chance of success go on to trial.”
However, because dismissing an action at a preliminary stage can have very serious consequences the courts must be cautious in exercising this power. As a result, an action will not be dismissed at such an early stage in the proceedings unless it is “plain and obvious” that it lacks a basis in law.
The plain and obvious situation opens the door to a dismissal of an action that is apparent from the allegations set out in the motion. The facts alleged in the motion must be assumed to be true.
Operation of Stare Decisis
In respect of dismissing an action on the basis of stare decisis, the Supreme Court held that judgments rendered under the article of the Code often concerned situations in which the right being claimed was clearly prescribed. An action will sometimes be dismissed if it is clear that an authoritative decision had already resolved the issue or issues raised in the motion. The court held that the doctrine of stare decisis is "not inflexible". The precedential value of a judgment may be questioned “if new legal issues are raised as a consequence of significant developments in the law, or if there is a change in the circumstances or evidence that fundamentally shift the parameters of the debate” where, on the other hand, the legal issue remains the same and arises in a familiar context, the precedent still represents the law and must be followed by the courts.
Accordingly, the judge must be satisfied in light of the record and the alleged facts that the precedent relied on by the applicant actually concerned the entire dispute that it should normally resolve and that it provided a complete, certain and final solution to the dispute.
The Case
In 1996 the federal government carried out a
major reform of the employment insurance program when it enacted the Employment
Insurance Act (“1996 Act”). One of the main components of the
reform concerned the mechanism for setting the premiums payable by workers and
employers who contributed to the program and thus the method of financing the
program. Faced with periodic deficits in the program and fearing the
effects of an economic downturn on the Consolidated Revenue Fund, Parliament
sought to create a reserve to enhance the program's stability while avoiding
significant fluctuations in premiums.
In 1998 and 1999, the Unions went to court to strike down
certain provisions of the 1996 Act, arguing that the premium-setting mechanism
was unconstitutional because the annual surpluses in the account were being
reallocated by the government to its general expenses, including budget deficit
reduction (there was a surplus of several billion dollars in the
account). In the Unions’ view, this was a misappropriation of monies that
were supposed to be ear-marked for employment insurance.
In December of 2008, the Supreme Court declared that the
measures adopted in the 1996 Act were valid and constitutional with the
exception of the measures that applied in 2002, 2003 and 2005. For those
years, premium rates had been set by sections in the 1996 Act that made it
possible to disregard the criteria which governed the exercise of the power to
set rates. The Supreme Court accepted that for the years in question, the
improper exercise by the Governor in Council of the power conferred on
Parliament was a technical defect and it suspended the effect of the
declaration of invalidity of the impugned sections to enable Parliament to
rectify the situation.
In July of 2010, Parliament enacted the Jobs and Economic
Growth Act (“2010 Act”) which provided for, among other thing,
closing the Employment Insurance Account and creating a new account
called the Employment Insurance Operating Account retroactive to January 1, 2009.
The 2010 Act did not specify that the balance of the
Employment Insurance Account, which at that point amounted to over $57 billion
was to be transferred to the new Employment Insurance Operating
Account. This is the context in which the litigation began.
In April of 2011, the Unions filed a motion in order to have
certain provisions of the 2010 Act declared unconstitutional. The
Attorney General of Canada argued that the issues raised by the Unions had already been decided by the Supreme Court in 2008 and moved to dismiss the action under
an Article of the Code on the basis that it was unfounded in law.
The motion to dismiss was granted by the Quebec Superior
Court. The motion judge held that the Supreme Court had previously held
it its 2008 case, that the monies from the program belonged to the government and
not to the contributors. The accumulated surpluses formed part of the government’s
revenues, did not have to be used solely for the employment insurance program
and were not a debt owed to the program by the Consolidated Revenue Fund.
Accordingly, she dismissed the action.
The Quebec Court of Appeal set aside the motion judge’s
decision and found that the action was concerned more with the ”effects of the
act of eliminating the balance and resulting accounting entries” that flowed
from the 2010 legislative amendment than with the use of the surpluses that had
accumulated in the account. The Court of Appeal held that the issue
had not been disposed of by the Supreme Court in its 2008 decision since the
legislation in question had not yet been enacted. The Court of Appeal
also noted that the Union’s allegation that the Consolidated Revenue Fund was
indebted to the Employment Insurance Account was one of the facts that the
trial judge had to assume to be true.
In allowing the appeal, the Supreme Court held that before
granting a motion to dismiss on the basis that an authoritative decision had
already resolved the issue before him or her, the judge "must be satisfied in
light of the record and the alleged facts that the precedent relied on by the
applicant concerned the entire dispute that it should normally resolve, and that
it provided a complete, certain and final solution to the dispute".
In this case, the Supreme Court held that Unions’ action was bound to fail.
The action's underlying premise was that a balance in the Employment Insurance
Account is a debt owed by the Consolidated Revenue Fund to that account.
In the Unions’ view, the premiums paid in the context of the employment
insurance program are constitutionally valid only if they are properly accounted
for. The court held however, that its 2008 decision settled the law in that regard and it
deprived the motion to institute proceedings of any legal basis. In that
case, the Supreme Court held that the amounts collected as contributions to the
employment insurance program formed part of the government’s revenues and could be
used for purposes other than paying benefits. Although, the connection
between the program and the premiums was a fact that could be considered in
determining the nature of the levies, it was wrong to say that the validity of
these levies depended on the existence of that connection.
Furthermore, the Supreme Court held that no debt of the Consolidated Revenue Fund to the
Employment Insurance Account ever existed, since the government cannot be
indebted to itself.
Because the action had no reasonable chance of success
the section of the Code applied and was appropriate to dismiss the action at
the preliminary stage.
Regards,
Blair
No comments:
Post a Comment