A-1016-96
The CSL Group Inc. and Canada Steamship Lines Inc. (Appellants) (Plaintiffs)
v.
Her Majesty the Queen in Right of Canada (Respondent) (Defendant)
Indexed as: The CSL Group Inc.v. Canada (C.A.)
Court of Appeal, Marceau, Décary and Létourneau JJ.A."Montréal, June 9, 10; Ottawa, July 3, 1998.
Crown — Torts — Action under Crown Liability and Proceedings Act, s. 3(a) for reimbursement of revenue lost by shipping companies due to restrictions, necessitated by Coast Guard Ships' Crews being on strike, imposed by authority responsible for traffic on St. Lawrence Seaway — Restrictions necessary for security reasons — Plaintiffs' argument: Treasury Board (TB) negligent in failing to file —designated employees— list within statutory limitation period after receiving notice to bargain — Alleged wrongdoing not within maritime law as damages claimed economic only, unrelated to appellants' ships, cargoes — Delay in filing list of designated employees not wrongful — Crown's only duty in respect of seaway to ensure security of public — May be discharged by methods other than designation of employees in case of strike — TB, in filing —designated employees— list under rights conferred by PSSRA, not dispensing service to public.
Public service — Labour relations — Shipping companies seeking damages due to legal strike by Coast Guard members causing delays for ships using St. Lawrence Seaway — Treasury Board (TB) late in filing list of designated employees under PSSRA, s. 79 — Delay not wrongful — Public servants not acting imprudently, in disorganized manner — Default by TB not resulting in civil liability — TB officials responsible for filing list of designated employees, Board itself not exercising rights, options conferred on them by Act as dispensers of service to public — Even if conduct complained of having significant consequences for public, economy, subject to sanction only in political arena.
This was an appeal from a Trial Division decision dismissing an action for damages under paragraph 3(a) of the Crown Liability and Proceedings Act. The appellants, a group of Quebec shipping companies, brought an action to obtain reimbursement of revenue lost by them when, as a result of restrictions imposed by the authority responsible for traffic on the St. Lawrence Seaway, they were prevented from performing contractual commitments in the course of their business. They did not dispute that these restrictions were necessary for security reasons and that all the measures were taken in order to mitigate the impact on the public of the strike legally commenced on November 11, 1989 by the Ships' Crews Group. They did argue, however, that the Coast Guard was not available in due course to remove the summer buoys by reason of the premature build up of ice that year, and that this fact was the result of wrongful conduct on the part of Treasury Board officials who failed to ensure that Ships' Crews would have to remain on duty in the event of a strike. The Treasury Board had intended to submit a list of employees in the various departments who, in its opinion, should be designated as performing duties necessary for public security, and that list included the Coast Guard Ships' Crews members. Under section 79 of the Public Service Staff Relations Act, Treasury Board had 20 days to file its list but did not do so until the 21st day after receiving the notice to bargain. The union sought judicial review of the acceptance for filing of the list and the Federal Court held that the time limit was mandatory and not to be extended unless an insurmountable obstacle were proven. The Trial Judge in this action ruled that the federal government is under no duty to maintain the St. Lawrence Seaway in perfect operating condition so that vessels can transit it without undue delay and that its only duty, which is a public law duty, is to ensure the protection and security of the public. He also concluded that Treasury Board employees who were late in filing the list committed no tort for which they could be liable at common law. These conclusions were the subject of this appeal.
Held, the appeal should be dismissed.
The Trial Judge did not misunderstand the elements of the cause of action set out in the statement of claim. The alleged wrongdoing had nothing to do with maritime law and the damages claimed, consisting solely of lost profits, were unrelated to the appellants' ships or cargos, since there were essentially economic. There was no connection, even indirect, with the carriage of goods by sea which the Supreme Court of Canada has held to be sufficient but essential if a situation was to fall under the heading of maritime law. The conflict of law resulting from the fact that the alleged wrongdoing by the Treasury Board employees was committed in Ontario and the damage suffered in Quebec must be resolved in favour of Quebec. However, the conclusion that must be reached from the facts as to liability does not vary from one legal system to the other. The Trial Judge was right in refusing to characterize the delay by the Treasury Board in filing its list of designated employees as wrongful. It could not be said that its officials acted imprudently or in a disorganized manner. At that time, they were correct in thinking that it would be better to wait for the reports from all the departments, even though it resulted in being late in filing by one day, given that the twenty-day time limit had until then been regarded as not being mandatory. Late filing of the section 79 "list" by the Treasury Board is no different from the simple refusal to file which is a decision that is subject to sanction in the political arena only. The government's only duty in respect of the Seaway is to ensure the security of the public, and that duty may be discharged by other methods than obtaining the designation of workers in contemplation of a strike. Even if there was one wrongful act on the part of an employee, it could not result in the Treasury Board's civil liability. Neither the Treasury Board officials who were responsible for filing the list of designated employees nor the Treasury Board itself, as representative of the Crown, were exercising the rights and options conferred on them by the Public Service Staff Relations Act as dispensers of a service to the public.
statutes and regulations judicially considered
Crown Liability and Proceedings Act, R.S.C., 1985, c. C-50 (as am. by S.C. 1990, c. 8, s. 21), s. 3(a).
Government Services Resumption Act, S.C. 1989, c. 24.
Public Service Staff Relations Act, R.S.C. 1970, c. P-35, s. 79.
Public Service Staff Relations Act, R.S.C., 1985, c. P-35.
cases judicially considered
applied:
ITO—International Terminal Operators Ltd. v. Miida Electronics Inc. et al., [1986] 1 S.C.R. 752; (1986), 28 D.L.R. (4th) 641; 34 B.L.R. 251; 68 N.R. 241.
distinguished:
Just v. British Columbia, [1989] 2 S.C.R. 1228; (1989), 64 D.L.R. (4th) 689; [1990] 1 W.W.R. 385; 41 B.C.L.R. (2d) 350; 41 Admin. L.R. 161; 1 C.C.L.T. (2d) 1; 18 M.V.R. (2d) 1; 103 N.R.1; Kamloops (City of) v. Nielsen et al., [1984] 2 S.C.R. 2; (1984), 10 D.L.R. (4th) 641; [1984] 5 W.W.R. 1; 29 C.C.L.T. 97; Home Office v. Dorset Yacht Co. Ltd., [1970] 2 All ER 294 (H.L.).
referred to:
Public Service Alliance of Canada v. Canada (Treasury Board), [1989] 2 F.C. 445 (C.A.); Canada (Attorney General) v. P.S.A.C., [1989] 3 F.C. 585; (1989), 105 N.R. 129 (C.A.); Kibale v. Canada (1993), 58 F.T.R. 199 (F.C.T.D.); Canada v. Maritime Group (Canada) Inc., [1993] 1 F.C. 131; (1992), 58 F.T.R. 253 (T.D.); Gingras v. Canada, [1994] 2 F.C. 734; (1994), 113 D.L.R. (4th) 295; 3 C.C.P.B. 194; 165 N.R. 101 (C.A.).
authors cited
Linden, J. "Tort Liability of Governments for Negligence" (1995), 53 Advocate 535.
APPEAL from a Trial Division decision ([1997] 2 F.C. 575) dismissing an action for damages brought under paragraph 3(a) of the Crown Liability and Proceedings Act and based on an alleged act of negligence committed by public servants of the Treasury Board of Canada in failing to file, before statutory deadline, list of "designated employees" prohibited from going out on strike. Appeal dismissed.
appearances:
David F. H. Marler for appellants.
Raymond Piché for respondent.
solicitors:
David F. H. Marler, Montréal, for appellants.
Deputy Attorney General of Canada for respondent.
The following is the English version of the reasons for judgment rendered by
Marceau J.A.: The special interest generated by this appeal from a final judgment of the Trial Division [[1997] 2 F.C. 575] arises not only from the fact that the fate of 13 parallel actions all involving large sums of money depends on its outcome, but primarily from the fact that its analysis brings us to a sort of crossroads where some broad avenues of the science of law meet. At first glance, the problems it raises prompt considerations relating to maritime law, common law, civil law, labour law, administrative law and Crown liability, all at once. The initial impression of diversity and complexity, however, is misleading and does not stand up under scrutiny. I believe that a succinct review of the facts, with the aim of dealing only with those that may be significant, and an analysis of the legal context, seeking wherever possible to avoid unnecessary discussions on points of law that can have no direct influence, will enable us to reach conclusions more rapidly and more simply than might have been expected.
The action disposed of in the judgment a quo was brought by a group of Quebec shipping companies which are all regular users of the Channel and the St. Lawrence Seaway. The purpose of the action is to obtain reimbursement from Her Majesty the Queen, that is, the federal Crown, for revenue lost by the companies in the fall of 1989 when, as a result of restrictions imposed by the authority responsible for traffic on the River, they were prevented from performing contractual commitments they had made in the course of their business.
The restrictions on traffic on the River had been made necessary as a result of the danger resulting primarily from the displacement of the summer buoys by the premature buildup of ice that year, and the fact that it was impossible for the federal Department of Transport to use its ice breakers so that the winter spars could be installed by the Coast Guard. This was because the members of the Coast Guard were not available, as they were all involved in a strike that had been legally commenced on November 11 of that year by the members of three units of federal public servants, two of which belonged to the Ships' Crews Group (the other being in the Hospital Services Group).
It is paragraph 3(a) of the Crown Liability and Proceedings Act, R.S.C., 1985, c. C-50 [as am. by S.C. 1990, c. 8, s. 21], pursuant to which the Crown is liable in respect of torts committed by its employees, as is a private employer, which is said to provide the legal foundation for the action. What is the tort alleged?
The plaintiffs/appellants are not disputing that the restrictions imposed by the authority on traffic on the River were necessary for security reasons; they acknowledge that all the measures were taken in order to mitigate the impact of the strike on the public to the extent possible, and that because of the measures taken there was no unfortunate loss of life or property. What they are contending is that it was the fact that the Coast Guard was not available that prevented the buoys from being replaced and created the danger, and that this fact was the result of wrongful conduct on the part of employees of Treasury Board, who had not done what they should have done two years earlier, in December 1987, to ensure that Ships' Crews would be unable to leave their jobs, even if there were a strike. Plainly, some explanation is required here.
The Public Service Staff Relations Act, R.S.C., 1985, c. P-35, is the one by which Parliament gave employees of the federal Crown the right to strike and named the Treasury Board to represent Her Majesty the Queen as employer of the vast majority of her employees. In order to promote collective agreements governing the conditions of employment of Crown employees, the Act provides that the members of a bargaining unit who seek to negotiate a collective agreement have the choice of referring a dispute either to arbitration or to conciliation by a conciliation board. Where conciliation fails, the right to strike is triggered. A bargaining unit which chooses the second process, known as the "conciliation-strike process", must give notice of its intention to the Treasury Board, and before a conciliation board is established, the employees in the bargaining unit concerned who perform duties that are necessary for the security of the public will then be "designated", and as a result will be required to perform their normal duties even after a strike begins. For the purposes of this "designation", under the Act as it stood in 1987 [R.S.C. 1970, c. P-35], Treasury Board had twenty days to file a list of the employees whom it believed should be designated. This was set out in section 79 of the Act.1 In the case in issue here, the Treasury Board had in fact intended to submit a list of employees in the various departments involved who, in its opinion, should have been designated, and that list included the Coast Guard Ships' Crews members;2 however, it filed its list on the 21st day rather than the 20th day after receipt of the notice to bargain. To the great surprise of the Treasury Board authorities, the list was ultimately rejected. On an application for review brought by the union against the acceptance of the filing, this Court held that the Board was wrong in the belief it had held to that point, that the twenty-day time limit was not mandatory and that failure to comply with it could be excused only on proof of an insurmountable obstacle, which the Treasury Board was not able to provide.3
In a long and carefully reasoned decision, the Trial Judge, Mr. Justice Nadon, analyzed all these facts and ultimately arrived at the conclusion that the action could not be allowed.4 The essence of his reasoning may be found, I think, in the brief summary that follows. Her Majesty the Queen, or, if you like, the federal government, is under no duty to the users of the St. Lawrence River to maintain the seaway in perfect operating condition so that vessels can transit it without undue delay. Its only duty, which is a public law duty, is to ensure the protection and security of the public. The Treasury Board employees who were late in filing the list committed no tort for which they could be liable at common law, the applicable law since this is a maritime law matter. It is understandable that their excuse, which was that they were waiting to receive all the reports from the various departments involved, relying as they were on the fact that the twenty-day time limit had always, until then, been considered to be directory rather than mandatory, was not found to be sufficient to relieve them of the need to comply with a statutory time limit that was held to be, on the contrary, mandatory. However, it was an explanation that leads to the conclusion that they did not act in a truly wrongful manner, within the common law meaning of that expression. In any event, those public servants were under no duty to the plaintiffs, particularly in respect of their loss of profits, since the requirements of foreseeability and proximity that must be present if such a duty is to arise were not met.
The appellants, through their counsel, criticized the approach taken and the conclusions reached by the Trial Judge on several points. First, they said that the Judge had not entirely grasped the cause of action on which they relied. Their action is based, they pointed out, on paragraph 3(a) of the Crown Liability and Proceedings Act, the liability being that of the principal, the employer. They are not claiming to have a remedy based on breach of a public law duty, and they agree that the respondent is not required to maintain the St. Lawrence River in perfect operating condition, or to file a list of designated employees within the meaning of the Public Service Staff Relations Act. In their factum, they attempted to clarify their position, as follows:
2. The delays and the consequential damages resulted from the fact that the Ships' Crews employed by the Canadian Coast Guard (C.C.G.) were on strike from November 10 to December 15 of that year. Although the strike was a legal strike, Plaintiffs' contention was that, but for an act of negligence by the Treasury Board, the crews would not have been entitled to strike for the reason that they would have been "designated employees". Had they been working, the delays and resulting damages to the vessels and their owners would not have occurred.
The appellants then criticized the Judge for examining the conduct of the Treasury Board employees solely from the standpoint of the common law, without regard to the law of Quebec, although that was where the damages claimed had been suffered. Lastly, the appellants do not agree that it may be argued in this case that the requirements of foreseeability and proximity as between the tortfeasor and the victim, which are required by the common law rules of civil liability, and a fortiori, the less strict requirement of a causal connection between the fault and the damage which is imposed by the Quebec law of civil liability, were not met, particularly if we examine the situation from the standpoint of the opening made in the law of the Crown's civil liability in more recent decisions, such as Just v. British Columbia, [1989] 2 S.C.R. 1228, and City of Kamloops v. Nielsen et al., [1984] 2 S.C.R. 2.
The appellants' criticisms have not persuaded me. I do not believe that the Trial Judge misunderstood the elements of the cause of action as they are set out in the allegations in the statement of claim. Plainly, paragraphs 11 and 12 of the claim suggest clearly the respondent was under a duty to keep the seaway open at all times.5 What can be said is that on appeal, under the pretext of clarifying their cause of action, the appellants have narrowed it.
It is true that one may have serious doubts about that view of the Judge, who seems to have taken for granted that the dispute was governed by maritime law. The wrongdoing alleged, it seems to me, has nothing to do with maritime law and the damages claimed, consisting solely of lost profits, are entirely unrelated to the appellants' ships or their cargoes, since they are essentially economic. There is no connection, even indirect, with the carriage of goods by sea that the Supreme Court held, in ITO—International Terminal Operators Ltd. v. Miida Electronics Inc. et al., [1986] 1 S.C.R. 752, at page 774 to be sufficient but essential if a situation is to fall under the heading of maritime law (because it is "integrally connected to maritime matters"). But the plaintiffs themselves at trial took the same view. Even on appeal, their position is singularly equivocal and extremely unclear. To speak of the civil law of Quebec, one must first eliminate maritime law, which, according to ITO , encompasses only the common law; at the same time, the conflict of law resulting from the fact that the alleged wrongdoing by the Treasury Board employees was committed in Ontario and the damage suffered in Quebec must be resolved in favour of Quebec, where the damage occurred, and this is certainly not a settled conclusion (see, inter alia, Kibale v. Canada (1992), 58 F.T.R. 199 (F.C.T.D.) and Canada v. Maritime Group (Canada) Inc., [1993] 1 F.C. 131 (T.D.); Gingras v. Canada, [1994] 2 F.C. 734 (C.A.)). In any event, however, I am of the opinion, as I shall explain in a moment, that the conclusion that must be reached from the facts in terms of liability cannot vary from one legal system to the other.
Lastly, I am entirely in agreement with the Trial Judge when he refused to characterize the delay by the Treasury Board or its employees in filing its list of designated employees as wrongful. In the circumstances, it cannot be said that the employees, if their behaviour must be isolated, acted imprudently or in a disorganized manner. At that time, they were correct in thinking that it would be better to wait for the reports from all the departments, even though it resulted in being late by one day, given the nature of the twenty-day time limit which had until then been regarded as not being mandatory. Nor do I have any difficulty with the manner in which the Judge analyzed and applied to the facts of the case the concepts of foreseeability and proximity in the common law of liability; as is the case for the concept of causality in the civil law, applying those concepts is at times a matter of great delicacy, where common sense plays a greater role than objective measures or methods of review. It seems, to me as well, that in our case both common law foreseeability and Quebec law causality are extremely tenuous when we look at them through all of the events that occurred and the things that were done during the two years after the allegedly wrongful act, were it not for which events and acts the damage would never have occurred. This is of little import, in fact, and here again I decline to say more since as I said, the problem may be solved much more simply. It is now time for me to explain my position.
The reasoning of the plaintiffs/appellants rests on a premise that, in my view, cannot stand. What it assumes is that the act of an agent may result in the agent's principal-employer being liable as employer, even if, had the employer itself performed the act, it would have incurred no liability. It is clear, as this Court pointed out in the decision in which it held the limitation to be mandatory,6 that late filing of the section 79 "list" by the Treasury Board, or the government or the respondent, is no different from simple refusal to file. And as noted earlier, the appellants willingly admit that refusal to file is a decision that is subject to sanction in the political arena only, even if it is plain that it may have significant consequences for the public and the economy. I would repeat, the government's only duty in respect of the seaway is to ensure the security of the public, and that duty may be discharged by quite a number of methods other than having employees "designated" in contemplation of a strike.
Even if we could isolate one genuinely wrongful act on the part of an employee, such as lingering at the tavern along the way to filing (and that is somewhat how the appellants present their position, although the evidence is that it was the actual authorities at the Treasury Board who decided to delay filing), it would not be possible, logically, to say there was any liability to the public. The first and only direct consequence of the wrongful act by the employee would be to have created an obstacle to the Treasury Board or the government filing its "list", and the whole thing would end there, since the default by the Treasury Board could not result in civil liability.
Counsel for the appellants spoke of the new opening provided by certain recent decisions concerning Crown liability. First, as I said, he referred to Kamloops, supra, in which the city had to answer for its building inspectors' failure to take all necessary steps to ensure that the requirements of its municipal by-law governing the construction of houses were complied with in a specific case. He also mentioned Just, supra, in which the province was held to be liable for failure to maintain a major artery in its road system. And he looked behind the Canadian cases to the influence exerted by the decision of the House of Lords in Home Office v. Dorset Yacht Co. Ltd., [1970] 2 All ER 294 (H.L.), in which the Home Office was held liable for damages caused by a young inmate who had escaped from the place where he was incarcerated as a result of negligence on the part of his guards. I am not forgetting that those decisions have put a definitive end to whatever remained in the mind of the courts of the idea that the Crown should never be held liable in tort and have made them realize that while such immunity may have been necessary in respect of acts performed as planner and governor, it was no longer necessary in respect of acts performed as supplier and dispenser of public services.7 And I believe that this development was eminently desirable. Is it not quite proper that the authority which decides to assume some role and to provide a particular service to the community do so prudently and diligently, both in terms of its management decisions and in terms of the implementation of those decisions by its agents; and is it not then normal that it be held fully liable to the community in general, and specifically to those who rely on its actions? However, I do not see how these decisions could be regarded as involving cases similar to the matter before us. Neither the members of the Treasury Board who were responsible for filing the list of designated employees nor the Treasury Board itself, as representative of the Queen, are exercising the rights and options conferred on them by the Public Service Staff Relations Act as dispensers of a service to the public.
To conclude the analysis, I am quite simply of the opinion that the action in liability brought by the plaintiffs/appellants against the respondent cannot be found to have any legal basis. The Trial Judge was correct not to allow it and the appeal from his judgment is without merit.
I would reject this appeal with costs.
Décary J.A.: I agree.
Létourneau J.A.: I agree.
1 I reproduce the text:
79. (1) Notwithstanding section 78, no conciliation board shall be established for the investigation and conciliation of a dispute in respect of a bargaining unit until the parties have agreed on or the Board has determined pursuant to this section the employees or classes of employees in the bargaining unit (hereinafter in this Act referred to as "designated employees") whose duties consist in whole or in part of duties the performance of which at any particular time or after any specified period of time is or will be necessary in the interest of the safety or security of the public.
(2) Within twenty days after notice to bargain collectively is given by either of the parties to collective bargaining, the employer shall furnish to the Board and the bargaining agent for the relevant bargaining unit a statement in writing of the employees or classes of employees in the bargaining unit who are considered by the employer to be designated employees.
(3) If no objection to the statement referred to in subsection (2) is filed with the Board by the bargaining agent within such time after the receipt thereof by the bargaining agent as the Board may prescribe, such statement shall be taken to be a statement of the employees or classes of employees in the bargaining unit who are agreed by the parties to be designated employees, but where an objection to such statement is filed with the Board by the bargaining agent within the time so prescribed, the Board, after considering the objection and affording each of the parties an opportunity to make representations, shall determine which of the employees or classes of employees in the bargaining unit are designated employees.
(4) A determination made by the Board pursuant to subsection (3) is final and conclusive for all purposes of this Act, and shall be communicated in writing by the Chairman to the parties as soon as possible after the making thereof.
(5) Within such time and in such manner as the Board may prescribe, all employees in a bargaining unit who are agreed by the parties or determined by the Board pursuant to this section to be designated employees shall be so informed by the Board.
2 Initially, 23 units representing employees in various departments were involved. Incidentally, conciliation failed for only 3 of the 23, which went on strike on November 11 and returned to work only on December 15, 1989, when special legislation, the Government Services Resumption Act, S.C. 1989, c. 24, was brought into force.
3 See Public Service Alliance of Canada v. Canada (Treasury Board), [1989] 2 F.C. 445 (C.A.), and Canada (Attorney General) v. P.S.A.C., [1989] 3 F.C. 585 (C.A.).
4 [1997] 2 F.C. 575 (T.D.).
5 Those paragraphs read as follows:
11. Following the failure by the Treasury Board to file the list of designated employees within the time allowed, the defendant could have taken other measures to ensure that navigation could continue in the navigable lanes in question in acceptably safe conditions, inter alia by contracting a large part of the work that the Coast Guard crews could have performed to private firms. Because of the inertia, stalling and general incompetence of the administration of the Canadian Coast Guard and the other employees of the defendant who were responsible for ensuring the security of navigation in the waterways in question, the defendant did not avail herself of any alternative arrangement to ensure that maritime traffic could transit the waterways in question.
12. Moreover, the defendant, who was well aware that a strike was imminent, could have taken a number of measures, through the intermediary of her Coast Guard or other employees, to avoid the situation that subsequently arose, by directing the Coast Guard to perform certain of its duties before the strike began, inter alia by requiring that it replace the summer buoys with the winter buoys . . . .
6 Public Service Alliance of Canada v. Canada (Treasury Board), supra, at p. 450.
7 On this point, see the excellent article by Linden J., entitled "Tort Liability of Governments for Negligence" (1995), 53 Advocate 535.