Falkiner v. Director, Income Maintenance Branch

Falkiner v. Director, Income Maintenance Branch Collection Decisions of the Court of Appeal Date 2000-07-24 Docket numbers M26092, M26102 Judges Osborne, Coulter Arthur Anthony Subject Civil Decision Content DATE: 20000724 DOCKET: M26102/M26092 COURT OF APPEAL FOR ONTARIO RE: SANDRA FALKINER, DEBORAH SEARS, CYNTHIA JOHNSTON- PEPPING AND CLAUDE MARIE CADIEUX (Appellants (Respondents in Appeal/Respondents to Motion)) v. DIRECTOR, INCOME MAINTENANCE BRANCH, MINISTRY OF COMMUNITY AND SOCIAL SERVICES AND ATTORNEY GENERAL OF ONTARIO (Respondents (Appellants/Moving Parties)) v. CANADIAN CIVIL LIBERTIES ASSOCIATION (Intervener) BEFORE: OSBORNE A.C.J.O. COUNSEL: Janet E. Minor for the appellants, Director of Income Maintenance et al. Barnet Kussner and Kim Mullin for the respondents, Falkiner et al. Martin Doane for the intervener HEARD: July 13, 2000 On appeal from the Divisional Court decision of Lane, Haley and Belleghem JJ. dated June 28, 2000. ENDORSEMENT [1] The appellants, the Director, Income Maintenance Branch, Ministry of Community and Social Services and the Attorney General of Ontario move pursuant to ss. 106 and 134(2) of the Courts of Justice Act and Rules 37, 61 and 63 of the Rules of Civil Procedure for: An order staying the decision of the Divisional Court dated June 28, 2000 that s. 1(1)(d) of Regulation 366 under the Family Benefits Act is unconstitutional, until leave to appeal this decision is determined and if leave is granted until the appeal is determined. [2] The appellants also move to expedite the hearing of the leave motion. That motion was unopposed and an order expediting the leave motion was granted: certain timelines were established for the delivery of factums. No purpose would be served in reviewing those timelines. [3] The respondents strongly oppose the appellants’ motion to stay. They take the position that the motion should be dismissed and alternatively that if it is granted that it would be granted only on the following conditions: (a) that the Ministry shall not refer for prosecution any new cases involving allegations of “welfare fraud” for having an undeclared spouse on the basis of the impugned provision, and shall make best efforts to ensure that no new charges are laid by the Crown, so long as this stay remains in effect; and (b) that the Ministry shall make best efforts to ensure that any pending charges for “welfare fraud”, for having an undeclared spouse on the basis of the impugned provision are stayed by the Crown so long as the interim stay remains in effect. Background [4] This case concerns the constitutional validity of the definition of “spouse” found in the Family Benefits Act for the purpose of assessing entitlement to social assistance benefits. In its decision dated June 28, 2000, the majority of the Divisional Court held that the definition of “spouse” contained in s. 1(1)(d) of Regulation 366 under the Family Benefits Act violates s. 15(1) of the Charter and cannot be saved under s. 1 of the Charter. The Divisional Court did not include in its order a temporary suspension of its decision invalidating the current definition of “spouse”. The appellants sought leave to appeal the Divisional Court and, as I have said, their motion for leave has been expedited. The Test for Granting a Stay [5] The parties appear to agree that the test that is to be applied when considering an application for a stay is set out in the Supreme Court of Canada’s decision in RJR-MacDonald v. Canada (Attorney General), [1994] 1 S.C.R. 311 at 334. In RJR- MacDonald, the Supreme Court summarized its earlier decision in Manitoba (Attorney General) v. Metropolitan Stores Ltd., [1987] 1 S.C.R. 110 at 127-129: First, a preliminary assessment must be made as the merits of the case to ensure that there is a serious question to be tried. Secondly, it must be determined whether the applicant would suffer irreparable harm if the application were refused. Finally, an assessment must be made as to which of the parties would suffer greater harm from the granting or refusal of the remedy pending an decision on the merits. Serious Question to be Tried [6] The parties agree that the issue whether the definition of Sspouse” in Regulation 336 violates the Charter is a serious question to be tried. Irreparable Harm [7] In Metropolitan Stores, supra, Beetz J. held that the second stay test requires the court to consider whether the party who seeks the stay would, unless the stay is granted, suffer irreparable harm. Sopinka and Cory JJ. explained in RJR- MacDonald, at p. 341, that the only issue to be decided at this stage is: … whether a refusal to grant release could so adversely affect the applicants’ own interests that the harm could not be remedied if the eventual decision on the merit does not accord with the result of the interlocutory application. ‘Irreparable’ refers to the nature of the harm suffered rather than its magnitude. It is harm which either cannot be quantified in monetary terms or which cannot be cured, usually because one party cannot collect damages from the other. [8] Although the public interest is generally a factor that is considered at the third stage (the balance of convenience), Sopinka and Cory JJ. held in RJR-MacDonald, at p.349, that when a government authority is the applicant on a motion for interlocutory relief, the public interest issue will be considered at the second – irreparable harm – stage. However, it will again be considered in the third stage when harm to the applicant is balanced with harm to the respondent, including any harm to the public interest that may in the circumstances be found to exist. [9] The appellants’ claim that a refusal of the stay would cause irreparable harm to the public interest appears to be based on administrative convenience and financial costs that will be incurred if the stay is not granted. However, as the respondents submit, administrative inconvenience, even where it is serious, does not generally constitute irreparable harm (see Wellcome Foundation Ltd. v. Novopharm Ltd., [1992] 45 C.P.R. (3d) 202 (F.C.T.D.) at 206). [10] The evidence discloses that temporary interim measures were put in place promptly following the release of the Divisional Court’s reasons as a means of dealing with the immediate implementation issues. The appellants suggest that errors in applying the decision will result in some persons mistakenly being found eligible for social assistance which will result in overpayments that may be impossible to recover. However, on cross-examination, Ms. Moretta, Director of the Social Assistance Programs Branch, acknowledged that mechanisms do exist to enable the Ministry to recover overpayments (see pp. 59-60 of the cross- examination of Ms. Moretta). [11] Ms. Minor, in her able submissions, emphasized that the same definition of spouse used in the Family Benefits Act is also used in the Ontario Works Act, 1997 and the Ontario Disability Support Program Act, 1997. These latter two statutes came into force in the spring of 1998 and represent the current legislation governing the provision of most social assistance in Ontario. The appellants submit that the effect of the finding that the definition of “spouse” is unconstitutional for Family Benefits Act purposes has a real ripple effect with respect to the other social assistance legislation in Ontario. Ms. Moretta in her affidavit, at pp. 92 and 93, confirms that. The appellants also contend that the Divisional Court decision has potential ramifications for other legislative definitions of “spouse”, in particular the Family Law Act, Part III definition. [12] In my opinion, irreparable harm is a generally neutral factor here. Both sides will suffer harm if I do not accede to their position on the stay issue. Neither side will suffer irreparable harm. The Balance of Convenience [13] The third test in an application for a stay requires a determination of which of the two parties will suffer greater harm from the granting or refusal of the stay sought pending a decision on the merits. The factors to be considered in assessing the “balance of inconvenience” will obviously vary from case to case. However, in Metropolitan Stores, supra, at p. 49, it was made clear that in all constitutional cases the public interest is a special factor which must be considered in assessing where the balance of convenience lies. [14] It is the appellants’ position that requiring immediate compliance of the decision of the Divisional Court would result in serious harm to the public. The appellants rely on a recent decision of Sharpe J.A. granting a stay in Mushkegowuk Council v. Ontario and Attorney General of Canada (1999), 126 O.A.C. at 285 (C.A.). They cite the following passage from Sharpe J.A.’s reasons: Administration of these benefits is a complex matter requiring knowledge of local conditions and the circumstances of social assistance recipients. To require a significant alteration in the administrative arrangements necessary for distribution of social assistance before legal issues have been finally resolved, would be a cumbersome, costly and potentially unnecessary course of action. In assessing the balance of convenience, I take into account the fact that the respondents have secured a judicial declaration which is determinative of their rights unless and until set aside or varied on appeal. I cannot ignore, however, the fact of the appeal and the concession that there is a serious issue to be dealt with on the appeal. [15] I agree with Sharpe J.A.’s practical concerns as expressed in Mushkegowuk Council. It is, however, important to note that in that case if some form of stay were not granted there was a serious risk that thousands of individuals would not receive needed primary social assistance. Sharpe J.A. explained, at para. 12 of his reasons, that he was granting the stay because “it is imperative that arrangements remain in place to ensure that individuals will continue to receive social assistance benefits to which they are legally entitled”. The circumstances in this case can be clearly distinguished from those of Mushkegowuk since the Divisional Court’s decision in this case does not affect the eligibility of current recipients of assistance under the Family Benefits Act. They will continue to receive benefits whether or not a stay was granted. [16] It appears to me that there is a real risk of financial hardship faced by applicants who are deemed ineligible on the basis of a definition of “spouse” which is held to be unconstitutional. This has to be set against the obvious administrative inconvenience to the government and the uncertainty of the law derived from the different definitions of “spouse” in statutes which are least generically related. There is also the risk of individuals who could face “welfare fraud” prosecutions for having an undeclared spouse. The respondents suggest that this could result in criminal charges and the prospect of a lifetime ban from eligibility for social assistance under the Ministry’s “zero tolerance” policy. [17] Taking all of this into consideration, I think that without any conditions the balance of convenience favours the respondents. However, with the conditions suggested by the respondents, the balance of convenience favours the appellants. Thus, the interests of justice would be best served if the stay sought were granted, but on conditions which generally reflect the conditions suggested by the respondents. They are: (a) The Ministry shall not refer for prosecution any new cases involving allegations of welfare fraud for having an undeclared spouse on the basis of the impugned provision, and shall make best efforts to ensure that no charges are laid by the Crown, so long as this stay remains in effect; and (b) The Ministry shall make its best efforts to ensure that any pending charges for “welfare fraud” for having an undeclared spouse on the basis of the impugned provision are adjourned or stayed by the Crown so long as the interim stay remains in effect. [18] In my view, these conditions are workable, notwithstanding the appellants’ submissions to the contrary. They represent a modest price to be paid for stability which will accrue as a result of the issuance on a stay of the Divisional Court order pending the application for leave to appeal and if leave is granted the appeal. [19] I do not accept the respondents’ position that I have no jurisdiction to grant a stay beyond the appellant’s application for leave to appeal. In my view, s. 132(2) of the Courts of Justice Act provides a broad based jurisdiction to make any interim order that is considered just (see Horsefield v. Ontario (Registrar of Motor Vehicles) (1997), 35 O.R. (3d) 304 (C.A.)). [20] This is not a case for costs. “C.A. Osborne ACJO”