This decision applies the reasons in 861808 Ontario Inc. v. Canada (Revenue Agency) 2013 ONCA 604 (CanLII) to the case of a Canadian Forces retiree seeking to protect his federal pension from CRA set-off. The applicant’s (it was an application, though it claimed damages) thesis was that he was seeking damages, which claim is not the kind of declaratory relief over which the Federal Court has exclusive jurisdiction under section 18 of the FCA. There was also an issue over whether having added employees of the Crown as individual respondents changed the application of the general rule that the Federal Court has exclusive jurisdiction.
“[25] In my view, the fact that the applicant joined the individual respondents [pension plan administrators] in the application does not take away the exclusive jurisdiction of the Federal Court in respect of the claim for injunctive relief.”
Interestingly, the Attorney General did not challenge the part of the application dealing with damages, on the basis that Canada v. TeleZone Inc., 2010 SCC 62 (CanLII) allows damages claims in either the Federal Court or the provincial superior Courts. (Para. 28.) Nonetheless, on its own motion, the Court stayed the damages claims:
[33] However, in my view, the applicant’s claim for damages is linked inextricably to his claim for injunctive relief, each of which would be dependent on a finding that the CRA was not entitled by law to attach his pension seeking collection of his assessed arrears of income tax by means of the notice of set-off, or that CFPS should be prevented, as a matter of law, from honouring or giving effect to the notice of set-off. I make no comment as to whether the applicant has pleaded sufficient facts in order to advance a claim for damages, this discussion being restricted to the question of jurisdiction.
[34] Given that the claim for damages and the claim for injunctive relief are inextricably linked, it would not be in the interest of justice to permit an action for an injunction to proceed in the Federal Court coincidentally with an action in the Superior Court for damages arising out of the same set of facts, due to the potential for inconsistent findings of fact and law by the two courts. Moreover, the Federal Court has greater expertise in respect of the subject-matter of the applicant’s claims, as described above, and it is appropriate to stay the claim for damages in the Superior Court for that reason as well (seeReza v. Canada (Minister of Employment and Immigration), 1994 CanLII 91 (SCC), [1994] 2 S.C.R. 394). The applicant’s claim for reimbursement of funds “diverted under the ‘statutory set-off’” in subparagraph 1(2) and his claims for damages in subparagraphs in subparagraphs 1(5) and (6) of the Notice of Application should therefore be stayed pursuant to section 106 of the CJA.
SMITH v ATTORNEY-GENERAL OF CANADA et al, 2016 ONSC 489 (D.A. Broad)