SUPERIOR COURT OF JUSTICE - ONTARIO

ONSC: 4764

COURT FILE NO.: CV-09-375977
DATE: 20120817

RE: The Professional Institute of the Public Service of Canada / L’Institut de la Fonction Publique du Canada, Raymond Lazzara, Deborah Anne Chamney and Humayoun Akhtar

and

Her Majesty in Right of Canada as represented by The Attorney General of Canada

COUNSEL: Paul J.J. Cavalluzzo, for the Applicants

Sean Gaudet and Rachel Doran, for the Respondent

COURT FILE NO.: CV-09-377318
DATE: 20120817

RE: John Gordon, Patricia Ducharme, Megan Adam, Nick Stein, Chris Aylward, Darrell-Lee McKenzie, and Public Service Alliance of Canada

and

The Attorney General of Canada

COUNSEL: Andrew Raven, for the Applicants

Sean Gaudet and Rachel Doran, for the Respondent

BEFORE: Justice E.M. Morgan

DATE HEARD: August 17, 2012

E N D O R S E M E N T

[ 1 ] These two applications were brought at the same time, raise identical constitutional challenges to the identical two pieces of federal legislation, have the same Respondent, and have been treated as one application by the Respondent and by each other. The two sets of applicants (collectively the “Applicants”) have brought the present motion together, and this endorsement applies to both motions.

[ 2 ] The Applicants seek an order that the challenges to the Expenditure Restraint Act , being part 10 of the Budget Implementation Act , 2009, SC 2009, C.2 (the “ERA”) and the Public Sector Equitable Compensation Act , being part 11 of the Budget Implementation Act , 2009, SC 2009, c.2 (the “PSECA”) be severed into two separate applications. Alternatively, they seek leave to amend the respective Notices of Application to retain only the ERA portion and to file fresh Notices of Application for the PSECA portion.

[ 3 ] The Applicants also seek the appointment of a case management judge to manage both applications. The Respondent agrees that the applications should be case managed.

[ 4 ] The ERA and the PSECA were both enacted as part of Parliament’s omnibus budget legislation in 2009. The ERA was wage restraint legislation that, the Applicants allege, took away constitutionally protected rights to collective bargaining. The PSECA was pay equity enforcement legislation that changed the way the pre-existing pay equity rules would be enforced and that, the Applicants allege, created gender discrimination among the federal government’s employees.

[ 5 ] The Respondent opposes the motion on the grounds that it has already responded to a double constitutional challenge in which the issues and evidence relating to the two statutes have been linked together by the Applicants. Having responded to an application that challenges both the ERA and the PSECA, the Respondent contends that it would be unfair to now make it undo that package in order to respond to separate applications.

[ 6 ] Indeed, counsel for the Respondent submits that not only would severance be unfair, it would be very difficult; in effect, Mr. Gaudet argues, the eggs cannot be unscrambled. As an example of the co-mingling of evidence between the two constitutional challenges, he points to the affidavit of Dr. Pat Armstrong, an expert affidavit submitted on behalf of the Applicants, which ostensibly addresses issues relating to the PSECA but which also provides an analysis of the impact of the ERA wage policies on the PSECA gender equality issues.

[ 7 ] Counsel for the Applicants, on the other hand, see the issues as having always been served up separately. They argue that the two statutory policies of wage restraint and gender-based pay equity are quite distinct, that the two Notices of Motion distinguish between the two pieces of legislation, and that the constitutional issues are different in that the ERA is subject for the most part to a section 2(d) freedom of association challenge while the PSECA is subject for the most part to a section 15 equality rights challenge.

[ 8 ] The Applicants also contend that they could have brought the two challenges in separate applications in the first place, as there is no necessary link between the ERA and the PSECA except that the federal government introduced and passed them in the same budget bill. Indeed, they point out that other cases concerning constitutional aspects of the ERA have proceeded in Ontario and in other provinces without touching on the PSECA. Counsel for the Applicants states that the two statutes were only challenged in one application out of administrative convenience at the time, and now that convenience is gone and has been replaced by a very inconvenient and delay-prone double application.

[ 9 ] In addition, the Applicants point out that although the PSECA has been passed by Parliament, it has never been proclaimed in force and the all-important regulations under that legislation have never been promulgated. As an example, counsel for the Applicants points out that the PSECA’s pay equity policy applies generally to female and male employees within the same job group, and that the definition section of the PSECA provides only that, “‘job group’ has the meaning assigned by the regulations.” In the absence of those regulations, counsel argues, the entire statute cannot be brought into operation, and a challenge cannot coherently proceed, even if it were to be proclaimed in force.

[ 10 ] The Applicants concede that there is no specific authority under the Rules of Civil Procedure to sever an application into two parts. Rule 6.01(1) allows a court to merge two separate proceedings where they raise issues in common, and Rule 6.01(2) confirms that the court’s discretion in doing so is quite broad. Counsel for the Applicants submits that it takes little leap of logic to conclude that if a court can merge two applications into one, it can also sever one application into two.

[ 11 ] I note that Rule 1.04(1) indicates that the Rules themselves are fashioned “to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits”. The Applicants are strongly of the view that the inclusion of the PSECA , with its missing regulations, is unnecessarily bogging down the ERA challenge. They also contend that it will be easy for a case management judge who becomes familiar with the issues to tell what evidence goes to the ERA portion of the case and what can wait for the PSECA portion to proceed. I agree with the Applicants on this point.

[ 12 ] Indeed, to the extent that some of the affidavit evidence addresses both statutes, I see no reason that should give a court cause for concern. Parties bringing a constitutional challenge to one piece of legislation are certainly permitted to submit affidavits that explain how the challenged legislation interconnects with other legislation. Dr. Armstrong’s affidavit may address the PSECA policy by indicating that it is exacerbated by the operation of the ERA, while some other expert affidavit may address the ERA policy by indicating how those wage restraints interplay with the PSECA. On the face of it, there is nothing wrong with any of that. Where there is a particular problem with overly broad affidavits once the ERA challenge is separated from the PSECA challenge, having a case management judge with a view to the issues and to the cost consequences of the change seems to me to be the complete answer.

[ 13 ] That said, it is difficult to know how to sever a single application into two (or, more accurately in this unusual case, to sever two companion applications into four). There would have to be new file numbers assigned to the resulting new applications, and new Notices of Application issued so that the pleadings would match the evidence and the issues in each court file. In the absence of a specific Rule governing severance, there do not seem to be mechanisms designed to facilitate the administrative side of what the Applicants seek.

[ 14 ] As counsel for the Respondent points out, the procedural relief sought here by the Applicants is akin to an amendment of their pleadings. Rule 26.01 permits such amendments unless prejudice would result that could not be compensated for by costs. The parties are still in the midst of exchanging affidavits. Cross-examinations have not yet started, and so there is no impediment to filing further affidavits if the contours of the application now change. I cannot see any prejudice to the Respondent other than one of costs, which can be evaluated in specific context by the case management judge.

[ 15 ] The Applicants have always been free to pursue the ERA challenge and not the PSECA challenge. They could do this without any court order at all, since there is nothing to prevent a party from pursuing some of the relief sought in an application and not pursuing the balance of the relief initially sought. However, the Applications also wish to preserve their right to challenge the PSECA in the future, and it would be unjust to have that portion of their application simply dismissed before the PSECA is even proclaimed in force or its regulations enacted.

[ 16 ] Accordingly, it seems to me that the best way to proceed is by way of the Applicants’ alternative relief. I grant leave to the Applicants to amend their Notices of Application to retain only the ERA portion, without prejudice to their right to pursue the PSECA portion in a fresh Notice of Application. I further order that all parties are free to use the affidavits already in the record in either the amended application for the ERA challenge alone or in any new application brought to challenge the PSECA. To the extent that the Respondent has costs thrown away in having produced affidavits in response to the initial combined application that turn out not to be used in response to either the amended ERA application or a new PSECA application, the case management judge can address those costs at the Respondent’s request at the appropriate time.

[ 17 ] I am not inclined to grant costs of the present motion to either side. The Applicants brought a motion with an unusual procedural request – to sever their own application several years after the case began – and this procedure is not mentioned anywhere in the Rules. It is difficult to blame the Respondent for wanting to seek the court’s views on this kind of change to the application. The Applicants have been successful in their motion, but from one perspective their success is an acknowledgment not of a weakness in the Respondent’s case but a weakness in their own case. As already indicated, the case management judge can address costs thrown away by the Respondent as a result of any changed Notice of Application, but there will be no costs of the present motion for or against any party.

[ 18 ] Rule 77.05 states that the assignment of a proceeding to case management is under the authority of the regional senior judge. At the hearing I encouraged counsel for the parties to write to the Regional Senior Judge for Toronto in order to request that these applications be assigned for case management. Case management will undoubtedly be of benefit to all parties.

Morgan J.

DATE: August 20, 2012