Canada: Preliminary Dismissal of Meritless Case: A Second Message Of Encouragement From The Supreme Court

The Supreme Court of Canada recently released an important decision regarding the preliminary dismissal of cases, this time through the doctrine of stare decisis, which dictates that a precedent case rendered by a higher court binds a lower court's decision.  In Attorney General of Canada v. Confédération des syndicats nationaux, 2014 SCC 49 ("CSN 2014"), Justices Lebel and Wagner, writing for a unanimous Court, confirmed that the action of the plaintiffs unions had no reasonable chance of success and should be dismissed based on stare decisis.  The Court's decision, in a case originating from Quebec, echoes its earlier ruling in Hryniak v. Mauldin, 2014 SCC 7 ("Hryniak")1, promoting procedural tools which can lead to preliminary dismissal of actions.

Quebec unions take two kicks at the can against the employment insurance program reform

In 1996, Parliament reformed the employment insurance program ("1996 EI Act"). A few years later, unions in Quebec sought to strike down provisions of the 1996 EI Actwhich altered the premiums-setting mechanism and permitted the federal government to accumulate surpluses (amounting to several billion dollars).  The unions argued that the surpluses were reallocated with an eye to reducing the budget deficit and amounted to a misappropriation of funds earmarked for employment insurance.  In Confédération des syndicats nationaux v. Canada (Attorney General), 2008 SCC 68 ("CSN 2008"), the Court held that most of the provisions of the 1996 EI Act were valid and constitutional.

ln 2010, Parliament enacted the Jobs and Economic Growth Act ("2010 Jobs Act").  The 2010 Jobs Act created a new Employment Insurance Operating Account, retroactive to January 1st, 2009 and closed the Employment Insurance Account.  Quebec unions filed a new constitutional challenge and sought to strike down provisions of the 2010 Jobs Act.  The Attorney General of Canada ("AGQ") brought a motion to dismiss on the basis that the issues had already been decided by CSN 2008.

One kick was enough

The Supreme Court agreed with the AGQ and held that the unions' challenge had no reasonable chance of success pursuant to s. 165(4) of Quebec's Code of Civil Procedure ("CCP"), which provides for preliminary dismissal of suits that are "unfounded in law, even if the facts alleged are true".  The Court acknowledged that the stare decisis doctrine had rarely been used at the motion to dismiss stage. Indeed, the Quebec Court of Appeal ("QCCA") had reversed the Superior Court's decision to dismiss the action, on the basis that it did not raise precisely the same questions as the ones answered by CSN 2008, and that the issue was best left for the merits. According to the QCCA, the unions' new challenge was not about the use of surplus, which had been settled by CSN 2008, but rather about the impact of the abolition of the credit balance. The Supreme Court disagreed and held that stare decisis could be dispositive at the preliminary stage in a case where "the legal issue" "arises in a similar context" and remains essentially the same. A court can preliminary dismiss an action based on its conclusion that a "precedent still represents the law and must be followed" (para. 24). The Court described the differences between stare decisis and res judicata: while the latter is designed to prevent the same parties from re-litigating the same issues, the former does not quite require the same "identities". What must be established for stare decisis to be dispositive, including at the preliminary stage, is that "the issue is the same and that the questions it raises have already been answered by a higher court whose judgment has the authority of res judicata" (para. 25).

The Court held that CSN 2008 had already provided "a complete, certain and final solution to the unions' action in this case" (see para. 37) by virtue of its conclusion that, as government revenues, the sums collected for employment insurance could be used for other purposes than paying employment insurance benefits.  Since this conclusion was dispositive for the unions' new action, their case had no reasonable chance of success.

Conclusion and Comments

In addition to providing clarity on the applicable test when stare decisis is raised in a preliminary motion to dismiss, CSN 2014 is noteworthy for the Supreme Court's strong statement, in a case originating from Quebec, that proper administration of justice requires that courts' resources not be expended on actions bound to fail, and that the principle of access to justice actually requires that courts use their power to dismiss meritless actions (based on, e.g., s. 165 (4) CCP).

As mentioned above, a similar statement had been made by the Court earlier this year in Hryniak, a case dealing with the summary judgment procedure available in the common law provinces (the Court acknowledged in Hryniak that even though summary judgment was unavailable in Quebec, s. 54.1 CCP, although "narrower on its face", had "been likened to" it—para. 34).

Now that the Supreme Court has made it clear that the "necessary culture shift" with respect to procedural tools as a means of enhancing access to justice through cheaper and faster alternatives than a full trial also applies in Quebec, the province's lower courts should revisit their reluctance to refuse to preliminary dismiss actions that are evidently doomed to fail, a reluctance partly based on the Court of Appeal's reversals of such preliminary dismissals.2

To view original article, please click here.


1.Previously discussed on this blog:

2.See, e.g., Acadia Subaru c. Michaud, 2011 QCCA 1037, Charles-Auguste Fortier inc. c. 9095-8588 Québec inc., 2014 QCCA 1107, Lefrançois c. Charland, 2011 QCCA 1877, Paquette c. Laurier, 2011 QCCA 1228.

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