Collateral Attack

Posted by Johannes Schenk on December 31st, 2005 — Posted in Employment Law, Labour Law

Collateral attack of an administrative decision is one of the issues examined in Western Stevedoring Co. Ltd. v. W.C.B., 2005 BCSC 1650. The case involves a judicial review of high level policy decision making of the BC Workers Compensation Board. The policy decision concerned section 39(1)(e) of the Act and consideration given to employers for worker’s pre-existing injuries. Predictably the petitioner could not show that the Board’s discretionary power was exercised in a patently unreasonable manner.

The case presents an interesting twist in that the petitioner was asking the Court to judicially review a policy and exercise of discretion that could have (and should have) been challenged by way of appeal in the individual case of each of the petitioner’s employees that had been injured. This presents a typical “collateral attack”. The Court has this to say on the issue:

[24] Although I find that the imposition of a premium surcharge can be reviewed by the court, the nature of the challenge in this case raises certain difficulties. The Board’s “decision” to implement a surcharge is purely arithmetical. The Board considered the petitioner’s claims history, and arrived at the appropriate surcharge level according to mathematical formulae. The petitioner does not challenge the legitimacy of the formulae, or the accuracy of the math. Instead, it says that the data to which the formulae have been applied are faulty; because the s. 39(1)(e) reserve is under-utilized, the petitioner’s claims history is worse than it believes it should be.

[25] The petition, then, while purporting to challenge the imposition of a surcharge, is, effectively, a challenge to the numerous administrative decisions that have resulted in the petitioner’s claims history. The Board argues that these proceedings amount to a “collateral attack” on decisions in individual claims as to whether or not those claims should be allocated to the s. 39(1)(e) reserve. It says that a collateral attack on those underlying decisions ought not to be entertained.

[26] It is true that Canadian courts have shown reluctance to allowing administrative decisions to be attacked collaterally. This reluctance has been most notable in penal proceedings. In Regina v. Consolidated Maybrun Mines Ltd., [1998] 1 S.C.R. 706, the Supreme Court of Canada considered the ability of a corporation charged with violation of an order of an administrative tribunal to defend itself against the charge by arguing that the underlying order itself was improperly made. In determining whether such a collateral attack could be undertaken, the court considered that five factors should be taken into account: (1) the wording of the statute from which the power to issue the order derived; (2) the purpose of the legislation; (3) the availability of an appeal; (4) the nature of collateral attack (i.e. whether the same attack could have been argued before an appellate administrative body); and (5) the penalty on a conviction for failing to comply with the order. These factors reflect the primary concern of the Supreme Court of Canada in Consolidated Maybrun, which was to ensure that decisions that are intended to be entrusted to administrative bodies not be inappropriately transferred to the court.

[27] While the law with respect to the availability of collateral attack in civil cases has not been altogether consistent, similar considerations apply. Courts must be careful to ensure that collateral attacks do not result in courts usurping jurisdiction that is intended to be exclusively exercised by an administrative tribunal. Courts have also recognized the desirability of certainty and finality in decision-making as a factor militating against allowing collateral attacks on administrative decisions: see, for example the recent Federal Court of Appeal decisions in Berhad v. Canada, 2005 FCA 267, 338 N.R. 75 and Grenier c. Canada, 2005 CAF 348.

[28] In civil and criminal cases, collateral attacks on administrative decisions can raise other concerns as well. A court hearing a civil or criminal matter may, for instance, not be the court that would have had jurisdiction to entertain a judicial review proceeding. This can lead to undesirable inconsistencies in the law (this was a factor considered in Grenier). As well, it may be that the procedures that apply in penal proceedings and in civil claims are less well-suited to the efficient and complete review of administrative decisions than are the rules that have been developed to deal specifically with judicial review of administrative action.

[29] There is a common theme to the various objections to collateral attack. As was observed by Arbour J. in Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77 at para. 34, prohibited collateral attacks are improper because they constitute an abuse of the court’s process.

[30] The court must be careful in approaching a judicial review proceeding that attacks administrative decisions collaterally. It must ensure that the proceeding is not an abuse of the court process. A collateral attack should not be allowed to circumvent statutory limitations on the availability of judicial review (for instance, limitation periods prescribed in s. 57 of the Administrative Tribunals Act, S.B.C. 2004, c. 45, or s. 18.1(2) of the Federal Courts Act, R.S.C. 1985, c. F-7). A collateral attack should also not allow a petitioner to get around discretionary bars to judicial intervention, such as unreasonable delay or mootness. As well, the court must ensure that a collateral attack is not an attempt to usurp the jurisdiction of the administrative tribunal. The standard of review applied to underlying administrative decisions must be identical whether a judicial review application attacks those decisions directly or collaterally.

[31] There are numerous dangers facing a court in attempting to deal with a case, such as the present, which indirectly attacks decisions. The record before the court in this case is, necessarily, incomplete and selective. The court is invited to accept broad generalizations in place of a consideration of detailed facts. The main legal issue – the legality of the board of directors’ policy to exclude the first ten weeks of a claim from the s. 39(1)(e) reserve – is artificially isolated from the particular contexts in which the policy operates.

[32] By refraining from challenging the individual allocation decisions directly, the petitioner provides the court with a limited factual foundation upon which to consider the reasonableness of the Board’s policies. Further, out of the numerous issues that might arise in any individual claim adjudication, the petitioner seeks to isolate the issue of a board of directors’ policy.

[33] Despite these difficulties, I am of the view that the current litigation provides a suitable framework in which to review the legality of the impugned policy. The factual matrix presented to the court, while not comprehensive, appears to me to be adequate. Further, this is not a case in which the petitioner is seeking a legal ruling on an issue that is (or may be) of purely academic concern.

[34] In the case at bar, I am not convinced that the collateral attack on the underlying decisions is abusive of the court’s process. The court clearly has jurisdiction to entertain a judicial review application challenging the Board’s underlying decisions on individual claims. The petitioner is in a position to attack those decisions directly. So long as the petitioner does not seek to take advantages from a collateral attack that would not be available in a direct attack, I am not convinced that there is a basis for the court refusing to entertain the application. In saying this, I recognize that the court must be vigilant to ensure that the same legal considerations are applied to this judicial review as would be applied to a direct attack on the underlying administrative decisions.

The Court seems to be saying that where the alternate proceeding follows the same parameters as the proceeding in the proper and ordinary course, collateral attack is permissible.

A case that gives one more variation on an important administrative law concept.

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