BETWEEN:
LIEUTENANT (NAVY) T.P. MCMANUS
and
ATTORNEY GENERAL OF CANADAAND CHIEF OF DEFENCE STAFF
REASONS FOR ORDER
[1] This is an application for judicial review of a decision of the (Acting) Chief of the Defence Staff dated October 29, 2004 in which it was determined that the Applicant was entitled under section 209.997(4) of the Queen's Regulations and Orders to a sum limited to 30 times the daily rate of incidental expense allowance for non-commercial lodgings.
[2] The Applicant Lieutenant (Navy) T.P. McManus has been a member of the Canadian Forces since 1984. He was posted to the United Nations Truce Supervisory Organization in Israel as of July 10, 2000, and returned to Canada from that posting on August 23, 2002. During the period of this posting Lt. (N) McManus' wife and children remained in Canada.
[3] While posted in Israel, Lt. (N) McManus received from the United Nations a Mission Subsistence Allowance (MSA) which allowance is described by the United Nations as follows:
Missionsubsistence allowance (MSA) is a daily allowance payable by the Organization for living expenses incurred by staff members in the field in connection with their temporary assignment or appointment to a special mission.
...
MSA rates are established for each mission on the basis of cost of long-term accommodation, food and miscellaneous expenses at the duty station of the mission assignment.
[4] Lt. (N) McManus rented living quarters and paid for utilities and his food while in Israel. His family continued to bear its usual living expenses in Canada.
[5] The Queen's Regulations and Orders (QR & O) are Regulations provided under the authority of the National Defence Act. They provide inter alia for certain additional compensation to members of the Canadian Forces serving abroad. Of particular interest here are the provisions of Article 209.997 in place during the period of Lt. (N) McManus' posting abroad. The relevant provisions read as follows:
209.997(2) Subject to the provisions of this article and to any limitations and conditions prescribed by the Chief of the Defence Staff, an officer or non-commissioned member is entitled to separation expense as compensation for additional expenses as a result of the separation from his dependents at such monthly rate as is determined pursuant to this article if:
...
(3) an officer or non-commissioned member who had been posted and is serving at a base or other unit element where single living quarters or rations or both are not available is entitled to separation expense at a monthly rate determined as follows:
...
(4) an officer or non-commissioned member who has been posted and is serving at a base or other unit or element where single quarters and rations are available is entitled to separation expense at a monthly rate equal to 30 times the incidental expense allowance as defined in subparagraph (1)(d) of article 209.30 for non-commercial lodgings.
[6] The Canadian Forces issue Canadian Forces Administration Orders (CFAO's) which are policy documents that serve to interpret and amplify various parts of the Queen's Regulations & Orders. The CFAO's are not legislated. The Canadian Forces Administration Order 209-3 applicable at the relevant time addresses the issue of Separation Expense benefits. The following provisions are relevant:
PURPOSE
1. This order amplifies QR & O Article [209.997] - Separation Expense (SE). It outlines the circumstances and conditions whereby a member may be provided SE when posted or attached posted to a new place of duty. Cases that fall within the intent of this order for situations not specified may be forwarded through normal channels to NDHQ/DCBA (Director Compensation and Benefits Administration), for consideration.
ENTITLEMENT.
2. Separation expense (SE) may be authorized by the commanding officer (CO) of the gaining unit for the reasons stated in Annex A to a member who has a dependant as defined in QR & O subparagraph 209.80(3)(b) who is normally resident with the member at the member's place of duty. For the purposes of the definition of dependant, the term "spouse" includes a common-law spouse where the common-law relationship is recognized under QR & O Article 1.075 (Recognized Marital Relationships). A member entitled to SE shall utilize rations and quarters (R & Q) if available. The member shall also be paid a monthly rate for incidental expenses as prescribed in QR & O paragraph [209.997] (4) or (5) as applicable. If R & Q are not available, the member shall be paid pursuant to QR & O subparagraph [209.997](3) a monthly rate for commercial or non-commercial lodgings, meals and incidental expenses. Additional parking charges incurred while occupying commercial accommodation while on SE may also be reimbursed.
Note- A member posted outside of Canadawho is entitled to Salary Equalization Factor (SEF) pursuant to CFAO 205-5, Military Foreign Service Regulations, paragraph 35 and to SE, shall have the SEF reduced by 25 per cent.
18. R & Q or Allowance for R & Q Provided By Third Party. Separation expense is payable at the rate prescribed in QR & O paragraph [209.997](4) or (5) as applicable during any period that single quarters and rations or allowances in lieu thereof are provided by a third party.
[7] It is common ground that under the provisions of Article 209.997(3) where "quarters or rations or both are not available" a person would at the relevant time be entitled to approximately $42.00 (US) per day whereas under Article 209.997(4) where "quarters and rations are available" a person would only be entitled to approximately $4.00 (US) per day.
[8] Lt. (N) McManus was paid $4.00 (US) per day for the period during which he was posted in Israel. Had he received $42 (US) per day the difference for the period would amount to about $20,000 (US). He filed a grievance in which he presented a variety of scenarios as to single and married members of the forces serving abroad under different circumstances and argued that he suffered an improper disparity in respect of his payment under his circumstances. In the first instance the matter was considered by the Director General, Compensation and Benefits who, in a letter to the Applicant dated 16 August 2001, stated, in respect of this issue:
4. With respect to the issue of SE, the intent of this benefit is to reimburse members for a portion of incidental expenses that occur as a result of being separated from their families. Lt. (N) McManus refers in his grievance to reference E, which states that in exceptional circumstances the rate of SE can be increased if the prescribed amount is deemed to be inadequate. However, it cannot be said that Lt. (N) McManus's rate of SE is inadequate. Lt. (N) McManus is provided Mission Subsistence Allowance (MSA), which is a UN benefit intended to cover all of a member's expenses in theatre. At reference F (adapted from Lt. (N) McManus's cost scenario at reference A), it is clear that the MSA allows him to reside in theatre at no cost, and according to Lt. (N) McManus's own calculations, this benefit is providing him with an excess of $617 each month. Thus Lt. (N) McManus is not maintaining two residences as he asserts, as he is effectively only paying for his expenses in Canada. Further, a portion of the MSA covers incidental expenses in theatre, even though SE is also designed to cover-off these costs. Thus, Lt. (N) McManus is receiving double the incidental expenses allowance necessary, a matter which should be reviewed by an appropriate competent authority. Accordingly, however, it is clear that a higher rate of SE cannot be justified in this instance.
...
7. Given the circumstances of the case, I am satisfied that Lt. (N)) McManus was treated in a fair and equitable manner consistent with others in similar circumstances. Therefore, the redress he seeks is denied. However the option to enter part three of the MFSR is available to him.
[9] Not satisfied, Lt. (N) McManus took the matter to a grievance procedure where a Member of the Canadian Forces Grievance Board found in his favour. In Findings and Recommendations dated 21st June 2004, the Member found, inter alia:
It is clear from the grievor's Annexes, specifically Annex A (p.6) that he was in receipt of the $4/day incidental expense allowance under subsection (4). The grievor attributed the rate of SE which he received to the fact that his MSA was found to be "essentially "free rations and quarters""(p.8). This was consistent with Canadian Forces Administrative Order (CFAO) 209-3, paragraph 18, which provided, in part:
...Separation expense is payable at the rate prescribed in QR & O paragraph 209.95(4) or (5) as applicable during any period that single quarters and rations or allowances in lieu thereof are provided by a third party.
The IA has acknowledged this methodology of calculating the SE, albeit obliquely, stating the grievor's receipt of the MSA covered all of his in-theatre expenses, thus implying that it was analogous to rations and quarters (R & Q) (p.14).
This method of calculation, that the receipt of the MSA entitled the grievor to receive only the daily incidental expense, is not supported by the regulation. There is no provision in section 209.997 which would grant any discretion to substitute an analogous benefit for R & Q. Similarly, nothing in the regulation provides for a reduction in SE benefits when a member is in receipt of MSA, nor is there any discretion to prescribe a reduction.
Where the lawmakers intended to have a benefit reduced due to the receipt of some other benefit they have clearly indicated this in the regulations. For example, the SEF regulations make a reduction for receipt of third party benefits explicit. Similarly, the SE regulation, in subparagraph (5), makes a reduction for receipt of Foreign Duty Allowance explicit.
Additionally, QR & O article 209.015 provided that benefits may be reduced where expenses or other remunerations are paid by a third party, however, it limited the reduction to benefits received under sections 2 (Transportation and Accommodation), 3 (Travelling Expenses) and 4 (Incidental Travelling Expenses). The SE benefit is provided for under section 9, which section was not included in article 209.015.
A principle of statutory interpretation requires that legislative or regulatory provisions, must be looked at, in the first instance, in isolation. If the meaning is clear, the resort to the larger context of the legislation or regulation, or resort or other interpretive aids, is inappropriate.
The plain meaning of QR & O article 209.997 does not support the substitution of MSA for R & Q and there is no discretion, unlike that found in section 9 of the Military Foreign Service Regulations (MFSR) or QR & O article 209.015, that would allow the CF to limit the SE benefit in the way that CFAO 209-3, paragraph 18 purports to do.
While the regulation does contain the phrase "limitations and conditions prescribed by the Chief of the Defence Staff", that power is limited.
Wilson J., speaking for four judges of the Supreme Court of Canadain Reference Re Bill 30, an Act to amend the Education Act (Ontario), stated:
It is however, well established today that a statutory power to make regulations is not unfettered. It is constrained by the policies and objectives inherent in the enabling statute. A power to regulate is not a power to prohibit. It cannot be used to frustrate the very legislative scheme under which the power is conferred.
The authorized limitations and conditions prescribed by a subordinate authority exercising the power conferred by the enabling regulation cannot extend as far as denying categorically and completely the entitlement provided by the Governor in Council regulation CFAO 209-3, paragraph 18, by disentitling entirely the grievor from receipt of a very benefit mandated by the QR & O, is beyond the authority to prescribe conditions and limitations and is therefore invalid.
[10] Lt. (N) McManus then applied to the (Acting) Chief of the Defence Staff for redress in accordance with his grievance. The (Acting) Chief in his letter to the applicant dated October 29, 2004, refused to accept the findings of the Grievance Board, stating:
With respect, I disagree with the Board. The evidence on file demonstrates that your situation was treated in accordance with QR & O 209.997(4) governing cases where R & Q are provided, and that under that paragraph your SE was reduced and limited to 30 times the daily rate of incidental expense allowance for non-commercial lodgings.
The key question is whether this action was within the authority of paragraph (4). In answering this question, one must choose whether to pursue a restrictive literal interpretation, or a more flexible purposive interpretation, of paragraph (4) consistent with the goals of QR & O 209.997.
A member is posted to meet the requirements of the service and, as a result, there is disruption associated with this posting. The CF provides a benefit package to alleviate this disruption. The objective is to minimize or eliminate out of pocket expenses. In your case, one of the concerns with you on IR was to deal with your needs for food (rations) and shelter (quarters). MSA was designed to provide you with the means to acquire "rations and quarters".
CFAO 205-5 paragraph 120 and subparagraph 35(d) reflect this reality. Paragraph 120, in particular, makes clear that MSA essentially ensures free R & Q and that the Crown does not subsidize a member for living expenses twice. I support this approach.
This approach requires a flexible interpretation of paragraph (4). However, this interpretation is most consistent with the public purpose in question; that is to ensure you have food and shelter. It would be extremely difficult for the CF to justify the use of public funds to be allocated to pay for living expenses already paid. Of relevance, the UN also considers payment of MSA to be equivalent to provision of R & Q. As stipulated in the MSA introduction, the allowance is reduced accordingly with the provision of either food or accommodation. They too do not subsidize R & Q when provided by a third party.
You were provided with an allowance that covered your R & Q and living expense, which is considered to be equivalent to free R & Q. I find that QR & O 209.997(4) is the applicable benefit authority and that your entitlement was payable at a rate of 30 times the daily incidental allowance.
[11] Such a decision of the (Acting) Chief is not subject to appeal or review save for judicial review under the Federal Courts Act. Section 29.15 of the National Defence Act, R.S.C. 1985, c.N-5 provides:
29.15 A decision of a final authority in the grievance process is final and binding and, except for judicial review under the Federal Courts Act, is not subject to appeal or to review by any court.
[12] This application is such as application for judicial review of the decision of the (Acting) Chief dated October 29, 2004.
ISSUES
[13] There are two issues for determination:
1. What is the appropriate standard of review in respect of the decision of the Acting Chief of Staff; and
2. Under the appropriate standard should that decision be set aside or other order made.
ISSUE #1 - Standard of Review
[14] The (Acting) Chief of Defence Staff is the most senior officer of the Canadian Forces, under the provisions of the National Defence Act, RSC 1985, c.N-5, he is "...charged with the control and administration of the Canadian Forces".
[15] Section 12(1) and (2) of the National Defence Act provide for the making of Regulations under that Act:
12. (1) The Governor in Council may make regulations for the organization, training, discipline, efficiency, administration and good government of the Canadian Forces and generally for carrying the purposes and provisions of this Act into effect.
(2) Subject to section 13 and any regulations made by the Governor in Council, the Minister may make regulations for the organization, training, discipline, efficiency, administration and good government of the Canadian Forces and generally for carrying the purposes and provisions of this Act into effect.
[16] The Queen's Regulation and Orders, section 209.997(2) pertinent here, provide that such article is "subject to the provisions of this article and to any limitations and conditions prescribed by the Chief of Defence Staff..."
[17] Ordinarily an interpretation in law by a person acting as a board or tribunal is reviewable on the basis of correctness. Such a standard has been stated in cases such as Pushpanathan v. Canada (MCI), [1998] 1 S.C.R. 982 where Cory J. for the dissent said at paragraph 82:
82 What constitutes an act contrary to the purposes and principles of the United Nations for the purposes of the Convention Relating to the Status of Refugees, Can. T.S. 1969 No. 6 ("Refugee Convention"), is a question of law. While the Immigration and Refugee Board must be accorded some deference in its findings of fact, that deference should not be extended to a finding on a question of law. The Board cannot be said to have any particular expertise in legal matters. Therefore the issue is whether the Board's decision on the question of law was correct.
[18] However, the majority of the Court in that case, in its decision given by Bastarache J. at paragraph 37 said:
37 As mentioned above, even pure questions of law may be granted a wide degree of deference where other factors of the pragmatic and functional analysis suggest that such deference is the legislative intention, as this Court found to be the case in Pasiechnyk, supra. Where, however, other factors leave that intention ambiguous, courts should be less deferential of decisions which are pure determinations of law.
[19] The Chief of Defence Staff can be considered to have certain expertise in controlling and administering the Canadian Forces. The Regulations, as well as the statute, give him, in respect of the issues, the power to prescribe "conditions and limitations" of the matters under review.
[20] Accordingly, I find in respect of the issue before me that deference should be given to the decision of the (Acting) Chief of Defence Staff on the basis of reasonableness simpliciter.
ISSUE #2 - Should the decision be quashed or another order made
[21] The decision of the (Acting) Chief of Defence Staff was to provide Lt. (N) McManus with a separation allowance of approximately $4.00 (US) per day on the basis that "single quarters and rations" were "available" to him in accordance with section 209.997(4) of the Queen's Regulations & Orders.
[22] In this case "availability" took the form of a Mission Substance Allowance provided by the United Nations which the (Acting) Chief of Defence Staff found at page 5 of his decision letter to be "considered to be equivalent to free R & Q (rations and quarters)".
[23] The question is whether the word "available" as used in subsections (2) and (3) of the Regulations at issue means available in specie, that is, without requiring any transactional occurrence from a member of the Forces, or whether it is "available" through the provision of money sufficient to secure quarters and rations. The word "available" as the Supreme Court of Canada tells us in Alberta Giftwares Ltd. v. The Queen, [1974] S.C.R. 584 per Ritchie J. for the Court at 588 is capable of many shades of meaning and must be understood in the context in which it is used:
"Available", like many other words in the English language, is capable of different shades of meaning, and in my opinion in construing a will, deed, contract, prospectus or other commercial document, the legal effect to be given to the language employed, is a question of law and in the construction of such a document, it is an error in law to attribute a fixed meaning to a word of variable connotation by selecting one of alternative dictionary definitions without regard to the context of the paragraph or sentence in which the word is used.
[24] The Supreme Court has also instructed that an interpretation of a regulation is to be made having regard to the context of the statute and regulations and that which best fits their purpose. As stated by Iacobucci J. for the Court in Bell ExpressVu Limited Partnership v. Rex [2002] 2 S.C.R. 559 at paragraph 30:
It is necessary, in every case, for the court charged with interpreting a provision to undertake the contextual and purposive approach set out by Driedger, and thereafter to determine if "the words are ambiguous enough to induce two people to spend good money in backing two opposing views as to their meaning".
(Willis, supra, at pp. 4-5)
[25] Looking at the context of this Regulation, it has, just as all of the Queen's Regulations & Orders, been promulgated under the provisions of section 12 of the National Defence Act which provides very general wording for the context of such Regulations "organization, training, discipline, efficiency, administration and good government".
[26] Counsel have drawn attention to other Regulations dealing with expenses in respect of members of the Canadian Forces, these are generally gathered in a section entitled "Transportation and Travelling Expenses" in ten subsections in which the one at issue here occurs in the last section entitled "Miscellaneous". Provisions in these Regulations other than the one at issue here, essentially provide for reimbursement for expenses actually incurred by the member upon provision of appropriate receipts. The one at issue here does not.
[27] Entitlement to separation allowance begins with section 209.997(2) of the Regulations, and commences with the words:
Subject to the provisions of this article and to any limitation and conditions prescribed by the Chief of Defence Staff...
[28] Thus the Regulations confer upon the Chief of Defence Staff the right to provide "limitations and conditions".
[29] Subsection (2) continues:
... an officer or non-commissioned member is entitled to separation expense as compensation for additional expenses as a result of the separation from his dependants...
thus making it clear that it is the officer or member's additional expenses, not those of his family, which are to be compensated.
[30] Subsections (3) and (4) dictate what level the officer or member is to be compensated (here $42 US/day or $4 US/day) depending whether or not "living quarters or rations are available". There is no reimbursement based on provision of receipts, only a more rough and ready criteria depending on "availability" of rations and quarters.
[31] Canadian Forces Administration Order 209.3, although not a statutory order nor a Regulation, is authorized by subsection (2) of Regulation 209.997 as a prescribed "limitation and condition". Section 18, previously reproduced in these reasons states that "Separation expense is payable at the rate prescribed in QR & O paragraph 209.94(4) (same as 209.997(4) ie: $4US/day) or c.51 (not applicable) as applicable during any period that single quarters and rations or allowances in lieu thereof are provided by a third party."
[32] The (Acting) Chief of Defence Staff in his letter of October 29, 2004 at page 5 stated:
You were provided with an allowance that covered your R & Q and living expense, which is considered to be equivalent to free R & Q. I find that QR & O 209.997(4) is the applicable benefit authority...
[33] Given the provision in sections 209.997(2) that the Chief of Defence Staff may provide "limitations and conditions" and that the wording in subsections (3) and (4), namely "available" is subject to a variety of meanings depending on context. And, given that the Administration Order 209.3 is a proper "limitation and conditions" and clearly states that "allowances in lieu" of rations and quarters may be considered as having made rations and quarters available, I find no reviewable error in the decision of October 29, 2004 made by the (Acting) Chief of Defence Staff. Accordingly, I will dismiss this application.
[34] As to costs, I will make no order as to costs given that the Applicant did prevail at the Grievance Board level, that it was reasonable to seek this judicial review, and the relatively small amount at stake, at least in this individual instance.
"Roger T. Hughes"
JUDGE
Toronto, Ontario
September 19, 2005
FEDERAL COURT
NAME OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-2171-04
STYLE OF CAUSE: LIEUTENANT (NAVY) T.P. MCMANUS
Applicant
and
ATTORNEY GENERAL OF CANADA AND
CHIEF OF DEFENCE STAFF
Respondents
PLACE OF HEARING: LONDON, ONTARIO
DATE OF HEARING: AUGUST 29, 2005
APPEARANCES:
Robert W. Vitols FOR THE APPLICANT
Robecca Baranowsky Coyne FOR THE RESPONDENTS
SOLICITORS OF RECORD:
DYER, BROWN
London, Ontario FOR THE APPLICANT
John H. Sims, Q.C.
Deputy Attorney General of Canada FOR THE RESPONDENTS