Defense Contract Management Agency - Americas (Canada) v. Public Service Alliance of Canada et al.

• Jurisdiction: Ontario
• Court: Superior Court of Justice of Ontario (Canada)
• Judge: Brown, R.S.J., Swinton and Lederer, JJ.
• Citation: 2013 ONSC 2005,(2013), 307 O.A.C. 290 (DC)
• Date: 22 March 2013
• Subject Matter: INTERNATIONAL LAW

Defense Contract v. PSAC (2013), 307 O.A.C. 290 (DC)

MLB headnote and full text

Temp. Cite: [2013] O.A.C. TBEd. JL.011

Defense Contract Management Agency - Americas (Canada) (applicant) v. Public Service Alliance of Canada and Ontario Labour Relations Board (respondents)

(513/12; 2013 ONSC 2005)

Indexed As: Defense Contract Management Agency - Americas (Canada) v. Public Service Alliance of Canada et al.

Court of Ontario

Superior Court of Justice

Divisional Court

Brown, R.S.J., Swinton and Lederer, JJ.

May 3, 2013.

Summary:

The Defense Contract Management Agency (DCMA) was a "combat support agency" within the United States Department of Defense. Its purpose was to administer contracts for the procurement in Canada of supplies, services and weapons for the American military. The Ontario Labour Relations Board certified the Public Service Alliance of Canada as the bargaining agent for DCMA's civilian employees working in Ontario. The Board found that it had jurisdiction to make the certification order because DCMA was not entitled to claim sovereign immunity. DCMA applied for judicial review.

The Ontario Divisional Court allowed the application and set aside the Board's certification order.

International Law - Topic 21

Definitions - Foreign state or agency of a foreign state - The Defense Contract Management Agency (DCMA) was a "combat support agency" within the United States Department of Defense whose purpose was to administer contracts for the procurement in Canada of supplies, services and weapons for the American military - In June 2011, the Public Service Alliance of Canada (PSAC) faxed a certification application to the Commander of DCMA - In July 2011, the Ontario Labour Relations Board certified PSAC as the bargaining agent for DCMA's civilian employees working in Ontario - The U.S. government subsequently objected to the method of service that had been used because s. 9(1) of the State Immunity Act required service on a foreign state to be effected through the Canadian Department of Foreign Affairs (DFAIT) - Following a reconsideration hearing, the Board found that it had jurisdiction to make the certification order because DCMA was not entitled to claim sovereign immunity - It held that DCMA was an "agency of a foreign state" rather than a part of the U.S. government itself - As such, DCMA did not have to be served through DFAIT - DCMA applied for judicial review - The Ontario Divisional Court allowed the application - When the structure and operations of DCMA were considered, it was evident that it was part of the U.S. government - The degree of government control of its operations, the nature of the delegated powers it exercised, and the terms of its employment relationships with foreign nationals all clearly showed that DCMA was part of the state and entitled to claim sovereign immunity - Accordingly, DCMA was not properly served with the certification application - See paragraphs 21 to 39.

International Law - Topic 250

General - Practice - Service on foreign state or agency of foreign state - [See International Law - Topic 21 ].

International Law - Topic 2202

Sovereignty - Incidents of - Immunity - Exceptions - Proceedings relating to commercial activity of foreign state - The Defense Contract Management Agency (DCMA) was a "combat support agency" within the United States Department of Defense whose purpose was to administer contracts for the procurement in Canada of supplies, services and weapons for the American military - In July 2011, the Ontario Labour Relations Board certified the Public Service Alliance of Canada as the bargaining agent for DCMA's civilian employees working in Ontario - DCMA raised the issue of sovereign immunity - Following a reconsideration hearing, the Board held that if DCMA was entitled to claim sovereign immunity, it was engaged in commercial activity and therefore the exemption in s. 5 of the State Immunity Act applied - DCMA applied for judicial review - The Ontario Divisional Court allowed the application - While DCMA's primary purpose (to oversee contract administration) might seem commercial, it was important to put that purpose in context - The nature and purpose of DCMA activity was sovereign, undertaken on behalf of the U.S. government in order to meet military and defence needs in accordance with American laws and regulations - Subjecting DCMA's operations to Board oversight in a collective bargaining regime would interfere with the sovereign activities of the U.S. - Therefore, s. 5 did not apply - See paragraphs 53 to 65.

International Law - Topic 2203.1

Sovereignty - Incidents of - Immunity - Exceptions - Submission to jurisdiction - [See International Law - Topic 2204 ].

International Law - Topic 2204

Sovereignty - Incidents of - Immunity - Waiver - The Defense Contract Management Agency (DCMA) was a "combat support agency" within the United States Department of Defense whose purpose was to administer contracts for the procurement in Canada of supplies, services and weapons for the American military - In June 2011, the Public Service Alliance of Canada (PSAC) faxed a certification application to the Commander of DCMA (Hayes) - Hayes was later advised that DCMA was immune from the jurisdiction of the Ontario Labour Relations Board - He raised the issue during post-vote representations - In July 2011, the Board certified PSAC as the bargaining agent for DCMA's civilian employees working in Ontario - Following a reconsideration hearing, the Board concluded that DCMA had waived immunity by participating in the proceedings and thereby submitting to the Board's jurisdiction (State Immunity Act, s. 4(2)(c)) - It inferred that DCMA should have known about the law of sovereign immunity because of its global operations - DCMA applied for judicial review - The Ontario Divisional Court allowed the application - Hayes was not familiar with the concept of sovereign immunity when he responded to the certification application - Moreover, he had no authority to grant such a waiver on behalf of the U.S. government - Therefore, there was no clear waiver by the U.S. - If the application had been served in the appropriate manner (through the Canadian Department of Foreign Affairs pursuant to s. 9(1) of the Act), someone in the U.S. Department of State or Department of Justice who was familiar with sovereign immunity would have had notice of the application - See paragraphs 40 to 52.

Cases Noticed:

New Brunswick (Board of Management) v. Dunsmuir (2008), 372 N.R. 1; 329 N.B.R.(2d) 1; 844 A.P.R. 1; 2008 SCC 9, refd to. [para. 19].

Ferguson v. Arctic Transportation Ltd. et al. (1995), 101 F.T.R. 16 (T.D.), refd to. [para. 23].

Tritt v. United States of America et al. (1989), 68 O.R.(2d) 284 (H.C.), refd to. [para. 24].

Collavino Inc. v. Tihama Development Authority (TDA) an Organ of the Republic of Yemen (2007), 420 A.R. 89; 2007 ABQB 212, refd to. [para. 25].

Croteau et al. v. Federal Trade Commission, [2006] O.A.C. Uned. 26 (C.A.), refd to. [para. 39].

Kuwait Airways Corp. v. Iraq (Republic) et al., [2010] 2 S.C.R. 571; 407 N.R. 145; 2010 SCC 40, refd to. [para. 43].

R. v. Madan, [1961] 2 Q.B. 1, refd to. [para. 44].

Baccus S.R.L. v. Servico Nacional Del Trigo, [1957] 1 Q.B. 438 (C.A.), refd to. [para. 44].

Aziz v. Republic of Yemen, [2005] I.C.R. 1391 (C.A.), refd to. [para. 44].

United States of America v. Friedland (1999), 128 O.A.C. 201; 182 D.L.R.(4th) 614 (C.A.), refd to. [para. 46].

Smith et al. v. Chin et al., [2006] O.T.C. 870 (Sup. Ct.), refd to. [para. 48].

Reference Re Canada Labour Code and State Immunity Act (Can.), [1992] 2 S.C.R. 50; 137 N.R. 81, refd to. [para. 55].

Goethe House New York, German Cultural Center v. National Labour Relations Board (1989), 869 F.2d 75 (C.A., 2nd Cir.), refd to. [para. 59].

Statutes Noticed:

State Immunity Act, R.S.C. 1985, c. S-18, sect. 4(2)(c) [para. 6]; sect. 5 [para. 7]; sect. 9(1) [para. 5].

Authors and Works Noticed:

Fox, Hazel, The Law of State Immunity (2002), pp. 265, 267 [para. 45].

Yang, Xiaodong, State Immunity and International Law (2012), p. 342 [para. 45].

Counsel:

Malcolm Ruby and Michael Comartin, for the applicant;

Andrew Raven and Wassim Garzouzi, for the respondent, Public Service Alliance of Canada;

Leonard Marvy, for the respondent, Ontario Labour Relations Board.

This application for judicial review was heard in Toronto, Ontario, on March 22, 2013, before Brown, R.S.J., Swinton and Lederer, JJ., of the Ontario Divisional Court. Swinton, J., delivered the following reasons for judgment for the court, which were released on May 3, 2013.