Judicial Review/Crown Liability - Case Summaries
The database contains 84 case summaries relating to Judicial Review/Crown Liability . The summaries are sorted in reverse date order with 20 summaries per page. If there are more than 20 summaries, use the navigation links at the bottom of the page.
Crown Liability - Licence to Fish for Capelin - Taking Without Compensation - Misfeasance - Breach of Contract - Interference with Economic Relations
Gillett v. Canada and Hurley, 2017 FC 574
In response to increasing fishing pressure in the capelin fishery, in 2007 Fisheries and Oceans Canada (“DFO”) imposed a management measure that only allowed capelin licence holders to fish in one management area per year. As a result, licence holders in the Newfoundland region who leased their capelin fishing vessels to licence holders in another region, were not permitted to use the same vessels in Newfoundland. The Plaintiff was a commercial fisher residing in Newfoundland who owned a fishing vessel with a number of licences including a licence to fish for capelin. Following his decisions to lease his vessel to another fish harvester in Quebec for the purpose of fishing capelin in Quebec waters in both 2007 and 2008, DFO prohibited him from fishing for capelin in Newfoundland in both 2007 and 2008. The Plaintiff then commenced a Federal Court action against the Government of Canada and the DFO official who implemented this management measure, claiming damages for loss of income. The Federal Court reviewed a number of issues, as set out below, and dismissed the Plaintiff’s claim for the reasons set out below.
WHETHER THERE WAS A TAKING WITHOUT COMPENSATION
As a preliminary issue, the Court had to decide whether the Plaintiff’s capelin licence, once granted, constituted property. In this regard, the evidence at trial was that licences were normally initially issued in the capelin fishery without conditions attached with a provision stating that “the Licence Holder cannot operate any licence without the license conditions for that fishery attached . . .” The conditions were generally then issued later in the year, often just before the season commenced. In accordance with its management measure, DFO did not issue any conditions to the Plaintiff in 2007 and 2008 because he had leased his vessel to a fisher in the Quebec region. After reviewing the evidence, the Court considered jurisprudence on the issue of whether or not a fishing licence is property including Saulnier v. RBC, 2008 SCC 58, and Her Majesty the Queen v. Hache, 2011 FCA 104 and noted that the findings in both Saulnier and Hache, that the rights conferred by fishing licenses constituted property interests, were made only for purposes of certain statutory definitions. The Court also considered 100193 P.E.I. Inc., 2016 FCA 280 and Anglehart v Canada, 2016 FC 1159. After reviewing these cases, the court went on to conclude that the Plaintiff had no property right in the capelin licences issued to him because the licences had been intentionally issued without conditions attached. Given the fact that the Plaintiff had no property interest in the licences in 2007 and 2008, it followed that there was no taking without compensation.
MISFEASANCE IN PUBLIC OFFICE
With respect to this issue, the Court applied the test set out in Odhavji Estate v Woodhouse, 2003 SCC 69. The Plaintiff argued that DFO’s application of the management measures preventing him from harvesting capelin after his vessel has been used in the Quebec fishery was conduct specifically intended to injure him. In this regards, DFO had stated that one of its main goals was to slow down the fishery and prevent gluts of fish arriving at fish processors at the same time. DFO also stated that its goal was to limit additional fishing effort by preventing previously inactive licences from becoming active. The accused argued that the goal of avoiding gluts was not advanced by preventing him from leasing his boat for use in the Quebec fishery because the fisheries were not held at the same time. The Court rejected this line of argument and stated that “even if I were to accept that the application of DFO’s policy measures in these particular circumstances was not necessary to advance DFO’s policy objectives, it does not mean the policy or application is unlawful” (para. 51). After citing Comeau’s Sea Foods Limited v. Canada,  1 SCR 12 and referring to the broad discretion that the Minister has to manage the fishery in the public interest, the Court concluded that “[t]hese measures took into account the recent history of that fishery and the input of interested stakeholders. I find no basis to conclude that these measures or their application to Mr. Gillett were arbitrary or based on irrelevant considerations or bad faith (para 52).
The court also addressed several other arguments of the Plaintiff with respect to misfeasance and rejected them (paras. 53-68).
BREACH OF CONTRACT
With respect to this issue, the Plaintiff argued that his application for a licence renewal was an offer, the $30 licence fees was consideration and the issuance of the licence was acceptance. However, the Court rejected this argument on the basis of the evidence that the licence was issued without attaching conditions and that no conditions were provided until after the season was over.
INTERFERENCE WITH ECONOMIC RELATIONS
With respect to this issue, the Plaintiff argued that DFO’s chief resource management officer for the applicable area had tortuously interfered with his economic relationship with DFO. However, the Court rejected this argument on the basis that it found no illegal or unlawful act by the resource manager and there was no evidence that he acted with intent to cause loss to the Plaintiff.
Judicial Review/Crown Liability
Elson v. Canada (Attorney General), 2017 FC 459
This case involved judicial review of a decision by the Minister of Fisheries (based upon a recommendation of the Atlantic Fisheries Appeal Board) to deny the Applicant’s appeal in which he sought an exemption from the Preserving the Independence of the Inshore Fleet in Canada’s Atlantic Fisheries policy (“PIIFCAF Policy” or Policy).
In 2007 the Minister of Fisheries introduced the PIIFCAF Policy for the purpose of strengthening the Atlantic Coast Owner-Operator and Fleet Separation Policies. This Policy, required in-shore fishers to sign declarations stating whether they were parties to a controlling agreement by a third party such as a fish processor. If they were party to a controlling agreement, they had until April 12, 2014 to be free of such an agreement, failing which their licences would not be renewed.
The Applicant was party to a controlling agreement by two fish processors. He was advised by DFO in writing that since he was subject to a controlling agreement, that after April 2014 he would not be eligible to receive a new or replacement licence until the controlling agreement was terminated. He was also told he had a right of appeal. In 2015, the Applicant appealed the Minister’s decision to an Appeal Board. The Appeal Board asked the Applicant to put a dollar value on his claimed financial hardship, but he neglected to do so. The Appeal Board subsequently recommended that the appeal be denied on the grounds that the Applicant had not demonstrated a valid extenuating circumstance and that he had been treated fairly. After reviewing this recommendation, the Minister rejected the Applicant’s appeal in a letter that gave no specific reasons for the denial other than a reference to the report of the Atlantic Fisheries Licence Appeal Board and “[h]aving considered all relevant information” (para. 19).
STANDARD OF REVIEW
The Court ruled that the standard of review was reasonableness. It stated that “reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process, but also whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law.” It also noted that issues of procedural fairness are reviewed on the correctness standard (para 26).
Issue 1: WHICH DECISIONS ARE SUBJECT TO JUDICIAL REVIEW?
The Court ruled that it was only the decision of the Minister, not the decision of the Appeal Board, that was subject to judicial review.
Issue 2: WAS THE MINISTER’S DECISION BASED ON RELEVANT CIRCUMSTANCES
The Applicant argued that in pith and substance the PIIFCAF Policy was social and economic legislation unrelated to protecting the fishery. Based upon the assumption that this was true, it was argued that to base a discretionary decision upon a policy that would be ultra virus Parliament if it were enacted as legislation, would be an irrelevant consideration. In rejecting this argument, the Court did a thorough analysis of the case law involving the division of powers over fisheries matters and concluded that the federal Parliament’s powers over fisheries are broad, are not limited to conservation, and include management of fisheries for social, environmental and other grounds (para. 51). The Court pointed out that the Minister strongly believed that an independent inshore commercial fishing fleet was an important element of an economically prosperous Atlantic Canada. Accordingly, the Court held that such social and economic factors were permissible factors for the Minister to consider. The Court also noted that since the PIIFCAF Policy was a policy, it could not be subject to a division of powers challenge (para. 56-63). In the alternative, the Court also ruled that even if the Applicant’s challenge had been to a S.7 discretionary decision as opposed to a policy, the challenge would not have stood up because the Policy was in pith a substance a valid exercise of federal fisheries power designed to prevent fish processing corporations from exerting licence control in the inshore fishing industry so as to protect the economy of coastal communities who depend upon the resource (paras. 73-4).
Issue 3: DID THE MINISTER REASONABLY EXERCISE, OR DID HE FETTER HIS DISCRETION?
With respect to this issue, the Applicant raised three arguments. His first argument was that the Policy contained mandatory requirements that fettered the Minister’s discretion. In rejecting this argument, the Court found as a fact that the Policy indicated that it only guided the Minister but was not binding on the Minister. The Court also held that it was not improper to stipulate what information must be provided by licence holders in order to assess their eligibility.
Secondly, the Applicant argued that the failure of the Policy to provide for individual harvester exemptions fettered the Minister’s discretion. However, in rejecting this argument the Court stated the Minister was free to state general requirements in his Policy. The Court also noted that the Policy provided for an appeal process, which the Applicant was advised of. At the Applicant’s appeal before the Appeal Board the Board asked him to put a dollar value on his claimed financial hardship and he had not done so. The Applicant had also not lead any evidence that it had attempted to mitigate the hardship by approaching a Recognized Financial Institution for a loan (para. 118). Upon cross examination on his affidavit the Applicant revealed that he made no attempt to terminate his controlling agreement with the fish processors and that his request for an exemption to the Policy was made at the request of the fish processors and conducted with their assistance.
Thirdly, the Applicant argued that the Minister’s decision letter failed to acknowledge the source and breadth of his broad discretion under s. 7 of the Fisheries Act or give adequate reasons for the rejection of the appeal. The Court accepted this argument, and concluded that the Minister “fettered his discretion by not also considering that it was open to him to afford the relief sought other than by way of the PIIFCAF Policy and the appeal process” (para. 135). This was because the record before the Minister contained no reference to s. 7 of the Fisheries Act, other that a reference in the letter from the Applicant’s counsel and the “Ministers denial letter failed to acknowledge the source and breadth of his broad discretion under section 7 of the Fisheries Act . . . “ (para. 135).
Issue 4: DID THE MINISTER HAVE AN OPEN MIND
The applicable test to determine whether an administrative decision-maker is biased will vary depending on the decision-making body (para. 142). Since the decision of the Minister of Fisheries being challenged was highly discretionary, was not constrained by statute and was based upon policy considerations which took the public interest into account, the applicable standard applied was whether the Minister had a closed mind. The onus was on the Applicant to show that there was prejudgement to the extent that any representations at variance with the Minister’s view would be futile (para. 146). The Court ruled that the Applicant had not met this burden for the following reasons:
(1) Previous statements cannot be used to fetter a Minister’s discretion;
(2) The PIIFCAF Policy explicitly stated that it was not binding on the Minister in making decisions regarding licences;
(3) Although first level of appeal was skipped, the appeal policy allowed for doing so; and
(4) The Appeal Board did not find any extenuation circumstances and found that the Applicant had been treated fairly.
Issue 5: The APPROPRIATE REMEDY
The Court reviewed jurisprudence that suggested at the remedial stage courts should consider whether quashing an administrative decision-maker’s decision and remitting it to the administrative decision-maker for re-determination would serve any practical or legal purpose. In addressing this issue, the court found that “the objective of the PIIFCAF Policy was to address the deliberate circumvention, by way of the proliferation of trust agreements (controlling agreements), of the Owner-Operator and Fleet Separation Policies” (para. 156). Given the failure of the Applicant to terminate the controlling agreement or provide any financial information to the Appeal Board, it was clearly open to the Minister to refuse to issue the licences to the Applicant. Accordingly, despite the finding that the Minister had fettered his discretion, the Court refused to quash the decision and send it back to the Minister for reconsideration.
Judicial Review - Competition for Access to Scallop Area - Whether Minister Exceeded Jurisdiction my Using Licence Conditions
Giroux v. Canada (Attorney General), 2016 FCA 288
This case involved in group of Scallop Fishers in the Bay of Fundy area who challenged a decision of the Minister of Fisheries of issue licences to another group with licence conditions that allowed them to fish in area SFA 29 West. After setting out the discretionary authority of the Minister, the Motions Court denied the motion on the grounds that the impugned licences, independent of the attached conditions included area SFA 29 West. Upon appeal, this decision was upheld.
Judicial Review and Crown Liability – Unjust Enrichment – Expropriation Without Compensation - Breach of Contract – Misfeasance of Public Office
Practice – Expropriation Without Compensation Claims May Be Dismissed on Summary Judgement
Her Majesty the Queen v. . 100193 P.E.I. Inc. et al., 2016 FCA 280
This was an appeal and cross appeal from a decision of the Federal Court (2015 FC 932) allowing in part the Appellant/Defendant’s motion for summary judgement to dismiss the Respondent/Plaintiffs’ claims. In their action, the Plaintiffs’ claim included the following:
1) Expropriation without compensation;
2) Breach of contract;
3) Unjust enrichment; and
4) Misfeasance of Public office.
The motions Court granted summary judgement dismissing the claim for breach of contract and unjust enrichment. It then dismissed the remainder of the application allowing the claims for unjust enrichment, expropriation without compensation and misfeasance to go to trial.
Some of the background to this case is described in the case of Arsenault v. Canada, 2008 FC 299 (digested on this webpage). The Plaintiffs were a group of approximately 30 snow crab fish harvesters residing in Prince Edward Island. They were licenced to fish in area 12 in the early 1990’s and were referred to as “traditional inshore fishermen”. They had some conflicts with a group of 130 “traditional mid-shore fishermen” from outside P.E.I. who were licenced to fish in areas 25 and 26. In 1993 the competitive shotgun type fishery for snow crab was replaced by an individual quota system. It was alleged by the Plaintiffs that at that time that they agreed to give up the competitive fishery, they also agreed to finance some research and conservation measures.
In 1997, the inshore fish harvesters were integrated into areas 25 and 26 with the mid-shore fish harvesters and agreed to a five-year management plan that involved them making significant contributions of funds for Department of Fisheries (“DFO”) management activities.
After the Marshall decision in 1999, DFO purchased two snow crab licences from two members of the inshore fishery pursuant to a government funded “buy back” program.
In 2003 DFO approved a three-year management plan which was the source of the Plaintiff’s complaints. They alleged that the plan reduced the Plaintiff’s share of the total allowable catch (“TAC”) in the following three ways: (a) integrating the inshore fishers into areas 25 and 26; (b) allocating 15.8% of the TAC to First Nations when only 5% of the TAC was freed up by the buy back; and (c) reserving an additional 15% of the TAC for new entrants. An additional complaint arose from DFO’s setting aside part of the snow crab resource between 2003 and 2006 to finance research activities. This practice was declared illegal by the Laroque decision in 2006 (2006 FCA 237.
Upon appeal, the Court of Appeal held that:
1) The Plaintiffs’ claims based upon expropriation without compensation and unjust enrichment should have also been dismissed by summary judgement;
2)The cross appeal was dismissed;and
3)The claim for misfeasance was allowed to continue to trial.
With respect to the claim for expropriation without compensation, the court held there was no genuine issue to go to trial because at law the case could not succeed. The court said that:
The law does not recognize a proprietary interest on the part of fishers in uncaught fish or the fishery, nor does the law recognize a right to compensation for a reduction in quota: Kimoto v. Canada (Attorney General), 2011 FCA 291 (CanLII), 426 N.R. 69
The Court also declined to follow a previous trial court decision of the Federal Court that declined to dismiss an expropriation without compensation case on summary judgement.
With respect to the unjust enrichment claim, given the Court of Appeal’s finding that there was no expropriation without compensation, the Court held that there could be no unjust enrichment because the Plaintiffs did not suffer a deprivation.
With respect to the misfeasance claim, the Court adopted the following test from Odhavji Estate v. Woodhouse, 2003 SCC 69:
"[T]he tort of misfeasance in public office is an intentional tort whose distinguishing elements are twofold: (i) deliberate unlawful conduct in the exercise of public functions; and (ii) awareness that the conduct is unlawful and likely to injure the plaintiff. Alongside deliberate unlawful conduct and the requisite knowledge, a plaintiff must also prove the other requirements common to all torts. More specifically, the plaintiff must prove that the tortious conduct was the legal cause of his or her injuries, and that the injuries suffered are compensable in tort law."
In allowing the misfeasance claim to continue to trial, the court noted that “the existence of a proprietary interest forms no part of the elements of the tort and that damages for the tort can legally embrace economic matters beyond proprietary interests (para 26)". In allowing this claim to proceed to trial the court limited the claim to DFO using the TAC to finance its activities and obligations it believed it had towards other groups of fish harvesters.
With respect to the counterclaim, the Court of Appeal upheld the Trial Court’s finding that the Plaintiffs did not produce evidence to support a finding that there was a contract that the TAC would only be freed upon for First Nations out of buy back quota. The Court found that the Minister’s statement only amounted to statements of policy objectives.
The Court of Appeal closed by commenting on the palpable and overriding error test as follows:
"One must keep front of mind that palpable and overriding error is a high standard: “[w]hen arguing palpable and overriding error, it is not enough to pull at leaves and branches and leave the tree standing,” but rather “[t]he entire tree must fall.” See Benhaim v. St Germain, 2016 SCC 48 (CanLII) at para. 38, citing Canada v. South Yukon Forest Corporation"
Crown Liability - Misfeasance - Reduction of Quota
Anglehart v. Canada, 2016 FC 1159
This cased involved a complaint by one group of snow crab fish harvesters who objected to the Minister reducing the quota in their area by 35 per cent. After rejecting a number of grounds of review, the court imposed liability based upon the tort of misfeasance in public office. In doing so, the court remarked that unlike a number of other grounds for review of a Minister’s decision regarding the management of a fishery, this ground did not require the plaintiffs to demonstrate that they owned the individual quotas associated with their licences. In finding for the plaintiffs the Court said as follows:
The reduction [of the total allowable catch] without justification, these attempts to find an explanation ex post facto, and the Minister’s reaction regarding questions he was asked by journalists after the 2003 fishing plan was released have satisfied me that the only reason the Minister reduced the TAC by 4,289 mt in 2003 was to force traditional crabbers to resume negotiations that could lead to a joint project agreement [for financing the fishery]. I am of the opinion that, in so doing, the Minister acted in bad faith, particularly in the context of all of the changes he chose to make to DFO policies that same year. He exercised his discretion by relying on considerations that are irrelevant, capricious or foreign to the purpose of the statute (para. 252).
Judicial Review/Crown Liability - Practise - Costs in Public Interest Litigation
Calwell Fishing Ltd. v. Canada, 2016 FC 1140
This case was brought by a group of fish packer owners whose businesses declined to the point where they were no longer economically viable. They sought a declaration based upon the common law doctrine of "taking". They argued that the state cannot take property without compensation except where such taking is supported by clear unambiguous statutory language. They submitted that a series of regulatory changes from the early 1980s up to the 2000s, including the buy-back of licences, fleet reduction, and commencement and enhancement of the Aboriginal Fisheries strategy eliminated available work for their packers. The Plaintiffs noted that during the period in question a number of fishing vessel owners and licence holders received compensation from the Government and question why no such compensation was offered to packers. In a decision rendered 11 March 2016 (2016 FC 312) (digested on this webpage) the Federal Court concluded that the Plaintiffs had not established "on a balance of probabilities, that the loss of their packing business was a direct result of government action."
In a subsequent hearing to determine costs, the Plaintiffs were successful in obtaining an order that each party bear their own costs on the following basis:
1)Rule 400(3) of the Federal Court Rules provides that the Court may consider whether the public interest in having a proceeding justifies a particular award in costs.
2)A losing party who raises a serous legal issue of public importance will not necessarily bear the other party’s costs;
3)The case explored the constraints on powers of the Minister of Fisheries and Oceans, as a steward of the fisheries, which requires a balancing of different public and private interests;
4)The impact of such issues extended beyond the parties to the action;
5)The issues were not cut and dry;
6)The Plaintiff’s did not have a defined pecuniary interest in the outcome, apart from reliance upon the Crown to do the honourable thing if they obtained their declaration;
7)Altruism and having little to gain financially work better than the pecuniary interest test;
8)The question of whether public access to a common property resource is “property” that can be subject to a regulatory taking is an issue that has not been previously resolved by a Court, and therefore the action was novel.
Judicial Review/Crown Liability - Declaratory Relief - Did the manner in which Fisheries and Oceans, Canada exercised its regulatory power amount to a "taking".
Calwell Fishing Ltd. v. Canada, 2016 FC 312
This case was brought by a group of fish packer owners whose businesses declined to the point where they were no longer economically viable. They sought a declaration based upon the common law doctrine of "taking". They argued that the state cannot take property without compensation except where such taking is supported by clear unambiguous statutory language. They submitted that a series of regulatory changes from the early 1980s up to the 2000s, including the buy-back of licences, fleet reduction, and commencement and enhancement of the Aboriginal Fisheries strategy eliminated available work for their packers. The Plaintiffs noted that during the period in question a number of fishing vessel owners and licence holders received compensation from the Government and question why no such compensation was offered to packers.
The court identified the elements of a "taking" to be as follows:
1)The plaintiff's property was taken by the defendant;
2) the same property was acquired by the defendant; and
3) the Defendant did not meet its duty to compensate.
With respect to the first element, the plaintiff based its argument largely upon the public right to access to fish as guaranteed by the Magna Carta. In rejecting the plaintiff's argument the the Court noted that Magna Carta rights can be taken away by competent legislation. It noted that licencing is a tool available to Minister under the Fisheries Act that allows the Minister to restrict entry into commercial fisheries and limit fishing effort. It said "regulations to not remove public access. They provide a 'new order' . . . " (para. 187).
The court the court also reviewed a great deal of evidence and concluded that although some of the regulatory actions such as reducing the total allowable catch of salmon and mandatory herring pooling negatively impacted the packing business, there were a number of other factors which had an even greater impact upon the packing business such as direct access to First Nations mandated by the Sparrow decision, technological advances such as fishing vessels with insulated holds with on board refrigeration systems, more modern larger packers, direct delivery premiums offered by fish processors, and fluctuating fish prices. Accordingly, the court concluded that the plaintiffs had not established "on a balance of probabilities, that the loss of their packing business was a direct result of government action." Since this was fatal to the claim, the court did not address the other elements of a "taking".
Editor's note: This case gives a good history of fisheries management policies over the last 20 years or so and discusses some of the challenges of balancing public rights and private interests.
Judicial Review - Failure of the Minister of Fisheries to Follow the Recommendation of the Atlantic Fisheries Licensing Appeal Board ("AFLAB")
Doucette v. Her Majesty the Queen (Minister of Fisheries), 2015 FC 734
In this case, the Applicant was a commercial fish harvester residing in Prince Edward Island who wished to move to New Brunswick. In order to do so, he sold the fishing license that he used while living in Prince Edward Island. After consulting with the Department of Fisheries and Oceans ("DFO"), he moved to New Brunswick and entered into an agreement to purchase a fishing license and related assets from a New Brunswick license holder for 1.5 million dollars and partly paid for it. This agreement provided that the vendor would hold the fishing license in trust until the Applicant had satisfied DFO residency requirements in New Brunswick.
Prior to the license being transferred to the Applicant, DFO imposed a freeze on any further transfers of the vendor's license and eventually the vendor withdrew his expression of intent to transfer the license to the Applicant.
Subsequently, the Applicant commenced a legal action against the Vendor, that resulted in a finding that the contract had been frustrated.
Subsequently, the Applicant met with Fisheries Minister, who allegedly said that she agreed to send the matter to the AFLAB and would abide by the recommendation of the AFLAB.
Subsequently, the AFLAB recommended that the Minister re-issue the license to the Applicant on the grounds that DFO had previously given him erroneous information about the required qualification that caused him to miss an opportunity to have the license transferred before the freeze. When the recommendation was made, however, DFO had a new Minister who rejected the recommendations of the AFLAB by way of letter dated 2 March 2012. The stated reasons for not following the recommendations were: (1) no request for issuance of the license had been made by the vendor; and (2) the Board had failed to consider the court case that had held the sale agreement was frustrated.
Subsequently the new Minister became sick and Minister Shea was re-appointed as acting Minister. After receiving a request for a reconsideration, she issued a letter dated 27 November 2013 stating that the Applicant's matter "has been thoroughly addressed and there is no merit for further review".
At the judicial review hearing a number of issues were raised.
WHICH DECISIONS ARE SUBJECT TO JUDICIAL REVIEW
The court held that the letter of 27 November 2013 was subject to review, but the original decision referred to in the letter of 27 November 2013 could also be considered.
STANDARD OF REVIEW
The court relied upon the decision of Malcolm v. Canada 2014 FCA 130 to apply a standard of reasonableness to the review of the Minister's decision. It applied the correctness standard to the procedural fairness issues.
Given the fact the decision had great financial weight for the Applicant the court found he was entitled to procedural safeguards. In failing to advise the Applicant that it was taking into consideration the court case that found the purchase agreement was frustrated and giving him an opportunity to comment, the AFLAB breached procedural fairness. However, the court found that this breach was immaterial because the Applicant at no time had a right to the license because at the time of the appeal the vendor had never applied to re-issue the license to the Applicant.
REASONABLENESS OF THE FIRST DECISION BY MINISTER ASHTON
The court commenced by stating the test as follows:
"The discretion of the Minister to issue fishing licences is outlined at section 7 of the Fisheries Act. It must be i) in accordance with the requirements of natural justice; ii) based on relevant consideration; iii) without arbitrariness; iv) in good faith; v) in accordance with applicable statute or regulations; and vi) in accordance with the provisions of the Charter (Comeau at paragraphs 30, 31, 36, 37 and 51).
The court then found that alleged promise by Minister Shea to follow the recommendation of the AFLAB did not create a substantive right because a Minister cannot fetter his or her discretion to act in the future.
The court then relied upon a written policy statement that "a replacement licence may be issued upon request by the current licence holder to an eligible fisher recommended by the current licence holder" to find that since the Applicants request was not in accordance with this written policy, "in refusing this request, Minister Ashfield exercised his discretion in accordance with the law and did not make the decision in bad faith"
With respect to allegations that DFO mislead the Applicant when he inquired about the residency requirements for obtaining a licence in New Brunswick, the court found that there was insufficient evidence to make such a finding and, in any event, a judicial review is not an appropriate forum to adjudicate that issue.
REASONABLENESS OF THE SECOND DECISION BY MINISTER SHEA
Based upon several authorities the court concluded that Minister Shea's alleged promise follow the recommendation of the Board would have been an impermissible fettering of her discretion.
The court dismissed the judicial review application but did not grant costs.
Editor's note: The court may have erred in stating the breach of procedural fairness was immaterial because the Applicant had no right to the licence because the vendor had not applied to issue it. The policy guideline relied upon by the court was just a policy statement that would not have been binding upon the Minister. The whole purpose of the licence appeal process is to provide for situations where stated policies should not be followed based upon extenuating circumstances. The failure to give the Applicant the right to comment on the court case deprived the Applicant of an opportunity to argue that the Minister should make an exception to his policy.
Judicial Review - Challenge of Decision of Minister issuing license for scallop fishing
Giroux v. Canada (Attorney General), 2015 FC 683
This case involved a challenge by group of commercial scallop fishers from one area when the Minister of Fisheries issued licenses to another group that allowed the other group to fish in the first groups historical area. This application was denied on the grounds that the Minister had very broad discretion to manage fisheries and issue licenses in doing so. The court applied Malcom v Canada (Fisheries and Oceans), 2014 FCA 130.
Review of licence condition granting fish farm facility veterinarian to allow transfes of diseased smolts that he or she deems to be low risk.
Morton v. Minister of Fisheries and Oceans and Marine Harvest Canada Inc., 2015 FC 575
This case involved judicial review of conditions in Salmon Farm licences on the Pacific Coast that allowed the transfer of diseased smolts from hatcheries to fish farms if, amongst other things, the fish farm's veterinarian deems the transfer to be of low risk. After a lengthy analysis, the court granted an order declaring that the impugned licence conditions were of no force and effect on the grounds that:
(1) They were inconsistent with the regulatory pre-conditions imposed on the Minister of Fisheries by s. 56 of the Fishery (General) Regulations and the precautionery principle; and
(2) There was an improper subdelegation of the Minister's authority becase (a) it conferred unlimited discrition upon the sub-delagate without any standards or criteria for the exercise of discritions and (b) the Minister did not retain supervisory control.
After an interesting analysis of the use of conditions in licences by the Minster, the Court concluded by noting that since the scope of regulation is constrained by its enabling legislation, "so too are licences".
Editor's note: Since many charges under the federal Fisheries Act are for breaches of license conditions, as opposed to breaches of regulations, this case could be useful in defending fisheries prosecutions.
Judicial Review/Crown Liability - Decision of Minister re Allocation of Total Allowable Catch of Halibut from Commercial Sector to Recreational Sector
Malcolm v. Canada (Minister of Fisheries), 2014 FCA 130
This case involved a representative proceeding brought by the applicant on behalf of all commercial halibut licence holders in British Columbia. The applicant sought judicial review of a decision of the Minister of Fisheries changing the allocation of the total allowable catch (“TAC”) of halibut between the commercial sector and the recreational sector from 88% (commercial)/12% (recreational) to 85%/15%.
In making the decision under review, the Minister rejected the advice of his department and also broke a prior stated policy of only modifying the allocation by a market driven mechanism.
In upholding the decision of the Applications Judge to dismiss the application, the Court of Appeal examined the following issues:
10 What is the applicable standard of review;
2) Does the doctrine of promissory estoppel apply;
3) If not, does the doctrine of legitimate expectations apply; and
4) if not, was the Minister's decision nevertheless reasonable.
STANDARD OF REVIEW
The Application's judge's selection of the appropriate standard is itself a question of law reviewable on the standard of correctness.
The issues of promissory estoppel and legitimate expectations were correctly reviewed by the application's judge on standard of correctness.
With respect to review of the substance of the Minister's decision, all the parties agreed that the applicable standard was reasonableness, but they disagreed as to what the standard required in the context of the case. The appellant commercial licence holders argued that the reasonableness standard set out in Dunsmuir applied without qualification. The Respondents argued that the Maple Lodge Farm test applied. In response to these arguments, the Court of Appeal appears to have subsumed the Maple Lodge Farm test into the Dunsmuir test as follows:
"A discretionary policy decision that is made in bad faith or for considerations that are irrelevant or extraneous to the legislative purpose is unreasonable by that very fact [Maple Lodge Farms]. Such a decision can also be unreasonable if it is found to be irrational, incomprehensible or otherwise the result of an abuse of discretion. The ultimate question in judicially reviewing the Minister’s decision in this case is to determine whether the decision falls within a range of reasonable outcomes having regard for both the context in which the decision was made and the fact that the decision itself involves policy matters in which a reviewing court should not interfere by substituting its own opinion to that of the Minister’s. It is with these considerations in mind that the reasonableness of the Minister’s decision should be determined." [para. 35]
After reviewing the authorities that provide for a very limited application of the doctrine of promissory estoppel to public authorities the Court of Appeal noted that the "Minister may modify the approach followed previously if, in the Minister's opinion, public interest considerations reasonably justify such a change of policy . On the facts of the case, the Court ruled that the estoppel did not apply.
This argument was rejected on the grounds that it is limited to only procedural relief and the applicant was seeking substantive relief.
REASONABLENESS OF THE DECISION
The essence of the appellant's argument was that the Minister abused his discretion in deciding to reallocate 3% of the TAC without using a market-based mechanism. The Court of Appeal rejected this argument and upheld the decision of the Minister for the following reasons:
1) The Minister has broad authority and discretion to manager fisheries in the public interest;
2) The Minister may take into account social and economic factors when allocating a fishery resource;
3) The Minister is not bound by policy decisions of his or her predecessors;
4) The Minister is not bound to provide compensation to affected fishers when reallocating TAC or reducing quota;
5) The commercial sector and the sports sector were unable to agree upon a market based mechanism despite numerous efforts by DFO;
6) The use of public funds to compensate the commercial fleet was not deemed appropriate by DFO;
7) DFO questioned the feasibility of a levy for fee mechanism to collect funds to support a market based mechanism;
8) a pilot experimental marked-based mechanism in introduced in 2011 did not meet with any substantial success;
9) The Minister's primary consideration was to encourage jobs and economic growth in B.C. and the recreational sector provides an important contribution to the economy of B.C.; and
10) Although not the option favoured by DFO officials, the plan implemented by the Minister was one of several options presented to him by DFO officials.
The Court summarized its decision as follows:
"The Minister’s decision to proceed with the 3% reallocation of the TAC without applying a market-based mechanism or another form of compensation was not irrational or incomprehensible when considering the record as a whole. Moreover, that decision was not an abuse of the Minister’s discretion, and it was not made in bad faith or on the basis of considerations that are irrelevant or extraneous to the purposes of the Fisheries Act. The Minister’s decision fell within a range of reasonable outcomes having regard for both the context in which the decision was made and the discretionary and policy nature of the decision."
Aboriginal Rights - Practice - Injunctions - First Nations Granted Interlocutory Injunction Prohibiting Opening of Commercial Roe Herring Fishery
Ahousaht Indian Band v. Canada (Minister of Fisheries and Oceans), 2014 FC 197
In this case the applicants were a group of five First Nations located on the West Coast of Vancouver Island who had recently had their right to to fish and sell fish affirmed by the Supreme Court of B.C. with the issue of justification and infringement to be later determined. When affirming this right, the court had given the parties a period of time to consult and attempt to negotiate the manner in which the aboriginal rights to fish and sell fish would be exercised. During this period the the Minister made a decision for a small scale opening of the commercial roe herring fishery, despite the fact that his officials had recommended keeping the fishery closed. It was also noteworthy that the fishery had been closed for the previous nine years because of conservation concerns. Shortly before the commencement of the commercial fishery, the group of First Nations brought an application for an interlocutory injunction.
The issues addressed by the court were as follows:
1) Does a serous issue arise;
2) Will irreparable harm occur if the injunction was not granted; and
3) Does the balance of convenience favour the injunction.
DOES A SERIOUS ISSUE ARISE
Without a great deal of analysis, the court found a serious issue arose with respect to:
a) Conservation issues concerning the fishery; and
b) The acknowledged Aboriginal rights of the Applicants to fish and sell fish.
The court found that there would be irreparable harm because of:
a) Serious conservation concerns;and
b) The Applicants would "lose their position and opportunity to reasonably participate in negotiations for establishment of their constitutionally protected Aboriginal rights to a community-based commercial herring fishery [para. 27].
Although inadequate consultation does not always constitute irreparable harm, the court distinguished Musqueam Indian Band v. Canada, 2008 FCA 214 on the basis that "the Applicants have established an Aboriginal right to fish and sell fish and are therefore operating within an established rights legal framework and because they are in the process of negotiating the manner in which the Applicants' Aboriginal rights can be accommodated and exercised. [para. 28].
BALANCE OF CONVENIENCE
In finding the the the balance of convenience favoured the applicants, the Court emphasized the need to consider the public interest in ensuring that the Crown followed the previous court's direction to participate in negotiations concerning how the applicant group would exercise its fishing rights.
The public interest also favoured conservation.
Given its finding as described above, the Court granted an interlocutory injunction prohibiting the Minister from opening the West Coast of Vancouver Island commercial herring fishery. It also relieved the applicants from the normal requirement of having to give an undertaking as to damages.
Editor's Note: At the time of writing, this decision was under appeal.
Aboriginal Rights - Judicial Review of Band Council Decision re allocation of Communal Fishing Licence - Whether Band Council is a "Federal board, Commission or Other Tribunal"
Malonie v. Shubenacadie Indian Band, 2014 FC 129
The applicant band member obtained a bank loan to purchase a fish boat upon the assurance of her Band Council that she would be given use of a communal snow crab licence and quota for a period of six years. She purchased the fish boat and had use of the licence and quota for three years. The Band then assigned the licence to another non-aboriginal party for a two year period. As a result, the applicant commenced a judicial review proceeding in Federal Court seeking the following:
1) An injunction prohibiting the Band from allocating the licence to anyone other than herself;
2) A declaration that the Band exceeded its jurisdiction in allocating the licence to another person.
PRELIMINARY JURISDICTIONAL ISSUE
As a preliminary matter, Band argued that its decision was not subject to judicial review by the Federal Court because in making the allocation decision the Band was not acting as a "federal board, commission or other tribunal" within the meaning of s. 2(1) of Federal Court Act. In holding that the Band was acting as a federal board, commission or other tribunal the court said as follows:
"[T]he Band Council’s decision to allocate the quota to Kaiser is reviewable because it was made under regulatory grant of authority delegated by the Minster to the Band to decide who is authorized to fish the quotas allocated by the communal licences. In other words, in this case, like the others where band council decisions have been found to be amenable to judicial review, the Council was exercising a power specifically afforded to it by regulation." [para. 31] In applying the test set out in Air Canada v Toronto Port Authority, 2011 FCA 347 the court also concluded that:
1) There were significant public aspects to the decision because the Interim Fishery Agreement with Federal Government recognized that communal licences were granted to the First Nation in order to provide members with opportunities to conduct fishing and related activities;
2) Granting of licences pursuant to a monopoly right to harvest a community resource has a significant public aspect;
3) The Band Council authority to issue communal licences was entirely "interwoven into the scheme established under the Fisheries Act and Regulations and is exercising a licensing power akin to that exercised by the Minister under section 7 of the Fisheries Act . . ." [para. 36].
4) The Band council is exercising authority delegated to it by the Minister; and
5) The decision to designate an individual under a communal licence involved the exercise of a compulsory power.
Given the court's conclusion that the decision was subject to the jurisdiction of the court over judicial review, it followed automatically that the requirements of natural justice and procedural fairness applied to the Band. The scope of of the requirements vary depending upon a number of factors set out in Baker v Canada (Minister of Citizenship and Immigration), 1999 CanLII 699 (SCC). In this particular case, the court found two important factors:
1) The applicant derived important income from having her fishing vessel fish for snow crab and that she took out a loan understanding that she would have access to the licence for five years; and
2) Given the letter the Band provided to assist with her financing and the failure of the Band to express any concerns about her performance, the applicant had a legitimate expectation that she would be advised if there was a risk of her losing the licence before the end of the five year term and that she would be given an opportunity to address any concerns and make a proposal.
Based upon these to factors the court concluded that the case fell towards the lower end of the spectrum, but was more than minimal. As result the court set aside the Band's decision to issue the quota to another party and ordered it to re-determine who and which vessel would have use of the licence. In doing so, the Band was required to:
1) Give her notice of its intention to make a decision;
2) Give her the right to submit a proposal for her use of the licence;
3) Give her the right to address the Band's concerns regarding lack of profitability in previous years;
4) The other party who the band had re-assigned the licence to and fished the licence for one year, should also be given an opportunity to make a proposal (the proposals of one applicant need not be disclosed to the other).
The court declined to deal with the applicant's claim that the Band's decision was unreasonable because it would be re-made. However the court did express the opinion that discretionary licensing decisions are afforded considerable deference. It also noted that the object of the Interim Fisheries Agreement to provide members of the First Nation with opportunities to conduct fishing and related activities, could be met "in appropriate circumstances by assigning the quota to a non-aboriginal enterprise that undertakes . . . to hire and train members . . ." "
Aboriginal Rights and Defences - Judicial Review of Decision of the Minister of Fisheries and Oceans to Renew Four Short-term Aquaculture Licences
K'omok First Nation v. Canada (A.G.), 2012 FC 1160
This cased involved a challenge by the K’omoks First Nation (“FN”) with respect to the granting of four aqua-culture licences issued to non-members of the FN in its claimed traditional territory in 2010 shortly after the Federal Government took over jurisdiction for regulating aqua-culture following the Morton decision. It also involved a challenge to the Minister of renewal of these four licences in 2012 by the Minister of Fisheries.
With respect to the issuance of the 2010 licences, the court held that given the immense task faced by the Department of Fisheries and Oceans (“DFO”) in taking over jurisdiction for the regulation of aquaculture, it was reasonable for it to limit its consultation to the conditions of licences as opposed to their very issuance. The Crown acted reasonably and honourably and could not be expected to have completed an assessment of the strength of the Band’s claim before issuing the licences.
In September of 2011 DFO agreed to consider the issue of whether the four licences should renewed. As a result it started a strength of claims analysis that was complicated somewhat by the fact that some of the shellfish species at issue are not native to B.C. As a result the strength of claim analysis was not complete and the four licences were renewed in 2012 for another year.
It was not until after the release of Kwicksutaineuk Ah-Kwa-Mish Fsrst Nation v. Canada (A.G.), 2012 FC 517 http://canlii.ca/t/frv2c that DFO formally admitted that it had a duty to consult with the FN.
After reviewing all of the evidence the court found that: (1) The Crown acted reasonably and discharged it duty to consult, except that it should have admitted earlier that it had a duty to consult; (2) The Crown acted reasonably in not assessing the strength of the Band’s claim before did; (3) the Crown is under an ongoing duty to continue consultations in good faith, and if appropriate, offer accommodation.
Judicial Review Crown Liability - Aboriginal Rights and Defences - Availability of Remedy of Declaratory Judgement stating First Nations persons were to be prosecuted without dispensation for violations of Aboriginal Communal Fishing Regulations - Offences - Misc. - Dispensation of outside charges against other persons does not render prosecution of participatns in protest fishery and abuse of process.
R v. Armstrong, 2012 BCCA 242
Aboriginal Rights and Defences - Judicial Review - Decision to Issue Fish Farm Licences in Broughton Archipelago After Federal Government Assumed Jurisdiction Over Aquaculture
Kwicksutaineuk Ah-kw A-mish First Nation v. Canada (A.G.) et al., 2012 FC 517
This was an application for judicial review that was a direct consequence of the Morton decision that held the provincial regulatory regime over fin fish aquaculture was constitutionally invalid. As a result of this decision, the federal government was given one year to consider and put into place a regulatory regime over aquaculture in B.C. This meant approximately 680 provincial aquaculture licences would expire on 18 December 2010 and not be renewed by the province.
The applicant First Nation brought an application for judicial review of the decision of the Department of Fisheries and Oceans (“DFO”), to issue fin fish aquaculture licences to two companies with salmon farms in the Broughton Archipelago on the north east coast of Vancouver Island. One of the sites had been licenced by the provincial government since 1992. The other site at issue had been licenced since 1993.
The applicant argued that the abundance and quality of its fishery is in decline and that the decline was being caused, in part, by the presence of salmon farms.
In deciding this application, the court examined the following issues:
(1) Did the applicant have standing;
(2) Did Canada have a duty to consult with the applicant regarding issuance of the licences;
(3) Were DFO’s efforts at consultation reasonable?
It was argued by the AG that rather than bring the application in the name of the Indian Band, the application should have been brought by an individual member of the aboriginal collective pursuant to Federal Court Rule 114(1). Since the language of s. 114(1) is permissive and not mandatory and since evidence was led establishing a connection between the band and the pre-sovereign group, the court held that the Band had standing.
DUTY TO CONSULT
The court reviewed the tests as set out in Haida Nation and in Rio Tinto (99) and held that the first two elements of the test were clearly made out. The more difficult question for court was the third requirement that there be “potential that the contemplated conduct adversely affect an Aboriginal claim or right” (99). After reviewing jurisprudence regarding change in governance, the court concluded that the “fundamental shift in the management of the aquaculture industry” created an obligation for the federal government to consult. In addition, although Haida states the duty to consult only applies to new potential adverse impacts, the court held that the “re-issuance of a licence, even if it is similar to the one it is replacing, is certainly sufficient to meet the third requirement underlying the duty to consult (110). The extent of changes brought about by the renewal will be a crucial factor in assessing the extent of the duty to consult.
With respect to evidence that fish farms adversely impact the claimed aboriginal fishing rights, after reviewing the evidence the court concluded that “there is still a lot to be learned regarding the causes of the decline of some salmon stocks in some rivers of the Broughton Archipelago (115). As a result the court held the “seriousness of the impact caused by the impugned licences on KAFN’s asserted Aboriginal right remains open to question; far from being firmly established . . . at least for now speculative.” It held that the consultation required was neither at the upper end of the spectrum nor the lower end.
WERE DFO EFFORTS REASONABLE?
After reviewing all of DFO’s consultation efforts, the court concluded its efforts were adequate. In doing so, it noted the following:
1) DFO was in a very difficult position as a result of the Morton decision;
2) DFO did in fact consult extensively over a 22 month period (119);
3) The applicant’s proposal to, in essence implement a fallowing strategy for the entire Broughton region, would have required DFO to undertake broad multilateral consultation involving all First Nations potentially involved as well as other interested parties; and
4) The applicant’s request to not issue the licences for the sites at issue did not come until one day before the expiry of the provincial licences.
Judicial Review/Crown Liability - Aboriginal Rights and Defences - Supreme Court Proceeding Seeking Damages for Failure to Give FSC Fishery Constitutionaly Protected Priority- Not within Exclusive Jurisdiction of Federal Court (Telezone applied)
Matsqui First Nation v. Canada (Attorney General), 2012 BCSC 492
Judicial Review/Crown Liability - Correctness Standard Applies to Review of Minister's Interpretation of Fisheries Act and S.A.R.A. in Non Adjudicative context
Canada (Fisheries and Oceans) v. David Suzuki Foundation, 2012 FCA 40
Judicial Review/Crown Liability - Practice - Larocque type Class Action - Substitution of Representative Plaintiff to Someone who is not member of Executive of Fisheries Organization
Iverson v. Canada (Minister of Fisheries and Oceans), 2011 BCSC 1619
Judicial Review/Crown Liability - Funds Received by Canada from USA Pursuant To Pacific Salmon Treaty Mitigation Program - No Unjust Enrichment - Justiciability
Kimoto v. Canada (Attorney General), 2011 FCA 91
This case involved amendments to Chapter 3 of the Pacific Salmon Treaty that required Canada to reduce its catch of chinook salmon from the west coast of Vancouver Island and required the U.S. to provide 30 million dollars to Canada for a fisheries mitigation program to reduce effort in Canada's commercial troll fishery. After some consultation, the Minister of Fisheries decided on a mitigation program that included a voluntary permanent licence program for trollers on the west coast of Vancouver Island (Area "G") and also trollers from the Strait of Georgia (Area "H") and Northern B.C. (Area "F"). The Area "G" trollers brought an application for judicial review challenging the decision and taking the position that the 30 million dollars should have been paid to them. At the first instance, the Federal Court trial division denied the application.
Upon appeal the Federal Court of Appeal also denied the application for the following reasons:
Since the applicants had no property right in the fish that remained uncaught (Saulner v. RBC was distinguished), the law of expropriation does not apply;
"The Minister is charged with the formidable task of managing, developing and conserving the fisheries, which belong to the Canadian people as a whole. Decisions with respect to conservation and management issues must necessarily balance the interests of competing stakeholders. In this case, the Minister informed herself of the available options (of which there were many) by conducting extensive consultations with the various stakeholders . . . In our view, the basis of the Minister’s decision was sufficiently transparent and intelligible, and the decision itself fell within the range of possible, acceptable outcomes which are defensible in respect of the facts and law (see Dunsmuir v. New Brunswick, 2008 SCC 190)";
In accordance with Comeau's Sea Foods Ltd. v. Canada,  1 S.C.R. 12, since licensing is a tool available to the Minister to manage the fishery, it was reasonable for him to choose a licence retirement plan to achieve reduction of fishing effort; and
The Larocque decision was distinguishable, because there was not sale of fish in the the Kimoto case.