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.
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Judicial review/Crown liability - Licences - compensation for closure of fishery - breach of contract
Puddister Trading Corporation Ltd. v. Canada , 1997 CanLII 5145
This case involved an application by a licence holder for compensation arising out of the closure of the offshore seal fishery of Newfoundland. While the plaintiff was not successful in its primary objective, of obtaining compensation for the closure of the fishery, it obtained limited success in obtaining damages against the Department of Fisheries and Oceans (D.F.O.) for the failure of bureaucrats to follow the instructions of cabinet. The details are set out below.
As a result of protests by Green peace and other environmental organizations in the 1970's and early 1980's, the European Economic Community banned the importation of whitecoat and blueback seal pelts into Europe in 1983. As a result of this ban, in 1984 and 1985 no offshore seal hunters participated in the fishery. However, they did continue to renew their licences in the hopes that market conditions would improve. In 1986, a Royal Commission on the seal fishery released a report that recommended permanent closure of the fishery for new born seals and compensation for those persons affected by the closure. In 1987, prior to any action being taken to implement this report, the Plaintiff, who owned several licensed offshore sealing vessels, began fishing again. This renewed fishing caused more protests from animal rights groups along with a "thinly veiled threat" from one such group to release a video that would adversely affect the East Coast cod fishery. These renewed protests in turn caused the Minister of Fisheries, Thomas Siddon, to permanently close the offshore fishery in 1988.
Shortly after the closure of the fishery, the Minister's delegate, John Crosbie, announced that the Government would appoint someone to look into the issue of compensation for persons displaced by the closure. At the time, the Minister and his delegate, were both in favour of compensation, while the bureaucrats including the Deputy Minister and the Atlantic Seal co-ordinator were against it. Consequently, because of the difference of opinion between the Minister and his bureaucrats, Cabinet decided to order and fund an independent study by John Gover into the issues surrounding compensation. John Crosbie then encouraged the offshore licence holders to get together and retain a consultant to assist them in presenting a case for compensation to John Gover. The Plaintiff and several other licence holders then retained independent consultants at a cost to them of roughly $28,000 dollars.
Unfortunately for the licence holders, the Minister did not occupy himself with the organization and implementation of the study. Instead, this task was left to the Atlantic Sealing Co-ordinator under the supervision of the Deputy Minister. Judge Simpson's critical comments in this regard are worth quoting at length:
In my opinion, the Minister erred when he trusted the implementation of the Study to his Department's officials without supervision by his personal staff when he knew that those officials opposed compensation. What happened was that Comeau and others did not ultimately arrange the broad independent study that the Minister and Crosbie had foreseen when the Study received Cabinet approval as part of the Sealing Policy, and which was reflected in the Draft Terms of Reference. Instead, the bureaucrats turned the Study into a narrow accounting exercise, compromised its independence and qualified it by introducing a requirement for ministerial or other undefined "official" approval prior to Phase Two. [emphasis added]
Ultimately D.F.O. never ordered the second phase of the study and the holders of offshore licences were never compensated for their losses arising from the closure of the fishery. The Plaintiff, Puddister Trading Co., then commenced its action claiming damages for breach of contract. Although the reasons for judgement are not entirely clear, it appears that the Plaintiff argued that the Government had made a binding offer to pay reasonable compensation to any fishers who participated in its study. It was argued that by participating in the study, the Plaintiff accepted this offer. It would also appear that the Plaintiff argued that the money it spent on consultants to provide the information for the study constituted the required consideration for the contract.
The court rejected the Plaintiff's claim based upon the objective theory of contract law. Subjectively, the Plaintiff honestly believed that by providing funding for the study, D.F.O. had made a commitment to pay compensation, however, the court found that there was no contract because a reasonable person in the Plaintiff's position would not have believed D.F.O. had made such a commitment simply by agreeing to study the issue. The court noted that upon the closure of a fishery D.F.O. was under no legal obligation to pay compensation to displaced fishers. Since the claim in contract failed, and since there was no legal obligation to compensate fishers for the closure, the Plaintiffs claim for compensation failed.
All was not lost, however, for the court concluded that D.F.O. had breached an obligation to perform a full study. Since it failed to do so, it was in breach of contract. Accordingly, damages were awarded to the Plaintiff to compensate it for the money it paid for consultants to participate in the study. In addition, the Plaintiff was awarded the costs of its action.
Counsel for the Crown: John J. Ashley and Glen Roebothan
Counsel for the Plaintiff: Cabot Marian and Peter O'Flaherty
Judicial review/Crown liability - Licences - absolute discretion to issue licence under section 7 - negligence-
Comeau's Sea Foods Ltd. v. Canada (Minister of Fisheries and Oceans) ,  1 SCR 12
In 1987 the Minister of Fisheries sent the Plaintiff, fishing company, a telex advising that he had authorized the issuance of 4 offshore lobster licences. The Plaintiff then provided the Minister with details of its fishing plans, including the fact that it would be converting its scallop vessels into lobster fishing vessels. After the initial notification, the issuance of the licences became a political issue and after intense lobbying from the inshore lobster fleet, the Minister announced that the 4 licences would not be issued pending further study. A study was completed which recommended that no new offshore licences be issued, since that could "influence the distribution of income derived from the lobster fishery, the ability of new entrants to gain access to the fishery and the relationship between the inshore and offshore fisheries." The Licences were never issued. At the trial level, the Federal Court held the Minister of Fisheries liable in negligence. On appeal, the Federal Court of Appeal, with Linden J. dissenting, reversed the decision of the trial court. Mr. Justice Major writing for the Supreme Court of Canada noted that section 7 of the Fisheries Act is silent on whether the Minister of Fisheries can revoke an authorization previously given. He then reviewed the authorities on the Ministers absolute discretion under section 7 and concluded as follows:
It is my opinion that the Minister's discretion under s. 7 to authorize the issuance of licences, like the Minister's discretion to issue licences, is restricted only by the requirement of natural justice, no regulations currently being applicable. The Minister is bound to base his or her decision on relevant considerations, avoid arbitrariness and act in good faith. (para. 36)
He went on to conclude that the power to authorize the issuance of a licence under section 7 is a continuing power within the meaning of section 31(3) of the Interpretation Act which can be revoked at any time prior to issuance of the licence. Since the Minister revoked his prior authorization for the purpose of invoking government policy, negligence was not established. The Appeal was dismissed without costs.
Counsel for the Plaintiff/Appellants: Stewart McInnes, Q.C. David S. MacDougall
Counsel for the Defendants/Respondents: David Sgayias, Q.C. Michael Donovan
Editors note: For an interesting comment on this case see  76 C.B.R 253.
Postscript: With respect to the quote set out above, readers should be cautioned not to interpret this so as to equate natural justice with the requirement of the decision maker to exercise his or her discretion "on relevant considerations, avoid arbitrariness and act in good faith". In this regard, see:
(1) Thomson v. Minister of Fisheries F.C.T.D. No. T-113-84 referred to at para. 36 of Comeau;
(2) Maple Lodge Farms Ltd. v. The Government of Canada  2 S.C.R. 2 as referred in Thomson above at footnote 9(in particular see the use of the words "and" after the words "natural justice" in the second to the last paragraph); and
3) Brown and Evans, Judicial Review of Administrative Actions in Canada section 14:2633 and chapter 7:4000).
Judicial Review/Crown Liability - Whether or Not Necessary to Pursue Judicial Review proceeding Prior to Tort Action
Donovan v. Canada (Attorney General), 2008 NLCA 8
This case involved three crab fishers who commenced three separate tort actions against the Crown for failure to renew crab licences. The application's judge struck all three actions on the grounds that the causes of action involved challenges to ministerial decisions which were matters within the exclusive jurisdiction of the Federal Court.
Upon appeal, one appellant was successful and two were not.
The successful appellant was George Perrot who sold a portion of his fishing enterprise to a third party but retained his supplementary crab licence. In doing so, he alleged that a D.F.O. employee told him he could retain the licence until he re-acquired another boat. He further alleged that the D.F.O. employee neglected to inform that he must renew the licence annually in order to retain his eligibility. Several years later when he applied to renew his licence, his application was denied because of his earlier failure to annual renew the licence.
Since Perrot's licence would have been renewed in the normal course of events without arbitrary decision making by the Minister, the court ruled that the validity of the Minister's decision to not renew need not be determined by the court. As a result, this was in essence a negligence action that was within the jurisdiction of the superior court.
The cases of the other two appellants involved refusals to renew licences after fishers had been charged with fisheries offences and found not guilty. In these cases, the appeal court ruled that the Federal Court had exclusive jurisdiction because "the common theme of all the allegations against the Crown by Duffett and Donovan was 'inextricably tied to the cancelling of the Permit for the 2000 Snow Crab fishery and the refusal to issue a Permit for the 2001 Snow Crab fishery'" (para. 18).
Since the Superior Court has concurrent jurisdiction over torts actions against the Crown, the proper procedure was to grant a stay pending determination of the validity of the ministerial decision, rather than than striking the statement of claim.
Editor's Postscript: This case was not followed in Canada (Attorney General) v. TeleZone Inc., 2010 SCC 62, para. 39.
Judicial review - decision of Minister declining to grant a communal fishing licence
Labrador Metis Assn. v. Canada (Minister of Fisheries and Oceans), 1997 CanLII 4864
This case involved a challenge by the Labrador Metis Association ("LMA") to the Minister of Fisheries for failing to respond to an application to issue it a communal fishing licence. D.F.O. presented evidence that it was concerned that a decision to issue a communal fishing licence could be interpreted my the LMA as recognition by the Government of Canada of the LMA's aboriginal rights which could have consequences well beyond the issuance of the licence. Accordingly, D.F.O. initially declined the request, based upon evidence received, but indicated it would reconsider such an application in the context of Land claims negations. D.F.O. also indicated that it would consider any evidence presented to it in the context of several ongoing prosecutions which were being defended on the basis of an aboriginal right to fish. After apparently reviewing information received by a specified date, D.F.O. failed to issue a licence.
With respect to the principles of natural justice and procedural fairness, the court concluded that it could not conclude there had been any breach because it was not presented with any evidence of what evidence was presented to the Minister through both the aboriginal land claims process and the prosecution process. Furthermore, the Minister indicated that he was open to reconsider his decision in light of emerging information and advances in the law. Accordingly the application for judicial review was dismissed.
Counsel for the applicant: Bruce Clark and Stuart Gilbey
Counsel for the crown: Geoffey Lester