Judicial Review / Crown Liability

Case Summaries

Editors Note: See also the Judicial review section of the paper: Federal Court Fisheries Issues: A Survey of Fisheries Cases Commonly Heard in the Federal Court of Canada - Presented to the Federal Court in April of 2011 (Sponsored by the Canadian Judicial Council and the Canadian Maritime Law Association)

Aboriginal - Judicial Review - Oral History - Judicial Review - Admission of supplementary affidavits of Aboriginal Oral History

Gwasslaam (Geroge Phillip Daniels) v. Canada (Fisheries and Oceans), 2008 FC 912 [link]

This case involved a claim to an aboriginal fishing right.

In an application under Federal Court Rule 312 to admit supplemental affidavit evidence of oral history, the Prothonotary denied the application primarily on the grounds that the evidence of oral history was available at the time the application was filed. Upon appeal from a decision of a Prothonotary, the court ruled that it was "in the interests of justice that available evidence with respect to the state of the oral history underlying the Aboriginal claim at the heart of the Application should be available to aid the judge deciding the Application." (para. 13)

Judicial Review Crown Liability - Extension of time to File application arising out of Larocque decision - Availability of order of Mandamus to return funds held by the Crown

Chiasson v. Canada (A.G.), 2008 FC 616, 295 D.L.R. (4th) 744 [link]

This case involved an agreement reached between the Minister of Fisheries and the Association des Pescheurs de Poissions de Fond Acadiens Inc. ("APPFA") whereby the Minister would issue a snow crab fishing licence to the APPFA with an allocation of 1000 metric tons in exchange for an agreement from the APPFA to pay the Minister $1,500,000 to be spent on certain management related projects. On June 23, 2006, after the APPFA had paid the money to the Minister, the Federal Court disallowed a similar arrangement in the case of Larocque v. Canada (digested herein). At this point in time the Minister had already spent $477,326 of the funds. Subsequent to the release of the Larocque decision the Minister stopped using the funds and instead used public funds for the management of the fishery.

The court addressed several issues, including:

1) Whether the 30 day deadline for judicial review should be extended;

2) Should a declaration be made that the Minister is illegally holding funds; and

3) Availability of an order of mandamus for the return of funds.

With respect to the first issue (extension of the limitation period), after reviewing the applicable authorities the court granted an extension as the Crown would suffer no prejudice and "[f]iling an application for judicial review in April or May 2006, before the Court of Appeal had rendered its decision in Larocque, would have been a waste of judicial resources. The state of the law in April 2006 was such that Mr. Justice de Montigny held in Larocque, 2006 FC 694 . . . at the trial level, that the program for issuing fishing licences fell within the Minister’s authority under section 7 of the Fisheries Acts."

With respect to the second issue, the court made a declaration that the Minister "illegally used or sold 1000 metric tons of snow crab to finance departmental research activities and is illegally holding the proceeds of the 2006 sale". In doing so, the court also cited authorities for the proposition that the government must obey the law (para. 33).

With respect to the third issue (mandamus), the court declined to make an order as the applicants had other recourses available to them, namely commencing a tort action in a superior court seeking damages (para 30).

Judicial Review/Crown Liability - Standard of Review

Dunsmuir v. New Brunswick 2008, SCC 9 (link)

Although this is a non-fisheries case, it is listed because it is a SCC decision that has made a significant change to the standard of review to be applied in judicial review proceedings. As a result of this case, there will now only be two standards: (1) correctness and (2) reasonableness.

Judicial Review/Crown Liability - Aboriginal Rights and Defences

Ahousaht First Nation v. Canada (Fisheries and Oceans), 2007 FC 567 [link]

This case involved an application by group of First Nations for judicial review of a decision of the Minister of Fisheries to implement a three year pilot plan for individual transferable fishing quotas in the for rockfish, lingcod and dogfish. It was alleged by the First Nations that the Minister had failed to satisfy its duty to consult before implementing the pilot plan. With respect to the scope of the duty to consult the court concluded as follows:

In this case, we are not dealing with a claim to a specific piece of land where the government might be contemplating some development project, or even the issuance of a licence to exploit resources on said land which might substantially deplete the resource in question. Rather, we are dealing with a claim of an aboriginal right to fish commercially, in the context of a proposal by the government to implement a program of quotas with a view, first and foremost, to encourage conservation, as well as to meet a number of other objectives, such as achieving greater accountability and improving economic viability. As such, the respondent argues that, rather than infringing the applicant’s alleged rights, the Pilot Plan will help protect the groundfish fisheries, for the benefit of all Canadians, including the applicants.

In ruling that the Crown had satisfied the duty to consult the court said as follows:

Given the multilateral consultations that were held by DFO in which the applicants took part, given the conservation issues at stake, given the potential impact on groundfish fisheries of the introduction of the 100 per cent monitoring of all catch for the 2006 fishing season without the implementation of transferable IQs, and given that the plan was introduced as a three-year pilot only, I am satisfied that the Minister’s decision to proceed without waiting for bilateral consultations with the applicants to conclude was justified, and did not constitute a failure to abide by his duty to consult with the applicants. [para. 66]

Editor's note: This case was upheld on appeal for slightly different reasons. The decision is reported at 2008 FCA 212 [link]

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 [link]

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/ Crown Liability - Whether Government of Canada had the Legal Right to Board and arrest vessel in International Waters - No Damages for out of pocket expenses arising from arrest - Test for liability of Crown for actions of servants acting pursuant to invalid legislation

Canada (Attorney General) v. Hijos, 2007 FCA 20 (link); application for leave to SCC dismissed [2007] SCCA 119 (link)

This case involved a civil action by the owner of the Spanish Trawler "Estai" against the Government of Canada arising out of its highly publicized seizure on the high seas in March of 1995. In response to various arguments advanced by the vessel owner, the trial court (2005 FC 1011 (link)) concluded as follows:

(1) Pursuant to the terms of the Coastal Fisheries Protections Act the regulations authorizing the arrest of the "Estai" on the high seas were valid and the ensuing arrest was therefore legal;

(2) When arresting the vessel, the authorities were not reckless and did not use excessive force;

(3) Ice damage was not proven;

(4) Given the stay of proceedings and remarkable circumstances, damages were awarded to cover out of pocket legal, ships agents expenses, loss of fishing income, and extra bunkers; and

(5) No punitive damages were ordered.

The Crown appealed the trial court's award of damages and the the plaintiff cross appealed on a number of grounds, the main one being that the trial court erred in concluding that the regulations authorizing the arrest of vessel on the high seas were not authorized by the Coastal Fisheries Protection Act.

The court rejected the vessel owner's cross appeal primarily upon a conclusion that the challenged regulations were intra virus. However, prior to doing so, it embarked upon an interesting review of the law with respect to the liability of the Crown for damages arising from the enactment of laws subsequently found to be unconstitutional. In doing so, it concluded that the Crown will not be liable unless it can be established that it was either acting in bad faith, was negligent or was reckless (para 61).

Judicial Review/Crown Liability - Application to Strike Pleadings - Public Trust Obligations - s. 7 fisheries Act

Canada (Attorney General) v. Prince Edward Island [2006] P.E.I.J. NO. 65, 2006 PESCAD 27 (link); leave to appeal dismissed [2007] S.C.C.A. no. 97 [2005] P.E.I. J. 77,

This case involves a statement of claim issued in the Prince Edward Island Supreme Court by the Government of Prince Edward Island against the Government of Canada claiming a series of declarations with respect both to the constitutionality of s. 7 of the Fisheries Act and a the validity of a series of historical management decisions of the Minister of Fisheries.

In refusing to strike the statement of claim, the trial court (2005 PESCTD 57) made a number of findings including the following: (1) It is not "plain and obvious" that the words "absolute" in s. 7 of the Fisheries Act are unconstitutional; (2) the jurisdiction of the Federal Court does not oust the jurisdiction of the Superior Court; and (3) With respect to the public trust argument, "[i]f a government can exert its right, as guardian of the public interest, to claim against a party causing damage to that public interest, then it would seem that in another case, a beneficiary of the public interest ought to be able to claim against the government for a failure to properly protect the public interest (para 30).

Upon appeal the Government of Canada, the Prince Edward Island Court of Appeal the court held that

The part of the statement of claim with respect to the constitutional challenge to s.7 of the Fisheries Act, supra is struck out as disclosing no reasonable cause of action. The claim for breach of the Terms of Union also discloses no reasonable cause of action. The Supreme Court of Prince Edward Island has no jurisdiction to hear the s.36 constitutional claim, the s.15 Charter claim or the breach of public trust claim. The appeal is therefore allowed.

Leave to appeal to the Supreme Court of Canada was denied without reasons.

Judicial Review/Crown Liability - Jurisdiction of Federal Court/Superior Ct - Duty to Seek Judicial Review prior to action for damages - Negligence Misrepresentation of Fisheries Officer

Genge v. Canada (Attorney General) [2007] N.J. No. 59, 2007 NLTD 36 (link)

This case involved a negligent misrepresentation action against the Crown arising from a fisheries officer who mistakenly advised a seal fisher that a seal hunt had closed. The Crown brought an interlocutory application for an order striking out the claim on the grounds that t\he court lacked jurisdiction and and order that the claim could only take place after the applicant has made an application for judicial review.

In refusing the Crown's application, the court followed Keeping v. Canada (Attorney General) 2002, 210 Nfld. & P.E.I.R. 1 (digested herein), to find as follows:

I find that the “essence” of the Respondents’ claim is that a fisheries officer made a “terrible mistake” which cost them financially. The mistake had nothing to do with the official capacity of the fisheries officer. It had nothing to do with the management of the seal fishery, the Fisheries Act, the Regulations, the Management Plans, Directives or Orders. The claim arises out of a federal employee that was not paying attention or was too distracted to properly inform himself of the true factual situation. It was a human failing and not an “official” failing. (para 9)

Judicial Review/Crown Liability - Judicial Review Of decision of Minister denying access to Nova Scotia snow crab fishery - Mootness

Campbell v. Canada (Attorney General) [2006] F.C.J. No. 637; 2006 FC 510 (Fed. Ct. T.D.) (link)

This case involved an application for judicial review of a decision of the Minister of Fisheries denying a request by nine applicants for access to the Nova Scotia snow crab fishery. With respect to the issue of mootness, since the fishing season had already passed there was no live controversy between the parties. Notwithstanding this fact, the court agreed to hear the matter as it involved an important issue and it was likely that the policy in issue would remain the same for the following year.

In denying the request for judicial review, the court refused to apply the pragmatic and functional test to determine a standard of review, on the grounds that this test did not apply to matters of natural justice (para 24-5).

Editor's note: To the extent that the court equated bad faith or failure to take into account relevant considerations with a breach of natural justice, see the postscript to Comeau Seafoods Ltd. decision herein (link).

Crown Liability/Judicial Review - denial of Application for Extension of Time to file judicial review application

Barnard v. Geof Regan, Minister of Fisheries and Oceans, Fisheries and Oceans Canada and Azulemar Fishing Ltd. 2006 F.C. 203 (reasons)

This case involved the ranking of Canadian fishing vessels on a list that allowed these vessels to participate in the U.S. tuna fishery. Under this list, it was anticipated that only the first 94 fishing vessels would be able to participate in this fishery in 2007 and thereafter. After being placed at 97th position on the list, the applicant appealed its ranking to the Minister of Fisheries by way of appeal to the Pacific Region Licence Appeal Board ("PRLAB"). Based upon a non binding recommendation from the PRLAB, the Minister refused to change the applicant's position on the list. Approximately three weeks after the thirty day deadline for filing an application for judicial review of the Minister's decision, the applicant filed an application for an extension of time. Shortly thereafter, Azulemar Fishing Ltd. was added to the proceeding as a respondent, as it occupied the 94th position on the list and would be unable to fish in 2007 if bumped off of the list by the applicant.

Upon hearing the application, the court denied the extension for the following reasons:

1) With respect to the existence of a reasonable explanation for the delay, the court concluded that the applicant did not form the intention to appeal until three weeks after the due date. Efforts to determine what is behind an impugned decision and determining what remedies to take do not constitute adequate explanations for delay.

2) With respect to the existence of an arguable case, the court concluded that judicial review of a decision not to vary a policy is not readily available.

3) With respect to prejudice, there was prejudice to the public in that there is a public interest in finality of decisions (Grenier v. Canada 2005 FCA 348). There was also clear prejudice to Azulemar Fishing Ltd., because it expended funds for the refit of its fishing vessel for the tuna fishery after the 30 day appeal period expired. This prejudice was compounded by the failure of the applicant to serve Azulemar with notice of its application in a timely manner.

Judicial Review/Crown Liability - Interlocutory Injunctions and Declaratory Relief - Practice - Interlocutory Injunctions against the Crown

Summerside Seafood Supreme Inc. v. Prince Edward Island (Minister of Fisheries, Aquaculture and Environment [2006] P.E.I.J. No. 32, 2006 PESCAD 11 (P.I.E.S.C. Appeal Div.) (link)

This case involved a fish processing plant that was refused a fish processing licence from the Provincial Minister of Fisheries because of its alleged indebtedness to the Provincial Government arising from a loan guarantee. The fish processor commenced a judicial review proceeding against the Government and its officials and then obtained an interim declaration that the fish processor had a right to have its 2004 processing licence issued to it and order that the licence be issued pending litigation.

On appeal by the Crown, the appeal court vacated the interim declaration on the grounds that it was unnecessary as an interlocutory injunction was available.

With respect to the issue of whether or not an interlocutory injunction should be issued, after a lengthy review of the applicable authorities on injunctions and related authorities on stays of proceedings, the court the court set out the following test:

All these comments suggest that it is time to set aside attempts to develop separate jurisprudence for mandatory versus prohibitory interlocutory injunctions or to make distinctions between interlocutory injunctions and stays of proceedings. Rather, there needs to be a focus on the principles applicable to all these analyses.

I would adopt the view that, while there must be a serious issue to be tried, to begin with all that is required is a finding that the issue is neither frivolous not vexatious. Once that is determined the court must consider the issues of irreparable harm and balance of convenience. Those latter two issues may be weak for the applicant, in which case it may be necessary to take another look at the seriousness of the issue to be tried. Where the case for the applicant appears almost certain to be found in his favor, then the other issues may not need to have a particularly strong weight in their favor, they could even be neutral. However, even where a judge is doubtful about the success of a case, but cannot find the issue to be frivolous, then irreparable harm to the applicant and/or overwhelming inconvenience to the applicant as opposed to very little inconvenience to the respondent, can decide the issue in the applicant’s favor. (para. 64-5).

Although the trial level judge granted an injunction, he did not state state what test, if any, he applied in granting the injunction. Accordingly, his decision amounted to an error of law. Since all of the material in support of the original application was before the appeal court, it considered the injunction application on its merits.

With respect to the first part of the three part test, although the material put forward was not strong, it convinced the court that there was a serious issued to be tried, because of the allegations that the discretion of the Treasury Board on whether or not to direct the minister to issue a processing licence was fettered by public announcements of the premier of the province. In addition, there was some evidence to suggest that the fish processor was not truly indebted to the province. However, given the existence of a strong privative clause, the existence of a serious issue to be tried was not sufficient to support an injunction without strong evidence of irreparable harm or balance of convenience.

In this regard, the Government provided no evidence of irreparable harm. Conversely for the fish processor there was evidence that: (1) the processor had been issued licences for the 12 previous years; and (2) the failure to obtain a licence would mean it could not hire its workers, process fish, meet the requirements of its suppliers and possibly go out of business.

Based upon all of the above, the appeal court was prepared to issue an interlocutory injunction. Although it was not prepared to order the government to issue a licence in the future, it granted an order enjoining the Minister of Fisheries, Aquaculture and the Environment from refusing to issue a fish processing licence to the fish processor on the basis that it was indebted to the province (para. 101).

Judicial Review/Crown Liability - Declaratory Relief - Does the Fisheries Act give the Minister of Fisheries and Oceans power to finance Research by selling fisheries resources

Larocque v. Canada (Minister of Fisheries and Oceans) [2006] F.C.J. No. 985, 2006 FCA 237 (F.C.A.) (link)

This case involved the failure of the Department of Fisheries and Oceans ("DFO") in 2003 to negotiate a co-management arrangement with the snow crab fleet, which would have provided funding for scientific research related the snow crab fishery. As a result of that failure, DFO decided to undertake research itself by hiring a private contractor and paying him by issuing a scientific research licence that allowed the contractor to retain and sell 50 metric tons of snow crab. Although the preferred method of research was by means of trawl survey, since the trawl surveys would not have produced enough fish to allow the contractor to catch and retain 50 metric tons, the licence also provided for two trap surveys. This method of financing was adopted notwithstanding the fact that the Auditor General has previously raised concerns about such methods.

In 2003, a snow crab fish harvester brought an application for a declaration that the Minister of Fisheries did not have the power "to issue a scientific fishing licence in exchange for a 50-ton allocation of snow crab" (para 9). At the initial application, the Trial Division of the Federal Court denied the application for the following reasons (as described by the Court of Appeal):

[I]issuing the licence would for all intents and purposes be no more than a veiled means of funding the DFO's activities" (paragraph 27). He says that in his opinion "the means of compensating the licence holder for his or her contribution to the DFO's scientific analyses is purely accessory to the true object of the licence" (paragraph 28); that "[t]he situation could have been regarded differently if it had been proven that the crab allocation granted to the licence holder resulted in significant net profits" (paragraph 29) and that "unless the Act were to prohibit the Minister from allocating a snow crab quota to a fisher in exchange for surveys carried out on behalf of the DFO for scientific purposes, I see nothing in the licence itself that would render its issuance unlawful or ultra vires" (paragraph 31). Stating that he was therefore of the opinion that "the Act is silent on this [issue]" (paragraph 32), he then says that the Minister has a broad discretion in issuing licences and that in this case he had exercised his discretion while taking into account the Parliament's objectives.

Upon appeal to the Federal Court of Appeal, the trial level decision was overturned and the requested declaration was granted. In doing so, the Court of Appeal was careful to clarify that it did not take issue with the power of the Minister to issue licences for scientific purposes (para. 11) or even authorize fish caught under a scientific licence to be sold under some circumstances (para. 25). However, based upon the facts of the particular case, the court found that the Minister erred in not obtaining authorization pursuant to the provisions of the Financial Administration Act. In a widely quoted part of the decision the court said as follows:

[I]t is accepted, as the Supreme Court of Canada put it in Comeau's Sea Foods Ltd. v. Canada (Minister of Fisheries and Oceans), 1997 CanLII 399 (S.C.C.), [1997] 1 S.C.R. 12, that "Canada's fisheries are a 'common property resource', belonging to all the people of Canada" and that "it is the Minister's duty to manage, conserve and develop the fishery on behalf of Canadians in the public interest" (at pages 25 and 26). They do not belong to the Minister, any more than does their sale price. Also, when the Minister decided to pay a contracting party with the proceeds of sale of the snow crab, he was paying with assets that did not belong to him. Paying with the assets of a third party is, to say the very least, an extraordinary act that the Administration could not perform unless so authorized by an act or by duly enacted regulations. Such an act, on its very face, is like an expropriation of fishery resources or a tax on them for the purposes of funding the Crown's undertakings.

Since the application was limited to declaratory relief, the decision has only prospective effect to future snow crab research.

Judicial Review/Crown Liability - Decision of Minister of Fisheries based upon Recommendation of Advisory Boards - Requirements of Natural Justice for requests for Reconsideration - Limit period for Review of Series of Decisions

Benoit v. Canada (Attorney General) [2006] F.C.J. 1357, 2006 FC 1076 (Fed. Ct. T.D.) (link)

This case involved a fish harvester who was denied CORE status in 1996 and failed to overturn the initial denial after a series of eight appeals.

With respect to the the non-binding recommendations of two advisory boards, the Court followed Jada Fishing Co. v. Canada 2002 FCA 103 (digested herein) to hold that these recommendations were not subject to judicial review.

With respect to the limitation period set out in s. 18.1(2) of the Federal Court Act, the Court held that only the most recent application to the Minister for reconsideration was subject to judicial review.

With respect to the standard of review to be applied to an application for reconsideration, the court applied the patent unreasonableness standard. That is "the Minister is bound to base his or her decision on relevant considerations, avoid arbitrariness and act in good faith." With respect to natural justice, in responding to an application for reconsideration when such an application had not been invited, only minimal procedural fairness was required.

Applying this test, the court declined to grant the application.

Judicial Review/Crown Liability - Decision of Minister of Fisheries based upon Recommendation of Appeal Board - Standard of Review - Reasonable apprehension of Bias No apprehension of Bias Arising from Department's Employee Acting as Secretary

Fennelly v. Canada (Attorney General) [2005] F.C.J. No. 1573, 2005 FC 1291

This case involved judicial review of a decision of the Minister of Fisheries to not re-issue an exploratory snow crab licence. During a previous judicial review application (digested herein), the court had made an order that the the Minister of Fisheries re-consider his decision based upon facts he had neglected to consider at the original appeal. After reconsidering the matter based upon the appropriate facts, the Minister once again decided not to re-issue the exploratory snow crab licence. The applicant then filed a new judicial review application alleging: (1) that the composition of the Licence Appeal Board that had advised the Minister raised a reasonable apprehension of bias because an employee of the Department of Fisheries served as its secretary and (2) the appeal board did not treat the applicant fairly.

With respect to the standard of review, the court applied the reasonableness standard to the appeal board (could the decision stand up to a somewhat probing analysis). With respect to the decision of the Minister, the court t followed Area Twenty Three Snow Crab Fisher's Association et al. v. The A.G. of Canada et al. 2005 F.C. 1190 and said that the patent unreasonableness test applied (the decision must be so clearly wrong that the result must almost border absurd), but never really applied the test as it only really reviewed the recommendation of the appeal board.

In reviewing the decision of the appeal board, the court was not persuaded the applicant was not treated fairly. With respect to the composition of the appeal board, the court followed Jada Fishing Co. v. Canada (Minister of Fisheries and Oceans) (2002), 288 N.R. 237 (F.C.A.) to find that existence of a secretary from the Department of Fisheries who took no part in the deliberations did not raise a reasonable apprehension of bias.

Editor's note: This case is a good example of the difficulty faced by applicants for judicial review when the most common remedy is to simply direct the decision maker to re-consider its earlier decision. As can be seen, notwithstanding directions to consider overlooked facts, it is not uncommon for the the decision maker to re-confirm its earlier decision.

Judicial Review/Crown Liability - Negligent Audit - Misfeasance - Taxation - transfer Pricing by Fish Processors

Canus v. Canada Customs 2005 NSSC 283 (Reasons)

This case involved an audit by Canada Customs and Revenue Agency of a Canadian Fish Processor that sold fish to its U.S. parent company. As a result of this audit, the company was re-assessed tax in the amount of $1,031345 for improper transfer pricing. As a result of this re-assessment the Fish Processor was limited in the amount of credit that it could obtain and accordingly had to curtail its business activities. Subsequent to the re-assessment, the Fish Processor was successful in having the re-assessment reversed.

The fish process then commenced an action in Nova Scotia Supreme Court alleging both public misfeasance and negligence.

With respect to misfeasance, after referring to Odhavji Estate v. Woodhouse, 2003 SCC 69, [2003] 3 S.C.R., the court refused to find any misfeasance because there was no evidence of an improper purpose, ill will or intent to harm. With respect to negligence, the court distinguished Cooper v. Hobart, 2001 SCC 79, [2001] 3 S.C.R. 537 as a case involving a claim for physical harm. It also said the claim could not be established as relational economic loss because it did not fall into an existing category or any analogous category. It also declined to find a new duty of care under the Ann's v Merton London Borough Council principal. In doing so it distinguished Keeping v. Canada 2003 Carswell Nfld. 113 (C.A.) and applied Jones v. Department of Employment, [1998] 1 All E.R. 725 (C.A.). In any event, even if there were a duty of care, it would be negated for the policy reason that such a duty would interfere with the Crown's ability to raise revenue. The court also declined to find negligent misrepresentation.

Judicial Review/Crown Liability - Challenge to Shrimp Allocation Decision based on failure to give sufficient weight to Land Claims Agreement - Standing of Attorney General of Nunavut - Aboriginal Rights and Defences - Challenge to Shrimp Allocation Decision based on failure to give sufficient weight to Land Claims Agreement

Nunavut Territory (Attorney General) v. Canada (A.G.) [2005] F.C.J. 423, 2005 FC 342

This case involved the challenge of a decision of the Minister of Fisheries involving the allocation of the benefit of a 29 per cent increase in the total allowable catch of shrimp. This 29 per cent increase amounted to 2,127 additional tons of catch. of that 2,127 tons, all but 940 tons were allocated to Nunavut or Nunavut related interests. The remaining 940 tons were allocated to 17 existing licence holders who helped develop the fishery. Of those 17 existing licence holders, 1.5 of the licences were Nunavut interests.

One of two preliminary motions concerned the standing of the Attorney General of Nunavut to bring the judicial review application. Since the A.G. was not directly affected by the decision, the court ruled it had no standing under s. 18.1 of the Federal Court Act. In addition, it did not have public interest standing because there was another reasonable and effective way to bring the issue before the court by way of application by Nunavutr Tunngavik Incorporated. Notwithstanding the lack of standing, in the interest of judicial economy the court decided to exercise its discretion to adjudicate the matter.

The court also rejected a preliminary motion to deny the application on the basis of mootness.

With respect to the main challenge to the decision, the court applied a standard of review of patent unreasonableness and denied the application as follows at paragraphs 69 - 70::

In Nunavut Tunngavik Inc. v. Canada (Minister of Fisheries and Oceans) [footnote deleted], Justice Evans, for the Court, wrote at paragraphs [4]:

appellant's quota in the turbot fishery has increased over the years, both absolutely and relatively, it cannot be said that the Minister had no regard to the adjacency and economic dependency principles.

I am satisfied that precisely the same could be said on the facts on this matter in relation to the Northern shrimp allocation in SFA 1 to Nunavut interests. Further, it is beyond question that the share of Nunavut interests in the 2003 increase of quota allocation was significantly higher than that of other interests in the same fishery. Against the words of Article 15.3.7 of the Agreement, it cannot be said that "special consideration" was not given to the principles of "...adjacency and economic dependence in the Nunavut Settlement Area on marine resources...", particularly when the Minister was required to apply those principles "...in such a way as to promote a fair distribution of [quota] between the residents of the Nunavut Settlement Area and the other residents of Canada ...in a manner consistent with Canada's interjurisdictional obligations." The special allocation made to Nunavut interests clearly was not "special enough" in the eyes of the Government of Nunavut and in the eyes of Nunavut Tunngavik Incorporated. It is not difficult for the Court to be sympathetic to that position, but that, of itself, is no grounds to set aside the decision under review. Against the standard of judicial review that is here appropriate, I am satisfied that the decision under review must stand. It cannot be said to be patently unreasonable. Put another way, it was open to the Minister, taking into account all of the competing interests that were before him.

Judicial Review/Crown Liability - Canadian Human Rights Act - Challenge to DFO decision to Issue Snow Crab Licences based upon Place of Residence

Dobbin v. Department of Fisheries and Oceans Canada, 2005 FC 1020 (Reasons)

This case involved a decision by the Department of Fisheries and Oceans to open a new area for the fishing of snow crab to be managed by the Quebec Region with licences issued only to residents of Quebec. Upon challenging the decision under the s. 41(1)(c) of the Canadian Human Rights Act, R.S.C. 1985, c. H-6 the Human Rights Commission rejected the claim as being beyond its jurisdiction. In doing so, it categorized the claim as discrimination based upon place of residence and held that this was not a prohibited ground of discrimination. Upon appeal to the Federal Court, the decision of the Human Rights commission was upheld.

Judicial review/Crown liability - Review of decision of Provincial Minister to deny processing licence for processing of snow crab

St. Anthony Seafoods Limited Partnership v. Nfld. & Labrador (Minister of Fisheries and Aquaculture) (2004) 245 D.L.R. (4th) 597 (Nfld & Lab. C.A.); Leave to appeal to SCC refused [2004] SCCA No. 548

This case involved a fish processing plant in Saint Anthony, Nfld. In 1998 the Minister of Fisheries and Aquaculture wrote to the processor and promised a multi-specie processing licence, including a licence to process snow crab. Although a licence to process shrimp was quickly granted, the Ministry never followed through on its promise to issue a snow crab licence.

Upon application for judicial review, the applicant argued, amongst other things, that (1) there was an abuse of ministerial discretion; and (2) promissory estoppel applied.

With respect to abuse of ministerial discretion, the court applied the functional and pragmatic approach from Baker v. Canada [1999] 2 S.C.R. 817. After applying the four part test, the court concluded that the patent unreasonable standard was appropriate because the decision maker was a minister upon whom considerable discretion was conferred by the statute (para 60). In applying the patent unreasonableness test, the court found that a defect in an evidentiary foundation for a decision could render the decision patently unreasonable (para 73). In this regard, the appeal court found that the Minister erred in, amongst other things, concluding that it had not made a prior commitment to grant a snow crab licence to the applicant (he incorrectly concluded the commitment had been made to a different corporate entity). Since the evidence showed that prior commitment was an important factor for the Minister, the court held that this error rendered the Minister's decision patently unreasonable. However, rather than substitute the decision of the court for that of the Minister, the court remitted the matter back to the Minister for reconsideration in accordance with its decision.

With respect to public law promissory estoppel, the court applied the test from Mount Sinai Hospital Center v. Quebec (Minister of Health and Social Services) [2002] 2 S.C.R. 281 which requires that "there be no estoppel in the face of an express provision of a statute" (para 83 quoting from Mount Sinai). Given the broad discretion in respect of processing licences given to the Minister under the Fish Inspection Act, the court found that "the over-riding public interest expressed . . . precludes the application of estoppel" (para 90).

Judicial review/Crown liability -Interim declaration of entitlement to fish processing licence

Summerside Seafood Supreme Inc. v. Prince Edward Island (Minister of Fisheries, Aquaculture and Environment [2004] P.E.I.J. No. 88, 2004 PESCTD 68 (Campbell J.)

This case involved a fish processing plant that had had its fish processing licence renewed every year for 12 years. When the Minister refused to renew the licence on the grounds that the plant was in default of a debt obligation to the provincial government, the plant brought a judicial review proceeding under the provincial Judicial Review Act and Crown Proceedings Act. Upon granting an interim declaration of entitlement to a fish processing licence, the court ruled as follows:

Injunctions cannot be granted against the Crown;
Although interim declarations are not generally granted, an exception to this general rule is when there there is a "deliberate flouting of established law by a government authority" (para. 32);
In deciding whether or not to grant an interim declaration, the three part test of R.J.R. MacDonald INc. v. Canada [1994] ! S.C.R. 311 (SCC) ought to be applied (para. 35);
Whether or not an order to issue a licence is mandatory or prohibitory is of no consequence because the costs to the government of issuing a licence are minimal (paras. 24-7); and
As an alternative to a declaration, the court could also grant interim relief pursuant to s. 3(4) of the Judicial Review Act.

Judicial Review/Crown liability - Decision of Minister based upon recommendation of appeal board containing misapprehension of facts quashed

Decker v. Canada (Attorney General) [2004] F.C.J. No. 1762, 2004 FC 1464

This case involved a ground fish harvester whose application for a temporary shrimp permit was denied on the ground that his vessel was not fully geared up and ready to fish at the required time. Upon appealing the denial to the Atlantic Fisheries Licence Appeal Board, his appeal was turned down by the Minister. Upon bringing a application for judicial review, the Federal Court quashed the decision of the Minister and remitted the matter back to him for re-consideration for the following reasons:

Since the report of the Appeal Board was one of the bases upon which the Minister arrived at his decision, the court could review the decision of the Appeal Board (Fennelly v. Canada 2003 FC.1097 (digested herein);
The Appeal Board made its recommendation based upon a misapprehension of the facts because it did not make a finding on two important issues: (a) whether or not an exemption to the gear on-board requirement was given to the applicant; and (b) whether or not extenuating circumstances existed due to demonstrated financial commitment by the applicant.

The Minister was not precluded from remitting the matter back to a differently constituted board.

Judicial Review Crown Liability - Challenge to Minister's power to amend a fish farm licence without proper consultation of Indian Band - Declaration of duty to consult
Aboriginal rights and defences - Challenge to Minister's power to amend a fish farm licence without proper consultation of Indian Band - Declaration of duty to consult

Blaney v. British Columbia (Minister of Agriculture Food & Fisheries) 2005 BCSC 283

This was a judicial review application challenging a decision of the Minister of Agriculture Food and Fisheries to approve an amendment of a aquaculture licence allow a change from Chinook salmon to Atlantic salmon. After hearing evidence the court granted a declaration that the Minister had a continuing duty to consult and adjourned the application for judicial review generally.

Judicial Review/Crown Liability - Unsuccessful challenge to variation order allowing dragging on Georges Bank - Canadian Environmental Assessment Act not applicable

Ecology Action Centre Society v. Canada (Attorney General) [2004] F.C.J. No. 1318, 2004 FC 1087

Judicial Review/Crown Liability - Decision of provincial Crown Agency in refusing to allow stacking of shellfish tenures upheld

Lorindale Holdings Ltd. v. British Columbia Assets & Land Corp. 2004 BCCA 352

Judicial Review/Crown Liability - Approval of Amendment of fish farm licence

Homalco Indian Band v. British Columbia [2005] B.C.J. No. 401, 2005 BCSC 283 (B.C.S.C.)

Judicial Review/Crown Liability - No breach of procedural fairness re application of limitation period for CORE review process

Brennan v. Canada (Minister of Fisheries) [2004] F.C.J. No. 259, 2004 FC 213

Judicial Review/Crown liability - Judicial review of decision of Provincial court judge for breaching rules of natural justice

Armstrong v. Gill [2004] B.C.J. No. 2392, 2004 BCSC 1480

This case involved a prosecution under the Fisheries Act. In the course of a pre-trial application by the defence for disclosure of Crown documents, the matter was adjourned so that the parties could exchange and file written submissions. Although written submissions from both parties were filed, for some unexplained reason only the Crown's submissions were provided to the judge hearing the motion. In the course of the subsequent hearing it became apparent that the judge had not received the written submissions of the defence and attempted to remedy the situation by hearing oral submissions from counsel for the defence.

Upon receiving an adverse ruling on the disclosure motion, the defence brought an application for certiorari of the ruling and an order of mandamus directing that the disclosure application be heard afresh before a different judge.

After reviewing the evidence and the applicable authorities, the court concluded that "an informed person viewing the events realistically and practically would concluded that in the circumstances that occurred here there was an appearance of bias" (para 39). Accordingly the requested remedies of certiorari and mandamus were granted.

Judicial Review/Crown Liability - Unsuccessful attempt to to establish misfeasance and tort of interference with contractual relations re issuance and failure to issue hake quota and licences

Oak Island Group Limited v. A.G. (Canada) 2004 NSSC 179

19, 2004 BCSC 919

Judicial Review and Crown Liability - Non infringement of treaty rights by British Columbia Oil and Gas Commission

Saulteau First Nation v. British Columbia (Oil and Gas Commission [2004] B.C.J. No. 128, 2004 BCSC 92

Judicial Review/Crown Liability – Definition of “fishing” - Does not require the holder of the licence to use or exploit the fish that were killed - Aboriginal Rights and Defences – Public Interest Standing

Chief Percy Williams et al. v. Minister of Fisheries and Oceans and Heritage Salmon Ltd. 2003 F.C.J. No. 1893, 2003 FCA 484

See trial level digest below.

Judicial Review/Crown Liability

Keeping v. Canada (Attorney General) [2003] N.J. No. 116, 2003 NLCA 21 affirming [2002] N.J. No. 9

This case involved a crab fisherman who relied upon a fisheries officer to measure the tonnage of his boat in order to qualify for a fishing licence. In holding the fisheries officer liable in negligence, the trial court found that measuring the depth of a vessel and telling the owner where to place the measuring tape was “not a policy decision but a decision required in the implementation of the policy” (para. 61 trial decision). Since the fisheries officer knew that the tonnage measurement was in connection with a licence that had been applied for, there was proximity or neighbourhood and harm was foreseeable.

With respect to the issue of whether or not the availability of an administrative remedy trumped tort law, the trial court distinguished the Comeau’s Sea Foods decision as a case involving a discretionary decision on a policy issue which had no application to a case involving simple negligence in the operational sense (where there is no practical administrative remedy available).

Upon appeal, the court similarly distinguished Comeau’s Sea Foods on the basis that in the Keeping case when the licence was applied for, the policy pertaining to the issuance of licences had already been adopted and implemented (para. 32). After referring to the test for setting aside a discretionary decision as set out in Comeau’s Sea Foods, the court said that if the vessel had been properly measured by the fisheries officer, “there would have been no valid reason for the Minister not to have issued William Keeping a supplementary crab licence. To not have done so, given that Mr. Keeping would have met all the required criteria, would have been completely arbitrary and in bad faith.”

Editor’s note: This case is significant because it could be used to argue that the failure of the Minister of Fisheries to renew a fishing licence is reviewable because it would be arbitrary and in bad faith.

Judicial Review/Crown Liability

Fennelly v. Canada (Minister of Fisheries and Oceans) [2003] F.C. NO. 1398, 2003 FC 1097

This case involved judicial review of a decision of the Minister of Fisheries to not re-issue an exploratory snow crab licence. The applicant was a fisherman who owned two boats, a 75 foot stern trawler (the “Bear Cove Point”) and a 95 foot multipurpose trawler (the “Sandy Joanne”). In 1995 he was issued an exploratory crab fishing licence for use on the “Bear Cove Point”, which has been continually re-issued since that time.

In 1998 he was also issued an exploratory snow crab licence for use on the “Sandy Joanne”. In 1999 when he applied for re-issuance of both licences, the licence on the “Bear Cove Point” was issued but not the licence on the “Sandy Joanne”. In the year 2000, the Department of Fisheries (DFO) wrote to the applicant and advised him that the licence issued to the “Sandy Joanne” in 1998 was a temporary replacement for the “Bear Cove Point”.

In 2001 the applicant applied to the Regional Licence Appeal Committee and requested that the licence for the “Sandy Joanne” be re-issued. This Committee declined his application and he subsequently applied to the Atlantic Fisheries Licence Appeal Board. During his appeal he advised the Board that there existed no documentation for the Department of Fisheries indicating that in 1998 he had to bank the crab licence on the “Bear Cove Point”. After hearing the appeal, the Board made a recommendation to the Minister of Fisheries that the appeal be denied. The Minister then denied the appeal.

In what appears to be a well-argued case, a number of issues were raised including:

Ability to review a decision of the Atlantic Fisheries Licence Appeal Board;
Standard of Review;
Requirements of Natural Justice;
Whether concern about criticism from other participants in the fishing industry was a proper factor for consideration by the Minister;
Adequacy of Reasons given by the Appeal Board; and
Whether or not the Minister based his decision on correct information (s. 18.1(4)(d) of the Federal Court Act).

Although the arguments with respect to these issues are set out in the reasons for judgement, the court only addressed the issue of whether or not the Minister (and the Appeal Board) based his decision on correct information. Upon reviewing the evidence the court found that both the Appeal Board and the Minister failed to address the issue of whether or not the licence issued to the “Sandy Joanne” in 1998 was only an authorization for the use of a replacement licence under the licence issued to the “Bear Cove Point” or whether it was a separate and independent licence (para. 48). Accordingly, the decision of the Minister to deny the issuance of a licence to the “Sandy Joanne” was quashed with an order that the matter be remitted back to the Minister who (with the assistance of the Appeal Board if he desired) would reconsider the matter after reviewing and considering the evidence with respect to status of the “Sandy Joanne” licence in 1998.

The court refused to make an order that the Applicant receive a separate licence for the “Sandy Joanne” as this would make the court the minister for the day, contrary to what was said in Carpenter Fishing Corp. v. Canada [1998] 2 F.C. 548 (C.A.).

Judicial Review/Crown Liability – Decision of Minister to Not Issue Licence

Keating v. Minister of Fisheries (2002) 224 F.T.R. 98, 2002 FCT 1174 (Fed. Ct. T.D.)

This case involved judicial review of a decision of the Minister of Fisheries to deny a fisherman’s request for the reinstatement of his supplementary crab licence. After an appeal to the Atlantic Fisheries Licence Appeal Board, the Board recommended to the Minister that the licence be re-instated based upon extenuation circumstances such as the fisherman’s illiteracy. However, after receiving a memo from a deputy minister saying allowing the appeal would “create considerable criticism from licensed crab fishers in the area” he denied the appeal.

In allowing the application and remitting the matter back to the Minister to make a decision, the court reasoned that taking into account potential criticism from other fishers was an extraneous and irrelevant consideration (para. 67-8, 71). The court also allowed extrinsic affidavit evidence because it did “not introduce material facts that were not part of the record before the Minister” (60). The court also applied Jada Fishing (2002) 288 N.R. 237 (F.C.A.) (digested herein) with respect to its ability to review the decision of an appeal board in the context of a review of a decision of the Minister who considered the recommendation of that board. In addition the court refused mandamus based upon the decision of Carpenter Fishing Corp. v. Canada [1998] 2 F.C. 247 (F.C.A.) (digested herein).

Editor’s Note: With respect to the courts finding that potential criticism from other fishers was an irrelevant consideration, at paragraph 67 the court distinguished Comeau Sea Foods Ltd. v. Canada (1997) 1 S.C.R. 12. In particular, see the court of appeal decision of Linden J. in Comeau at paragraph 33 and paragraph 50 of the Supreme Court of Canada decision where the court said, “[w]here a Minister of the Crown is required by statute to exercise his or her discretion in reaction to immediate and pressing policy concerns, the Legislature can usually be taken to have intended that he or she be ultimately responsible to political authority.”

Judicial Review Crown Liability - Employment Law – Employment Insurance Appeal

Mercer v. Canada (Minister of National Revenue [2003] T.C.J. NO. 543, 2003 TCC 652 (Tax Ct. of Canada) (Cain D.T.C.J.)

This case dealt the issue of whether or not the common law spouse of an East Coast fish boat owner who worked as a deckhand on his fishing vessel could be considered an employee for the purpose of a section of the Employment Insurance Act that excluded coverage for employees who do not work at arms length from their employers. Based upon the evidence that the deckhand received 79 per cent of the share of the catch while only performing 50 per cent of the duties, the Court excluded coverage based upon the assumption that she was an employee.

Judicial Review/Crown Liability – Exemption from Crown Disclosure – S. 37-8 Canada Evidence Act

Pereira E. Hijos, S.A. v. Canada (Attorney General) [2002] F.C.J. No. 1658, 2002 FCA 470 (F.C.A.)

This case involved a damage action against the Federal Government alleging trespass, assault and negligent navigation arising out of the seizure of the Spanish fishing vessel “Estai” on the high seas in 1995. The decision involved a pre-trial application for an order that a Crown official answer a number questions with respect allegations that the Canadian Government was involved in vote buying in order to get the support of Cuba and other countries to support it in its successful bid at a N.A.F.O. meeting to obtain a large share of the Greenland halibut quota in 1995. The Crown opposed the application on the basis that disclosure would be contrary to the public interest and as such was exempt from disclosure pursuant to ss. 37 and 38 of the Canada Evidence Act.

At first instance (2001 FCT 1434 (Fed. Ct. T.D.) (Nadon, J.)), the court denied the Plaintiff’s application on the ground that disclosure would have a “chilling effect” on Canada’s international relations. It also concluded that the answers sought from the Crown were irrelevant to the issues before the court.

Upon appeal, the Federal Court of Appeal allowed the appeal and required the questions to be answered with Canada being given the right to file a new certificate because the current certificate was filed before the questions were asked and did not state the release of information would be injurious to Canada’s international relations. Even though the Court of Appeal agreed with the motions judge that “the information which the plaintiffs seek to obtain will not establish a fact crucial to the plaintiffs case” (one of the factors to be considered in the test set out in R. v. Kahn, [1996] 2 F.C. 316 (T.D.)), it decided to allow the appeal.

Judicial Review/Crown Liability – Admission of Extrinsic Evidence re Lack of Jurisdiciton

Ecology Action Centre Society v. Canada (Attorney General) 2002 FCT 1209; [2002] F.C.J. No. 1778 (T.D.) (Dawson J.)

This case involved an application to quash a variation order that opened the Georges Bank for fishing by any means, including dragging. The Applicant argued that the variation order was beyond the jurisdiction of the decision maker because the use of draggers would cause damage to fish habitat.

At the initial application before a Prothonotary, the applicant tendered seven affidavits of expert evidence regarding the impact that draggers would have on the area affected by the variation order. The Prothonotary refused to admit these affidavits on the grounds that they were not before the initial decision maker and that the want of jurisdiction argued could be made apparent without reference to the affidavits.

Upon appeal, the court applied the test for reviewing discretionary decisions of prothonotaries. In doing so he rejected an argument that the Prothonotary’s order was based upon an incorrect application of the principle or a misapprehension of the facts. With respect to facts, the court applied Gitxsan Treaty Society v. Hospital Employees’ union, [2000] 1 F.C. 135 (C.A.) for the proposition that extrinsic evidence is only admissible in those circumstances “in which the only way to get at the want of jurisdiction is by the bringing of such new evidence before the reviewing court”. With respect to principle, the court rejected the argument that the test set out in Gitxsan only applies to judicial review of decisions that are judicial in nature. The Court agreed with the Prothonotary that substantial material was already before the court on the matters raised by the impugned affidavits. For similar reasons, the court also found that the decision of the Prothonotary did not raise an issue “vital to the final result of the case”.

Judicial Review/Crown Liabiltiy - Injunctions Against the Crown

North of Smokey Fisherman’s Association v. Canada (Attorney General) [2003] F.C.J. No. 40, 2003 FCT 33 (Fed. Ct. T.D.) (Layden-Stevenson J.)

This case involved a judicial review proceeding against the Minister of Fisheries challenging his decision to open a winter cod fishery in the Sydney Bight area east of Cape Breton. While the hearing of the proceeding was pending, the applicant, an association of fishermen, brought on a motion for an interlocutory injunction enjoining the Minister from opening the fishery.

The court dismissed the application for an injunction for the reasons set out below.

S. 22 of the Crown Liability and Proceedings Act prohibits injunctions against the Crown when acting within the powers granted to it by law (although allowing declarations). Since the applicant was not able to show any statutory provision contravened by the Minister or any evidence that his decision was motivated by irrelevant considerations or that he acted arbitrarily or in bad faith, s. 22 applies. In this regard, the court appears to have rejected an argument that the Oceans Act, SC. 1996, c. 31 bound the Minister to take the precautionary approach to management.

Alternatively, the court ruled that the applicant did not satisfy the three-part test for an injunction.

With respect to whether or not there existed a “serious issue to be tried”, the court noted that when the result of the interlocutory motion will, in effect, amount to a final determination of the application, the threshold for satisfying the test is raised and the applicant must make out a prima facie case.

With respect to “irreparable harm”, the court noted that it was necessary to show irreparable harm to the applicant itself.

With respect to “balance of convenience”, the court noted that “an action taken by the Crown is prima facie deemed to be in the public interest . . .” (para. 24). When a public authority is prevented from exercising its statutory powers, “it can be said that the public interest, of which the authority is the guardian, suffers irreparable harm . . . A court should not, as a general rule, attempt to ascertain whether actual harm would result (para. 26) . . . Here, NOSFA, in effect, seeks to have the court manage or police the fishery. That is not a function of the court.” (para. 27).

Judicial Review/Crown Liability – Damages for delay in Issuing Hake Licence - Practice – Application to Strike because Action is Judicial Review Dressed Up as Tort action

Oak Island International Group Ltd. v. Canada (Attorney General) 2003 NSSC 47; [2003] N.S.J. No. 79 (N.S.S.C.) (Edwards J.)

This case involved a Nova Scotia corporation involved in the business of fishing for silver hake and selling it to an offshore market. The company alleged that it was injured as a result of : (1) a delay in approving its fishing licence and quota in 1995; (2) it received a shortfall in its quota allocation in 1995; and (3) in 1996 it was denied a licence because it did not meet a 15 per cent Canadian processing requirement.

The Crown made a pre-trial application to strike the statement of claim on the grounds that under s. 28 and 18.1 of the Federal Court Act the Nova Scotia Supreme Court did not have jurisdiction because the action was really judicial review dressed up as a tort action.

In denying the Crown’s motion, the court applied the test set out in Horseman v. Horse lake First Nation [2002] A.J. No. 1020 (Q.B.) to the effect that the plaintiff need only show that it was not plain and obvious at this stage that its action was not based on a cause of action other than judicial review. In applying this test, the court reviewed the plaintiffs claims of: (1) abuse of public office; (2) interference with the respondent’s economic interests; and (3) interference with the Respondent’s economic relations to conclude that these were clearly issues of tort law and not within the scope of judicial review.

Editor's note: For more cases dealing with this issue see footnote 17 in the paper CROWN LIABILITY C.L.E. of British Columbia FEDERAL COURT PRACTICE UPDATE - 2003 by Brad Caldwell and Robin Whittaker.

Judicial Review/Crown Liability – Definition of “fishing”- Aboriginal Rights and Defences – Public Interest Standing

Chief Percy Williams et al. v. Minister of Fisheries and Oceans and Heritage Salmon Ltd. 2003 FCT 30 (F.C.T.D.) (Rouleau J.)

This case involved an application by the Chief Percy Williams on behalf of the members of the Twicksutaineuk/Ah-kwa-mish Tribes for judicial review of a decision of the Minister of Fisheries to issue a Marine Mammal Predator licence to a fish farm for the purpose of killing of problem seals and seal lions.

As a preliminary matter, the court had to determine whether or not the tribe members had public interest standing. Upon reviewing the first of the three part test set out in Harris v. Canada [2002] 4 F.C. 37 (F.C.A.), the court ruled that the tribe members did not have public interest standing because they were not able to establish that they were likely to succeed on the merits of their application.

The Tribe essentially argued that the licence in question was not a “fishing” licence because it did not require the holder of the licence to use or exploit the fish that were killed. After reviewing the legislation in question and the relevant case law, the court rejected this argument. The court was of view that the act of fishing was complete once possession of the fish is obtained. As an example, the court referred to catch and release practices in the sports fishery where anglers catch fish with the specific intention of releasing them once they are caught.

Postscript: This decision was upheld by the Court of Appeal 2003 FCA 484

Judicial Review/Crown Liability

Hache v. Canada (Minister of Fisheries and Oceans 2002 FCT 703, [2002] F.C.J. 952 (F.C.T.D.) (Tremblay-Lamer J.)

This case is the sequel to Aucoin v. Canada (Minister of Fisheries and Oceans) [2001] F.C.J. 1157 (digested herein). Aucoin involved a challenge to a co-management agreement between D.F.O. and the East Coast (zone 12) snow crab fishermen. It is reported that as a result of changes to the Unemployment Insurance Act in 1995, it became apparent that numerous employees working in snow crab processing plants were not going to be able to work the minimum number of weeks required to qualify for unemployment insurance benefits. Consequently, D.F.O. initiated discussions with the zone 12 crab fishermen for the purpose of obtaining a contribution of funds from them to be used with other funds contributed by the Provincial Government for the purpose of creating make work projects for the shore workers. As a result of these discussions, the crab fisherman entered into a co-management or partnering type agreement to provide a percentage of their gross revenue to the shore workers.

Pursuant to this agreement, a procedure for collecting funds was set up as follows: Each year, D.F.O. with-held 20 per cent of the fishermen’s quota and transferred it to a non profit corporation. Upon payment by each fisherman to the non-profit corporation, the corporation would notify D.F.O. and then transfer the payment to a second non-profit corporation. Upon transfer of the money, the fisherman’s share of the with-held quota would then be released.

Although legislation was tabled in Parliament to authorize this type of co-management or partnering agreement (Bill C-62), this legislation died on the order paper when Parliament was dissolved in April of 1997. Despite the failure to pass this legislation, the crab fishermen honored this agreement and paid the levy for several years until they received an opinion from the Auditor General that the levy was of questionable legality. They then decided to challenge the levy imposed for the 2001 fishery by way of an application to the Federal Court for judicial review.

Upon review, Rouleau J. found that the decision of the Minister was null and void and ultra virus his powers under the Fisheries Act and prohibited the Minister from implementing the plan.

The applicants in the Aucoin proceeding then commenced and action in Federal Court seeking damages against the Crown for, amongst other things, return of the funds they paid in 2001 in order to obtain the release of the 20 per cent quota that had been with-held. The plaintiffs then brought an application for summary judgement of their claim.

The court denied the summary judgement application and referred the matter to the trial court. In doing so, it said, amongst other things, as follows:

1. The characterization of the quota transferred from the Partenariat to the individual fishers was incorrect because “the quota to be allocated was within the discretion of the Minister and no fisher has the legal right to a specific quota in any given year” (para. 16);

2. Air Canada v. Ontario Liquor Control Board, [1997] 2 S.C.R. 581 can be distinguished because the funds in this case appear to have been paid to a third party;

3. A full trial is necessary to determine whether or not the fishers received anything in exchange for the quota they are alleged to have lost;

4. The facts of the case appeared closer to the facts of Cheticamp Fisheries Co-operative Ltd. v. Canada [1995] N.S.J. No. 127 (C.A.) where an action against the Crown for interference with economic relations failed because the plaintiff failed to prove that it did not receive value equal to the monies held back; and

5. The Plaintiffs had not provided sufficient evidence that the Minister’s actions were deliberately calculated to injure the plaintiffs as is required to support a claim of misfeasance of public office.

Judicial Review/Crown Liabilitiy

Jada Fishing Co. Ltd. et al v. Canada (Minister of Fisheries and Oceans) et al. 2002 FCA 103 (F.C.A.)

In this case the motions judge (Pelletier J.), reviewed a recommendation regarding a quota allocation adjustment for an individual fisherman made by the Pacific Region Licence Appeal Board to the Minister of Fisheries. Using the Pushpanathan pragmatic and functional analysis as applied to an “expert tribunal,” the motions judge applied a standard of review of reasonableness. Upon appeal, the Federal Court of Appeal held that the recommendations of the Appeal Board itself were not reviewable, but proceeded to review the decision of the Minister based in part upon the Appeal Board’s recommendations. In doing so, the court applied the reasonableness standard of review. Since the decision of the Minister was upheld on the reasonableness standard, the court did not feel it necessary to consider whether or the patent unreasonableness test should be applied on the basis of Suresh v. Canada (Minister of Citizenship and Immigration) 2002 SCC 1. In addition, the court pointed out that the remedy requested by the applicant (an increased quota) could not be granted in any event because it would “merely amount to a substitution of the Court’s recommendation for that of the Panel . . .”.

Judicial Review/Crown Liability

Jose Pereira E. Hijos, S.A. v. Canada (Attorney General) 2001 FCT 1434 (Fed. Ct. T.D.) (Nadon, J.)

The court denied the Plaintiff’s application on the ground that disclosure would have a “chilling effect” on Canada’s international relations. It also concluded that the answers sought from the Crown were irrelevant to the issues before the court.

Judicial Review/Crown Liability

Keeping v. Canada (Attorney General) [2002] N.J. No. 9 (Nfld. & Labrador S.C.) (Alward J.)

This case involved a crab fisherman who relied upon a fisheries officer to measure the tonnage of his boat in order to qualify for a fishing licence. In holding the fisheries officer liable in negligence, the court found that measuring the depth of a vessel and telling the owner where to place the measuring tape was “not a policy decision but a decision required in the implementation of the policy” (para. 61). Since the fisheries officer knew that the tonnage measurement was in connection with a licence that had been applied for, there was proximity or neighbourhood and harm was foreseeable.

With respect to the issue of whether the availability of an administrative remedy trumped tort law, the court distinguished the Comeau’s Sea Foods decision as a case involving a discretionary decision on a policy issue which had no application to a case involving simple negligence in the operational sense (where there is no practical administrative remedy available).

Editor's note: This case was upheld on appeal at 2003 NLCA 21.

Judicial Review/Crown Liability – Ministerial Discretion – Patently Unreasonable Test

Tucker v. Canada (Minister of Fisheries and Oceans) [2001] F.C.J. No. 1862 (F.C.A.)

This case involved an action by a fisherman against the Minister of Fisheries for damages arising from a decision by the Minister requiring the fisherman to elect either to utilize an inshore fishing licence for groundfish or an offshore fishing licence for turbot. In reviewing the Minister’s discretionary power to issue licences under section 7 of the Fisheries Act, the trial court upheld the Minister’s decision. Upon appeal, the decision of the Minister was also upheld. In doing so, the Court said as follows: “the Court should only concern itself with ensuring that the decision is made in good faith, falls within the broad purposes of the Act and is not patently unreasonable, which we take to mean clearly irrational”(para. 2).

Judicial Review/Crown Liability

Newell v. Canada 2002 FCT 373 (Fed. Ct. T.D.) (Mackay, J.)

This case involved a crab fisherman who exceeded his individual quota for 1999 crab landings and consequently had his 2000 individual quota reduced by an amount equal approximately to his overage in the previous year. In response, the fisherman commenced an action against the Crown seeking damages for the Crown’s “intentional tortuous interference with his economic interests which caused him to suffer economic loss”.

Upon application of the Crown, the Court struck the fisherman’s claim on the grounds that it disclosed no reasonable cause of action. The Court’s reasons for doing so included the following:

1.The Mathews v. Canada (A.G.) (1996) 118 F.T.R. 81 (T.D.) line of authorities were distinguishable because in the Newel case the statement of claim contained no factual allegations that the primary purpose of the quota reduction was to impose a penalty; and

“Since a fishing licence conveys a privilege, not a right, the plaintiff’s claim that the Crown tortiously interfered with his economic right to fish does not disclose a reasonable cause of action i.e., a claim recognized by law” (para. 13).

In obiter, the Court also dealt with the issue of whether or not it was necessary to first bring an application for judicial review before bringing a application for damages as was done in the case of LaPointe et al. v. Canada (Minister of Fisheries and Oceans) (1992), 51 F.T.R.161. Based upon the Zarzour v. Canada (2000) 268 N.R. 235 (F.C.A.) the Court suggested that “it may be that in particular circumstances there is no necessity to first seek judicial review before initiating a claim for damages . . .” (para. 18).

Judicial Review/Crown Liability

Durant v. Canada (Minister of Fisheries and Oceans 2002 FCT 327 (Fed. Ct. T.D.) (O’Keef, J.)

This case involved an application for judicial review of a decision by the Minister of Fisheries to discontinue the practise of allowing oyster cleaners to go out onboard oyster boats to clean oysters while the boats fish. Although a fisher’s registration card and a licence were apparently required to clean oysters aboard a fish boat, for many years D.F.O had not been enforcing this rule and had been allowing cleaner to attend on boats with a fisher’s registration card, but not a licence. As a result of an announcement made in April of 2000, commencing on September 15, 2000 no oyster cleaners were allowed to clean oysters aboard fish boats (licences were not issued for this purpose). In denying the application for judicial review, amongst other things the court rules as follows:

The decision to be reviewed is the change of policy itself, rather than the announcement of the change of policy, therefore the 30 day limitation period does not start from the date of the announcement;
The standard of review to be applied was the patently unreasonable test;
Under the circumstances, the issuance of the news release inviting interested person to contact the Regional Director for further information satisfied any requirements for procedural fairness and natural justice;
No substantive right could be recognized based upon the doctrine of legitimate expectations;
There was no evidence of abuse of public power, as the change in policy appeared to be motivated by concerns over conservation and sustainability of the industry;
Damages cannot be awarded in a judicial review hearing (Tench v. Canada (Attorney General) (1999), 179 F.T.R. 126 (F.C.T.D.)

Editor’s note: Charges under the Fisheries Act against the applicant were dismissed in Prince Edward Island Provincial Court 2. See the digest of this case under the heading “Offences – Misc.”

Judicial Review/Crown Liability – Co-Management Agreements

Aucoin v. Canada (Minister of Fisheries and Oceans) 2001 FCT 800

This case involved a challenge to a co-management agreement between D.F.O. andthe East Coast (zone 12) snow crab fishermen. It is reported that as a result of changes to the Unemployment Insurance Act in 1995, it became apparent that numerous employees working in snow crab processing plants were not going to be able to work the minimum number of weeks required to qualify for unemployment insurance benefits. Consequently, D.F.O. initiated discussions with the zone 12 crab fishermen for the purpose of obtaining a contribution of funds from them to be used with other funds contributed by the Provincial Government for the purpose of creating make work projects for the shore workers. As a result of these discussions, the crab fisherman entered into a co-management or partnering type agreement to provide a percentage of their gross revenue to the shore workers.

Although legislation was tabled in Parliament to authorize this type of co-management or partnering agreement (Bill C-62), this legislation died on the order paper when Parliament was dissolved in April of 1997. Despite the failure to pass this legislation, the crab fishermen honoured this agreement and paid the levy for several years until they received an opinion from the Auditor General that the levy was of questionable legality. They then decided to challenge the levy imposed for the 2001 fishery by way of an application to the Federal Court for judicial review.

Upon reviewing the case, the court looked at the question of whether the conditional licences issued to the non-profit corporation (presumably to hold he 20 per cent quota) could be authorized under s. 7 of the Fisheries Act. In rejecting the Minister’s discretion to do so, the court said as follows:

There is evidence that the licences for snow crab fishing were issued to the ‘Partenariat’ [the non profit corporation] who owned no fishing vessel and were not engaged in the fishing industry. Though the Minister has absolute discretion, it is specified that he may issue licences for fisheries or fishing, not for the purpose of assisting in setting up an unemployment benefit scheme and collecting additional levies. The Minister’s conduct in this regard is not supported by any authority nor is it justified for any statutory purpose. The Fisheries Act is to protect and regulate fisheries and this was undoubtedly beyond the scope of the Minister’s discretion (para. 43)

. . . I am satisfied that the Minister did not act in good faith (para. 45)

A regime established for the purpose of offering financial aid to seasonal employees for area fish plants who no longer qualify for employement insurance benefits is wholly unrelated to the issuance of leases or licences for the proper management and control of fisheries and conservation and protection of fish (para. 46).

In addition, in the absence of either an authorization from Cabinet or enabling legislation, the court also questioned the ability of the Minister to enter into legally binding contracts to fetter his discretion under s. 7 of the Fisheries Act.

As a result of the court’s conclusions, it issued an order prohibiting the implementation of the partnering agreement and setting aside the decision of the Minister transferring 20 per cent of the quota to the non profit corporation.

Editor’s Note: In the Report of the Panel on Studying Partnership released in 1998 (www.dof-mpo.gc.ca/COMMUNIC/backgrou/1998/hq90_e.htm), a letter from the Deputy Minister of Fisheries is quoted as confirming that the Minister of Fisheries lacks the legal authority to enter into partnering arrangements. Despite this fact, the Minister appears to have proceeded with a number of partnering arrangements on both the East coast and the West coast without passing any new legislation to authorize it. Given this fact, it is not surprising to see this agreement being struck down by the courts.

Judicial Review/Crown Liability – Aboriginal Rights

Yale First Nation v. HMTQ In Right of Canada et al 2001 BCSC 746

This case involved an alleged agreement between the Yale First Nation and the Minister of Fisheries to allow a pilot sale fishery in the year 2000 pursuant to the Aboriginal Communal Fishing Licence Regulations.

In an application for summary judgment under Rule 18A, the Yale First Nation sought a declaration that a document purporting to record the agreement was an enforceable agreement.

The Crown opposed the application for summary judgment and also sought a declaration under Rule 19(24) that the plaintiff’s claim be struck as disclosing no reasonable claim.

With respect to the summary judgment portion of the application, the court admitted parole evidence to find that the written agreement contained a condition precedent to the effect that the agreement was contingent upon the Department of Fisheries obtaining a similar agreement from a neighbouring First Nations group. Since such an agreement was not obtained, the condition precedent was not satisfied and the agreement was not enforceable.

In obiter, the court also said that given the decision of Comeau’s Seafoods Ltd. v. Canada (Fisheries and Oceans) (1997), 142 D.L.R. (4^th) 193 (S.C.C.), even if the condition precedent had been satisfied, the Minister could not have been forced to issue a fishing licence.

With respect to the application to strike under Rule 19(24), the court was sympathetic to the Crown’s argument that at best the agreement was only an agreement authorize the issuance of a licence. And since the Minister had the discretion under section 7 of the Fisheries Act to revoke that authorization at any time prior to the licence being issued, no damages could flow. However, since the Federal Court of Appeal in Comeau’s Seafoods “did not state that such a claim [for damages] could never be successful”, the court did not strike the plaintiff’s claim.

In obiter, the court also suggested that under the circumstances, the plaintiff may not have been entitled to declaratory relief because the declaration only concerned a future right (the issuance of a fishing licence) as opposed to an existing right. Given the Comeau decision, the court suggested the plaintiff’s rights did not ripen until a licence had actually been issued.

Editor’s Note: Unfortunately, the reasons for judgment in this case do not show the actual wording of the written agreement signed by the Yale First Nation. If the actual agreement only referred to the Minister agreeing to “authorize” the issuance of a licence, then I would agree with the obiter comments of the court. However, if the agreement were simply to issue a licence, I would think the plaintiff would have a reasonable prospect of at least obtaining a judgment for damages. See for example paragraphs 74-7 of the Court of Appeal judgement in Comeau Seafoods; Puddister Trading Corporation Ltd. v Canada (28 May 1997), No. T-168-92 (Fed. Ct. T.D.) (Simpson J.) (digested herein); But see: Aucoin v. Canada (Minister of Fisheries and Oceans) [2001] F.C.J. No. 1157; 2001 FCT 800 at para. 47-8.

Judicial Review/Crown Liability - Injunctions

Cassie v. Canada (Minister of Fisheries and Oceans) [2001] F.C.J. No. 625; 2001 FCT 379 (Fed. Ct. T.d.) (Blanchard J.)

This case involved an application by a group of snow crab fishermen for an injunction ordering the Minister of Fisheries to issue snow crab licences to them.

Whether or not the court could issue an order of mandamus compelling the Minister to issue the requested licences.

In denying the application, the court relied upon Hahlon v. Canada (Minister of Employment and Immigration) [1986] 3 F.C. 386 for the proposition that an order of mandamus may be made to compel the performance of a public duty, but it cannot dictate the result to be achieved. Since the Minister has complete discretion under s. 7 of the Fisheries Act, the court cannot dictate how that discretion will be exercised.

The court also noted that s. 22(1) of the Crown Liability and Proceedings Act prohibits the issuance of an injunction against the Crown.

Given all of the above, the applicant failed to satisfy the first branch of the tripartite test set out in RJR-Macdonald Inc [1994] 1 S.C.R. 311.

Judicial Review/Crown Liability – Application to strike under Rule 221(1)(a) as disclosing no reasonable cause of action.

Radil Bros. Fishing Co. Ltd. v. Her Majesty the Queen et al. 19 October 2001 (No. A-786-00) (F.C.A.)

Facts

This case involved an appeal from an order of the trial division of the Federal Court (2000 F.C.J. 1885) allowing an appeal from an order of a Prothonotary (reported at (1999) 175 F.T.R. 182). The alleged facts, as taken from several of the judgements, are quite complicated as the case arose out of what is commonly called a “licence swap” transaction. The aggrieved party in this case was the owner of an 86-foot fishing vessel with a category “T” trawl licence which had both a good history of landings and a high priority position in the Hake Consortium selection process (the “Owner”). In 1993 the Owner entered into an agreement to purchase a category “A” salmon licence from a fish processor for placement upon its vessel. An “A” licence was then transferred to the Owner’s vessel by way of a transaction whereby a married set of “A” and “T” licences belonging to the fish processor were transferred to the Owner’s vessel and the Owner’s single “T” licence was transferred back to the vessel from which the married licences had come. The result was a classic “swap” transaction.

It was alleged by the Owner, that prior to the swap it was known to all parties that a quota system would likely be introduced in the ground fish fishery and that catch history would be a factor in calculating individual vessel quotas. Subsequently, when the individual quota fishery was instituted into the ground fish fishery in 1997/8, the quota allocation was based 70 per cent upon the catch history of the vessel. Since the swapped “T” licence obtained from the fish processor did not have as good a landings record as the original “T” licence, the Owner lost a considerable amount of quota. In addition, it lost its priority on the Hake Consortium selection process.

It was alleged by the fish processor that prior to the swap, it had discussed the proposed transaction with the director of licensing for D.F.O., and had been given a verbal assurance that the transfers would be affected so that the catch histories of the vessels would stay with the vessels and not be transferred with the licences. Unfortunately for the Owner and fish processor, the director of licensing had died and there was no written record of the alleged agreement with him.

To make matters worse, the vessel to which the original “T” licence was transferred, was subsequently sold by the fish processor to a third party who claims to have specifically purchased the vessel because of the high landings associated with the swapped licence. It claimed to have had no knowledge of the alleged agreement with D.F.O. and opposed the enforcement of any such agreement.

Previous Proceedings

The plaintiff originally commenced legal proceedings by way of a judicial review application under Federal Court Rule 300 seeking both mandamus and declaratory relief against the Crown. Upon the application of the third party purchaser, the court later ordered that the application be converted to an action so as to allow for full discovery and viva voce (oral) evidence. However, when converting the proceeding to an action, the Owner also claimed for damages in addition to the declaratory relief originally claimed.

During a summary trial application before Rouleau J., the third party purchaser was then successful in having the portion of the prayer for relief struck which claimed relief above and beyond what was originally contained in the (originating) application under Rule 300. In response, the Owner then commenced an action in Federal Court claiming both the declaratory relief and damages which had been claimed in the previous action as converted from an (originating) application. This action was against the Crown, the fish processor and the third party purchaser. An identical action was also commenced in the Supreme Court of British Columbia. In response, the Crown brought an application in Federal Court to strike out the Owners statement of claim pursuant to Rule 221(1) as disclosing no reasonable cause of action.

At first instance before Prothonotary Hargrave, the Court denied the motion to strike, provided the plaintiff amended its statement of claim to include grounds upon which the “a minister’s discretionary decision might be challenged, grounds which might include malfeasance, or grounds similar to those set out in Thomson v. MCI . . . or in Williams v. Canada . . .”

Upon Appeal to the trial division of the Federal Court (McKeown J.), the decision of the Prothonotary was reversed by striking out the statement of claim in the Federal Court action.

Decision of the Federal Court of Appeal

Upon further appeal to the Federal Court of Appeal by the Owner, the court of appeal in a decision written by Decarry J.A., allowed the statement of claim to be struck, but gave the Owner leave to file a re-amended statement of claim alleging negligent misrepresentation against the Crown. In doing so, the court applied the test set out in Hunt v. Carey Canada Inc, [1990] S.C.R. 959 as modified as it relates to parallel Federal Court proceedings in the case of Sweet v. Canada, [1999] F.C.J. No. 140 (F.C.A.). The court also rejected the assessments of the case provided by both the Prothonotary (malfeasance) and the Motions Judge (illegality). The appeal court was of view that the motions judge construed the decision of Comeau’s Sea Foods Ltd. v. Canada, [1995] 2 F.C. 467 to narrowly in rejecting negligent misrepresentation as a possible cause of action because of the availability of an administrative law remedy to the plaintiff.In this regard, the court said:

It is premature, at this early stage of the proceedings, to conclude that Radil has no chance, with appropriate amendments, to demonstrate that the alleged negligent misrepresentation was part of an operational, as opposed to policy decision, that there was a prima facie duty of care and that the scope of the duty was not, in the circumstances, to be negatived or limited. Radil has a steep hill to climb, but it cannot, at this state, be said that it cannot be done. (para. 37)

Editor’s note: With respect to the issue of negligence, see the dissent of the Federal Court of Appeal in Comeau’s Sea Foods v. Canada where Linden J. argues for a remedy against the Minister of Fisheries based upon the law of negligence as set out in Anns v. Merton London Borough Council. See also [1994] 76 CBR 253, where the author argues that in Comeau, the Supreme Court of Canada missed an opportunity to clarify the law regarding negligence of public officials. Given the dissenting opinion of Linden J., I would agree with the Federal Court of Appeal that the trial level appeal court was over zealous to the extent that it held that it was plain and obvious that a claim base upon negligence must fail.

See also the digest of this case under the heading, “Practise – Admiralty jurisdiction over fisheries matters”

Postscript: See also 2002 FCT 1237 where the Crown brings a partially successful motion on the grounds that the amended statement of claim exceeds what is allowed by the order of the Court of Appeal. See also 2003 FCT 79 where Prothonotary Hargrave fore the most part denies a Crown application to strike out the amended statement of claim.

Judicial Review/Crown Liability

Mount Sinai Hospital Center v. Quebec 2001 SCC41

Although this is not a fisheries case, it is very similar to the Comeau’s Seafood decision of the S.C.C. (digested herein) in the sense that it dealt with an initial promise by a Minister to issue a licence (for a short term care hospital facility), subsequent reliance on that promise, and then a refusal to issue the licence.

At the final level of appeal before the S.C.C., the majority decision distinguished the Comeau’s Seafood decision by confining its application to legislation such as the Fisheries Act which has a two step authorizing and then issuing process for licences. Unlike the Comeau’s Seafood case, the majority forced the Minister to issue the licence on the ground that once the Minister had made up his mind to issue the licence, his discretion had been exhausted and a subsequent Minister’s later reversal of the earlier Minister’s decision to not issue the licence was reviewable.

Unfortunately, the majority sidestepped the issue of whether or not public law promissory estoppel applied.

The minority judgement concurred in the result, but reached it by way of a different analysis. They reviewed the decision of the Minister by applying a standard of patent unreasonableness. In their view, the decision of the Minister was patently unreasonable.

The minority also concluded that public law promissory estoppel could not be applied. In doing so, they set out the four requirements for promissory estoppel and added that for public law estoppel, there is a fifth requirement, namely: “[p]ublic law estoppel clearly requires an appreciation of the legislative intent embodied in the power whose exercise is sought to be estopped. The legislation is paramount. Circumstances that might otherwise create an estoppel may have to yield to an overriding public interest expressed in the legislative text . . . ‘there can be no estoppel in the face of an express provision of a statute’” (para. 47).

Aboriginal Rights and Defences – Availability of Interlocutory Relief to stop Enforcement Measures
Practise – Injunctions that Finally Determine Rights Ought not be made on an Interlocutory Basis
Crown Liability Judicial Review – Availability of Injunctive Relief Against the Crown

Shubenacadie Indian Band v. Canada (Minister of Fisheries and Oceans) [2000] F.C.J. No. 1445 (Fed. Ct. T.D.) (Pelletier J.)

This case involved a Nova Scotia Indian Band which was relying upon the two R v. Marshall decisions (digested herein) in support of an application for an interlocutory injunction to enjoin D.F.O. from taking enforcement measures to prevent its members from participating in a Band regulated lobster fishery.

The two main issues in the case were:

Whether the relief claimed was available on an interlocutory basis; and

Whether the balance of convenience favoured the granting of an injunction.

With respect to the first issue, the court reconciled two somewhat inconsistent authorities to hold that “injunctions which finally determine rights, and therefore amount to a declaration of rights, ought not be made on an interlocutory basis” (para. 44) except in situations where (1) “the rights must be exercised immediately or not at all” or (2) “when the damage caused by the refusal of the injunction will make success at trial nugatory” (para. 51). Since the issue of treaty rights to fish for lobster would likely “stretch a long way into the future (para. 52), the court did not apply any of the exceptions to the general rule. Accordingly the Court ruled that the motion for interlocutory relief be dismissed.

Despite its dismissal of the motion, the court also gave its view on the application of the tripartite test for the availability of an injunction. In reviewing the test for determining the balance of convenience the court applied RJR-MacDonald Inc. v. Canada [1991] 1 S.C.R. 311 to find that in constitutional type cases, one must look at the public interest. Once it is established that the government authority is charged with the duty of promoting the public interest and that the “impugned legislation, regulation, or activity was undertaken pursuant to that responsibility” . . . “the court should in most cases assume that irreparable harm to the public interest would result from the restraint of that action” (para. 65). Since the impugned conduct was the enforcement activities of the Department Fisheries against persons fishing without licences, the court ruled, that “the public interest is against creating a vacuum of authority”. Accordingly the court found that the balance of convenience did not favour granting an injunction.

Judicial Review - Injunctions - Declaratory Relief

McKay v. Canada (Minister of Fisheries and Oceans) (11 December 1998) No. T-1602-98 (Fed Ct. T.D.) (Weston J.)

This case involved an attack on the alleged privatization of the ground fish fishery in the Scotia-Fundy area by way of the creation of individual transferable fishing quotas. The case was brought as an action for both injunctive and declaratory relief. On a pre-trial application by the Defendant, the court struck the portions of the statement of claim asking for injunctive relief on the grounds that such relief can only be obtained by way of application for judicial review under section 18.1 of the Federal Court Act see: Mundle v. Canada (1995), 85 F.T.R. 258).

With respect to the declaratory relief sought, the court allowed the statement of claim to stand, as its allegations were consistent with the basis of challenge allowed by Carpenter Fishing Ltd. v. Canada (1997), 221 N.R. 372, namely "bad faith, nonconformity with the principles of natural justice where the application of those principles is required by statute, and reliance upon considerations that are irrelevant or extraneous to the statutory purpose."

Counsel for the Plaintiff: Bruce Wildsmith

Counsel for the Defendant: John Ashley

Judicial Review - Constitutional validity of terms and conditions imposed on Seal Observation Licences - interim injunction application against the Crown.

International Fund for Animal Welfare, Inc. v. Canada (Attorney General) (17 March 1998) No. 98-CV-5100 Ontario Ct. of Justice (General Division) (Chadwick J.)

This case involved a constitutional challenge of the conditions imposed upon observation licences for the East Coast seal fishery, issued under section 31 of the Marine Mammal Regulations.

The Plaintiff argued that the conditions imposed upon the licences prevented the Plaintiff from fulfilling its mandate of informing the public about the seal hunt and thus violated the Plaintiff's rights to freedom of expression under section 2(b) of the charter.

Upon applying for an interlocutory injunction against the crown, the Plaintiff's application was denied. In its reasons for judgment, the court said that when determining the balance of convenience in a constitutional case, one must go beyond considering just the interests of the parties to the suit. Interlocutory injunction are rarely granted because they have the effect of disrupting the orderly function of government (Manitoba A.G. v. Metropolitan Stores Ltd. [1987] 1.S.C.R. 110). The court refused to grant an injunction because it would cause harm to the public interest and restrain the Minister from exercising his power under the Fisheries Act.

In its reasons, the court referred extensively to Animal Welfare Inc. v. Canada 35 C.P.R.R. 359 where a similar application was reviewed by the Federal Court of Appeal. In that case, the court held that both regulations requiring observers to stay half a nautical mile from the hunt and the manner in which the regulations were implemented were not reasonably justified under section 1 of the Charter. A passage quoted from the Court of Appeal said as follows:

In fact, the permit procedure set up by the Regulations is official discretion at large, with no specified standards at all, not even verbal formulations of them. Limits on the freedom of expression cannot be left to official whim but must be articulated as precisely as the subject matter allows: Re Ontario Film and Video Appreciation Society and Ontario Board of Censors (1983),5 C.R.R. 373, 147 D.L.R. (3d) 58, 41 O.R. (2d) 583 (Div.Ct.), affd (1984), 7 C.R.R. 129, 5 D.L.R. (4th) 766, 45O.R. (2d) 80 (C.A.); leave to appeal to S.C.C. granted[(1984), 10 C.R.R. 384n] but appeal discontinued December17, 1985.
The locus limitation therefore fails on at least the second and third means tests: the means, far from being a minimal interference with the freedom of expression, do not even purport to limit the infringement as much as possible; moreover, the effects of the Regulations are clearly disproportionate to the legislative objective ,going far beyond what is necessary for that purpose.

Counsel for the Plaintiff: Clayton Ruby and Lesli Bisgould

Counsel for the Defendants: Charlotte A. Bell, Q.C. and Cassandra Kirewskie

Judicial Review - Decision of Minister to establish quota policy - legislative function

Carpenter Fishing Co. et al. v. Minister of Fisheries and Oceans (23 Dec. 1997) A-941-96; 1997 CanLII 6391 (Fed. C.A.), (Leave to appeal to S.C.C. denied 20 August 1998, S.C.C. Bulletin, 1998, p. 1194 & 19 November 1998 Bulletin 1998.)

On December 23, 1997, a unanimous decision of the Federal Court of Appeal overturned the Carpenter Fishing Decision.

Background Information

This case involved a challenge to the Current Owner Restriction (C.O.R.) of the individual quota system (I.V.Q.) set up for the halibut fishery in 1990. When the I.V.Q. system was implemented, it allocated the total quota amongst the licence holders on the basis of a formula allowing a weight of 30% for the length of the vessel and 70% for catch history of the licence in the best fishing year during the qualifying period of 1986 through 1989. The C.O.R. provided that if a licence was purchased during the qualifying period, the new owner of the licence was restricted to using landings for only the years when that operator held the licence. If a licence was purchased after the qualifying period, only the landings of the previous owner could be used.

The seven plaintiffs were all persons who were limited to a choice of less than the full four years in the qualifying period because they had acquired their halibut licences between the Fall of 1987 and February of 1990. After a six day trial of the matter in June of 1996, the Federal Court of Canada, declared that the C.O.R was a nullity and no longer enforceable by D.F.O. It then invited the parties to continue the trial at a later time to determine the damages to be paid to the plaintiffs for their loss of income between 1990 and the 1996. The trial court based its decision to declare C.O.R. a nullity upon the following grounds: (1) the consultative process for implementing the I.V.Q. breached the rules of natural justice and was undemocratic; and (2) the Minister of Fisheries acted for an improper purpose in endorsing a policy which was discriminatory.

The decision to overturn the decision of the trial court, was given by Mr. Justice Decarry with Pratt, J.A. and Linden J.A. concurring.

Consultative Process

With respect to the consultative process, the Court of Appeal said as follows: "When examining an attack on an administrative action - the granting of the licence - a component of which is a legislative action - the establishment of a quota policy - reviewing courts should be careful not to apply to the legislative component the standard of review applicable to administrative functions" (p.11). The court then held that since the establishment of a quota was a legislative function, the Minister of Fisheries was under no duty to consult at all. With respect to the trial courts criticism of the consultative process voluntarily adopted by D.F.O., the court said: "The finding by the Trial Judge that the process was undemocratic was at best irrelevant, at worst totally unsupported by the evidence" (p.13).

The court said that since the decision of the Minister to implement an I.V.Q. program was legislative in nature, his decision could only be challenged if the plaintiffs established either bad faith or reliance upon considerations that were irrelevant or extraneous to the statutory purpose of the Fisheries Act.

Irrelevant Purpose and Bad Faith

The Court of Appeal strongly criticized the finding of the trial court with respect to bad faith. The words of the court in this regard are worth quoting at length: "Allegations and findings of bad faith against a minister are so serious and damaging that the least one can expect from a litigant and trial judge is that they make them expressly and unequivocally. Unfortunately, in the case at bar, the respondents and the Trial Judge were content with elusive innuendos that make the task of the appellants and of this court very difficult . . . If the quota policy is adopted for a valid purpose . . . one cannot look at its effects to condemn the motives of its proponents"(p.12)

With respect to improper purpose, the trial court found the Minister's purpose for implementing C.O.R. to be improper because it discriminated against new entrants to the fishery in order to benefit and thus gain the support of, old entrants. The Court of Appeal referred to the Gulf Trollers Association case which found that Parliament may manage the fisheries for social or economic purposes, as well as to section 7, of the Fisheries Act which gives the Minister of Fisheries absolute discretion to issue fishing licences. It then concluded that the courts should give effect to the intent of Parliament to confer upon the Minister the "widest possible freedom to manoeuvre" (p.15). It is only when actions of the Ministry . . . are clearly beyond the broad purposes permitted under the Act that courts should intervene" (p. 15).

Upon reviewing the evidence of the trial court, the Court of Appeal noted that the imposition of individual quotas inescapably carries with it some element of arbitrariness and unfairness and then concluded as follows: " can it reasonably be said that a compromise which attracted the support of the halibut industry, which was centred on the personal fishing experience of the licence holders, which allowed for new entrants to participate in the quotas on the basis of the personal fishing experience of their immediate predecessor and which preserved the right of dissatisfied licence holders to challenge the quotas attributed to them under the chosen formula, is based on considerations irrelevant or extraneous to the statutory purpose of the Fisheries Act? Of course not" [emphasis added].

Severance of C.O.R.

In its reasons for judgement, the Court of Appeal noted that the plaintiffs were not attacking the I.V.Q. policy itself, they were simply attacking the portion of it which they did not like. In response, the court said as follows: "They asked the Trial Judge, for all practical purposes to substitute their own formula to that of the Minister, without any consultation with the industry and without any vote. In complying with their request, the Trial Judge became the Minister for a day and imposed a formula the effect of which on the halibut fishery is unknown and untested. This, clearly, the Trial Judge could not do . . . the most he could have done would have been to remit the matter back to the Minister for reconsideration and adoption of a different formula"(p.16).

Counsel for the Respondent: Murray Smith

Counsel for the Appellant: Not known

Judicial review - decision of Minister declining to grant a communal fishing licence

Labrador Metis Assn. v. Canada (Minister of Fisheries and Oceans) (3 Feb. 1997) (Fed. Ct. T.D.) (Rothstein J.)

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

Judicial Review - Jurisdiction of Superior Court to hear challenge to authority of Minister of Fisheries to authorize commercial food fishery under Aboriginal Communal Fishing Licences Regulations

Regina v. Cummins (10 November 1997) Vancouver Reg. No. A953384 (B.C.S.C.) (Thackray J.)

This case involved an action for a declaration that that section 6 of the Aboriginal Communal Fishing Licences Regulations is invalid by reason of an unlawful sub delegation of legislative power. The Crown sought a stay of the proceedings on the grounds that the action was essentially a matter of judicial review which was within the exclusive jurisdiction of the Federal Court by virtue of s. 18 of the Federal Court Act.

The Plaintiff argued that the action should be characterized as either an action concerning the validity of a federal enactment or alternatively an request for a "Dawson - type" declaration.

After a lengthy review of the law, the court accepted the argument of the Crown and characterized the action as a matter of judicial review which is in the exclusive jurisdiction of the Federal Court.

Counsel for the Crown: Paul Partridge

Counsel for the Plaintiff: Christopher Harvey

See also Neskonlith Band v. Canada (Attorney General) (22 Sept. 1997) (T-1497-97) (Fed. Ct. T.D.) (MacKay J.), digested under Aboriginal Rights and Defences.

Judicial review/Crown liability - Licences - compensation for closure of fishery - breach of contract

Puddister Trading Corporation Ltd. v Canada (28 May 1997), No. T-168-92 (Fed. Ct. T.D.) (Simpson J.)

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) (30 January 1997) No. 24682 (S.C.C.) (link)

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 [1994] 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 (link);

(2) Maple Lodge Farms Ltd. v. The Government of Canada [1982] 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).

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