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Section 27 of the Surface Rights Act and the Potential Fallout of Non-Compliance

Fri, 05/22/2015 - 10:00am

By: Fenner Stewart

PDF Version: Section 27 of the Surface Rights Act and the Potential Fallout of Non-Compliance

Legislation Commented On: Surface Rights Act, RSA 2000, c S-24

Section 27 of Alberta’s Surface Rights Act obliges operators to notify landowners of the opportunity to renegotiate leases, but provides no enforcement measures for operator non-compliance. This post explores the potential fallout.

1. Introduction

Alberta’s Surface Rights Act helps to encourage the negotiation of surface leases between landowners and operators. Whether granting a producer the right of entry to drill for oil and gas or granting an energy company the right to place a pipeline or power transmission line across one’s property, many landowners would not allow such operators access to their land if the force of law did not compel the right of entry. In mining and drilling cases, the common law recognizes an implied right of entry in conjunction with the granting of mineral rights. In pipeline and transmission line cases, the Crown can exercise its power of expropriation to take private property for public use. In these situations, the legal authority for such rights of entry is not dependent on any power granted by the Surface Rights Act.

The primary purpose of the Surface Rights Act is to avoid litigation when an obstinate landowner rejects all reasonable offers for compensation in exchange for access to their property. When negotiations breakdown, the Surface Rights Board intervenes and establishes the terms, including compensation, of the surface lease. By offering an alternative to a privately negotiated lease, the Act promises to break deadlocks between lessor-landowners and lessee-operators resulting in expedited energy projects. Further, it is hoped that by providing an alternative to the more adversarial judicial system, more amicable relations between landowners and operators will develop even in less than ideal circumstances.

Unfortunately, section 27 of the Surface Rights Act appears to be undermining the goal of facilitating amicable relations. Section 27 aspires to initiate the renegotiation of a surface lease every 5 years. Such renegotiations are necessary so that the parties can review the compensation payable in light of variables arising and evolving over the lease term. These variables include: the compensation that other landowners recently received, the per acre value of the land, the actual loss of use, and other adverse effects such as damages. The problem lies in section 27’s requirement that obliges the operator to notify the landowner of the opportunity to renegotiate the lease. Predictably, the landowners rely upon this notification requirement. The Act, however, provides no punitive measure for non-compliance; this, in turn, leaves the operator to follow market incentives. Since renegotiating a lease usually costs the operator more through additional compensation payouts, this incentive encourages the operator, as a rational market actor, to ignore the notification requirement. Non-compliance with the requirement frustrates the landowner when he or she discovers they were short changed by the operator; this ultimately undermines the goal of amicable relations. Undermining amicable relations is precisely what the drafters of the Surface Rights Act were attempting to avoid. In contemplation of this regulatory failure, this article explores the pitfalls of this legal quagmire for landowners, the Alberta government, and even the operators who appear to be profiting from the situation.

2. Landowners

If the landowner can look past this additional point of contention with the process, he or she may see the advantage in the situation. To start, the landowner can apply to the Surface Rights Board to adjust the compensation and remedy the situation. If the rate of compensation is higher, the operator will be required to back pay the difference, plus interest if appropriate. So the landowner will not miss out on any compensation. Furthermore, if the operator is failing to provide notice as a normal course of business, which appears to be what is happening in some cases, the operator may neglect to notify the landowner even when it is in its own benefit to do so. The landowner is under no obligation to remind the operator of this failure to negotiate if it is not in the landowner’s interest to do so. In addition, if the operator overpays, the Board will not require the landowner to reimburse the overpayment. The landowner can enjoy the windfall without fearing adverse consequences down the road.

The only potential pitfall for the landowner is the time limitation for providing his or her notice to the operator; the Act requires landowners to provide notice to the operator of his or her intention to have the Board review the compensation. This notice needs to be given within a reasonable period of time measured from the date the renegotiation ought to have occurred. So the landowner will not be able to reach back indefinitely to claim additional compensation. This is fair; if renegotiation fails to occur, the landowners are not blameless. They ought to read their leases and know their rights. The regulatory requirement that the operator needs to provide notice should be considered a courtesy to the landowner, and it should not be used as a reward to landowners who mismanage their business affairs. The time limitation reflects this balance.

3. The Alberta Government

Systemic non-compliance occurs, most often, when regulators fail to appreciate other normative pressures placed upon those subjected to their regulation. The most obvious of these normative pressures, especially for businesses, are market pressures. All for-profit actors exist in competitive marketplaces; they need to be profitable to survive. On a fundamental level, business decision-makers evaluate potential options for profit in light of the potential risks associated with each option. From this vantage point, a regulation is merely a single risk in the complex spectrum of risks that must be successfully navigated to achieve profit. The bottom line is that if non-compliance is profitable, profitable businesses will not comply. Regulators ignoring this slightly cynical truism, do so at their peril. Section 27 is a perfect example; the regulatory drafters ignored the market incentives for non-compliance and achieved the foreseeable result: non-compliance.

Some might regard section 27’s failing as insignificant, considering the landlord’s ability to recoup losses, but regulators should never create rules that habitually encourage non-compliance. Those subjected to such regulatory incompetence understandably conclude that regulators are either indifferent to the rule breaking or too inept to notice. This can nurture an unpredictable culture of non-compliance, which impacts the integrity of the entire regulatory field, and can result in much more serious regulatory failures in the future.

Of course, to err is human, but it is less understandable when no effort is made to correct an obvious pattern of perpetual failure. In other words, regulatory shortcomings will occur, but when identified, they ought not be allowed to persist; in fact, they ought to be fixed as soon as reasonably possible. In the case at hand, the regulator should devise an adequate mechanism to inspire compliance, but requiring compliance with full knowledge of systemic non-compliance ought to stop—better to not regulate at all. So, at bare minimum given the present circumstances, the regulator ought to repeal the notice requirement.

 4. Operators

At first blush, there appears to be little incentive to comply with the notice requirement. A shrewd operator will appreciate that not all landowners will petition the Board to review the rate of compensation, which saves it money presuming renegotiation increases compensation. Also, an operator may have a significant number of surface leases in Alberta. Managing each of them incurs administrative expenses, including: the cost of ensuring that the landowner receives notice as prescribed, the cost of renegotiating the lease, and potentially the cost of preparing for a review by the Board. The only potential cost of non-compliance is the interest charged upon the back pay, and such interest is only charged when the Board deems it appropriate. Even if interest is charged, a rational market actor will appreciate that the present discounted value of money will mitigate the said interest payment. Accordingly, based solely on the immediate economic considerations outlined above, no operator ought to comply with this requirement.

However, if operators focus solely upon these immediate economic considerations, they may win the battle but lose the war. To appreciate this warning, one needs to step back and adopt a more farsighted cost-benefit analysis. To start, the benefit is marginal to most operators. The savings of non-compliance is minuscule relative to the operating budgets of the relevant players in Alberta. It is fair to say that for the average oil and gas producer, these gains would have no noticeable impact upon their bottom line. Of course, achieving impressive operational efficiency is a details game; every penny counts, but risk-reward needs to be kept in balance. If the reward is a small one, the risk ought to be as well.

The risk analysis starts with section 27. Prima facie, there appears to be no cost in non-compliance. The formula is simple: potential cost of interest less the present discounted value of money equals zero—or next to zero. Of course, this assumes that there are no additional costs. This begs two questions. Does this strategy aggravate landowners? If yes, does it matter?

In answering the first question, when the surface owner does not own the subsurface mineral interests, they receive relatively little of the gain and suffer the majority of the inconvenience of drilling and production. In fact, there is generally not a natural market because there is not a willing supply of landowners lining up asking oil and gas producers to start drilling on their land. Anyone who knows the business of upstream oil and gas can appreciate that such production does little to add to the quiet enjoyment and value of one’s property. It is safe to say, without engaging in formal empirical research, that most surface owners who do not have a stake in the oil and gas royalties would prefer no development on their land.

One would think that in the United States of America, where freedom is intimately connected to the right of private property, the imposition of the right of entry would be less acceptable than in Alberta; this is not that case. In America, when surface owners buy land with severed mineral interests or choose to sever the mineral interest, they generally accept that they own only a portion of the land. Furthermore, the right of entry is taken into account when negotiating the purchase price of the land. From this perspective, the implied right of access is more palatable. At the most rudimentary level, if the landowners do not like their situation, they should not have bought into the situation in the first place. In other words, the landowner chose this potential inconvenience when they purchased the property with the severed interest or sold such mineral interest to another. The right of entry is just part of the deal.

In Alberta, the provincial Crown owns approximately 81% of subsurface rights—66 million hectares. Generally speaking, Alberta landowners never chose to sever the mineral interest; never chose to purchase land with a split title; and arguably paid a price that was not properly discounted to reflect the implications of these realities. To put differently, they were cut out of the deal from day one. Thus, Alberta landowners, unlike American landowners, are less amicable to drilling and production on their land. Without choice, they do not see themselves as the author of these impositions. Rather, the lack of choice creates the perception, rightly or wrongly, that oil and gas producers and the provincial Crown are imposing themselves upon the landowner and profiting handsomely from doing so. Thus, it is not surprising that the surface lease issue is contentious in Alberta as Dome Petroleum Ltd v Richards, (1985) 66 AR 245 so clearly demonstrates.

So, does it matter if non-compliance alienates landowners? Yes. The current oil and gas business in Alberta requires polish and a deft touch; operators need all the public support they can muster. For instance, consider the challenge posed by today’s environmental activists. Simple industry reform, to many, will not avoid dangerous climate change; they are squarely fighting to have the use of fossil fuels phased out completely. These activists are not only targeting politically embedded carbon producers, like the coal industry, but also soft targets, such as pipelines, hydraulic fracturing, and other non-conventional forms of production. Needless to say, this is not good news for producers of Alberta’s crude.

Furthermore, hydraulic fracturing is transforming America, in particular the Midwest, from a customer to a competitor. Alberta crude needed access to new markets even before the “U.S. Shale Gale,” but today the Cushing Hub is starting to look less and less like a reliable option to meet Canadian needs. For a case in point, America’s Senate shelved Keystone XL, after an icy President Obama declared: “Understand what this project is. It is providing the ability of Canada to pump their oil, send it through our land, down to the Gulf, where it will be sold everywhere else.” Obviously, Canadian-American cooperation generated by the politics of peak oil has shifted—at least for now.

Regardless of the future of Keystone XL, Alberta crude still needs at lease one significant pipeline from Alberta to a Canadian coast. This has been complicated by recent events, including the Tsilhqot’in Nation case, 2014 SCC 44, coupled with the new pressures placed upon the Assembly of First Nations, the promise of more public demonstrations such as the Burnaby Mountain Protests, and the opposition to an “Alberta” pipeline expressed by Southern Quebec and other such Eastern constituents. Finally, to add insult to injury, crude prices are falling dramatically amidst a shift in the geopolitics of global oil markets that no one—except maybe the Saudis—fully understand. The only thing that appears clear is that there is willingness to allow crude oil prices to remain uncomfortably low, at least for Canadian oil sands producers, for the foreseeable future.

In sum, what’s the benefit? Basically, there isn’t one: a nominal cash savings. On the other hand, it is the little things, such as this non-compliance, that can swing public support against the industry, and there is not much room to squander goodwill as it is. In light of this, non-compliance with section 27 makes little sense.

An earlier version of this post was first published in CAPL’s “The Negotiator” in February 2015. With CAPL’s permission, the Farmers’ Advocate Office at Alberta’s Ministry of Agriculture and Rural Development will republish it in May 2015.

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The Application of stare decisis in Administrative Decision-Making

Tue, 05/19/2015 - 10:00am

By: Shaun Fluker

PDF Version: The Application of stare decisis in Administrative Decision-Making

Case Commented On: Altus Group v Calgary (City), 2015 ABCA 86

In Altus Group v Calgary (City), 2015 ABCA 86, the Alberta Court of Appeal confronts the application of stare decisis to administrative tribunal decision-making. Some would say it is a truism that statutory decision-makers are not bound by precedent given the fact-intensive and policy-laden nature of their work, and that most tribunal members have little or no substantive legal training. Jurists of Diceyan thought have surely held this position and indeed typically point to the very absence of stare decisis in administrative law to bolster their suspicion of and disregard for statutory decision-making and to justify the need for intrusive judicial scrutiny. In modern times, a tribunal seeking to downplay arguments based on precedent might be expected to respond along the lines of “[w]hile our earlier decisions may be relevant and even persuasive in this case, we are not bound by these previous rulings.” But on the other hand, many administrative law practitioners have no doubt appeared before a tribunal who references its earlier decisions and the need for consistency to support a particular ruling. Perhaps all we can say for sure is that the application of stare decisis to administrative decision-making is a tricky business.

The need for consistency in administrative decisions is starting to gain some traction in Canadian administrative law at the expense of the traditional rule that a statutory tribunal is not bound by its prior decisions. In particular, this issue has arisen in the context of statutory interpretation by administrative decision-makers. I raised this point earlier in Some Thoughts on the Presumption of Deference under the Dunsmuir Framework in Substantive Judicial Review wherein I questioned the ruling in Alberta Treasury Branches v Alberta Union of Provincial Employees, 2014 ABQB 737, that it was lawful for a statutory decision-maker to completely depart from an earlier interpretation of provincial legislation.

In Altus Group the Court of Appeal has ruled that while an administrative tribunal is not bound by its previous decisions and is free to adopt any reasonable interpretation of its home legislation in a matter before it, previous interpretations given to that legislation will have some bearing on the reasonableness of the tribunal’s interpretation in a current matter (at paras 16 – 31). Whether this decision is helpful in clarifying the application of stare decisis in administrative decision-making is open to question. It seems to me while the Court begins by asserting that stare decisis is not applicable to an administrative decision-maker, in the end the Court rules that stare decisis does apply to how an administrative decision-maker interprets its home legislation. And since the vast majority of administrative decisions involve some measure of statutory interpretation, this decision is arguably a significant change from the traditional rule.

The Court observes that little attention has been paid to conflicting statutory interpretations given by administrative tribunals and the need for consistency in statutory decision-making (at para 19). The issue is commonly understood as arising from the conflict between two fundamental norms in public law: (1) the separation of powers doctrine that calls on the judiciary to respect the intention of the legislative branch to empower an administrative tribunal to make legal determinations within its specialized area; and (2) the rule of law that abhors arbitrary decision-making by public officials and calls for similar treatment in legal determinations.

The leading authority on this topic is the Supreme Court of Canada’s 1993 decision in Domtar Inc v Quebec, [1993] 2 SCR 756, 1993canlii106, which ruled that conflicting interpretations by an administrative tribunal of its home legislation does not constitute an independent basis for judicial review. Madam Justice L’Heureux Dubé held that allowing the superior courts to resolve conflicting administrative decisions would inevitably thwart the intention of the legislature to empower administrative decision-making to make legal determinations within its specialization, as jurisprudential conflicts would develop over time in mature administrative regimes and eventually demand intrusive judicial review. The Court stated that any conflicts within administrative law that are truly offside the rule of law should be remedied with legislative action (Domtar at 794-800). We might say this decision asserts the norm of curial deference over the rule of law.

This line of authority can be seen in the more recent iterations by the Supreme Court on applying the reasonableness standard to review the interpretation given by an administrative tribunal to its home legislation. Perhaps the most striking illustration of this is the Supreme Court’s 2013 decision in McLean v British Columbia (Securities Commission), 2013 SCC 67. This case involved a dispute over the interpretation of a provision in the Securities Act, RSBC 1996, c 418, given by the British Columbia Securities Commission. In upholding the interpretation provided by the statutory agency, Justice Moldaver stated that there may be competing lawful interpretations of the same legislative provision (at paras 40, 41, emphasis by the Court):

The bottom line here, then, is that the Commission holds the interpretative upper hand:  under reasonableness review, we defer to any reasonable interpretation adopted by an administrative decision maker, even if other reasonable interpretations may exist.  Because the legislature charged the administrative decision maker rather than the courts with “administer[ing] and apply[ing]” its home statute (Pezim, at p. 596), it is the decision maker, first and foremost, that has the discretion to resolve a statutory uncertainty by adopting any interpretation that the statutory language can reasonably bear.  Judicial deference in such instances is itself a principle of modern statutory interpretation.

Accordingly, the appellant’s burden here is not only to show that her competing interpretation is reasonable, but also that the Commission’s interpretation is unreasonable.  And that she has not done.  Here, the Commission, with the benefit of its expertise, chose the interpretation it did.  And because that interpretation has not been shown to be an unreasonable one, there is no basis for us to interfere on judicial review — even in the face of a competing reasonable interpretation.

Justice Moldaver applied the modern principle of statutory interpretation to conclude that the interpretations put forward by the Appellant and the Commission were both reasonable given the applicable facts and law, and that the principle of curial deference required the Court to uphold the interpretation given by the Commission rather than adopt the interpretation put forward by the Appellant.

The question more particularly at issue in this post would be whether the Commission is then able to adopt the Appellant’s competing interpretation of the Securities Act in a subsequent proceeding on similar facts? Is it still the case that the curial deference espoused by Justice Moldaver requires the reviewing court to respect this choice by the Commission as well? One argument would surely be that since both interpretations were seen as reasonable by the Court in the Mclean case, curial deference (and arguably stare decisis itself) requires that both interpretations remain reasonable in any subsequent proceedings. However the rising line of authority that calls for consistency in legal determinations suggests otherwise.

Canadian courts have supported the need for consistency in administrative decision-making on many occasions. The Supreme Court of Canada relied on the need for consistency when it qualified the rule of natural justice that “she who hears decides” by acknowledging the legitimacy of institutional consultations within an administrative agency on specific cases to ensure individual adjudicators or panels of that agency render consistent findings on substantively important topics within their regulatory area (IWA v Consolidated Bathurst, [1990] 1 SCR 282, 1990 Canlii 132). More recently in Communications, Energy and Paperworkers Union of Canada, Local 30 v Irving Pulp & Paper, 2013 SCC 34 , Justices Moldaver and Rothstein (in dissent) speak of the need for statutory decision-makers to consider prior rulings in their field. Irving Pulp& Paper involved the review of an arbitration decision on a labour grievance dispute concerning random drug testing in the workplace, and Justices Moldaver and Rothstein remarked (at paras 77, 78):

Thus no arbitral board is an island unto itself. As it is with the common law, which matures with the benefit of experience acquired one case at a time, so it is with the arbitral jurisprudence. Indeed, in this case, the arbitral board cited multiple prior arbitral awards for the proposition that Mr. Day had a right to privacy in his workplace . . .

Respect for prior arbitral decisions is not simply a nicety to be observed when convenient. On the contrary, where arbitral consensus exists, it raises a presumption – for the parties, labour arbitrators, and the courts – that subsequent arbitral decisions will follow those precedents. Consistent rules and decisions are fundamental to the rule of law.

This decision and others in this camp assert the rule of law over curial deference. The significance here is that once an administrative tribunal has adopted a particular interpretation of its governing legislation which is found to be reasonable by a reviewing court, the tribunal is no longer free to adopt another interpretation – arguably contrary to what the Supreme Court of Canada suggested in McLean. The scope of what amounts to a reasonable decision under the presumption of deference is significantly narrowed once a statutory tribunal has established a body of decisions in its area.

The Irving Pulp & Paper decision also illustrates some of the difficulty faced by a reviewing court when it digs into the jurisprudence of an administrative decision-maker. Just how far should a reviewing court dig? In assessing the reasonableness of the board’s decision in Irving Pulp & Paper, the majority of the Court found the arbitration board had given careful attention to the consensus of prior arbitral awards in balancing workplace safety and employee privacy (at paras 29-42). In contrast, the dissenting justices held the board departed from that consensus because it held the employer in this case to a higher evidentiary burden without any explanation, and that accordingly its decision was unreasonable because it departed from the jurisprudence without explanation (at paras 98-111). Arguably the Irving Pulp & Paper dissent is exactly the sort of intrusive review – guised as deference – that Justice L’Heureux Dubé cautioned against in Domtar.

In Altus Group the Court of Appeal gives likewise gives emphasis to the need for consistency in administrative decision-making over curial deference, noting it is difficult to conceive of meaningful legislation that allows for competing, reasonable interpretations (at paras 23-30). The Court concludes:

[W]hile an administrative decision-maker is unconstrained by the principles of stare decisis and is free to accept any reasonable interpretation of the applicable legislation, the reasonableness standard does not shield directly conflicting decisions from review by an appellant court. In assessing the reasonableness of statutory interpretation by the administrative tribunal, the appellant court should have regard to previous precedent supporting a conflicting interpretation and consider whether both interpretations can reasonably stand together under principles of statutory interpretation and the rule of law. (at para 31, emphasis mine)

Query whether a reviewing court can insist on consistency in administrative decision-making, while remaining true to the principle of curial deference called for under the reasonableness standard in Canadian administrative law? We can begin to see why the application of stare decisis to administrative tribunal decision-making is a fundamental problem for Canadian administrative law. Administrative decisions by their very nature usually involve statutory interpretation. As John Willis persuasively observed almost a century ago, the nature of legislative drafting is such that in cases where parties are willing to spend money to argue their case on a statutory provision you can be sure there are at least two compelling interpretations of that provision (John Willis, “Statutory Interpretation in a Nutshell” (1938), 16 Can Bar Rev 1). Thus most administrative decisions will require a statutory tribunal to choose between reasonable, competing interpretations of its governing legislation. How is it then possible to both defer to the interpretation given by a statutory tribunal and also insist on consistency in those interpretations? The real answer is that it is not possible to reconcile these public law norms in the case of statutory interpretation by administrative tribunals. Any attempt to reconcile will either be an application of correctness under the guise of reasonableness or some fudging on whether there is more than one reasonable interpretation of the statutory provision in question.

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Assessing Canada’s Habitat/Fisheries Protection Regime: A Near Total Abdication of Responsibility?

Fri, 05/15/2015 - 10:00am

By: Martin Olszynski and Alex Grigg

PDF Version: Assessing Canada’s Habitat/Fisheries Protection Regime: A Near Total Abdication of Responsibility?

Legislation Commented On: Section 35 of the Fisheries Act, RSC 1985 c F-14, as amended by the Jobs, Growth and Long-term Prosperity Act SC 2012, c 19

Roughly three years ago (on June 29, 2012), Bill C-38, the omnibus budget bill also known as the Jobs, Growth and Long-term Prosperity Act, received royal assent. As most ABlawg readers will surely know, Bill C-38 fundamentally changed some of Canada’s most important environmental laws. Among these were changes to the Fisheries Act and a new regime for the protection of fish habitat in particular. Section 35 of the Act, which used to prohibit any work or undertaking that resulted in the “harmful alteration or disruption, or the destruction” (HADD) of fish habitat, was amended to prohibit works, undertakings and activities that result in “serious harm to fish that are part of a commercial, recreational or Aboriginal fishery,” serious harm being defined as “the death of fish or any permanent alteration to, or destruction of, fish habitat” (DPAD). At the time of Bill C-38’s passage, this wording was widely panned as vague, confusing and bound to reduce the scope of protection for fish habitat (see here, here, here, here and our own professor emeritus Arlene Kwasniak here). This summer – and with a view towards a Fisheries Act panel at the Journal of Environmental Law and Practice’s 5th conference in Kananaskis in June – we are conducting research to assess the merits of this new regime. This blog sets out our approach and some preliminary findings. Long story short, it appears that the federal government has all but abdicated its role in protecting fish habitat in Canada.

Background

Section 35 has always been more of a regulatory regime than a prohibition. Impacts to fish habitat prohibited by subsection 35(1) could be – and still can be post-Bill C-38 –authorized by the Minister, through the Department of Fisheries and Oceans (DFO), pursuant to subsection 35(2). Prior to Bill C-38, this regulatory regime generally worked as follows. DFO would receive inquiries or authorization requests from proponents (referred to as “referrals”), which it would then review to determine if a HADD was likely to occur. DFO would then do one of two things. For low risk projects, it would provide advice to proponents on how to avoid a HADD and, consequently, the need for an authorization. Such advice could be found in a letter specific to the proponent (referred to as a Letter of Advice) or in an Operational Statement (essentially a generic Letter of Advice available on DFO’s various regional websites for certain, usually routine, kinds of projects, e.g. culvert cleaning and beaver dam removal). In the case of the latter, DFO simply requested that proponents voluntarily notify DFO of their project. If avoidance of a HADD was not possible, DFO would require proponents to obtain an authorization, which until 2012 also triggered the need for an environmental assessment (EA) pursuant to the previous federal EA regime.

As noted above, Bill C-38 received royal assent in June 2012, but the changes to the Fisheries Act were not brought into force until November 25, 2013. Around that time, changes were also made to the manner in which DFO conducts its business. Operational Statements have been replaced with a “self-review” feature on DFO’s primary fisheries protection website. Here, project proponents are provided information and advice about the kinds of waters and works that DFO has determined do not require an authorization, with the important difference that there is no longer any way for proponents to notify DFO of their projects. Proponents are also encouraged to seek advice from a Qualified Environmental Professional (QEP), which suggests that Letters of Advice will also be less frequent; no doubt a reflection of the fact that the department had its budget reduced by $80 million in 2012 and another $100 million in 2015.

The Minister of Fisheries and Oceans also released the Fisheries Protection Policy Statement (October 2013), which set out her interpretation of the new “fisheries protection” regime and which replaced the Policy for the Management of Fish Habitat that had been in place since 1986. The stated goal of the 1986 policy was to ensure “No Net Loss” (NNL) of the productive capacity of fish habitats, which would be achieved by requiring compensatory (offsetting) fish habitat when authorizing any HADDs. DFO had a hard time achieving this objective, in large part due to inadequate monitoring and enforcement activity (see here and here). Under the new fisheries protection regime, the goal is “to provide for the sustainability and ongoing productivity of commercial, recreational and Aboriginal fisheries” directly (Fisheries Act, s 6.1).

Approach

To gain some insight into how DFO is actually implementing the new fisheries protection regime and the implications for fish habitat in Canada, we are currently analyzing over 150 subsection 35(2) authorizations issued by DFO’s two largest regions (the Pacific and Central & Arctic Regions) over a six month period (May 1 – October 1) for the years 2012, 2013, and 2014 (2014 being the first year under the new regime). Because DFO does not maintain a public registry, these authorizations were obtained through the federal Access to Information Act, RSC 1985 c A-1. By analyzing and comparing these authorizations, we hope to get a better sense of how the new regime is different from the previous one, especially with respect to the relevant level of harm (HADD v. DPAD) and the new requirement that fish be part of, or support, a fishery in order for their habitat to receive protection.

In order to help frame the analysis and provide additional baseline information, however, we are also analyzing and compiling data from twelve annual reports to Parliament by DFO (2001/02 – 2013/14). These reports are statutorily required by section 42.1 of the Fisheries Act and must include information on “the administration and enforcement of the provisions of the Act relating to fisheries [previously habitat] protection and pollution prevention for that year,” as well as a statistical summary of convictions under the Act. They contain information regarding the number of referrals that DFO received in a given year, the number of authorizations issued, as well as DFO’s enforcement activities (e.g. the number of warnings issued, charges laid, as well as convictions reported) – all broken down by project type and region. The preliminary findings discussed below come from our initial analysis of these twelve annual reports.

As a quick aside, readers can access the 2012/13 report here, and previous reports here and here. To access the 2013/14 report, readers must click here. This is because it is not yet available on DFO’s website (or anywhere else on the internet for that matter), notwithstanding the fact that it is May 2015 and that these reports are supposed to be tabled in Parliament “as soon as feasible after the end of each fiscal year” (section 42.1). Indeed, it took considerable (student) sleuthing to discover that Minister Shea had in fact deposited the 2013/14 report with the Clerk of the House of Commons less than a month ago (April 21, 2015), at which time it was apparently sent to the Standing Committee on Fisheries and Oceans (though you won’t find the report on its website either). We obtained our copy by contacting the Library of Parliament directly.

Preliminary Findings

Figure 1 (below) demonstrates that the total number of authorizations issued by DFO (nationally) (right axis) has declined from a high point of almost 700 in the 2003/04 fiscal year to roughly 150 for 2013/14. The most dramatic drops occurred between 2006 – 2008 and then again in 2012 – 2014. Similarly, the number of referrals that DFO reviewed has also declined. The most dramatic decline in referrals occurred between 2004 and 2006. The slight lag in the drop in the number of authorizations issued around that time makes sense when one considers that referrals would take on average two years to process (thus the decline in authorizations in 2006 is likely a reflection of the decline in referrals in the preceding two years). That is not the case, however, with respect to the declines in both authorizations and referrals immediately following the passage of Bill C-38 in 2012, bearing in mind that the changes to the Fisheries Act were not brought into force until November 25, 2013 (in other words, the data below includes only four months of activity under the new regime). These declines appear consistent with a Vancouver Sun story from June 2014, wherein the chair of the Fraser Valley Watersheds Coalition suggested that “[t]he level of disturbance has clearly increased in recent years… people got the memo that now is the time, no one is watching, the rules are vague, your chances of being prosecuted are virtually none.” As for those four months under the new regime (November 25, 2013 – March 31, 2014), DFO only issued 17 authorizations in that time. Pro-rated to a yearly average, that would be 51 – or an 83% decline from an average of 300 authorizations/year in the years prior to the passage of Bill C-38.

Overall, this information can only mean one of two things. Either project proponents have become exceedingly good at understanding and avoiding impacts to fish habitat, or they have had increasingly less reason to worry about the consequences of those impacts. We are going to suggest the latter for two reasons.

First, the decline in referrals between 2004 and 2006 coincides with DFO’s launching of its “Environmental Process Modernization Program” (EPMP), which is referred to widely in its annual reports for those years. The goal of the EPMP was to “contribute to more efficient and effective delivery of its regulatory responsibilities and to support the federal smart regulation agenda” (Fisheries and Oceans Canada, 2005. Annual Report to Parliament on the Administration and Enforcement of the Fish Habitat Protection and Pollution Prevention Provisions of the Fisheries Act, April 1, 2003 to March 31, 2004 at 7). Probably the most tangible result of that program was the development of DFO’s “risk management framework” (below – as found in DFO’s “Practitioners Guide to the Risk Management Framework for DFO Habitat Management Staff” at 18), pursuant to which risks to fish habitat were classified as high, medium and low, with high-risk projects receiving site-specific review and authorization, medium risk projects being subjected to streamlined authorization processes, and low risk projects being subject to advice and Operational Statements.

What is striking about this figure is the upward and seemingly arbitrary placement of the low-risk threshold, which results in this category taking up roughly 60% of the available matrix space. This is remarkably consistent with an approximately 60% reduction in authorizations following the implementation of the EPMP starting around 2004/05 (see Figure 1).

Our other reason for suggesting that fish habitat is likely being degraded may seem simplistic but here it is nevertheless: if project proponents had become pros at avoiding impacts to fish habitat, it seems unlikely that they would bother to lobby for changes to the Act. The only other alternative is that they were pros, but compliance was deemed too costly (see preceding link). In either case, the future for fish habitat – and Canadian fisheries – appears bleak.

There is, of course, a simple way to test our theory: compliance and enforcement. With all of the time and resources saved by the reductions in project review, one might reasonably expect a shift towards increased compliance and enforcement activity. Here too, however, we see a dramatic decline, as set out in Figure 2:

It would be one thing if, all other things being equal, the number of charges laid decreased over time. But that is not the case. There has also been a dramatic decrease in the number of warnings issued since 2001/02, again most notably following the implementation of the EPMP in 2004 but also from 2010 onwards. The most telling trend, however, is in the number of hours actually allocated to enforcement. These numbers only began to be reported in the 2009/10 fiscal year, but saw a significant decline (~ 75%) since 2012/13.

A near-total abdication of the federal government’s role in protecting fish habitat in Canada? Looks like it. Stay tuned for more in June.

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A “Convicted Terrorist” By Any Other Name

Wed, 05/13/2015 - 11:45am

By: Maureen Duffy

PDF Version: A “Convicted Terrorist” By Any Other Name

Case Generally Considered: Pelham, Warden of the Bowden Institution, et al. v. Khadr, No. 36081 (Alberta) (Criminal) (SCC, By Leave); Bowden Institution v Khadr, 2015 ABCA 159; Khadr v Bowden Institution, 2015 ABQB 261; Canadian Broadcasting Corporation v Warden of Bowden Institution, 2015 FC 173; Khadr v Edmonton Institution, 2014 ABCA 225; Khadr v Edmonton Institution, 2013 ABQB 611

“What’s In a Name?”

Shakespeare famously wrote:

’Tis but thy name that is my enemy;

Thou art thyself though, not a Montague.

What’s Montague? it is nor hand, nor foot,

Nor arm, nor face, nor any other part

Belonging to a man. O! be some other name:

What’s in a name? that which we call a rose

By any other name would smell as sweet …

The idea, of course, is that names may be superficial labels, which do not, by themselves, define the character of the person to whom they are attached. Rather, they can be misleading, giving an impression of a person that is entirely different from reality.

A name, or a label, can be dispositive, however, if your name happens to be “Omar Khadr.” While Khadr’s status, both legally and in the public perception, should have been based on the specific facts and the law regarding his case, the reality is that the Canadian Government has gone to lengths to build a narrative around him, which does not match those facts or that law. Although the U.S. Government is largely responsible for the many abuses Khadr suffered in the eight years he was in U.S. custody, his case seems to be less in the public eye in the U.S., so this phenomenon has not played out in quite the same way there.

Khadr’s case provides a disturbing example of ways in which the public narrative created around a story can overshadow, and even contradict, the story itself. It would not be possible, in a posting like this, to comprehensively explore this theme relating to Khadr, since this phenomenon played out over a period of approximately 13 years. The intent, rather, is to illustrate this problem through several specific examples. The problem is significant, because the media in Canada picked up on much of the discourse used by the Government, and several misconceptions appear to have thus become embedded in some of the public discourse. That problematic perception became apparent this past week, as Khadr was released on bail, pending the appeal of his Military Commission “conviction,” and as the Supreme Court of Canada hears one of the outstanding legal issues on this case on May 14, 2015.

The statements routinely made by the Canadian Government, echoed by the media, suggest that Khadr is some sort of hardened terrorist, convicted of terrible crimes. To genuinely believe that, though, one must overlook virtually every aspect of his case, right from the very beginning.

I have blogged about some of the serious lapses in the handling of Khadr’s case by U.S. authorities, here, and, to a lesser extent, here, and here. While the extensive litigation, in two countries, may make this case appear complex, the underlying issues are actually quite straightforward and not consistent with the public narrative presented. It is only by considering the context of what happened that a true narrative can emerge.

“Sticks and Stones May Break My Bones, But Names Can Never Hurt Me”

The “Convicted Terrorist” and/or “Convicted War Criminal”

The Canadian Government, and much of the media, often call Khadr a “convicted terrorist,” or sometimes a “convicted war criminal.” Aside from the fact that these terms are not simply interchangeable in the way such usage suggests, there are numerous other problems with these labels.

It is arguable that Khadr is not a “convicted” anything. The problems with the way Khadr was treated date back to 2002, in a virtually unbroken chain, so they are extensive, but well documented. The many problems with each step of his proceeding have been seriously critiqued as undermining the legitimacy of any ultimate “conviction.”

For example, there is the over-arching problem with the notorious Guantanamo Bay prison, which the U.S. uses to warehouse people it accuses of terrorism, but is unwilling to try before a legitimate court, established under Article III of the U.S. Constitution. The prison has been widely denounced for egregious human-rights violations, and it has been referred to as a “legal black hole.”

Then there is the important fact that Khadr was tortured. While the extent of his torture has been the subject of some dispute, the fact of his mistreatment was acknowledged by some of his interrogators and accepted as fact by the Supreme Court of Canada (see Canada (Prime Minister) v. Khadr, [2010] 1 SCR 44, 2010 SCC 3 (CanLII)). In real courts, evidence obtained through torture is inadmissible. In the parallel world of Guantanamo Bay, however, a military judge ignored even the admissions of mistreatment by Khadr’s interrogators to find that he had not been mistreated.

There is also the problem with the very existence of the Military Commissions. The U.S. has a sophisticated court system, sanctioned by the U.S. Constitution, which is perfectly capable of trying allegations relating to terrorism. In fact, numerous high-profile terrorism prosecutions have been successful before U.S. courts, such as that of Richard Reid, the so-called “Shoe Bomber”, or Umar Farouk Abdulmutallab, the so-called “Underwear Bomber”. Those cases both involved plots to attack a civilian population, not the alleged tossing of a grenade in the heat of a battlefield firefight, so they also highlight substantive problems with calling Khadr’s alleged actions “terrorism” at all.

For those detained at Guantanamo Bay, the U.S. Government has gone to great lengths to avoid the U.S. court system. To avoid U.S. courts, President George W. Bush simply made up a parallel system, a fabricated Military Commission system, after the 9/11 attacks. Although the specifics have since evolved, it was obvious from the original structure of the Military Commissions that they were intended to avoid the due process guaranteed under the U.S. Constitution. The Military Commission system was amended, and supposedly “improved” – although arguably made worse – through the iterations of the Military Commissions Acts of 2006 and 2009, in the face of successful challenges before the Supreme Court of the United States (see Hamdan v. Rumsfeld, 548 U.S. 557 (2006)). The Military Commissions are still widely denounced as violating international standards for fair trial, as well as those mandated by the U.S. Constitution. David Glazier, an American law professor and former member of the U.S. Navy, summed up the Military Commissions by saying “[t]here’s no plausible reason for the government to be using these military commissions, they’re really just a complete failure on every level.” Nathan Whitling, one of Khadr’s lawyers, has referred to the Military Commissions as “kangaroo court[s].”

The list goes on, of course. Khadr was held for eight years with no trial before his hearing at the questionable Military Commission even began. He was charged with various offenses that were only created four years after the incident giving rise to his charges. Some of those same offenses have already been thrown out on appeal in other cases, and all of them are subject to potential problems, both based on retroactivity and based on the fact that they do not meet the standards for war crimes under international law.

Khadr was also charged with killing a U.S. soldier, and wounding another, in a case that proceeded before a U.S. Military Commission, before a U.S. military officer as presiding judge, with members of the U.S. military as members of the jury, and U.S. military personnel as prosecutor and defense. The lack of impartiality is obvious. There is also the substantive issue as to whether the laws of war actually allow for criminal sanctions for throwing a hand grenade during the course of a firefight.

I previously blogged, beyond all of the above, about the disturbing, coercive circumstances under which Khadr pled guilty to the “charges” before this problematic court. Although the Canadian Government makes much of the fact that Khadr pled guilty, he hardly did so under conditions that could be described as voluntary.

Even this is not a comprehensive list of the numerous problems with Khadr’s so-called conviction. For the Canadian Government to simply refer to Khadr as a “convicted terrorist”, or a “convicted war criminal”, is misleading at best.

The shaky foundation of Khadr’s “conviction” before the Military Commission has been given a coat of whitewash by the Canadian Government. As soon as Khadr crossed the border to return to Canada, the official narrative has simply assumed that his underlying “conviction” in the U.S. was legitimate. Putting a coat of whitewash on rotting wood may give a short-term appearance of something new, but the underlying wood rot will eventually show through. By taking the position that it has in regard to Khadr, the Canadian Government has moved from simply endorsing the misconduct of the U.S. to actively perpetuating it.

All of this sounds rather complicated, but it did not have to be. If either the U.S. or Canada truly believed that Khadr was a “terrorist” or a “war criminal”, the recourse would have been simple. They could have charged Khadr with offenses under their respective national laws, in legitimate courts that are governed by their national constitutions. The fact that both, instead, relied on a process so riddled with legitimacy problems is enough, on its own, to raise serious doubts as to Khadr’s “conviction”.

The problems do not stop there. Khadr’s age at the time of the firefight raises a number of additional issues, further muddying the narrative.

The “Young Jihadist”

Khadr is also sometimes referred to as a “young jihadist.” Those defending him, similarly, often refer to him as a “child soldier”, and Khadr himself used that term in an editorial he wrote in late 2014. The issue of Khadr’s age is relevant to the upcoming hearing before the Supreme Court of Canada, in relation to the decision by the Alberta Court of Appeal to grant his habeas corpus petition, and to order his transfer to another prison facility, based on his age at the time of the Afghanistan incident (see 2014 ABCA 225).

The narratives surrounding his age continue to be as polarized as the issue of whether he is a “convicted terrorist”. What is often missing from these narratives, however, is the possibility that Khadr was, in reality, an abused child.

At the age of 15, he was put in a battlefield situation, in another country, by his father – a fact that is apparently undisputed. He was an unemancipated minor. He did not choose to pick himself up and go to Afghanistan to fight with Al Qaeda, which is the type of conduct often associated with those referred to as jihadists. Rather, his parents brought him there at an age under which he was legally subject to their decisions.

While it is true that child soldiers are entitled to special legal protections, and that Khadr was not afforded any of those protections – but was abused instead – there is this preliminary issue regarding his status that is often overlooked. Generally, when a child is thrown into a dangerous situation by his parents, the State intervenes to protect the child, not to torture and demonize him. Dennis Edney, Khadr’s Edmonton lawyer, put it best when he said, after Khadr’s release on bail, “[w]hen you put your children to bed, ask yourself if you would like your children abused like Omar Khadr?”

Khadr also appears to have been tainted by the larger public dislike for his family, the so-called “first family of terror.” This mindset ignores the fact that the law does not generally hold people responsible for the criminal actions of relatives. Khadr was arguably a greater victim of that “first family” than most people. When his father endangered him, he should have been protected from this family, not blamed for their perceived wrongdoing. If a parent beats a child, that child is generally subject to protection from the parent, not blamed for the beating, and certainly not tortured and imprisoned because of the beating.

Doomsday Predictions About Khadr’s Release

The muddled narrative about Khadr took on a new layer with doomsday predictions, as the Government sought to block his ordered release on bail pending his appeal of his Military Commission ruling (see 2015 ABQB 261; 2015 ABCA 159). The Canadian Government argued that releasing Khadr would damage relations with the U.S. An official of the U.S. Government, however, quickly quashed that argument by saying that Khadr’s release was subject to Canadian law and would have no impact on U.S.-Canadian relations.

The Canadian Government, however, continues to claim that Khadr presents a threat to the safety of Canadians and continues to call him a “convicted terrorist”. Ignoring the actual facts of this case, Prime Minister Harper said about Khadr’s release, “Mr. Khadr, as we all know, pled guilty to very grave crimes, including murder …”

The Alberta Court of Appeal, in considering the Crown’s evidence regarding supposedly irreparable harm from Khadr’s release, saw it differently. In an already-famous line from the ruling, the Court said “… Mr. Khadr you are free to go” (2015 ABCA 159 at para 42).

Previously Missing from the Narrative: Khadr’s Own Voice

With the exception of the editorial Khadr published late last year, his voice has been conspicuously absent from the dramatically competing narratives about him. Once he was transferred to Canada, the Government fought hard to keep the media away from him, resulting in an unsuccessful court action, filed by various media groups, seeking access to interview him. (see Canadian Broadcasting Corporation v Warden of Bowden Institution, 2015 FC 173). Given the efforts the Canadian Government has undertaken to control the narrative around Khadr, it is perhaps not surprising that the Government also fought to keep the media away from him.

The public narrative, though, may have undergone a shift, based on Khadr himself. In an interview outside of his lawyer’s house, shortly after his release, Khadr presented as an affable young man, with no bitterness, no wish to cause any harm, and a compelling hope that his release signals the first step in the beginning of a new life. It is difficult to reconcile the image of that young man with the “unrepentant terrorist” at the center of so many dire Governmental warnings.

The facts of what happened should have been sufficiently compelling to change the narrative in favour of Khadr, but the mere invocation of labels was adequate for many people to overlook the reality of his case. Perhaps, in finally seeing Khadr’s face and hearing his words in his own voice, the misleading narrative that has been built around him may finally be shattered.

Khadr still has protracted legal proceedings ahead of him, including the appeal of his Military Commission judgment and his third Supreme Court of Canada case. His scheduled parole hearing was cancelled on May 12, 2015, since his sentence was claimed to be suspended while he is out on bail. With optimistic predictions as to the ultimate outcome of the Military Commission proceeding, it is entirely possible that Khadr will not be returned to prison.

In the meantime, it is time for the public narrative to shift. On the day of Khadr’s hearing before the Supreme Court, his attorney, Dennis Edney, will be speaking at Carleton University, in an event that is well named as “Omar Khadr: Facts Over Fear.” Khadr himself presented the best argument for a shift in public narrative, asking Canadians to “see who [he is] as a person, not as a name.”

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Kaddoura v Hanson : The Alberta Rules of Court Regarding Disclosure Work; Delay Tactics Sourced In Old Rule Logic and Old Rule Opinion Do Not

Tue, 05/12/2015 - 10:00am

By: Brett Code, Q.C.

PDF Version: Kaddoura v Hanson: The Alberta Rules of Court Regarding Disclosure Work; Delay Tactics Sourced In Old Rule Logic and Old Rule Opinion Do Not

Case Commented On: Kaddoura v Hanson, 2015 ABCA 154

In Kaddoura v Hanson, 2015 ABCA 154, the Alberta Court of Appeal eliminated from current and future consideration several old arguments regularly advanced under the old Rules of Court by parties wanting to avoid complete record disclosure and wanting to use the available motions process and its concomitant rights of appeal to delay the discovery process. In a case concerning the record disclosure obligations of third-partied lawyers alleged by straw buyers in mortgage fraud schemes to bear concurrent or exclusive responsibility for the plaintiff bank’s losses, the Court of Appeal solidified an understanding that the “new” Rules were meant to improve efficiency and reduce cost, in particular by limiting the delay and avoidance tactics previously available and oft-used by litigants under the old Rules. The message to litigants in Alberta is that the new Rules are unambiguous, and they work. Recycled arguments previously used to limit the application of the Rules to current discovery obligations will fail.

Obligations of “Mortgage Fraud” Litigants

Although it seems unlikely that the unanimous Court (Justices Martin and Slatter, JJ.A., and Justice Yamauchi, J. (ad hoc)) intended to narrow the compass of its decision such that it apply only to cases involving mortgage fraud litigants, the Court did open with a clear statement of a very narrow issue, namely (at para 1):

These two consolidated appeals raise issues about the obligations of “mortgage fraud” litigants to produce documents that are in the possession of lawyers sued in that litigation…

Most of what is decided here undoubtedly applies generally to the interpretation and application of the disclosure rules, but some of it may well only apply to particular cases as they are set out in particular, unique pleadings.

After setting out that limiting statement of the issue, the Court then defines mortgage fraud, sets out the various participants, and then explains why knowing the various participants is important for these matters of documents disclosure (at paras 2-5).

The Royal Bank sued two straw buyers in separate lawsuits. Those straw buyers then third-partied the lawyers involved, alleging that they knew or ought to have known that the underlying real estate transactions were not legitimate.

What then makes it possible that the decision is intended to apply narrowly is the description of the documents regarding which disclosure is sought and their intended use during the discovery process, namely, a creative application of the similar fact evidence rules as applied in the civil context.

The claims of the straw buyers against the lawyers are based on allegations regarding either their complicity in the mortgage scheme, their actual knowledge of the underlying facts, or their failure to realize that the transactions were illegitimate and to advise the straw buyer clients accordingly. In order to prove that portion of the claim, the straw buyers seek access to other client files in their lawyers’ offices relating to similar transactions. As the Court says (at para 11):

The respondents’ proposed line of argument is that if the lawyer was involved in numerous other files involving the same main fraudster, it would support an inference that the lawyer actually knew, or “ought to have known” that something illegitimate was going on. In other words, the straw buyers seek to use circumstantial evidence to prove the state of mind or state of knowledge of the lawyers. Irregularities in any one real estate file may simply be an aberration; a pattern of files with similar irregularities arguably calls for an explanation. In order to support this line of argument, the straw buyers seek production of other client files in the lawyer’s offices involving the same alleged main fraudster or bank loans officer. The argument is that if those files disclose a pattern of irregularities, it will assist the straw buyers in proving one of the issues in the litigation.

The Court then cited two old cases decided before R. v. Handy, 2002 SCC 56, in support of the proposition that while similar fact evidence is more commonly used in criminal trials, it can be used in civil ones (Mood Music Publishing Co. v De Wolfe Ltd., [1976] Ch 119, [1976] 1 All ER 763 (CA); Greenglass v Rusonik, [1983] OJ No 40 (CA), cited at paras 12-13). The brief summaries of the reasoning in those cases demonstrate that they were throw-backs to a time when Makin v. Attorney-General for New South Wales, [1894] AC 57 (PC), was the leading case regarding the admissibility of otherwise inadmissible character evidence.

If the current case ever comes to trial, the inclusionary judicial discretion created by the Supreme Court of Canada in Handy will apply, and, on the logic set out in the quoted para 11 above, admissibility will not be an issue, as probative value will almost certainly exceed prejudicial effect and pass the other limiting tests set out in the Handy decision.

Rule 5.2: Litigants Must Disclose that which is Relevant and Material; the Old Limiting Arguments No Longer Apply and Should not Be Argued [Ever Again]

The Court was obviously satisfied, as were the two courts below, that proof of such similar conduct evidence easily met the requirement of Rule 5.2 of the Alberta Rules of Court that all documents must be disclosed which: “could reasonably be expected to significantly help determine one or more of the issues raised in the pleadings, or to ascertain evidence that could reasonably be expected to significantly help determine one or more issues raised in the pleadings.

The Court was surely correct in that conclusion. If, upon a review of the lawyer’s real estate files, a pattern of conduct is discoverable that demonstrates the kind of mental state needed to prove liability for complicity in mortgage fraud, the test is obviously met. Without those files, and all of them, nothing could be harder than proving liability of lawyers on such allegations. There would almost certainly be no direct evidence, leaving only circumstantial evidence of the type described. Unless the practical approach promoted by the Court here is taken to the application of Rule 5.2 to these facts, the discovery process itself would cause the premature defeat of what might otherwise be a good claim.

Without such persuasive circumstantial evidence, the requirement, set out by the Supreme Court of Canada in F.H. v. McDougall, 2008 SCC 53, that trial courts assess the inherent probabilities and inherent improbabilities of the likelihood of certain conduct or facts before a court finds that the standard of proof has been met would almost certainly foreclose the possibility of a finding of liability against a lawyer. In accordance with the understanding set forth by the SCC regarding “inherent improbabilities”, a trial judge would be reticent to find liability of such a blameworthy nature regarding a lawyer, who, by virtue of his or her position as a barrister and solicitor having sworn an oath to uphold the law, renders inherently improbable such defalcation. (See my prior post on this subject here).

Historically, arguments accepted under the old Rules of Court to limit the disclosure obligations of litigants sometimes worked just that way, that is, to defeat claims really before they ever got started. In Kaddoura v. Hanson, the appellants tried to use all of the arguments from the old Rules to defeat this neat application of Rule 5.2.

Fortunately for all who wish to see renewed efficiency in the discovery process, the Court appears to have eliminated four of the most popular and most successful arguments from bygone days for refusing even to disclose relevant and material records:

  • There is no longer any value, if there ever was, in arguing that a litigant need not disclose documents of “secondary” or “tertiary” relevance (at para 15). Those terms, the Court states conclusively, are “not helpful” and are too imprecise to assist in determining relevance. The Court does state that there are limits to what may be relevant and material at the disclosure stage, but they are not understood, if they ever could have been, by the old terminology. Rather, the language used in Dow Chemical Canada ULC v Nova Chemicals Corp., 2014 ABCA 244 (CanLII) at para 21, now sets the limit: “Production of records is not required just because some remote and unlikely line of analysis can be advanced, and it will not be ordered to support lines of pretrial discovery that are unrealistic, speculative, or without any air of reality”.
  • The Court similarly dispatched the argument by an intervenor, the Law Society of Alberta, that the relevant documents need not be disclosed because the straw buyers “already know the answer” (at para 16). Referring to the discovery purpose of obtaining admissions to eliminate trial issues, the Court put paid to that argument. With luck, it will never be used again in one of these applications.
  • With equal efficiency and verve, the Court eliminated one of the favourite opinions of many masters and judges along the way, that the litigant need not disclose records because the party opposite was on a “fishing expedition” (at para 17). Nice image but it has no application to the discovery and disclosure of records in litigation in Alberta. Look to the Rules, the Court says, in short. The “fishing expedition” defence has always been an improper reversing of the onus onto the litigant entitled to disclosure and discovery. As the Court says (at para 17), “the onus is on the other litigant to review its own records and prepare an affidavit of records listing relevant records that do exist” (citations removed). That historical reverse onus was good for overall efficiency. Applied as it would have been here by the appellants, it would have resulted in the similar conduct evidence, if any, being buried and in the third party claim being eliminated, denying the straw buyers the ability to try to develop their arguments based upon circumstantial evidence. Thus that old argument was “efficient”, because it brought to an end many cases for lack of proof by many a plaintiff, but it was fundamentally unjust and almost surely incorrect at least on some occasions, such as it would have been if applied here, and perhaps on most occasions.
  • Finally, the Court eliminated the ultimate argument of desperation by disclosing litigants that “there are other ways” for the party to obtain the information they seek (at para 18). Here, for example, the third party lawyers argued that the straw buyers could conduct research at Land Titles. The Court simply pointed them back to the Rules, which create “an efficient, structured, and comprehensive method of obtaining relevant and material information in litigation” (at para 18). The Rules create an obligation to disclose, which obligation creates a concomitant right in the other litigant to receive the disclosure, which right does not include compromising obligations to go to the local library or any other local government office to try to make up its own discovery process before being entitled to assert the right so created.

It would be a benefit to us all, particularly to those who seek access to justice through an efficient process of discovery, if none of these arguments were ever made again. By so concisely dispatching them, the Court of Appeal has sent a clear message to litigants to stop wasting time with them.

Privilege and Confidentiality

The appellant lawyers and the intervenor Law Society then argued several more old arguments designed to thwart the efficient, structured, and comprehensive method for the disclosure of relevant and material records, namely, as summarized by the Court (at para 20):

The appellants and the Law Society argue that i) the Master’s order compromises the privilege over the files; ii) the files are third party records and should only be obtained using the procedure under R. 5.13; and iii) the Master’s order was made without notice being given to the clients.

After acknowledging, if it were ever in doubt, the fundamental importance of solicitor-client privilege (at para 19), the Court eliminates these arguments by a reference, not to new law or to a change to or to compromise of fundamental principles of law, but to that old bug-bear of parties wanting to delay proceedings: to the matters at issue in the application at bar as raised in the Notice of Motion.

As to privilege, the Court said this, likely in response to hifalutin arguments that tried to persuade them to deal differently with this issue than had the Court below. The problem for the appellants and the Law Society was simple: privilege was not engaged on the application or the appeal from the decision of the Master on that application. Nonetheless, the Court repeated for those who held any doubts (at para 19):

It is not disputed that solicitor and client privilege is one of the most carefully guarded principles of our legal system: Canada (Privacy Commissioner) v Blood Tribe Department of Health, 2008 SCC 44 (CanLII) at para 9, [2008] 2 SCR 574; Canada (Attorney General) v Federation of Law Societies of Canada, 2015 SCC 7 (CanLII) at paras 44, 120; University of Calgary v JR, 2015 ABCA 118 at para 19.

Here, the straw buyers had not sought production of documents but only disclosure. From the Master below, they had obtained only disclosure. On appeal to a Justice in Chambers, the appellants got the last protection to which they were entitled, which should have obviated the need to appeal further, namely, the Justice in Chambers ordered that the records be disclosed not with reference to client names but anonymously. The Court of Appeal was very clear in its admonition here, saying (at para 23):

The chambers judge modified the Master’s order to the extent of allowing the files to be disclosed anonymously, a modification which effectively mitigated any objection that might be made on this ground. (emphasis added)

The appeal against the disclosure of the records was frivolous.

The Master’s Order, the Order of the Chambers Justice, and, now, the Order of the Court of Appeal clearly preserve any and all arguments against the production of privileged documents. This application was not about production but about disclosure. The Court could not have been clearer than in this decision that all relevant and material documents must be disclosed. All arguments regarding the non-production, as opposed to the disclosure, of records were “premature” (at para 24).

Arguing against even mere disclosure on the basis of privilege has often been a proper shortcut, giving proper deference to efficiency: why bother disclosing records that will never see the light of day? The consequence of that type of shortcut-thinking has been the analytical fusion of the two concepts, with parties refusing to disclose on the basis that they are pretty sure that they will not have to produce later on. When applied unthinkingly as though non-production automatically follows, such fused thinking is an error.

In certain circumstances such as this one where the similar conduct evidence may exist but has yet to be discovered, that shortcutting has two effects, one apparently positive, one certainly negative: 1) it lightens the disclosing party’s obligation under the discovery rules, which is likely a very good thing; 2) it eliminates the possibility of arguments based upon circumstantial evidence and results in the defeat of a case before it really gets started, which may well be unjust.

On these facts, the disclosure will not be of all of the files of the third partied lawyers. Only those documents that may tend to prove the alleged knowledge component by way of the similar conduct evidence will be disclosed. Once the universe of relevant and material but privileged documents has been delimited and enumerated (after some possibly difficult work by the disclosing party), the arguments about privilege and its application to that limited universe of documents can be had. Until that work is done, and done on the basis of clear pleadings that set out the matters at issue, the arguments propounded by the appellants and by the Law Society were premature.

That the Court was eager to eliminate, once and for all, hopeless old arguments that demonstrated a failure to understand the manner by which the Rules were meant to operate is shown in para 25. The argument was made that the Court could not rule on matters of privilege or touching privilege because notice had not been given to those persons to whom the privilege belonged, that is, any other straw buyers who might have been clients of the third-partied lawyers and who might have been victimized in similar mortgage fraud schemes as might be demonstrated once the files of the third partied lawyers are reviewed for the purpose of identifying such clients, if any. The Court said (at para 25):

There is a chicken-and-egg aspect to the appellants’ position. The respondents do not want to see or review every file in the offices of the defendant lawyers. They are only interested in real estate files involving the same alleged main fraudster and bank loans officer. If the respondents were really required to proceed under R. 5.13 relating to the production of documents of third parties, and if they could only proceed on notice to the other straw buyer clients, how would they know which clients to serve with the application? If they are not entitled to a list of the relevant records, they would be forced to give notice to every client of the lawyers. Under the Master’s order, there will be a discrete target list of clients who have files that are said to be within the scope of relevance. This is undoubtedly why the Rules require that even privileged documents be listed, with issues of production and privilege deferred until later.

Again, the Court is saying to the appellants and to the Law Society: read the Rules. Do not argue issues that do not yet apply. Do not appeal because the Court below did not give you the relief you sought for arguments that do not yet apply and that are obviously, on the basis of the clear and unambiguous reasoning of the Court below as it clearly and unambiguously applies to the pleadings, premature.

“Control”

The Court also eliminated this old argument, that is, that even though copies of the relevant and material documents are in the lawyer’s files, the lawyer does not have “control”, because their production requires the consent of a third party, by the actual client in that relevant and material transaction. The Court looked to the word “control”, saw that it did not require an element of sole control, found the undeniable, which is that, if it is in the lawyer’s file, the lawyer is in control of it, and required that it be disclosed. The Court again reminded the appellants (at para 35) that disclosure of such documents in their control is not production of them, which issue would be argued at another application, to which production was relevant:

On the face of it, the lawyers have control of the client files, because they have them in their possession. In a physical sense, they could produce them for inspection at any time. The appellant’s argument is rather that since the files are in some respects the property of the clients, the lawyers are not entitled or authorized to disclose them. The Rules of Court, however, distinguish between the obligation to disclose the files, and a second obligation to produce them for inspection. Questions about entitlement to view the files are more properly examined in the context of claims of privilege and confidentiality. The appellants’ arguments about “control” are, in the present context, merely another version of their arguments about privilege, confidentiality, and the related duty of the lawyer to maintain privacy over the client’s business.

Ditto.

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ITLOS Special Chamber Prescribes Provisional Measures with Respect to Oil and Gas Activities in Disputed Area in Case Involving Ghana and Côte d’Ivoire

Mon, 05/11/2015 - 10:00am

By: Nigel Bankes

PDF Version: ITLOS Special Chamber Prescribes Provisional Measures with Respect to Oil and Gas Activities in Disputed Area in Case Involving Ghana and Côte d’Ivoire

Decision Commented On: International Tribunal on the Law of the Sea (ITLOS), Special Chamber, Dispute Concerning Delimitation of the Maritime Boundary between Ghana and Côte d’Ivoire in the Atlantic Ocean, Order with respect to the prescription of provisional measures, April 25, 2015, ITLOS Case No. 23

By way of a Special Agreement concluded on 3 December 2014, Ghana and Côte d’Ivoire submitted a dispute concerning their maritime boundary to a Special Chamber (SC) of ITLOS. The SC was fully constituted on 12 January 2015 and on 27 February 2015 Côte d’Ivoire made a request for the prescription of provisional measures under Article 290(1) of the Convention on the Law of the Sea (LOSC) requiring Ghana to:

  1. take all steps to suspend all ongoing oil exploration and exploitation operations in the disputed area;
  2. refrain from granting any new permit for oil exploration and exploitation in the disputed area;
  3. take all steps necessary to prevent information resulting from past, ongoing or future exploration activities conducted by Ghana, or with its authorization, in the disputed area from being used in any way whatsoever to the detriment of Côte d’Ivoire;
  4. and, generally, take all necessary steps to preserve the continental shelf, its superjacent waters and its subsoil; and
  5. desist and refrain from any unilateral action entailing a risk of prejudice to the rights of Côte d’Ivoire and any unilateral action that might lead to aggravating the dispute.

In the circumstances of this case the first request was very far reaching given the extent of the development that had already occurred in and around what is now a disputed area.

Article 290(1) of LOSC allows the relevant tribunal to prescribe “any provisional measures which it considers appropriate under the circumstances to preserve the respective rights of the parties to the dispute [hereafter referred to as head one] or to prevent serious harm to the marine environment [hereafter, head two], pending the final decision.”

This post provides the background to the dispute and then offers a summary of the Order issued by the Special Chamber and the supporting reasoning focusing on the preservation of the respective rights of the parties. The post concludes with some comments on the Order within the context of other relevant jurisprudence.

Background to the Dispute

In order to understand the full implications of the request for provisional measures in this case it is useful to have some background on the dispute. This appears most readily from Ghana’s written statement on Côte d’Ivoire’s request for the prescription of provisional measures. The Special Agreement between the Parties to submit the dispute to the SC actually originated with Ghana unilaterally instituting proceedings in September 2014. It is Ghana’s position that, while there is no definitive written treaty between the parties delimiting the continental shelf or exclusive economic zone (and also the territorial sea) between them, both parties have followed a uniform practice since the 1960s of disposing of oil and gas rights in their adjacent offshore areas on the basis of an equidistance line. According to Ghana it was not until 2009 that Côte d’Ivoire unexpectedly changed its position and began to argue in favour of a different line which lies significantly to the east of the equidistance line.

Reproduced here is Figure 3 from Côte d’Ivoire’s Request for the Prescription of Provisional Measures. That Figure illustrates the implications of Côte d’Ivoire’s proposed delimitation line. The red line shows the equidistance line which Ghana contends that both states have relied upon. The yellow line shows Côte d’Ivoire’s claimed delimitation line, and the black dotted line shows an equidistance line re-plotted by Côte d’Ivoire as part of these proceedings. The map also shows the oil and gas developments that Ghana has licensed. While it shows that the Jubilee field (which commenced production in 2010) is still on the Ghanaian side of Côte d’Ivoire’s new line, more recent developments including the so-called TEN fields (Tweneboah, Enyenra and Ntomme) are firmly within the disputed zone. Ghana takes the view that all of these developments occurred without any sign of protest from Côte d’Ivoire until 2009 (and no protest to the operator, Tullow, until 2011) and that that lack of protest should be a relevant matter in adjudicating on the merits but also in considering any request for provisional measures given the acknowledged importance of securing the rights of both parties (see Provisional Measures Order at paras 39 & 40).

In support of its request for provisional measures Côte d’Ivoire also alleged (Provisional Measures Order at para 50) that Ghana’s oil and gas legislation “is out of step with international standards” and that Ghana’s experience with production from the adjacent Jubilee field “has already evidenced many technical failings”. This allegation was principally used to support Côte d’Ivoire’s application in relation to the protection of the marine environment branch of Article 290(1).

In sum this was an unusual although not unprecedented fact pattern (see, for example, the North Sea Continental Shelf Cases, [1969] ICJ Rep 4 and the subsequent settlement treaties) insofar as significant exploration and investment had already occurred in what was now a disputed zone – well before the matter was submitted to formal dispute settlement.

In its Request, Côte d’Ivoire notes that the timetable established by the Special Chamber makes it such that a decision on the merits cannot be expected before the second half of 2017.

The Test for Provisional Measures: Preservation of the Respective Rights of the Parties

The jurisprudence of both ITLOS and the International Court of Justice establishes that provisional measures should not be prescribed unless the tribunal establishes prima facie jurisdiction (not an issue in this case given the Special Agreement, at paras 37-38) and unless the tribunal finds that there is “a real and imminent risk that irreparable prejudice may be caused to the rights of the parties in dispute” (M/V “Louisa” (Saint Vincent and the Grenadines v. Kingdom of Spain), Provisional Measures, Order of 23 December 2010, at para 72) and before the issue on the merits can be resolved (Construction of a Road in Costa Rica along the San Juan River (Nicaragua v. Costa Rica); Certain Activities Carried Out by Nicaragua in the Border Area (Costa Rica v. Nicaragua), Provisional Measures, Order of 13 December 2013, ICJ Reports 2013, at para 25). Irreparable harm in this context refers to harm that cannot be compensated for by way of damages. The case law also establishes that the measures must be required as a matter of urgency, “that is to say” (Provisional Measures Order, at para 42) “the need to avert a real and imminent risk that irreparable prejudice may be caused to rights at issue before the final decision is delivered …”.

Côte d’Ivoire based its claim for provisional measures under the preservation of rights head of Article 290(1) on the need to preserve (Provisional Measures Order, at para 46) three categories of “exclusive sovereign rights … arising under UNCLOS”:

  • the right to explore for and exploit the resources of Côte d’Ivoire’s seabed and the subsoil thereof by carrying out seismic studies and drilling, and installing major submarine infrastructures in the disputed area; (Articles 2(2), 56(1), 77(1), and 81)
  • the right to exclusive access to confidential information about its natural resources in the disputed area; (Article 246(5))
  • the right to select the oil companies to conduct exploration and exploitation operations and freely to determine the terms and conditions in its own best interest and in accordance with its own requirements with respect to oil and the environment”; (Articles 2(2), 56(1), 77(1))

Damage to Côte d’Ivoire as a result of allowing Ghana to continue its activities would, in the view of Côte d’Ivoire, be irreversible because it would deprive Côte d’Ivoire of its sovereign right to decide when, how and under what conditions the exploitation of these resources will take place, and even whether it should take place; drilling activities by their very nature are “irreversible”; the rock cannot be reconstituted; the well can be plugged with cement, but its lining remains; the subsoil cannot be restored to its prior state; and, the collection and circulation of information relating to the natural resources of the disputed area by Ghana and by private oil companies could not be reconstituted, possibly leading to an irreversible and deleterious change in Côte d’Ivoire’s bargaining power in dealing with potential investors (Côte d’Ivoire’s Request, at paras 34-35).

Ghana in reply took the view that Côte d’Ivoire had not met the test for obtaining an order of provisional measures principally on the ground that any harm such as that alleged could be met by an appropriate reward of damages and by delivery of any information acquired by Ghana. In addition, Ghana considered that Côte d’Ivoire’s claims in respect of information were not supported by any particular provision of the Convention (Provisional Measures, at para 55). Ghana also considered that the SC should take some note of the weakness of Côte d’Ivoire’s case in light of its failure to object in a timely way to Ghana’s actions and those of its licensees.

Subject to two important qualifications, the SC largely sided with Côte d’Ivoire. While it agreed with Ghana (at para 88) that “the alleged loss of the revenues derived from oil production could be the subject of adequate compensation in the future” the on-going exploration and exploitation activities were different. These activities “will result in a modification of the physical characteristics of the continental shelf” and (at para 90) “any compensation awarded would never be able to restore the status quo ante in respect of the seabed and subsoil.”

As for the question of confidential information about the natural resources of the continental shelf, the SC considered (at paras 92 & 93) that the matter had been dealt with in part by Ghana’s observation that “information about petroleum recovered is recorded in detail, as part of standard practice in petroleum production and revenue accounting” and that “the information currently being gathered in the disputed area will be duly recorded, and Ghana will be in a position to provide that information to Côte d’Ivoire if ordered to do so at the conclusion of the case”. The SC accepted this undertaking. However, the SC was also of the view that Côte d’Ivoire’s interests required prospective protection insofar as “the rights of the coastal State over its continental shelf include all rights necessary for and connected with the exploration and exploitation of the natural resources of the continental shelf” and that “the exclusive right to access to information about the resources of the continental shelf is plausibly among those rights.” Any loss of such an exclusive entitlement would (at para 96) “create a risk of irreversible prejudice to the rights of Côte d’Ivoire” should the SC rule in favour of Côte d’Ivoire on the merits with respect to any part of the disputed area.

The operative clauses of the Order provide as follows (at para 108):

… pending the final decision, the following provisional measures under article 290, paragraph 1, of the Convention:

(a) Ghana shall take all necessary steps to ensure that no new drilling either by Ghana or under its control takes place in the disputed area as defined in paragraph 60;

(b) Ghana shall take all necessary steps to prevent information resulting from past, ongoing or future exploration activities conducted by Ghana, or with its authorization, in the disputed area that is not already in the public domain from being used in any way whatsoever to the detriment of Côte d’Ivoire;

(c) Ghana shall carry out strict and continuous monitoring of all activities undertaken by Ghana or with its authorization in the disputed area with a view to ensuring the prevention of serious harm to the marine environment;

(d) The Parties shall take all necessary steps to prevent serious harm to the marine environment, including the continental shelf and its superjacent waters, in the disputed area and shall cooperate to that end;

(e) The Parties shall pursue cooperation and refrain from any unilateral action that might lead to aggravating the dispute.

In prescribing these measures the SC emphasised that it was not concerned with the relative merits of the Parties’ claims, it was enough that the SC could conclude (at para 62) that Côte d’Ivoire had “presented enough material to show that the rights it seeks to protect in the disputed area are plausible” (emphasis supplied) and that there was (at para 63) a link between the rights Côte d’Ivoire claims and the provisional measures it seeks.

While the SC generally sided with Côte d’Ivoire, there were, as noted above, two important qualifications. The first relates to the crucial distinction between ongoing activities and new activities. In its “Written Statement” Ghana made much of the fact that billions of dollars of investments had already been made within the area which was now disputed without any complaint from Côte d’Ivoire and that any shut down of these activities would have dire and irreversible consequences for Ghana and its people as well as its licensees.

The SC drew a clear distinction between ongoing activities already authorised by Ghana and in respect of which drilling has already taken place and new drilling activities. With respect to the former the SC denied the requested relief on the twin grounds (at paras 100-102) that any prohibition in relation to existing activities “would cause prejudice to the rights claimed by Ghana and create an undue burden on it” and “could also cause harm to the marine environment.” With respect to new activities the SC was of the view that it was necessary to order Ghana to take all the necessary steps to ensure no new drilling activity in the disputed area in order to preserve the rights of Côte d’Ivoire. The scope of this obligation is examined in more detail below.

The second qualification relates to Côte d’Ivoire’s efforts to maintain that the SC should also impose provisional measures in order to prevent “serious harm to the marine environment”, largely on the basis of what it alleged to be Ghana’s sub-standard record with respect to offshore oil and gas activities. The SC was wholly unpersuaded of this (Provisional Measures Order, at para 68), but did choose to affirm more generally its concern for “the risk of serious harm to the marine environment” and reiterated that Article 192 of LOSC imposes an obligation on States to protect and preserve the marine environment and that Article 193 of LOSC provides that States have the sovereign right to exploit their natural resources pursuant to their environmental policies, but that this right is to be exercised “in accordance with their duty to protect and preserve the marine environment”. The SC also chose to refer to previous decisions which emphasised the duty of states to cooperate in the prevention of pollution of the marine environment under Part XII of the Convention and general international law and crucially “that rights arise therefrom which the Tribunal may consider appropriate to preserve under article 290 of the Convention” (MOX Plant (Ireland v. United Kingdom), Provisional Measures, Order of 3 December 2001, at para 82; Land Reclamation in and around the Straits of Johor (Malaysia v. Singapore), Order of 10 September 2003, at para 92; and Request for an Advisory Opinion submitted by the Sub-Regional Fisheries Commission, Advisory Opinion of 2 April 2015, at para 140).

The decision was unanimous. Judge ad hoc Mensah (appointed by Ghana) appended a separate opinion to the Order. Judge Mensah’s principal point was that the SC needed to be sensitive to the interests of both parties, particularly in the circumstances of this case in which Ghana had proceeded prudently on the basis of an equidistance line accepted at least in the practice between the two states. In the end he concluded that the SC had protected the interests of both by confining the application of the measures to prevent new drilling activities and refusing to extend them to work in relation to projects that had already been approved and drilled.

Comments

The comments that follow explore the scope of the Order and then the relationship between this decision and the Tribunal’s Award in Guyana v Suriname and the ICJ’s provisional measures decision in the Aegean Sea Continental Shelf Case, Order of 11 September 1976 (Greece v Turkey). The SC does not refer to either decision although both were referred to by the parties in this case.

Scope of the Order

The operative clauses of the Order are quoted above in their entirety. It is evident that paragraph (a) deals with “new drilling”. It therefore applies to both exploratory drilling and drilling designed to delineate the geography of an existing discovery. Thus if a licensee in the disputed area has already drilled one well and wants to drill a second step-out well to delineate the geographical extent of the discovery, Ghana’s duty under the Order is a duty not to permit the new well and if the permit has already been issued it is a duty to exercise due diligence to ensure that its licensee does not drill that second well unless operations had been commenced before the Order was issued. Thus Ghana will need to refrain from authorizing further development activities within the disputed area to the extent that such developments require new wells. This will have serious implications for the plans of any operator to proceed to production and will certainly significantly delay an investor’s recovery of sunk investments.

Paragraph (b) of the Order deals with the use (not the collection) of geological information “resulting from” “exploration activities”. It requires Ghana to exercise due diligence to prevent any such information which is not already in the public domain “from being used in any way whatsoever to the detriment of Côte d’Ivoire.” Given the reasoning behind the terms of the Order it is perhaps surprising that this paragraph was not framed in somewhat wider terms. The SC’s reasoning seemed to accept that the generation of new information in the hands of third party licensees may pose some downside risk to the ultimate holder of the sovereign rights to the resource and yet it is clear that the Order does not prevent the generation of information from future exploration activities, so long as such activities do not include the drilling of a new well or wells. Thus, (and subject to the terms of paragraph (e)) the Order will not preclude Ghana from continuing to authorise seismic activities. In other respects the obligation is broad. Thus, Ghana’s obligation under this paragraph is not confined to information in relation to the disputed area that arises after the date of the Order but also applies to any information generated with respect to past and ongoing exploration activities. By its terms the paragraph is confined to information arising from exploration activities. It is not clear why this obligation does not also extend to information generated by ongoing production activities.

Paragraph (c) requires Ghana to monitor all authorised activities within the disputed area with the goal of ensuring the prevention of serious harm to the environment, while paragraph (d) is addressed to both parties and requires them to take the necessary steps to protect the marine environment and to cooperate to that end.

Paragraph (e) of the Order is also directed at both Parties. In addition to emphasizing the need for cooperation between them it also requires each of them to refrain from unilateral action that might aggravate the dispute between the Parties. While such a provision might be thought to have some connection to the duty of states under Articles 83(3) and 74(3) of LOSC (discussed further below) not to take measures to hamper or prejudice efforts to reach agreement on delimitation, my review of other ITLOS provisional measures orders suggests that it is a rather standard part of such orders or at least the narrative of the decisions (see for example, Arctic Sunrise at para 98 (not the operative clauses of the formal Order); and Land Reclamation, at para 102 (equally not the operative clauses of the Order)).

The next two sections of this post review the “pending agreement” provisions of LOSC and the Award in Guyana v Suriname (2007) and then the ICJ’s Aegean Sea provisional measures Order with a view to assessing whether the ITLOS SC decision in this case is consistent with this earlier jurisprudence.

The “Pending Agreement” Provisions of LOSC

As is well known, the Exclusive Economic Zone (EEZ) and continental shelf delimitation provisions of LOSC (Articles 74 and 83) both contemplate delimitation by agreement “in order to achieve an equitable solution.” Failing agreement, States shall resort to the procedures contemplated by Part XV of LOSC as occurred in this case. Pending agreement States shall consider provisional arrangements and shall do nothing to “jeopardise or hamper the reaching of the final agreement” (the duty not to jeopardise). It is perhaps this second element of the obligation which seems most relevant to the proceedings here.

The Arbitral Tribunal in Guyana v Suriname offered an extended commentary on the duty not to jeopardise obligation. The Tribunal noted (at paras 465 et seq) that the obligation:

… is an important aspect of the Convention’s objective of strengthening peace and friendly relations between nations and of settling disputes peacefully. However, it is important to note that this obligation was not intended to preclude all activities in a disputed maritime area. …

In the context of activities surrounding hydrocarbon exploration and exploitation, two classes of activities in disputed waters are therefore permissible. The first comprises activities undertaken by the parties pursuant to provisional arrangements of a practical nature. The second class is composed of acts which, although unilateral, would not have the effect of jeopardizing or hampering the reaching of a final agreement on the delimitation of the maritime boundary.

The Tribunal is of the view that unilateral acts which do not cause a physical change to the marine environment would generally fall into the second class. However, acts that do cause physical change would have to be undertaken pursuant to an agreement between the parties to be permissible, as they may hamper or jeopardise the reaching of a final agreement on delimitation. A distinction is therefore to be made between activities of the kind that lead to a permanent physical change, such as exploitation of oil and gas reserves, and those that do not, such as seismic exploration.

It should be noted that the regime of interim measures is far more circumscribed than that surrounding activities in disputed waters generally. As the Court in the Aegean Sea case noted, the power to indicate interim measures is an exceptional one, and it applies only to activities that can cause irreparable prejudice. The cases dealing with such measures are nevertheless informative as to the type of activities that should be permissible in disputed waters in the absence of a provisional arrangement. Activities that would meet the standard required for the indication of interim measures, in other words, activities that would justify the use of an exceptional power due to their potential to cause irreparable prejudice, would easily meet the lower threshold of hampering or jeopardising the reaching of a final agreement. The criteria used by international courts and tribunals in assessing a request for interim measures, notably the risk of physical damage to the seabed or subsoil, therefore appropriately guide this Tribunal’s analysis of an alleged violation of a party’s obligations under Articles 74(3) and 83(3) of the Convention.

It is important to emphasise at this point that the Tribunal is distinguishing between the general treaty duty (arising under LOSC) not to jeopardise the opportunity for reaching agreement and the more specific and more onerous duties that might arise from the exercise of the “exceptional” power to prescribe provisional remedies. The Tribunal however went on to note that the duty not to jeopardise should not be given so robust an interpretation that it should stifle all opportunities for development:

470. It should not be permissible for a party to a dispute to undertake any unilateral activity that might affect the other party’s rights in a permanent manner. However, international courts and tribunals should also be careful not to stifle the parties’ ability to pursue economic development in a disputed area during a boundary dispute, as the resolution of such disputes will typically be a time-consuming process. This Tribunal’s interpretation of the obligation to make every effort not to hamper or jeopardise the reaching of a final agreement must reflect this delicate balance. It is the Tribunal’s opinion that drawing a distinction between activities having a permanent physical impact on the marine environment and those that do not, accomplishes this and is consistent with other aspects of the law of the sea and international law.

It is evident that the Guyana v Suriname Tribunal was at pains to distinguish between the duty not to jeopardise and the circumstances under which it would be appropriate to prescribe provisional measures that are more demanding than the behavior required by the duty not to jeopardise; but it also suggests that there is some common ground between the two situations insofar as in each case the Tribunal must be careful not to unnecessarily stifle the ability of the parties to pursue economic development. The Award also serves to emphasise that activities that might not be tolerated if carried out unilaterally may of course be sanctioned by agreement between the Parties, either as a provisional arrangement or otherwise.

The ICJ’s Provisional Measures Decision in the Aegean Sea Continental Shelf Case

The SC did not mention the Guyana v Suriname Award but neither did it mention the ICJ’s Order with respect to Greece’s application for the indication of provisional measures in the Aegean Sea case. In that case Greece sought provisional measures that would require both parties to refrain from all exploration activity and scientific research within the disputed area in order to protect the sovereign rights of Greece to research, explore and exploit the continental shelf appertaining to Greece and its islands, “which rights” Greece asserted, are (at para 15) “exclusive in the sense that if Greece does not undertake research on the continental shelf or explore it or exploit its natural resources, no-one may undertake these activities, or make a claim to the said continental shelf, without the express consent of Greece.” Greece further contended (in language that is clearly echoed in the pleadings in this case) that (at para 26):

… Turkey’s seismic exploration threatens in particular to destroy the exclusivity of the rights claimed by Greece to acquire information concerning the availability, extent and location of the natural resources of the areas; that the acquisition and dissemination of such information without the consent of Greece prejudices its negotiating position in relation to potential purchasers of exploitation licences, thereby permanently impairing its sovereign rights with respect to the formulation of its national energy policy.

The Court however was not persuaded that seismic activities were sufficiently intrusive or likely to result in irreparable injury such as to justify the indication of provisional measures. There was, said the Court (at para 30), no evidence of “any risk of physical damage to the seabed or subsoil or to their natural resources” nor “the establishment of installations on or above the seabed of the continental shelf” and nor was there “the actual appropriation or other use of the natural resources of the areas of the continental shelf which are in dispute”. In short (at para 33), there was no risk of irreparable prejudice and accordingly the Court declined to indicate any provisional measures.

Final Observations

On the face of it, the Order of the Special Chamber seems consistent with the Aegean Sea decision and the Award in Guyana v Suriname. After all both of these decisions generally support a distinction between seismic activities and activities that actually disturb the seabed (see especially Guyana v Suriname at paras 479 and 481, perhaps the latter hinting that in some circumstances even unilateral seismic testing may not be permissible if it may jeopardise or hamper the reaching of an agreement between the parties). The two decisions suggest that activities that disturb the seabed are inconsistent with a duty not to jeopardise reaching agreement and fully justify an award of provisional measures. However, one must be careful to ensure that provisional measures are appropriately responsive to the particular facts and circumstances of each case. There is some evidence of that here insofar as the SC evidently rejected Côte d’Ivoire’s application to suspend all ongoing activities in the disputed area. But is this sufficiently responsive? Consider the situation in which a licensee has already drilled a discovery well which justifies additional activity (including drilling activities) to determine if and how the licensee should proceed to production. Harm has already been done to the seabed; if the results are such that any prudent operator would proceed to the next stage it is hard to see how the authorization of further drilling on the same geological structure results in irreparable harm. Furthermore by taking this position the SC has likely significantly increased Côte d’Ivoire’s bargaining power. I say this because Ghana will come under tremendous pressure from any licensee in the position described above to create the circumstances in which that licensee will be able to proceed to map out the scope of its discovery and actually proceed to production (subject to any accounting which may subsequently be required). True, Ghana may well have protected itself from any legal recourse under the terms of its licences, but both the licensee and Ghana will have a shared economic interest in seeing any discovery proved up in an orderly way.

Under the terms prescribed by the SC, Ghana will need to secure (as suggested by the tribunal in Guyana v Suriname) the agreement of Côte d’Ivoire to any further development of this discovery which entails additional drilling. It is an open question whether in doing so the Order has simply preserved the rights of Côte d’Ivoire pending a decision on the merits, a decision which we cannot expect for at least two years. This is a long time for any licensee to sit on a discovery made only on the basis of a significant capital investment, and one wonders whether the SC has achieved a fair balance between the rights and interests of the two parties.

This comment has been cross posted on the blog of the KG Jebsen Centre of the Law of the Sea of the University of Tromsø, the Arctic University of Norway, and on ABlawg, the blog of the Faculty of Law, the University of Calgary. Thanks to Alex Oude Elferink for his comments on an earlier draft of this post.

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A Cautionary Tale for Step-Parents and Step-Children

Tue, 05/05/2015 - 10:00am

By: Jonnette Watson Hamilton

PDF Version: A Cautionary Tale for Step-Parents and Step-Children

Case Commented On: Peters Estate (Re), 2015 ABQB 168 CanLII

People have many different ways of defining “family” and what being part of a family means to them. The idea that “a family is what you make it” or “families are who you love” is true enough when it comes to inheritance if you make a will. But the assumption that each of us can define family for ourselves is not true if we die without a will. If we die intestate (i.e., without a will), then the law will define our family for us — and the law’s categories are not flexible ones. They are not even twenty-first century categories. While the percentage of Canadian families who correspond to the nuclear-family model has declined, the laws of intestate succession still depend on that model. As a result, for those who die without a will, there is the possibility that the people they considered family will not inherit from them. The Peters Estate case is a cautionary tale about the need for wills or adoption in a modern world where “family” is a constantly changing concept.

The Decision

The family at the centre of the Peters Estate case was that of Ileen Peters. She died intestate in 2013. Her husband, Lester Peters, had predeceased her in 2009, after a 43 year marriage. Ileen and Lester had one biological child together, a son. Lester Peters also had four daughters and those daughters were Ileen Peters’ step-daughters.

Ileen Peters’ son was appointed to administer her estate. One of her step-daughters applied to the court for directions, seeking to have the estate divided equally among the five children/step-children.

The only issue was whether the four step-daughters were also beneficiaries of Ileen Peters’ estate, along with her son. Because she died intestate, the answer is found in the Wills and Succession Act, SA 2010, c W-12.2. That Act, which came into effect on February 1, 2012, is the latest provincial effort to try to ensure the fair distribution of the estates of people who die without a will. The relevant sections of the Act are sections 65(a) and 66(1)(a) (emphasis added):

65 If an individual dies leaving no surviving spouse or adult interdependent partner, the intestate estate shall be distributed

(a) to the descendants of the intestate in accordance with section 66 …

66(1) When a distribution is to be made under this Part to the descendants of any individual, the intestate estate or the portion of it being distributed shall be divided into as many shares as there are

(a) children of that individual who survived the intestate ….

Given the wording of these sections, the only question before Justice Rodney A Jerke was: “Who are the descendants of Ileen Peters?” (at para 8). The term “descendants” is defined in section 1(1)(e) of the Act as follows:

“descendants” means all lineal descendants of an individual through all generations;

And according to Justice Jerke and the 7th edition of Black’s Law Dictionary, “lineal descendants” means “a blood relative in the direct line of descent — children, grandchildren, and great-grandchildren are lineal descendants” (at para 10).

Given these definition, Justice Jerke’s conclusion followed quickly and easily:

Ms. Peters’ four step-daughters are not her blood relatives, so they are not her lineal descendants. [Her son] is her only lineal descendant. Accordingly he is her sole beneficiary (at para 11).

Justice Jerke went on to note that the facts presented a very sympathetic case for the step-daughters (at para 12). He mentioned that the marriage between their father, Lester Peters, and Ileen Peters had lasted 43 years; that Lester Peters was the father of all five children; that Lester and Ileen Peters were in bankruptcy at the time of the father’s death; and that all five children gave up any claim in their father’s estate in favour of Ileen Peters. He noted that Ileen Peters treated her step-daughters in every way as her daughters (at para 16). None of those facts mattered, or, to use Justice Jerke’s words, “this evidence is not relevant to a determination of who are Ms. Peters’ descendants” (at para 13). The facts were not relevant because the Act sets out a definition of “descendants” and the step-daughters did not fit within that definition.

Commentary

Justice Jerke spelled out all of the elements of a classic “cautionary tale” when he concluded as follows (at para 20):

This case is an example of the personal difficulties and harm to relationships which can occur when individuals do not have a will. The distribution of this modest estate has become an instrument with the potential to create, enhance or perpetuate ill will amongst five family members at a time when they should instead be benefiting from good memories of their mother and father.

In that conclusion, readers are warned of the moral danger of not making a will. The story of Ileen Peters, a person who disregarded this danger and died without a will, was told. The story ended with her step-daughters, who she had treated in every way as her daughters, suffering the unpleasant fate of disinheritance.

However, in addition to functioning as a lesson on why the parents of so-called “blended families” must make wills, the Peters Estate case also illustrates how antiquated the intestate succession provisions of the 2012 Wills and Succession Act are when it comes to step-children (or at least those step-children who are adults and able to earn a livelihood.)

Sections 65 and 66 of the Wills and Succession Act are supposed to approximate what a parent without a surviving spouse would have done if they had made a will. Every Canadian jurisdiction has a law similar to the provisions in Alberta’s Wills and Succession Act for inheriting when there is no will. See, for example, sections 1(1) and 23 of British Columbia’s Wills, Estates and Succession Act, SBC 2009, c 13 where “descendant” is defined to mean “all lineal descendants through all generations” and section 1(1) and 47 of Ontario’s Succession Law Reform Act, RSO 1990, c S.26 where “issue” is defined as “a descendant conceived before and born alive after the person’s death.”

So who counts as “children” or “lineal descendants” or “issue” for the purpose of inheriting from a parent without a will? A biological child, or “blood relative”, is included, as the definitions cited in the Peters Estate case make clear. An adopted child is also included because the legislation that governs adoptions says he or she is included: Child, Youth and Family Enhancement Act, RSA 2000, c C-12, s 72 and Adult Adoption Act, RSA 2000, c A-4, s 9. A step-child — a person defined by Statistics Canada as “a child in a couple family who is the biological or adopted child of only one married spouse or common-law partner in the couple, and whose birth or adoption preceded the current relationship” (Portrait of Families and Living Arrangements in Canada, fn 16) — is excluded.

There are at least two problems with the exclusion of step-children.

First, a large number of individuals may be affected. The number of blended families and hence the number of step-children is generally accepted to be growing in Canada. The 2011 Canadian census counted step-families for the first time and found that 12.6% of couples with children living at home are step-families. They also found that while 12.5% of opposite-sex couples with children were step-families, close to half (49.7%) of same-sex couples with children were step-families: Portrait of Families and Living Arrangements in Canada. These numbers omit, of course, adult step-children not living with their step-parent, but they do give some indication of the potential size of the problem. They also suggest an adverse impact based on sexual orientation.

Building on that suggestion of an adverse impact leads to the second and more substantive problem. The intestate succession provisions in the Wills and Succession Act use formal adoption, as that practice exists within a Eurocentric nuclear family model, to define what qualifies as a parent-child relationship worthy of including in intestacy laws. The Act ignores the practice of informal adoption as it exists within extended family models which are more prevalent in some ethnic and Aboriginal communities in Canada. (See Michael J Higdon, “When Informal Adoption Meets Intestate Succession: The Cultural Myopia of the Equitable Adoption Doctrine” (2008) 43 Wake Forest L Rev 223, available at SSRN, discussing the impact on African American and Hispanic communities in the United States).

Neither of these problems appears to have been considered in the drafting of the 2012 Wills and Succession Act, which was the result of a major law reform project undertaken by Alberta Justice. Part of their law reform process included public and technical consultations on questions about the transfer of property on death: see Alberta Justice Succession Law Reform Stakeholder Consultation: Summary of Input, October 2009. However, the question of who to include in the definition of children was not one of the questions put to those consulted. The definition of children who inherit on intestacy is unchanged in its effect from the legislation which preceded the current act. Section 1(b) of the Intestate Succession Act, RSA 2000, c I-10 defined “issue” to include “all lineal descendants of the ancestor.”

By failing to recognize blended families as a significant and legitimate segment of Canadian society in intestate succession laws, legislation such as Alberta’s Wills and Succession Act arguably demeans blended families. It has been argued that the failure to account for blended family members not only authorizes inequitable estate distributions but also affects social perceptions of the legitimacy and status of blended families. Scholars of intestacy law have also argued that provisions excluding step-children may affect relations between stepfamily members, lessening their degree of commitment and exacerbating adjustment difficulties for family members. See Jennifer Seidman, “Functional Families and Dysfunctional Laws: Committed Partners and Intestate Succession” (2004) 75 U Colo L Rev 211 at 226; Cristy G. Lomenzo, “A Goal-Based Approach to Drafting Intestacy Provisions for Heirs Other than the Surviving Spouse” (1995) 46 Hastings LJ 941 at 947; Mary Louise Fellows et al., “Committed Partners and Inheritance: An Empirical Study” (1998) 16 Law & Inequality 1 at 3; E. Gary Spitko, “The Expressive Function of Succession Law and the Merits of Nonmarital Inclusion” (1999) 41 Ariz L Rev 1063 at 1066. See more generally Frances H. Foster, “The Family Paradigm of Inheritance Law” (2001) 80 NC L Rev 199 and Susan N. Gary, “Adapting Intestacy Laws to Changing Families” (2000) 18 Law & Inequality 1.

It might be argued that it is too difficult to include step-children, or at least those step-children who should be presumed to be included in a step-parent’s donative intent. When the Alberta Law Reform Institute issued Report No. 78 in June 1999 on the Reform of the Intestate Succession Act, they considered the question of whether a step-child should be able to inherit if a step-parent died intestate (at 137):

In some families, the only father or mother the children have known is the step-parent because, for whatever reason, there is no contact with one of the biological parents. In these situations, it may seem logical for the stepchild to inherit from the step-parent. Although these situations do arise, the relationships between step-parents and stepchildren vary too much to support a generalization that the majority of step-parents would want their stepchildren to share in their estate. We, therefore, make no recommendation for change on this issue. Stepchildren will not share in the estate of an intestate step-parent.

However, a categorical approach is not necessary. The inclusion of step-children can be made dependant on the circumstances of the relationship.

The Uniform Probate Code in the United States (sections 2-115, 2-116, and 2-117) offers one example of a relationship-focused type of approach. It uses the concept of “functioned as a parent of the child.” That phrase means “behaving toward a child in a manner consistent with being the child’s parent and performing functions that are customarily performed by a parent, including fulfilling parental responsibilities toward the child, recognizing or holding out the child as the individual’s child, materially participating in the child’s upbringing, and residing with the child in the same household as a regular member of that household.” See National Conference of Commissioners on Uniform State Laws, Amendments to the Uniform Probate Code, 2008 at pages 27-29.

However, unless and until the current intestate succession provisions of the Wills and Succession Act are changed (or successfully challenged for adverse impact discrimination), step-children must count on their step-parents to do one of two things: either formally adopt them or include them in a valid will. Merely leaving everything to your “children” in a store-bought or downloaded form is not enough; one vague word can destroy a family. But both formal adoption and valid wills require a significant commitment of time and money and are out therefore out of the reach of some families.

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Reflections on the Alberta Energy Regulator’s Best-In-Class Regulatory Initiative

Mon, 05/04/2015 - 10:00am

By: Fenner Stewart

PDF Version: Reflections on the Alberta Energy Regulator’s Best-In-Class Regulatory Initiative

Initiative Commented On: Alberta Energy Regulator’s Best-In-Class Regulatory Initiative

The University of Pennsylvania’s Penn Program on Regulation (PennReg) has now completed its consultation of experts and stakeholders as part of its “Best-In-Class” Regulatory Initiative, which is funded by the Alberta Energy Regulator (AER). This post discusses the “Best-In-Class” Regulatory Initiative as well as one of PennReg’s three consultations, entitled the “Alberta Dialogue.”

The Setup

In November 2014, the AER announced that PennReg had won a 1.2 million dollar consultation contract. This contract requires PennReg to guide the AER on how to become a “Best-In-Class” regulator. Some environmental groups are ready to dismiss such “Best-In-Class” or “World Class” initiatives as ruses to dress up, and legitimate, particular practices in the energy sector. Others, like the Environmental Law Center, are optimistic participants. Still other observers, like our Nigel Bankes, are already starting to measure the AER against a “Best-In-Class” standard, finding that in some areas, its performance might be a little less-than-class.

The stakes are high for the AER; the regulatory field that it has to manage is a tough one. Implicit in the AER’s mandate is the need to create and maintain difficult balances. On one side, it needs to give weight to efficient hydrocarbon development and the Alberta economy. On the other, it needs to protect the natural environment and Aboriginal rights (in a manner that, at least, considers the advice of the Aboriginal Consultation Office). These balances are not only central to the operation of the AER, but also are central concerns of our time. They are too big to be settled by the AER alone. There will be no grand solutions. The AER will not satisfy all interests all the time. There will be winners and losers.

The Best In-Class Regulatory Initiative

The “Best-In-Class” Regulatory Initiative has three aims: to identify the attributes of a top regulator, to understand how the AER can adopt such attributes, and to create metrics to measure the AER’s success. PennReg has completed all three of its planned consultation dialogues: the “International Expert Dialogue” held in Philadelphia on March 19-20, the “Aboriginal Dialogue” held in Edmonton on March 26, and the “Alberta Dialogue” held in Calgary on April 12-14.

To date, PennReg has produced three outputs. The first is a number of short white papers, by an impressive collection of regulatory scholars, on what a “Best-in-Class” regulator might be. The second is an online knowledge platform, called the “Reading Room”, which shares articles and other materials on regulatory excellence, performance management, and oil and gas regulation. The third is an interim report entitled “Listening and Learning: Toward a Framework of Regulatory Leadership.”

Now that PennReg has finished collecting information, it will use it to advise the AER through direct consultations. It will also release a set of expanded white papers later this summer. The outcome of this process promises to help the AER set priorities, engage more meaningfully with the public, find better solutions to problems, and re-organize its operations. In other words, this process promises to transform the AER into a “Best-In-Class” regulator.

The Alberta Dialogue

The Alberta Dialogue, which I attended, brought together a varied group of about sixty stakeholders of the AER. The stakeholders included landowners, industry, environmental groups, Aboriginal peoples, municipal and provincial officials, Canadian academic experts, and other concerned citizens.

The event comprised four sessions. The topics of the sessions included priority setting, problem solving, public engagement, the attributes of a “Best-in-Class” regulator, and measuring success. Each session first divided the invited participants into breakout groups to discuss issues. In the breakout groups, a facilitator guided the interaction between participants, helping to ensure a respectful and targeted engagement. A diverse range of stakeholders populated each group, reflecting the diversity of demands that the AER has to balance. The facilitator encouraged full participation, including personal recollections and experiences. AER representatives floated between the rooms observing the process. The sessions were recorded. After this, the members of the breakout groups reconvened in a plenary panel discussion. In part, representative participants reported their group’s insights. The large group discussion that followed was also recorded.

Cary Coglianese and Harris Sokoloff coordinated the three-day event, but Sokoloff was the driving force in the stakeholder engagement process. Sokoloff is the Faculty Director of the Penn Project on Civic Engagement. Since 1995, this project has worked within policy networks to build understanding between diverse groups of stakeholders. The project self-identifies as a “neutral, honest broker”, which helps citizens, organizations and governments to create insights and solutions to their problems. It explains that it “structures civic engagement to have tangible impacts on civic life” by “turning talk into action”.

What Coglianese and Sokoloff are doing, at a rudimentary level, is to inspire citizen involvement within governmental planning practices. This is not a new idea. It recognizes the political nature of planning, the need for meaningful citizen involvement, and the legitimacy of pluralism as a lens for viewing social conflicts (Lane 2005). The hope of such initiatives, generally speaking, is that collaborative engagement between stakeholders can achieve negotiated consensus (Brand and Gaffikin 2007).

A central idea of such collaborative processes is that the spectrum of viewpoints inspires creative thinking between stakeholders to achieve resolution. As Steven Johnson aptly puts it: “we are often better served by connecting ideas than we are by protecting them” (Johnson 2010, 22). Thus, a foundational presumption of such citizen involvement processes is that the knowledge generated will present resolutions, or roadmaps to resolutions, which all of the stakeholders may not love, but which they can all live with.

Ongoing Challenges for the Best In-Class Regulatory Initiative

Coglianese is a very well-regarded American regulatory theorist, who has recruited an all-star team of scholars to help him think about the AER, including Robert Baldwin, Daniel C. Esty, Neil Gunningham, Bridget Hutter, David Levi-Fair, Harris Sokoloff, and David Vogel. The challenge of such academic work is to make it practical—to ensure that the recommendations are detailed enough to provide meaningful guidance at the operational level.

Another challenge is that the sessions at the Alberta Dialogue engaged with few truly substantive issues; the lack of shared technical expertise between stakeholders led to a high level of generality in discussions. To some degree, this is a necessary evil of such civic engagement deliberations—it is the cost of inclusion. But what was lost, in this case, was a testing of the tensions and differences between stakeholders. Relations were surprisingly amicable; it was a feel good event. Hopefully, PennReg has an accurate gauge of just how difficult finding balances will be for the AER.

Concluding Thoughts

In an area as politically contentious as Canadian energy regulation, PennReg will not satisfy every interest with its recommendations, nor will the AER satisfy every interest when it implements them. Regardless of the quality of PennReg’s guidance, the AER is unavoidably set up to disappoint some stakeholders. The fact is that there is very little, if any, middle ground on some issues.

The words of John Lydgate, or maybe they belong to Abraham Lincoln, come to mind: “You can please some of the people all of the time, you can please all of the people some of the time, but you can’t please all of the people all of the time.” Critics of the AER would say that the AER has done a very good job of pleasing some of the people all of the time, and that it must start pleasing more of the people more of the time. This is not to trivialize the matter: if AER is going to win the praise it desires, this is what it must do.

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Leave to Appeal granted in Ernst v. Alberta Energy Regulator

Thu, 04/30/2015 - 6:52pm

By: Jennifer Koshan

Case commented on: Ernst v Alberta Energy Regulator, 2013 ABQB 537, aff’d 2014 ABCA 285, leave to appeal granted April 30, 2015 (SCC)

Today the Supreme Court (Justices Abella, Karakatsanis and Côté) granted leave to appeal with costs in the cause to Jessica Ernst.  The Court’s description of the case is as follows:

Charter of Rights – Constitutional law – Enforcement – Remedy – Freedom of expression – Statutory immunity clause held to preclude adjudication of individual’s action in damages for alleged Charter breach by the regulator – Can a general “protection from action” clause contained within legislation bar a Charter claim for a personal remedy made pursuant to s. 24(1) of the Charter – Can legislation constrain what is considered to be a “just and appropriate” remedy under s. 24(1) of the Charter – Vancouver (City) v. Ward, 2010 SCC 27, [2010] 2 S.C.R. 28.

The applicant owns land near Rosebud, Alberta. She brought an action against: i) EnCana Corporation for damage to her water well and the Rosebud aquifer allegedly caused by its construction, drilling, hydraulic fracturing and other activities in the area; ii) Alberta Environment and Sustainable Resource Development, claiming it owes her a duty to protect her water supply and had failed to address her complaints about EnCana; and iii) the respondent regulator, for “negligent administration of a regulatory regime” related to her claims against EnCana. She brought a further claim for damages against the regulator under s. 24(1) of the Charter for alleged breaches of her s. 2(b) Charter rights. She alleges that from November, 2005 to March 2007, the Board’s Compliance Branch refused to accept further communications from her through the usual channels for public communication until she agreed to raise her concerns only with the Board and not publicly through the media or through communications with other citizens. She submits the respondent infringed her s. 2(b) Charter rights both by restricting her communication with it and by using those restrictions to punish her for past public criticisms and prevent her making future public criticisms of the respondent.

The respondent brought an application to strike paragraphs from the Statement of Claim or grant summary judgment in its favour. The Court of Queen’s Bench of Alberta granted the application and struck out the applicant’s negligence and Charter claims. While the Court held that the Charter claims were not doomed to fail and did disclose a cause of action, it held that the courts were precluded from considering the claims by the statutory immunity provision in the Energy Resources Conservation Act, R.S.A. 2000, c. E-10. The Alberta Court of Appeal dismissed the appeal.

There have been several ABlawg posts on the Alberta courts’ earlier decisions in the Ernst litigation. The most relevant to the issue that is now going to the Supreme Court is my post The Charter Issue(s) in Ernst: Awaiting Another Day.

This post notes that at the ABQB level, Chief Justice Wittman found that although Ernst’s Charter claim against the ERCB (now AER) should not be struck on the merits, section 43 of the Energy Resources Conservation Act, RSA 2000, c. E-10 (ERCA) barred Ernst’s Charter claim (2013 ABQB 537 at paras 42, 82-88). Ernst had not directly challenged the constitutionality of section 43; notice of constitutional question had not been given to the Attorneys General of Alberta and Canada under section 24 of the Judicature Act, RSA 2000, c J-2. Nevertheless, the Alberta Court of Appeal weighed in on the constitutional legitimacy of section 43, stating that “It cannot be suggested that those sorts of limits on remedies are unconstitutional” (2014 ABCA 285 at para 26). I concluded that because the constitutional issue was not squarely before the Court, its decision “should not be taken as a definitive assessment of the constitutionality of [section 43], nor that of its successor, section 27 of the Responsible Energy Development Act, SA 2012, c R-17.3. That issue awaits another day, and sadly for Ernst, that day will not come in her case, even though her Charter claim against the ERCB was arguable.”

It appears that I must now eat my words, since “that day” does seem to have come; the SCC will consider the constitutionality of section 43 and like sections in other legislation. Ernst framed the issue on appeal as whether legislation can “block an individual from seeking a remedy for a breach of her Charter rights” under s 24(1) of the Charter, which provides that “Anyone whose rights or freedoms, as guaranteed by this Charter, have been infringed or denied may apply to a court of competent jurisdiction to obtain such a remedy as the court considers appropriate and just in the circumstance.”  Focusing on the interaction between section 43 of the ERCA and section 24 of the Charter may negate the need for a direct constitutional challenge to section 43. And it should be noted that the Ontario Court of Appeal came to a conclusion contrary to that of the Alberta Court of Appeal about the constitutionality of such statutory bars in Prete v Ontario (1993), 1993 CanLII 3386 (ON CA), 16 OR (3d) 161, application for leave to appeal to SCC dismissed with costs, [1994] 1 SCR x.

For other ABlawg posts on the Ernst litigation see:

Shaun Fluker, Ernst v Alberta Environment: The Gatekeeper Refuses to Strike or Grant Summary Judgment

Martin Olszynski, Regulatory Negligence Redux: Alberta Environment’s Motion to Strike in Fracking Litigation Denied

Shaun Fluker, Ernst v Alberta (Energy Resources Conservation Board): The gatekeeper is alive and well

Martin Olszynski, Revisiting Regulatory Negligence: The Ernst Fracking Litigation

And for Jessica Ernst’s blog, which contains copies of all of the relevant documents, see here.

 

A Missing Issue in the 2015 Alberta Election: Curbing Carbon Emissions

Wed, 04/29/2015 - 10:00am

By: Shaun Fluker

PDF Version: A Missing Issue in the 2015 Alberta Election: Curbing Carbon Emissions

Legislation Commented On: Specified Gas Emitters Regulation, Alta Reg 139/2007

One might think that curbing carbon emissions would be a key topic during an election in the province which emits more carbon emissions than any other jurisdiction in Canada. Carbon emission is after all an inherently political topic these days both at home and abroad. However, the absence of debate on how Alberta should address carbon emissions is one of the more defining features of the 2015 Alberta election. This is particularly noteworthy because of Ontario’s recent announcement that it will join the carbon emissions cap-and-trade scheme operating in Quebec and California under the Western Climate Initiative. Premier Jim Prentice stated that Alberta (see here) will not join this regional scheme, and recent media commentary has expressed concern with this position (see here).

The absence of election debate on carbon emissions is also noteworthy since the governing legislative framework for carbon emissions in Alberta – the Specified Gas Emitters Regulation – will expire on June 30, 2015, just 2 months after this election passes (ABlawg has previously examined the Specified Gas Emitters Regulation here, here, and here, and readers not familiar with these earlier posts are encouraged to read them). This comment describes how the platforms of the New Democrats, Liberals, Wildrose, Alberta Party, and Progressive Conservatives (PCs) address carbon emissions, and then makes some observations on why the absence of debate on this topic is problematic.

The New Democrats state on page 17 of the Leadership for What Matters platform (here) they will redirect funding away from existing carbon reduction programs such as Carbon Capture and Storage, phase out coal-fired electricity generation, and encourage renewable energy production from less carbon intensive sources such as wind and solar.

The Liberals state in the Trusted Leadership for all Albertans plan (here) that they will impose a price on actual carbon emissions (page 8) and will redirect funding away from Carbon Capture and Storage (page 10).

The Wildrose Party policy on the Environment (here) states (at page 3) they will also cancel public funding for Carbon Capture and Storage and ensure that Alberta’s standards for carbon emissions are in line with national and international standards.

The Alberta Party states in its platform The Alberta Party has a Better Way (here) that they will phase out coal-fired power, impose a $30 per ton price on carbon for large emitters who do not reduce their carbon emissions by 30%, and require 25% of electricity generation to come from renewable sources over the next 10 years.

The Progressive Conservatives state they will invest in additional carbon emissions abatement technologies. The Prentice Plan (here at page 17) states that the PCs will accelerate investment in technologies and engineering solutions to the problem of excessive carbon emissions.

None of these platforms demonstrates real enthusiasm for addressing the carbon emissions problem. But what is most interesting to me is that the three leading parties (NDP, Wildrose, and PCs based on current polling) have very little if anything to say about how Alberta currently imposes a price on carbon emissions.

Pricing carbon emissions using market-based regulation is increasingly the preferred policy tool across the globe to address carbon emissions and is eclipsing other forms of regulation such as command-and-control or direct investment. Alberta has a market-based system, but this system has problems and Albertans should demand a government that will fix them. The slated expiry of the Specified Gas Emitters Regulation provides a great opportunity to do this work, but silence on the election front suggests the existing regulation will be quietly renewed with little or no changes.

The Specified Gas Emitters Regulation establishes what is known as an intensity baseline-and-credit system. The legislation requires each regulated emitter in Alberta (a person who operates a facility that emits at least 100 000 tons of carbon annually) to calculate a baseline intensity of carbon emissions per unit of economic production in a facility. For example, in relation to oil production the intensity figure represents the amount of carbon per barrel of production. Over the course of successive compliance periods, a regulated emitter must reduce its emissions intensity below its baseline by a specified percentage up to 12%. Alberta thus requires a regulated emitter to improve its emissions efficiency, but there is no absolute limit or cap on emissions. Regulated emitters in Alberta can increase absolute emissions and remain in compliance under the Specified Gas Emitters Regulation so long as increased emissions result in increased economic production.

A regulated emitter whose emissions intensity in a given year is below its prescribed baseline earns credits that can be traded or submitted for compliance in subsequent years. A regulated emitter whose emissions in a given year are above the baseline must submit credits or offsets earned previously or acquired from others, or alternatively pay $15 per ton of excess into the Climate Change and Emissions Management Fund. Compliance data indicates most regulated emitters pay the $15 per ton administrative penalty to cover excess emissions (see here). Meanwhile overall emissions from regulated emitters under the Specified Gas Emitters Regulation continue to rise (see here). If the objective of the regulation is to reduce overall carbon emissions in Alberta, it isn’t working.

The fact that Ontario intends to join the cap-and-trade system implemented in Quebec and California is a game changer for the regulation of carbon emissions in North America. This regional market will undoubtedly attract more provinces and states over the next several years, and it will entrench a regional cap-and-trade system in North America that may ultimately link with other regional markets across the globe. Participants in these market-based systems will be subject to an absolute emissions limit, but there will also be opportunities to speculate and profit on the price of carbon emissions. In order for Alberta-based carbon emitters to participate in this system the Specified Gas Emitters Regulation doesn’t just need to be tinkered with – the regulation and the intensity-based emissions limit will have to be scrapped along with other elements of Alberta’s current system that do not align with the Quebec-California market, such as unlimited use of emissions offsets (for some discussion of this on ABlawg see here).

The Alberta government likes to tell the world that it was the first jurisdiction in North America to implement regulations that limit carbon emissions, and by implication has shown environmental leadership on the carbon file. Unfortunately Alberta chose to implement a system (intensity baseline-and-credit) that doesn’t result in actual carbon emissions reductions, and so those jurisdictions who seek to actually reduce emissions within their borders are looking elsewhere for leadership.

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Solicitor-Client Issues and the Information and Privacy Commissioner

Tue, 04/28/2015 - 11:00am

By: Linda McKay-Panos

PDF Version: Solicitor-Client Issues and the Information and Privacy Commissioner

Case Commented On: University of Calgary v JR, 2015 ABCA 118 (CanLII)

The Alberta Court of Appeal (per Justice Russell Brown, with Justices Myra Bielby and Patricia Rowbotham concurring) recently ruled that a delegate of the Alberta Information and Privacy Commissioner did not have the statutory authority to issue a notice to the University of Calgary to produce documents so that the Commissioner could determine whether the University had properly claimed that the records were subject to solicitor-client-privilege. Further, the Commissioner did not have the statutory authority to compel the production of the records.

JR sued the University, alleging wrongful dismissal and other legal issues. During the litigation, when the parties exchanged affidavits of records, JR did not object to the University asserting solicitor-client-privilege for some of the documents. The litigation was resolved (see 2012 ABQB 342) and JR has had no involvement in the litigation since then (at para 3).

At the same time that the civil action was commenced, JR applied for access to information under section 7 of the Freedom of Information and Protection of Privacy Act, RSA 2000, c F-25 (FOIPPA). She sought emails, file information, letters, records of discussion, third party correspondence, personal notes and meeting notes regarding her that were in the possession of the University. The University provided some disclosure, but JR asked the Commissioner to review the University’s assertion of solicitor-client-privilege over some of the records. After mediation failed, the Commissioner commenced a formal inquiry, appointing a delegate under section 61 of FOIPPA to hear the matter (at para 4).

When the University was asked to provide unredacted copies of the records JR had requested, the University’s access and privacy coordinator responded that she had been advised that the University was asserting solicitor-client-privilege over the communications that had been given and received by the University’s lawyers in respect of the matter (at para 5).

The Commissioner’s delegate responded by referring to a document created by the Commissioner’s office: The Solicitor-Client Adjudication Protocol, which, the Court was quick to point out, had no statutory or regulatory force (at para 6). The preamble to the Protocol states that it was the result of a careful analysis of the Supreme Court of Canada’s decision in Canada (Privacy Commissioner) v Blood Tribe Department of Health, 2008 SCC 44, which held that the Privacy Commissioner of Canada did not have the authority to compel production of records subject to solicitor-client-privilege. The Protocol proceeds to distinguish the Blood Tribe case on various grounds (e.g. the difference in powers and procedures between the federal Privacy Commission and the Alberta Information and Privacy Commission) and concludes that the Alberta Commissioner can require production of records in order to assess whether an assertion of solicitor-client-privilege is proper (at para 7).

After the University stated that it was asserting solicitor-client-privilege, the delegate invoked FOIPPA section 56(2) and issued a “notice to produce records”. Further, the delegate relied on section 56(3) of FOIPPA, which provides:

56(3) Despite any other enactment or any privilege of the law of evidence, a public body must produce to the Commissioner within 10 days any record or a copy of any record required under subsection …(2)

It is interesting to compare the language of the impugned provision in the provincial legislation to that in the federal legislation. The Personal Information Protection and Electronic Documents Act, SC 2000 c 5 (PIPEDA) section 12(1), at issue in Blood Tribe, provided as follows in 2008:

12(1) The Commissioner shall conduct an investigation in respect of a complaint and, for that purpose, may

(a) … compel [persons] … to produce any records and things that the Commissioner considers necessary to investigate the complaint, in the same manner and to the same extent as a superior court of record.

This section was amended in 2010, but the current provision (section 12.1) has essentially the same wording as section 12 did in 2008 (see here).

The University sought judicial review of the delegate’s decision to issue the notice to produce. The Law Society of Alberta intervened at both the Court of Queen’s Bench and the Alberta Court of Appeal hearings (at para 10).

Court of Queen’s Bench Justice C.M. Jones used a correctness standard to review whether the Commissioner’s delegate had authority to issue a notice to produce the records when solicitor-client-privilege had been asserted. The correctness standard was also applied to the issue of whether the delegate had to resort to a notice to produce in order to ascertain whether solicitor-client-privilege had been properly asserted (see 2013 ABQB 652 (CanLII) at paras 112 and 121). Was the delegate correct when it stated it was asking for production of the documents in order to determine whether solicitor-client-privilege had been properly asserted?

Justice Jones held that the ordinary meaning of section 56(3) was that the Commissioner (or his/her delegate) had the power to compel the production of records subject to solicitor-client-privilege. This conclusion was supported because only that interpretation would meet the legislative objective of section 2(e) of FOIPPA (providing for independent reviews of decisions of public bodies under FOIPPA) and by the fact that FOIPPA does not limit the Commissioner’s authority to questions of fact and law, except solicitor-client-privilege (ABQB at paras 213-215).

While the University advanced three grounds of appeal, the Alberta Court of Appeal chose to really only deal with one issue: Did Justice Jones err in interpreting section 56(3) of FOIPPA as empowering the Commissioner to order production and inspection of records over which solicitor-client-privilege is asserted, such that he should have followed Blood Tribe? The University was supported by the Law Society’s submission that a contextual analysis of section 56(3) would take into account the importance of solicitor-client-privilege (at para 23).

The ABCA reinforced the holding in Blood Tribe with respect to the correct rule of statutory interpretation to be applied in the context of an assertion of solicitor-client-privilege (at para 40):

Blood Tribe’s direction is categorical: because of the central importance of solicitor-client privilege to our legal system and to the preservation of a relationship which is integral to the administration of justice, where statutory language might be interpreted as authorizing an infringement of solicitor-client privilege, the rule of strict construction – and only the rule of strict construction – is to be applied ab initio. It follows that the chambers judge erred in applying the modern approach to statutory interpretation in considering the meaning of section 56(3). Inasmuch as section 56(3) might authorize the infringement of solicitor-client privilege, he ought to have interpreted that provision strictly. The cases he relied upon in doing otherwise either have no application to solicitor-client privilege (Canada 3000) or are in my respectful view irreconcilable with Blood Tribe and as such in error (Newfoundland and Labrador Information and Privacy Commissioner; Central Coast) [references omitted].

The ABCA next summarized Blood Tribe’s principles about the issue of whether a legislative provision displaces the presumption that the Legislature did not intend to authorize the infringement of solicitor-client-privilege (at paras 42 to 43):

1. To abrogate solicitor-client privilege, statutory language must be clear, unequivocal and unambiguous: Blood Tribe at paras 2, 18, 25-26;

2. Statutory language cannot be taken as authorizing the infringement of solicitor-client privilege by inference or implication: Blood Tribe at paras 18 and 31; and

3. General (or “open-textured”) language granting power to compel production of records is insufficiently specific to authorize a demand for production of records over which solicitor-client privilege is asserted: Blood Tribe at paras 2, 11 and 26.

In brief, statutory language, to be taken as authorizing acts which may infringe solicitor-client privilege, must be clear, explicit and specific. …

The ABCA then applied these principles to the question of whether section 56(3) authorizes the Commissioner to infringe solicitor-client privilege and concluded that section 56(3) “does not clearly, explicitly and specifically authorize infringement of solicitor-client-privilege” (at para 49).

Commentary

It is possible that the question of whether or not provincial privacy commissioners may compel production of documents that are the subject of a claim of solicitor-client privilege—whether for any purpose or for the purpose of determining the veracity of the claim of privilege—will end up being decided by the Supreme Court of Canada. Some provincial commissioners have quasi-judicial (adjudicative) authority that does not exist in the federal sphere. In some jurisdictions, this has been interpreted to mean that in order to fulfill their quasi-judicial mandate, commissioners should at least have the authority to assess whether a claim of solicitor-client-privilege has been properly made.

For example, like Alberta’s Commission, some Ontario boards and commissions consider that their quasi-judicial function allows them to request disclosure of the documents subject to a claim of solicitor-client-privilege, at least for the purpose of determining whether the claim was properly made (see: Simon Ruel, “What Privileges Arise in the Administrative Context and When?” (2013) Can J Admin L & Prac 141 at 153-4). Some provinces have taken a different stance. After similar legislation in Newfoundland and Labrador was interpreted to allow the Commissioner to compel document production in Newfoundland & Labrador (Attorney General) v Newfoundland & Labrador (Information and Privacy Commissioner), 2011 NLCA 69, the Newfoundland and Labrador Legislature amended its legislation in Bill 29 (An Act to Amend the Access to Information and Protection of Privacy Act, SNL 2012, c 25) to exempt the Commissioner from having these powers. (It should be noted that the agency claiming solicitor-client-privilege in this case was governmental.)

The distinction between adjudicative and investigative powers in Commissions is sometimes used by courts to find that commissioners have authority to determine matters of solicitor-client-privilege see: School District No 49 (Central Coast v British Columbia (Information and Privacy Commissioner), 2012 BCSC 427.

The debate centres around the appropriate function of commissions (as administrative tribunals) versus courts. Administrative agencies are not modeled exactly like courts. This is deliberate, to ensure that they are not constrained by overly rigid rules. They are required to act in the public interest, are not bound by stare decisis, and may build relationships with industry members in order to fulfill their statutory regimes (Peter Ruby, Lauren Macleod “Solicitor-Client Privilege and Administrative Agencies” (2009) 22 Can J Admin L & Prac 91 at 93. The lack of stringent rules and greater flexibility allows administrative bodies to be faster and less expensive and may reduce the need for legal representation.

Some commissions argue that, in the interest of supporting administrative expediency, commissions that already have decision-making (and not merely advisory) powers should be able to address the issue of solicitor-client-privilege in order to avoid the expense of a court application. Also, Ruby and MacLeod (at 102) point out that commissioners may frequently use their interpretation of their powers to request that solicitor-client-privilege be waived. On the other hand, solicitor-client-privilege is very highly protected as a substantive rule of law in Canada (Ruby and MacLeod at 94). It is considered to have a critical role in the proper functioning of Canada’s legal system. Lawyers must be able to properly advise their clients, and this requires full disclosure between lawyers and their clients; clients must be candid with their lawyers yet be assured that what they say will not be used against them (Ruby and MacLeod at 94). The argument is that because solicitor-client-privilege is so important, it must be carefully safeguarded, and if a tribunal is going to be given the power to abrogate solicitor-client-privilege by statute, it must be explicitly stated.

It seems in the Alberta case, the easiest solution would be for the Legislature to amend our legislation to explicitly state the Commissioner’s powers to compel disclosure of documents that are subject to the claim of solicitor-client-privilege. Otherwise, government departments and businesses will be able to involve lawyers in cases at the early stages, allowing the assertion of solicitor-client-privilege (whether appropriate or not), thereby requiring the Commission to go to court, and thus possibly discouraging expedient and fair resolution of access to information and privacy cases.

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Is the Federal Government Intent on Hurrying Along the ‘Sixth Extinction’?

Mon, 04/27/2015 - 10:00am

By: Martin Olszynski

PDF Version: Is the Federal Government Intent on Hurrying Along the ‘Sixth Extinction’?

Legislation Commented On: Species At Risk Act, SC 2002 c 29

Sitting on a shelf in my office – unread since roughly this time last year – is Elizabeth Kolbert’s book The Sixth Extinction: An Unnatural History. Ms Kolbert’s book recently won the Pulitzer Prize for non-fiction, having been described by its judges as “an exploration of nature that forces readers to consider the threat posed by human behaviour to a world of astonishing diversity.” Also sitting on my computer’s desktop – unfinished since this past December – has been a blog post about the federal government’s failure to list species under the Species At Risk Act (SARA) since 2011, notwithstanding the fact the scientific body responsible for recommending listing, the Committee on the Status of Endangered Wildlife in Canada (COSEWIC), has made 67 such recommendations since that time (all of which was reported in the Globe and Mail here; after this story broke three bat species were listed, but to my knowledge the government hasn’t changed its basic position, as further discussed below). My plan was to read Ms. Kolbert’s book and use it to frame a post describing yet another example of the federal government’s total disregard for the rule of law when it comes to species at risk (see e.g. here). But I am already late to the party and, having just blogged about environmental-law-as-process and its implications for the environment, it seems to me that such a post makes for a reasonable Exhibit A. The fact that I have a huge pile of marking sitting in front of me right now is also not irrelevant.

To understand the problem it is necessary to first understand the dynamics – and the history – of SARA’s listing process. Pursuant to section 27 of SARA, COSEWIC makes a recommendation to Cabinet. Cabinet, upon recommendation of the Minister of the Environment, then has nine months to either accept the recommendation and list the species, decline the recommendation (in which case it must provide reasons for its decision), or it can return the matter to COSEWIC for further clarification.

As noted by Professor Stewart Elgie, this approach was actually the result of a last minute political compromise that ensured SARA’s passage:

One of the most contentious issues in SARA’s development was the process for listing endangered species. Almost all environmental groups and scientists, and even some industries, advocated a scientific approach, in which COSEWIC …would make final decisions about which species to list under the Act… Environment Minister David Anderson and the Prime Minister’s Office (PMO) were strongly opposed… Their view was that listing species had social and economic consequences, and so decisions should be made by elected, accountable politicians. […]

This listing controversy carried over into the parliamentary Committee hearings held after SARA’s second reading. The Committee decided to adopt a compromise approach… It left cabinet with discretion over species listing, but limited that discretion in two ways: (i) cabinet had to decide within six months of a COSEWIC recommendation, and (ii) it had to provide reasons in the Canada Gazette if it did not accept a COSEWIC recommendation. The hope was that these requirements would result in more species getting listed, or at the very least more timely and transparent decisions.

…The PMO finally agreed to…the Committee’s changes to the listing process (and several other changes), with one small revision: cabinet would have nine months, rather than six, to act on COSEWIC’s recommendations to allow sufficient time for normal pre-regulatory analysis and consultation.

See Stewart Elgie, “Statutory Structure and Species Survival: How constraints on Cabinet discretion affect Endangered Species Listing Outcomes” (2008) 19 J Env Law & Prac 1 at 4-5 [italics mine].

In his article, Professor Elgie sought to test the belief that such a “constrained discretion” scheme would lead to higher listing rates than a purely discretionary approach (as is found in most provinces). The results showed “a substantial difference in listing rates between jurisdictions with full discretion (35%) and those with constrained discretion (78%)” (ibid, at 14), supporting the general thesis that constraining discretion leads to more listing.

Or at least it did, until the federal government seized upon section 25 of the Act:

25. (1) When COSEWIC completes an assessment of the status of a wildlife species, it must provide the Minister…with a copy of the assessment and the reasons for it…

(3) On receiving a copy of an assessment of the status of a wildlife species from COSEWIC under subsection (1), the Minister must, within 90 days, include in the public registry a report on how the Minister intends to respond to the assessment and, to the extent possible, provide time lines for action.

Thus, while section 27 states that Cabinet has only nine months following the receipt of a COSEWIC assessment to make a decision, section 25 states that the assessment first goes to the Minister, who then has only 90 days to report on how he or she intends to respond (a process which includes consultation) but who is given an unspecified amount of time to bring the actual assessment to Cabinet (and triggering the nine month period).

Since about 2007, the government has been of the view that there is no limit on the amount of time that the Minister can take to form his or her response and bring COSEWIC’s assessment to Cabinet, an interpretation so strained that it caught the attention of the House of Commons Standing Joint Committee on the Scrutiny of Regulations:

9. The wording of the Act, taken solely on its face without reference to the broader intent of the scheme reflected in it, does support the interpretation advanced by the Department. At the same time, given the intent of section 27 of the Act as stated by the Minister of the day, it is difficult to conclude that Parliament intended that the goal of a timely decision on an assessment could be defeated simply by delaying submission of the assessment to [Cabinet]. Indeed, under the interpretation advanced by the Department, it would have to be concluded that [Cabinet] need never be provided with an assessment, no matter what recommendation it might contain. The Committee has therefore concluded that the failure to provide for the delivery to, and receipt of, an assessment by [Cabinet] reflects an unintended gap in the scheme established by the Act” [italics mine].

While it is certainly open to the Committee to entertain an interpretation of section 25 that disregards Parliamentary intent and the scheme of the Act, courts are pretty much bound by the rules of statutory interpretation, the most important one being that “the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament” (E.A. Driedger, Construction of Statutes (2nd ed. 1983) at 87).

As it turns out, this “purposive approach” was invoked to resolve a similar conundrum under the Canadian Environmental Protection Act, 1999, SC 1999 c 33 a few years back. In Great Lakes United v. Canada (Minister of the Environment), 2009 FC 408 (CanLII), the applicants – once again, environmental groups – alleged that the Minister of Environment was in breach of his duties in relation to the National Pollution Reporting Inventory (NPRI). More specifically, they alleged that the Minister had unlawfully failed to require mining companies to report releases or transfers of pollutants from their tailings impoundment areas. The relevant sections were 46 and 48:

46. (1) The Minister may, for the purpose of conducting research, creating an inventory of data, [etc…] publish…a notice requiring any person described in the notice to provide the Minister with any information that may be in the possession of that person…

48. The Minister shall establish a national inventory of releases of pollutants using the information collected under section 46 and any other information to which the Minister has access…

The government argued that “the use of the word ‘may’ in section 46 makes it clear that the section is wholly permissive, and the Minister’s choice of the scope of information required under any notice sent out under section 46 is entirely the function of a policy decision” (at para 194). Justice Russell disagreed:

[198] If this interpretation were accepted, however, it would mean that, if the Minister chooses not to collect information under section 46 about any “releases of pollutants”, either from a particular sector or otherwise, then any national inventory established under section 48 need not accurately or fully reveal to Canadians the environmental and health hazards they face.

[199] This interpretation is very difficult to reconcile with the obligations imposed upon the Government of Canada under other sections of the CEPA and, in particular, section 2 which, among other things, obliges the Government of Canada to protect the environment and to provide information to the people of Canada on the state of the Canadian environment.

[200] Simply put, I cannot see how the national inventory that must be established under section 48 can, when the full context of the CEPA is examined, be entirely governed by whatever information the Minister may, or may not, choose to collect under section 46.

[201] The discretion allowed under section 46 must, in my view, be exercised in a way that meets the obligations of the Government of Canada, as those obligations are defined in the CEPA, and that allows the various tools necessary to fulfill the general scheme and objects of the CEPA to be assembled and used in a meaningful way. A national inventory of releases of pollutants can hardly play the role ascribed to it by the CEPA if the Minister decides, under section 46, not to collect information so that the people of Canada are not provided with a full and accurate picture of the releases of those pollutants that pose environmental and health risks.

In my view, the same reasoning applies to SARA and the Minister’s duties pursuant to section 25. SARA is, by its very nature, ‘emergency room’ legislation. As recently noted by the Federal Court in Western Canada Wilderness Committee v Canada (Fisheries and Oceans), 2014 FC 148 (CanLII), in the context of litigation challenging the government’s failure to prepare SARA recovery strategies on time:

[101] To state the obvious, the Species at Risk Act was enacted because some wildlife species in Canada are at risk. As the applicants note, many are in a race against the clock as increased pressure is put on their critical habitat, and their ultimate survival may be at stake.

[102] The timelines contained in the Act reflect the clearly articulated will of Parliament…recognizing that there is indeed urgency in these matters.

While it is true that section 25 contains no clear timelines, it is equally clear that the Minister cannot drag his or her feet in tabling a COSEWIC assessment before Cabinet. “There is always a perspective within which a statute is intended to operate; and any clear departure from its lines or objects is just as objectionable as fraud or corruption.” (Roncarelli v. Duplessis, [1959] SCR 121 at 140). There are presently 117 species awaiting a Ministerial response. Don’t dither, Minister. To borrow the words of Ms. Kolbert, you are “deciding…which evolutionary pathways will remain open and which will forever be closed” (at 268).

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Still Just the Facts: Applying the Bright Line Rule

Thu, 04/23/2015 - 10:00am

By: Alice Woolley

PDF Version: Still Just the Facts: Applying the Bright Line Rule

Case Commented On: Statesman Master Builders v Bennett Jones LLP, 2015 ABCA 142

In a unanimous judgment the Alberta Court of Appeal has reversed a decision by Justice Macleod removing Bennett Jones LLP as counsel for its longstanding client Matco Investments Ltd. on the basis of a conflict of interest (Justice Macleod’s decision is here). In a blog on that earlier judgment I suggested that the decision indicated the importance of the facts to the outcome in conflicts cases. While the firm had taken significant steps to manage the conflict, the case management judge may have been influenced by the fact it had not been as absolutely candid as it could be:

The unfortunate thing for the firm here is that in many ways it had been candid with Statesman. Its e-mail regarding the advance consent was pretty blunt as to what it was trying to do. But the lesson may be that there is very little judicial tolerance for an absence of candour in situations of conflict; a little bit of candour won’t do (“The more things change…”)

The Court of Appeal (Justices Berger, Veldhuis and Wakeling) has now reached a different result, ruling that the firm ought not to be disqualified. That result appears, however, not to be because the Court of Appeal has adopted a tolerant attitude to an absence of candour. Rather, the Court of Appeal seems simply to have assessed the firm’s conduct differently, viewing the advance consent obtained by the firm as sufficient to make it unreasonable for the client to now assert a conflict. The Court of Appeal also relied on its finding that by the time of the alleged conflict the affected client “had already terminated its limited retainer” (at para 23) which was a different interpretation of the facts than that of the case management judge.

The conflicts issue arose from a dispute between Matco Investments Ltd. and the Statesman Group of Companies, which had been in a joint venture to develop some condominiums through the General Partner, in which they held equal shares. Matco was a longstanding client of Bennett Jones, and the firm acted for the company in relation to the joint venture. It also, however, acted for the General Partner in a builders’ lien dispute against a third party. Before it took on that case the firm sent a conflicts waiver to the Statesman Group general counsel saying:

Matco is an important client of our firm, and I want to be careful that by this retainer we do not disqualify ourselves from assisting Matco in what I trust is the unlikely event of disagreement between it and the Statesman group in future. I confirm our agreement that this retainer is sufficiently limited in scope that you will take no objection to our continued freedom to act for Matco in such event (at para 5).

In 2010 a disagreement did arise between Matco and Statesman, and Matco retained Bennett Jones to pursue an oppression action against Statesman. Statesman found out that Bennett Jones was acting on the oppression matter on June 21, 2010 (at para 10). The last activity on the builders’ lien file occurred on June 24, 2010, at which point the file was transferred to another law firm.

The Court of Appeal noted that Bennett Jones said that the retainer had in fact been ended by the General Partner in May 2010, but the letter terminating the retainer was not introduced in evidence. The Court of Appeal did observe though that from late May the billings on the file were only for “non-substantive services” (at para 8). Ultimately the Court of Appeal concluded that by June 2010 “the Statesman Group itself had already terminated its limited retainer with Bennett Jones” (at para 23). In the original case management decision Justice Macleod, by contrast, said “Apparently, the Law Firm became aware that the Statesman group was in the process of terminating the Law Firm but nonetheless they acted for those entities up until June 24, 2010.” (ABQB, at para 12).

Based on these facts the Court of Appeal held that Bennett Jones ought not to have been removed as counsel for Matco. In its view it was not reasonable for Statesman to object to Bennett Jones’s conduct. Matco was a long-standing client of the firm; the builders’ lien matter was very specific and only accepted by Bennett Jones “on the express condition that it would not be prevented from acting for its continuing client, Matco, in any future disputes”; Statesman had terminated the retainer prior to that action beginning; and, there was no factual connection between the oppression action and the builders’ lien dispute (at para 23).

The Court of Appeal expressly rejected Justice Macleod’s conclusion that the consent did not cover the dispute that had arisen between Matco and Statesman, staying that that conclusion was “contrary to the express words of the consent which refer to any future disagreement between Matco and the Statesman Group” (at para 24). The Court further noted that there was no substantial risk to Bennett Jones’ representation of the General Partner given the “short overlap” between when Matco raised the oppression issue and when Statesman terminated its retainer (at para 27). Further, Bennett Jones did not act without commitment to its client given that “the Statesman Group terminated its limited retainer with Bennett Jones on its own volition” (at para 28). Also, contrary to the conclusion of the case management judge, Bennett Jones did not violate its duty of candour given that from the outset it was clear with Statesman that it would continue to represent Matco (at para 30).

Finally, the Court held that the disqualification remedy was not appropriate. It could not be justified to protect confidential information or to avoid impaired representation, and it was also not necessary to “maintain the repute of the administration of justice” (at para 32). Statesman had delayed a year before seeking to remove Bennett Jones, disqualification would deprive Matco of the law firm it had used for over 25 years, and Bennett Jones was acting on a good faith belief “that its continued representation of Matco did not contravene any duty of loyalty” (at para 34).

In the end the difference between the case management judge and the Court of Appeal seems largely to come down to two things: the Court of Appeal saw the advance consent as sufficient to give Matco notice of the conflict, and relied on Statesman having terminated its relationship to Bennett Jones at or around the time that the conflict arose. Given those different assessments of the facts, the different legal conclusions naturally follow.

The focus for firms managing conflicts of interest remains on acting with as much good faith and candour with affected parties as they can. The additional thought, however, is that a firm may also need to hope for good fortune in being able to convince a reviewing court of that good faith and candour in the first instance.

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Environmental Laws as Decision-Making Processes (or, Why I am Grateful for Environmental Groups this Earth Day)

Wed, 04/22/2015 - 9:22am

By: Martin Olszynski    

PDF Version: Environmental Laws as Decision-Making Processes (or, Why I am Grateful for Environmental Groups this Earth Day)             

Event commented on: Earth Day

This past weekend, as part of the Canadian Institute for Resource Law’s “Saturday Morning at the Law School” series, I gave a free public lecture on the basic nature and features of Canadian environmental law. April 22 being Earth Day, I thought I would try to capture some of that discussion in a blog post. My starting point was that while Canadians may assume that their environmental laws consist of standards and limits designed to protect the natural environment, the reality is that many of our most important environmental laws simply set out a process for decision-making, where environmental considerations have varying degrees of importance. As further set out in this post, this reality has important implications for the state of the environment and the mechanics of government accountability, which in turn suggest a fundamental and indispensable, if also imperfect, role for environmental groups in this context.

Some Substantive Environmental Laws

Before considering environmental laws as process, I should make clear that there are some substantive environmental laws in Canada. Most of these take the form of activity or industry specific regulations developed by various ministries and departments by virtue of some authority in the laws passed by our legislatures. For example, pursuant to subsections 36(5), 36(5.1), and 36(5.2) of the federal Fisheries Act, RSC 1985 c F-1, the Governor in Council (i.e. Cabinet) has been given the authority to develop regulations to authorize the deposit of substances deleterious to fish, which is otherwise prohibited by subsection 36(3). There are now ten such regulations applying to various industries and activities: metal mining, pulp and paper mills, and wastewater systems (to name but a few). Most – though not all – of these contain quantitative limits on the amount of pollution that can be released (see e.g. Schedule 4 of the Metal Mining Effluent Regulations SOR 2002-222). To be sure, these limits are not totally protective; rather – and much like the process-based environmental laws discussed below – they reflect a compromise of environmental, economic and social considerations.

Environmental Laws as Discretionary Decision-Making Processes

Many environmental laws, however, do not contain any substantive limits – including some of Canada’s most important ones. For example, subsection 35(1) of the Fisheries Act states that “no person shall carry on any work, undertaking or activity that results in serious harm to fish that are part of a commercial, recreational or Aboriginal fishery, or to fish that support such a fishery.”

On its face, this law appears very protective, bearing in mind that the Fisheries Act defines serious harm as “the death of fish, or the permanent alteration or destruction of fish habitat” and that commercial, recreational and Aboriginal fisheries are found in most Canadian waters (at least according to the Department responsible for enforcing the Act). But this is only half the story. Pursuant to subsection 35(2), and paragraph 35(2)(b) in particular, the Minister (through his or her delegates in the Department) is given a broad discretion to authorize such harm pursuant to whatever terms and conditions he or she deems fit. Although the Minister is required to take certain environmental considerations into account (as further discussed below), there is no clear limit to the amount of harm that he or she may authorize.

A similar scheme is found under the much-reduced-in-scope Navigation Protection Act, RSC 1985 c N-22. Section 3 prohibits the construction, placement, alteration, etc… of any work in or across any listed navigable water, but the Minister may approve such works pursuant to section 6. The same is true on the provincial level. Under Alberta’s Water Act, RSA 2000 c W-3, for example, it is prohibited to take or divert water without a license (subsection 49(1)), but the relevant regulator (Alberta Environment and Sustainable Resource Development or, in the case of oil and gas activities, the Alberta Energy Regulator) is given a broad discretion to grant such licenses (subsection 51(4)).

As I’ve blogged about before, the procedural nature of modern environmental law has actually long been recognized. In his authoritative article on the topic nearly ten years ago, American law professor Dan Tarlock invoked scientific uncertainty (especially in the field of ecology) as one of the main drivers of an environmental law that he described as “a dynamic, but inevitably ad hoc, decision-making process” (A. Dan Tarlock, “Is There a There There in Environmental Law?” (2004) 19 J Land Use & Envtl L 213 at 219). At the same time, Professor Tarlock was quick to add that such processes had to be structured with what he termed “guideposts”: “environmental impact assessment, polluter pays, precaution, and sustainable development” (ibid). The need for such guideposts speaks to the other main driver of the environmental law-as-process paradigm: the reluctance of governments to bind themselves too tightly in this context. In matters of environmental and natural resources development, governments often prefer discretionary decision-making powers, even though (or perhaps because) it is widely understood that the exercise of such powers is “subject to the political, economic, and social winds of the time and place in which any particular decision occurs” and that “such winds usually favour business as usual,” not environmental protection (see Bruce Pardy, “Ecosystem Management in Question: A Reply to Ruhl” (2005) 23 Pace Environ Law Rev 209 at 217).

The purpose of “guideposts,” then, is to act as a kind of drag on government decision-making, reducing an otherwise infinite number of potential outcomes to those that fit within a certain, at least somewhat protective, range. Under the Canada National Parks Act, SC 2000 c 32, for example, subsection 8(2) requires the Minister to give the “maintenance or restoration of ecological priority” first priority in all aspects of parks management. Similarly, where the Minister of Fisheries and Oceans proposes to authorize serious harm to fish pursuant to subsection 35(2) of the Fisheries Act, section 6 sets out a series of factors that he or she must consider, including fisheries management objectives and whether there are measures available to avoid, mitigate or offset serious harm to fish, all with a view towards providing for “the sustainability and ongoing productivity of commercial, recreational and Aboriginal fisheries” (section 6.1). While such guideposts will not yield a single right answer, and in some cases have not lived up to expectations, they do narrow the range of potential outcomes.

Perhaps the strictest set of guideposts can be found in the federal Species at Risk Act, SC 2002 c 29 (SARA).  Like the examples above, section 32 prohibits the killing, harming, harassment or capture of a listed species (e.g. endangered or threatened), while subsection 73(1) gives the Minister the power to issue a permit for such harm where it is “incidental” to carrying out some other activity (often referred to as “incidental take” permits). Before issuing such a permit, however, the Minister must be of the opinion that (subsection 73(3)):

(a) all reasonable alternatives to the activity that would reduce the impact on the species have been considered and the best solution has been adopted;

(b) all feasible measures will be taken to minimize the impact of the activity on the species or its critical habitat or the residences of its individuals; and

(c) the activity will not jeopardize the survival or recovery of the species.

This list, and (c) especially, comes very close to a substantive standard (or environmental bottom line) while still leaving room for some permits to be issued in certain instances. Pursuant to subsection 73(3.1), the Minister must include in a public registry an explanation of why any permit has been issued, taking into account the matters referred to above.

Implications

Perhaps the most important practical effect of the environmental law-as-decision-making process paradigm is that each day, permit-by-permit, authorization-by-authorization, Canada’s environment is being degraded. The extent of this degradation depends on the actual decisions made. Some decisions will fall within the range established by the relevant guideposts; many do not (this is the stuff of the vast majority of environmental litigation). Differentiating between these two requires effort. Some statutes provide for public notice to be given when a decision is made (e.g. the Water Act, SARA, the Canadian Environmental Assessment Act, 2012, SC 2012 c 19 s 52), but others do not (e.g. the Fisheries Act). And while it is tempting to suggest that the latter should simply be amended to require such notice (they should be), this ignores the fact that Canadians are arguably already drowning in information.

If you were inclined to keep tabs on major resource development, or a specific project in particular, you’d have to know your way around the Canadian Environmental Assessment Registry. If you happen to be concerned about species at risk, you better get familiar with the SARA Registry. Concerned about pollution more generally? You’ll need to visit Environment Canada’s National Pollution Release Inventory. Perhaps oil sands are your thing; you now have unprecedented access to air, land and water data through the Joint Oil Sands Monitoring Program’s Information Portal. You should also browse through relevant permits and authorizations on Alberta Environment and Sustainable Resource Development’s website. Want to know about the state of Alberta’s environment more broadly? Let me introduce you to the Alberta Environmental Monitoring, Evaluation and Reporting Agency (AEMERA). Simply put, the number of decisions being made and the amount of information that needs to be digested is staggering.

Enter environmental groups. I am using the term broadly here to refer not just to the big environmental non-governmental organizations but also the small and local ones. I have never worked for one so can’t say for sure, but it seems that at least some staff and/or volunteers make it their job to keep track of those decisions relevant to their mandate. When something seems amiss, they try to raise public awareness and yes, sometimes they go to court. Both are difficult tasks. With respect to the former, they are faced with general apathy (an observation, not a criticism). With respect to the latter, they will be successful if – and only if – they can convince a court that the decision in question falls outside of the above noted range of permissible outcomes, which is a rather long-winded way of saying it was unlawful. If not, the matter returns to the public, or political, arena.

This is not to suggest that I agree with everything these organizations do, or every tactic they adopt. But as Professor Bankes and Mascher and I recently observed, there would probably still be no critical habitat identified for the Greater Sage Grouse, no proposed recovery strategies for White Sturgeon, and no legal protection for Killer Whales (all unlawfully withheld) without these groups and the litigation that they bring forward.

It may be the case that, when a tree falls in the forest and no one is around, it doesn’t make a sound. But if that tree was unlawfully felled, then it still contributes to the process of environmental degradation. In this context, and to borrow the (in)famous wording of the Northern Gateway Joint Review Panel, Canadians seem better off with environmental groups than without them.

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Keeping Faith Out of the Public Square: Is Calgary City Hall Offside?

Mon, 04/20/2015 - 10:00am

By: Kathleen Mahoney

PDF Version: Keeping Faith Out of the Public Square: Is Calgary City Hall Offside?

Case Commented On: Mouvement laïque québécois v Saguenay (City), 2015 SCC 16

O God, author of all wisdom, knowledge and understanding. We ask Thy guidance in our consultations to the end that truth and justice may prevail, in all our judgments. Amen. (Prayer recited at Calgary City Council meetings)

What is wrong with this invocation? The Supreme Court of Canada would say nothing, as long as it is not invoked at City Hall to open meetings. In its recent decision in Mouvement laïque québécois v Saguenay (City), 2015 SCC 16 [Saguenay], the Court seems to have closed all the doors to future prospects of religious faith playing a role in the public square. Calgary’s mayor Naheed Nenshi disagrees, saying that there is room in the public square for faith, and that Calgary City Hall will explore ways of getting around the ruling. (Calgary Herald, April 15, 2015). Will this be possible? Constitutionally speaking, it will be very difficult.

The Saguenay case arose when a citizen, Mr. Simoneau, who regularly attended the public meetings of the municipal council of the City of Saguenay objected to the way in which the mayor opened the meetings by reciting a Catholic prayer, starting and finishing with the sign of the cross. Simoneau, who considers himself an atheist, felt uncomfortable with this practice and asked the mayor to stop. When the mayor refused, he brought his complaint to the Québec Human Rights Commission, arguing that contrary to the Quebec Charter, his freedom of conscience and religion was being infringed by the mayor and City Hall and asked that the recitation of the prayer cease. City Hall then pre-emptively passed a by-law attempting to address the substance of the complaint and accommodate the non-believers. The by-law changed the wording of the prayer and provided for a two?minute delay between the end of the prayer and the official opening of council meetings so that non-believers could leave the Chamber while the prayer was being recited. Simoneau then challenged the legitimacy of the new by-law.

The Human Rights Commission struck down the by-law and ordered that the recitation of the prayer cease and awarded $30,000 in compensatory and punitive damages to the complainant. The Quebec Court of Appeal reversed the decision, saying that the prayer expressed universal values and could not be identified with any particular religion, and thus did not affect the state’s neutrality. According to the Court of Appeal, Mr. Simoneau had not been discriminated against and any interference with his beliefs was trivial or insubstantial. The Supreme Court of Canada unanimously restored the decision of the Human Rights Commission (with a majority judgment by Justice Gascon and a concurring judgment by Justice Abella, disagreeing only with respect to the majority’s approach to the standard of review).

The core value of state neutrality is front and center in the Court’s decision. This should come as no surprise to anyone familiar with the Supreme Court’s jurisprudence on freedom of religion. The Court cited the Big M Drug Mart decision of 1985 (at para 68) where then Chief Justice Dickson, in striking down Sunday observance legislation, said:

           A truly free society is one which can accommodate a wide variety of beliefs, diversity of tastes and pursuits, customs and codes of conduct. A free society is one which aims at equality with respect to the enjoyment of fundamental freedoms” (R v Big M Drug Mart Ltd., 1985 CanLII 69 (SCC), [1985] 1 SCR 295 at 336-37).

Following this principle, the Court in this case emphasized that the constitutional guarantee of freedom of religion and conscience means that the freedom to be free from religion is just as important as the freedom to practice it (at paras 70, 74). Agnostics and atheists are entitled to express their beliefs just as much as believers. By having an opening prayer to begin the business of City Hall, the principle is violated because by officially invoking God’s guidance, City Council is effectively practicing religion.

Expanding on the necessity for neutral public spaces, the Court says dignity, multiculturalism and diversity (at para 74) are also preserved. In a rare move, the Court invoked the multiculturalism section of the Canadian Charter, saying section 27 requires that the state’s duty of neutrality be interpreted not only in a manner consistent with the protective objectives of the Charter, but also with a view to promoting and enhancing diversity. Section 27 recognizes that Canada is not the purely Christian nation it once was. While the Christian faith may be part of Canada’s or Quebec’s culture and heritage, governments cannot hide behind history to promote religious views (at paras 78, 118).

The Court rejected the argument that by taking religion out of public spaces the Court favours non-believers. It pointed out that it would be equally offensive if municipal officials were to make a solemn declaration that its proceedings were based on a denial of God. The state neutrality principle would render such an invocation unconstitutional because it would exclude those who believe in a God (at para 133).

Finding that prayers in the public square violate equality rights of non-believers further bolstered the Supreme Court’s ruling (at paras 116, 127). When government officials legitimize prayers as part of official functions, they discriminate against non-believers’ fundamental rights to equally participate in the democratic process (at paras 75, 120, 127). Nenshi’s argument that a non-denominational prayer would suffice, fails to address exclusion. Any kind of prayer amounts to making City Hall a preferential space for people with religious beliefs. By injecting prayer into official proceedings, the Council creates a favorable environment for believers’ democratic participation. The non?believers who wish to participate pay the price of isolation, exclusion and stigmatization by doing so (at para 121). The Court found Saguenay’s attempt at accommodation by giving those who preferred not to attend the recitation of the prayer time to leave and re?enter the council chamber had the effect of exacerbating the discrimination. When the prayer was being said non-believers had two choices: draw attention to themselves by publically announcing their beliefs inviting stigmatization and exclusion; or stay in place and participate in a practice offensive to their atheistic beliefs. The Court found this to be an unacceptably discriminatory (at paras 121, 122).

It is clear that neither the preservation of a historical religious heritage nor the notion that a given faith is that of the majority should override the constitutional principles underlying the state neutrality principle. The Court acknowledged the historical roots of confederation with religion but explained the evolution of political theory in Western democracies toward religious neutrality, citing (at para 71) the explanation of Lebel J. in the case of Congrégation des témoins de Jéhovah de St?Jérôme?Lafontaine v Lafontaine (Village), 2004 SCC 48 (CanLII), [2004] 2 SCR 650:

…There were, of course, periods when there was a close union of ecclesiastical and secular authorities in Canada. European settlers introduced to Canada a political theory according to which the social order was based on an intimate alliance of the state and a single church, which the state was expected to promote within its borders. Throughout the history of New France, the Catholic Church enjoyed the status of sole state religion. After the Conquest and the Treaty of Paris, the Anglican Church became the official state religion, although social realities prompted governments to give official recognition to the status and role of the Catholic Church and various Protestant denominations. This sometimes official, sometimes tacit recognition, which reflected the make?up of and trends in the society of the period, often inspired legislative solutions and certain policy choices. Thus, at the time of Confederation in 1867, the concept of religious neutrality implied primarily respect for Christian denominations…

Consequently, the City of Saguenay’s argument that their prayer was no different than the one recited by the Speaker in the House of Commons and should be accepted as a legitimate reflection of Canadian tradition was rejected (at para 142). Although the House of Commons prayer could possibly be protected by Parliamentary privilege, in light of the Supreme Court’s ruling, it too, is likely unconstitutional. The Court avoided the discussion, stating that in the absence of evidence concerning the House of Commons prayer; it would be inappropriate to refer to it to support a finding on the validity of Saguenay’s prayer (at para 143).

In a similar vein, Saguenay argued that the reference to the supremacy of God in the preamble to the Canadian Charter that states: “Whereas Canada is founded upon principles that recognize the supremacy of God and the rule of law,” authorizes the state to profess a theistic faith. Rejecting this argument as well, the Court said the preamble to the Charter articulates the “political theory” underlying the 1867 constitution upon which the Charter’s protections are based (at para 147, citing Reference re Remuneration of Judges of the Provincial Court of Prince Edward Island, [1997] 3 SCR 3 at para 95.) Thus, the reference to God in the preamble could not be relied on to reduce the scope of the freedom of religion and conscience nor could it have the effect of granting a privileged status to theistic religious practices (at para 149).

On the other hand, something that may give some comfort to Mayor Nenshi is the Court’s acknowledgment that their analysis does not apply to every reference to God in the public sphere. The Court’s concern is when the reference amounts to the state’s observance of a religious practice (at para 146):

The moral source of that practice, whether divine or otherwise, is but one of the contextual factors that make it possible to identify the practice’s purpose and its effect. It is that purpose and that effect that are determinative of the existence of discriminatory interference with freedom of conscience and religion and of a breach of the state’s duty of neutrality.

This would give a municipality some leeway to allow prayer in the public domain by, for example, having a moment of silence for participants to invoke their own source of inspiration and guidance, religious or secular, before the meeting commences. In order for any religious references in the public square to amount to an infringement of fundamental freedoms the minimum threshold the Court must find is (1) that the complainant’s belief is sincere, and (2) find that the complainant’s ability to act in accordance with his or her beliefs has been interfered with in a manner that is more than trivial or insubstantial (at para 86). Thus, references such as “God keep our land glorious and free” in the national anthem would not offend neutrality principles.

A neutral public space, therefore, does not mean the homogenization of private players or an obliteration of religious diversity (at para 74). The principle that neutrality is required of institutions and the state, not individuals and groups, is an important distinction (at para 74, citing R v N.S., 2012 SCC 72, [2012] 3 SCR 726, at paras 31 and 50?51).

Future directions in the law with respect to individual and group expressions of faith are foreshadowed in another Quebec case, Loyola High School v Quebec (Attorney General) 2015 SCC 12, that held “a secular state does not – and cannot – interfere with the beliefs and practices of a religious group unless they conflict with or harm over-riding public interests” (at para 43).

This indicates that while the Court cannot see its way clear to approve religious practices by the state, it also will not look kindly on any attempts by the state to impose religious beliefs on individuals such as secular dress codes on the public servants (such as was attempted in Quebec) or attempts to impose bans on face-covering niqabs at citizenship ceremonies (as the federal government wishes to do) unless they can demonstrate a compelling reason of public interest to do so.

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Does the Stinert Decision Signal the End of the Preliminary Inquiry?

Fri, 04/17/2015 - 10:00am

By: Lisa Silver

PDF Version: Does the Stinert Decision Signal the End of the Preliminary Inquiry?

Case Commented On: Regina v Stinert, 2015 ABPC 4

For years the efficacy of the preliminary inquiry has been questioned, studied and pronounced upon by lawyers, government officials, and the courts. Despite debate and amendments, the inquiry still exists as the legislative “shield” between the accused and the Crown, protecting, as Justice Estey explains in the 1984 majority decision of Skogman v The Queen, [1984] 2 SCR 93 (at page 105), “the accused from a needless, and indeed, improper, exposure to public trial where the enforcement agency is not in possession of evidence to warrant the continuation of the process.” However, the preliminary inquiry is at risk. Both levels of government see no value in the procedure, only costs. The courts, since Skogman, have followed suit finding the preliminary inquiry irrelevant and contrary to the efficient and effective administration of justice. Certainly, the recent Alberta Provincial Court decision in Regina v Stinert, 2015 ABPC 4 reflects this view and, as argued in this post, may signal the end of the preliminary inquiry.

The preliminary inquiry discussion started benignly with the call for the abolition of the grand jury system; an English common law procedure requiring a panel of 24 jurors to evaluate the charges to determine if the case should proceed to an Indictment. The grand jury was ultimately codified in the 1892 Criminal Code but not before a vigorous debate on the issue. Prior to presenting the final version of the Criminal Code, the government requested input on the grand jury from justice officials including eminent judges. This correspondence, as well as the subsequent vote, is documented in the Sessional Papers No. 66 from the Sessional Papers of the Parliament of the Dominion of Canada, Volume 17, 1891.

The vote on the issue was too close to command any change, with 48 judges and attorneys general in favour of abolishing the practice, 41 against abolition and 12 undecided on the issue. Instead, the grand jury system was abolished by attrition as individual provinces simply stopped using the practice. Even so, the ability to convene a grand jury remained in the Code until finally repealed in the 1985 Criminal Code amendments. To this day, s. 576(2) still specifically precludes the preferment of a bill of Indictment before a grand jury. Ironically, the principle argument advanced in favour of eliminating the grand jury inquiry, which Supreme Court of Canada Justice Gwynne called in the 1891 debate “more ludicrous than real,” was the existence of the preliminary inquiry as the true procedural safeguard against the power of the state.

The main purpose of the preliminary inquiry is the committal function. To determine this, a preliminary inquiry justice considers whether or not there is sufficient evidence to commit the accused to trial pursuant to s. 548 of the Criminal Code. If the evidence is insufficient for committal, the accused will be discharged. In those circumstances, the Crown still has the authority to prefer an Indictment under s. 577 of the Code with the written consent of the Attorney General or Deputy Attorney General.

Although the test requires a fairly low evidential threshold, there are cogent illustrations of the impact of this discharge power. An example is found in the case of Susan Nelles, who was the pediatric nurse on duty when a number of babies died in the cardiac ward of the Hospital for Sick Kids in the early 1980s. She was ultimately charged with first-degree murder of four children by allegedly injecting them with lethal doses of the drug digoxin. The subsequent preliminary inquiry revealed a complete lack of evidence for the charge, resulting not only in her discharge but also in an inquiry into the deaths. In this way, a preliminary inquiry protects an accused from the awesome power of the state and can also provide a forum safe from the vagaries of public opinion.

Nevertheless, according to Mr. Justice Estey in Skogman, the preliminary inquiry serves an additional purpose, derived through usage, of “a forum where the accused is afforded an opportunity to discover and to appreciate the case to be made against him at trial where the requisite evidence is found to be present” (at page 105). It is this ancillary purpose, grounded in the right of an accused to make full answer and defence, which garners the most criticism and provides support for abolition. This argument suggests that with the advent of the Charter and the stringent disclosure requirements of Stinchcombe, [1991] 3 SCR 326, the preliminary inquiry is no longer a necessary discovery tool.

In the 1985 Arviv decision, 19 CCC (3d) 395, 1985 CarswellOnt 97, the highly regarded criminal law jurist Mr. Justice Martin, writing for the Ontario Court of Appeal, made explicit the connection between the inquiry discovery function and the disclosure obligation when he commented on “the failure to institutionalize procedures for the disclosure of the Crown’s case has contributed to the development of this function of the preliminary hearing. A preliminary hearing is not, of course, the only way of providing disclosure or discovery of the Crown’s case” (at para 31). This added caveat is clear: there are other less costly and time efficient ways to fulfill disclosure requirements. Thus in Arviv, the court found that a direct Indictment depriving the accused of a preliminary inquiry, and the subsequent loss of the ability to cross examinee the main Crown witness prior to trial, was not contrary to s. 7 of the Charter provided there was adequate disclosure.

Coincidentally, it was Mr. Justice Martin who earlier chaired and wrote the majority opinion of the 1982 Ontario Bench and Bar Council Report of the Special Committee on Preliminary Hearings. Unsurprisingly, the majority report called for an end to the preliminary inquiry to be replaced by a robust disclosure procedure. Notably, there was a minority report submitted by two prominent defence counsel, Earl Levy, Q.C. and the now retired Ontario Superior Court Justice Ron Thomas, which cautioned against the removal of the inquiry process. Despite the controversy, the preliminary inquiry seemed, for a time, to be safe from legislative abrogation.

About a decade later, in the O’Connor case, [1995] 4 SCR 411 the Supreme Court of Canada, in an all too familiar fractured mid-nineties type of decision, had an opportunity to weigh in on the matter in the context of the production of third-party records. Madam Justice L’Heureux-Dubé, writing in obiter on this issue, reiterated the stance articulated in Arviv and, in a strongly worded rebuke directed toward defence counsel, she commented (at para 170) that:

Although preliminary inquiry judges are not permitted to determine the credibility of witnesses, one might hazard to say that the ancillary purpose of “discovery” has lately begun to eclipse the primary purpose of sparing the accused the gross indignity of being placed on trial in circumstances where there is simply insufficient evidence to justify holding the trial at all.  One provincial court judge, in the course of a thoughtful discussion on the evolving role of the preliminary inquiry, recently expressed great frustration with this apparent turn of events:

…the preliminary hearing or preliminary inquiry has been turned into a nightmarish experience for any provincial court judge.  Rules with respect to relevancy have been widened beyond recognition.  Cross-examination at a preliminary inquiry now seems to have no limits.  Attempts by provincial court judges to limit cross-examination have been perceived by some superior courts as a breach of the accused’s right to fundamental justice, a breach of his or her ability to be able to make full answer and defence…The present state of the preliminary inquiry is akin to a rudderless ship on choppy waters.  The preliminary hearing has been turned into a free-for-all, a living hell for victims of crime and witnesses who are called to take part in this archaic ritual. (R. v. Darby, [1994] B.C.J. No. 814 (Prov. Ct.), at paras. 9 and 10.)

Justice L’Heureux-Dubé considered the Stinchcombe requirements as an appropriate substitute for the ancillary purpose of the preliminary inquiry and concluded by suggesting that “consequently, in light of Stinchcombe and other decisions of this Court that have elaborated on those disclosure guidelines…, it may be necessary to reassess the extent to which the “discovery” rationale remains appropriate as a consideration in the conduct of the modern-day preliminary inquiry” (at para 171).

This reassessment did indeed happen and not too long after the O’Connor case. In October of 2001, the then Liberal government proposed, as part of a miscellany of criminal law amendments, significant changes to the preliminary inquiry process in the omnibus Bill C-15. The then Justice Minister Anne McLellan, in her presentation to the House upon second reading of the Bill, described the revisions as criminal procedure reform, spearheaded by the provinces, in an effort to:

simplify trial procedure, modernize the criminal justice system and enhance its efficiency through the increased use of technology, better protect victims and witnesses in criminal trials, and provide speedy trials in accordance with charter requirements. We are trying to bring criminal procedure into the 21st century. This phase reflects our efforts to modernize our procedure without in any way reducing the measure of justice provided by the system.

Madame Justice Deschamps considered these amendments in Regina v S.J.L., [2009] 1 SCR 426. In her majority decision, the Court confirmed there was no constitutional right to a preliminary inquiry. According to Justice Deschamps (at para 23), the ancillary function of the preliminary as a discovery tool “has lost much of its relevance” due to enhanced disclosure requirements, which did not include requiring the Crown to produce a witness for cross examination at the preliminary inquiry. Justice Deschamps pointed to the new procedures as clearly illustrating the trend “toward the adoption of mechanisms that are better adapted to the needs of the parties, not the imposition of more inflexible procedures” (at para 24).

It is this last phrase – “better adapted to the needs of the parties, not the imposition of more inflexible procedures” – that requires further attention. A quick survey of the new procedures suggests the opposite: the rules have in fact created a more inflexible process, whereby the needs of the accused may not be met as they were under the less regulated system.

The primary modification made by the 2002 amendments appears to be insignificant but, in fact, serves to animate the previous criticisms of the preliminary hearing. The new Code section alters the default position for an accused facing an indictable offence, who elects to be tried by a superior court judge, from requiring a preliminary inquiry unless waived, and note the word “waive” implies a legal right, to an optional course of action initiated by the accused (or prosecutor) upon “request.” Not only must the accused or the prosecutor request a preliminary inquiry under s. 536 but the party must also comply with the various Criminal Code rules respecting the holding of a preliminary as well as any Rules of Court enacted in relation to the procedure.

One such rule, Section 536.3, requires the requesting party to provide a “statement that identifies the issues on which the requesting party wants evidence to be given at the inquiry and the witnesses that the requesting party wants to hear at the inquiry” within the time period specified by the Rules of Court or in the absence of Rules, by the justice conducting the preliminary inquiry. In Alberta, this requirement is fulfilled by submitting a written statement pursuant to procedural forms found on the provincial court website. Form A is counsel’s written “wish list” identifying the issues and the witnesses counsel “wishes” to hear from at the preliminary. A “wish” is of course not a command and the prosecutor can, pursuant to s. 540(7), file a witness statement instead of calling the witness to testify. It must be remembered that this ability was available to the prosecutor under the original format, but subject to the preliminary hearing justice, under s. 540(9), considering it “appropriate” to require the witness’s attendance to give viva voce evidence.

What is new is the advent of, what is colloquially known as, a “focus hearing” under s. 536.4. This hearing assists to further delineate the issues and to identify the required witnesses. Such a hearing may be brought upon application by the prosecutor or accused or by the preliminary hearing justice on his or her own motion. Although, at first blush, this hearing seems to merely “assist” counsel to fulfill the s. 536.3 requirements, it does much more than direct counsels’ attention to those issues. Under s. 536.4(1)(b), the focus hearing not only helps the parties to identify the witnesses required but does so in the context of the “witnesses’ needs and circumstances.” Thus, the “wish” to hear particular witnesses under s. 536.3 may be subject to an application by the other party opposing the attendance of the witness on a “needs and circumstances” basis. For example, the prosecutor may argue that a child witness, in a sexual assault case, may be compromised emotionally by testifying at the preliminary hearing and should not be required. This new “necessity” requirement seems to be a more robust test than found under s. 540(9).

Furthermore, the focus hearing under s. 536.4(1)(c) permits the court to “encourage” the defence and prosecution to “consider any other matters” to “promote a fair and expeditious inquiry.” In other words, this focus hearing acts as a pre preliminary hearing conference in an effort to streamline the process. Used correctly, this pre hearing may have the effect of encouraging resolution as evidenced by Form C, entitled Agreement And Admissions At Hearing Held Under Section 536.4 Criminal Code. On whichever basis the focus hearing is used, clearly the aperture of the focus is much wider than what is envisioned under s. 536.3.

It is, however, the inflexible application of these rules by the courts that may finally signal the end of the preliminary inquiry. In the Stinert case the Honourable Judge Rosborough, in referring to the comparable British committal hearing, suggested calls for reform were as a result of the procedure’s “lack of utility and its effect of bloating the criminal process” (at para 8). The issue in Stinert involved the quality of the Form A statement submitted by the defence. The filed statement requested the prosecution to lead “any and all evidence that the Crown intends to rely on to prove the case against the accused including but not limited to evidence of a direct or circumstantial nature, viva voce evidence of Crown witnesses and any relevant documents, electronic recordings, photographs, videos or expert reports” and listed two police officers as the desired witnesses. Judge Rosborough, in deciding that the statement did not satisfy the requirements under the section, found counsel’s statement “little more than a differently worded request for disclosure” and unacceptably consistent with the general practice in Red Deer to describe the issues in a “vague and overbroad” statement (at para 28). Such a practice, Judge Rosborough held, necessitated the court to “intervene” and take a proactive approach to the preliminary inquiry process by regulating the “form, content and practice” of the s. 536.3 statements (at para 38).

This enhanced gatekeeper role, as envisioned by Judge Rosborough, required the filing of a “proper” 536.3 statement as an aspect of the “request” to have a preliminary inquiry. If the statement was deficient, then the accused’s request was at risk. In support of this interpretation, Judge Rosborough relied upon the Ontario Court of Justice decision in Regina v Callender, 2007 ONCJ 86. In that case, Justice Bruce Duncan deemed the accused abandoned or withdrew his request to have a preliminary inquiry by virtue of his failure to appear for the hearing. Justice Duncan, exasperated by two earlier aborted attempts to hold the preliminary, denied the defence application to hold the hearing in the absence of the accused as provided for under s. 544 of the Code. Instead, Justice Duncan committed the accused for trial on the basis that the preliminary inquiry is by request only and could therefore be withdrawn. The accused, by failing to appear, effectively withdrew his request and thus left committal for trial as the only option.

In Justice Duncan’s opinion, a request was much like the accused bringing an application or launching an appeal, it is an optional hearing at the behest of the applying party and therefore no rights can flow in absence of this request. Once abandoned, the request is extinguished and the default position, committal for trial, survives. In the Callender case, committal was not an issue, the hearing was purely requested for the ancillary discovery function, which could be replaced by full Crown disclosure. Further, the prejudice to the administration of justice, by improper use of court and witness time, was significant. To permit the hearing to proceed in the accused’s absence, Justice Duncan found, would leave the “impression that the accused is a tail that is permitted to wag the dog of the criminal justice system.” (at para 12)

In the context of the specific facts in the Callender case and in light of the default committal position, Justice Duncan’s decision makes sense. However, Judge Rosborough’s reliance on this case (at para 31) as authority for finding that an “obviously deficient” s. 536.3 statement could result in an order for committal as the preliminary inquiry would be deemed withdrawn or abandoned, is reading in a far greater gatekeeper role than is suggested on even a strict reading of the circumscribed rules surrounding preliminary inquiries. Although a “request” implies the accused has the burden of bringing the matter to court, it does not follow that upon that request, if an accused does not comply with the rules to the specifications of the court, the accused is deprived of both the committal and discovery function of the preliminary hearing. Even with the requirement under s. 536.3 that the reasons for the request be articulated, the defence is not required, and should not be required, to disclose the strategy or tactical focus of the defence. To do so would be tantamount to requiring disclosure of the defence far beyond the reasonable requirement to disclose experts and alibis. To be sure, counsel has an obligation to the client to consider the case and provide a meaningful s. 536.3 statement but any deficiencies should not deprive the accused of interacting with the case he or she must meet.

Further, considering the ability of the court to hold a focus hearing under s. 536.4, there is no reason for a denial of a preliminary hearing. Even an abandoned appeal, depending on the circumstances, may be restored pursuant to Rule 14.65 of the Alberta Rules of Court and conversely an abandoned application can be reinvigorated. It should be noted that Judge Rosborough did not limit his ruling to a situation where the accused is not opposing committal. Although the ruling appears to be driven by the lack of utility of a preliminary hearing, it must be remembered that the preliminary inquiry is still a vital part of our criminal justice system as a true expression of the court’s gatekeeper function.

The Stinert decision can be viewed as both continuing judicial antipathy toward the ancillary function of the preliminary and as the flexing of the judicial gatekeeper “muscle,” which, as a result of recent Supreme Court of Canada decisions in Regina v Hart, [2014] 2 SCR 544, Regina v Mack, [2014] 3 SCR 3 and Regina v Grant, 2015 SCC 9, is now expected of trial judges making threshold rulings. In fact, it is this enhanced gatekeeper role which should be the reason to retain the preliminary hearing not only for committal issues but for evidential reasons as well. These recent Supreme Court of Canada cases imbue threshold decisions with more weight than before, placing a burden on the accused to show the evidence has an “air of reality.” The preliminary inquiry, therefore, can be an indispensable tool to establish the required evidential foundation for these threshold issues, be they issues of admissibility, providing the basis for a legal defence or setting the stage for a Charter application. Thus the notion that the preliminary inquiry lacks utility and interferes with the administration of justice fails to recognize the access to justice issues resulting from the inquiry’s demise. In order for the counsel to “appreciate the case made against” the accused, counsel has to have an opportunity to see it (see earlier quote by Mr. Justice Estey in Skogman at page 105).

The other critic of the inquiry, the government, has been unable to look past the efficiency and cost argument. Alberta, for example, has taken a strong stand for abolition of preliminary inquiries as part of the government’s response to a review of a s. 11(b) Charter stay entered in a sexual assault case. As part of the Injecting a Sense of Urgency: A New Approach to Delivering Justice in Serious and Violent Criminal Cases Reports, Alberta Justice recently issued a paper on “Eliminating Preliminary Inquiries” which justifies the government’s position for “historical” reasons. In this view, the preliminary inquiry, as a committal and disclosure forum, can be adequately substituted for by appropriate prosecutorial discretion and full disclosure.

Although superficially this argument has merit, upon closer consideration such a prospect fails to provide an important element of the preliminary, which is the oversight of a fair and impartial member of the judiciary. Such judicial oversight has become a cornerstone of our justice system as provided for in the search warrant requirements. Moreover, in the most recent decision from the Supreme Court of Canada, Regina v Nur, 2015 SCC 15, Chief Justice McLachlin cautions against substituting prosecutorial discretion for judicial decision making, particularly in the adversarial context. Without this judicial review of committal, there is no ability to challenge the decision in court through a quash committal or certiorari application. This would, in the words of the Chief Justice in Nur, “create a situation where the exercise of the prosecutor’s discretion is effectively immune from meaningful review” (at para 94). Finally, although Stinchcombe has set high disclosure expectations, disclosure is not a static concept but continues throughout the case. Disclosure requests are often informed by the preliminary inquiry process, which can actually result in trial efficiencies.

In fact, statistically, the preliminary inquiry works. In a timely 2013 article entitled Why Re-open the Debate on the Preliminary Inquiry? Some Preliminary Empirical Observations, University of Ottawa criminologist Cheryl Webster, who has done extensive research on court reform for the federal government, and retired Department of Justice counsel Howard Bebbington, found value in the preliminary inquiry process as, based on an empirical study, it did positively impact court resources. The authors recommend a more detailed review be done before changes to an old, but useful, process be made.

Clearly, the debate on the efficacy of the preliminary hearing must be re-opened before the federal government abandons the hearing without further input. The government needs to take heed to their own implementation promise that changes will not “in any way” reduce “the measure of justice” provided under the original system (see earlier quote by then Justice Minister McLellan when presenting Bill C-15 in the House of Commons). Although any such debate must recognize both sides of the issue, a more meaningful debate would include a real assessment of the advantages and disadvantages of the inquiry process. We must be open to looking at other ways to retain the safeguards presently built into the preliminary inquiry process. For instance, where committal is not in issue, we may find a useful court alternative in the civil discovery procedures, which permits a less formal and less costly forum for the questioning of parties after full disclosure of documents. With an informed and thoughtful discourse on the issue, a more flexible approach could, and should, be found to save the preliminary inquiry from a premature legislative demise.

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May Provinces (or States) Limit Imports on the Basis of Greenhouse Gas Emissions Elsewhere?

Thu, 04/16/2015 - 10:00am

By: James Coleman & Martin Olszynski

PDF Version: May Provinces (or States) Limit Imports on the Basis of Greenhouse Gas Emissions Elsewhere?

Report Commented On: Canada’s Ecofiscal Commission, The Way Forward

Last week, a group of economists known as “Canada’s Ecofiscal Commission” issued a much-discussed report that urged Canada’s individual provinces to drive Canadian climate policy by adopting their own carbon pricing schemes. But the report barely touched on one of the key challenges for provincial or state regulation without the support of the national government: what may places that price carbon do to avoid losing industry to places that don’t?

This is an urgent question across North America because, for different reasons, Canada and the United States are unlikely to adopt uniform nationwide climate policies in the near future. In Canada, the conservative government has repeatedly delayed federal climate regulations and the leader of the liberal party has pledged to leave the provinces in charge of carbon pricing. In the United States, congressional inaction has pushed President Obama to rely on a rarely-used Clean Air Act provision that requires states to adopt their own regulations for power plant carbon emissions. Accordingly, climate regulation will be somewhat different in each state and province. But states and provinces lack a key power that national governments use when they adopt climate regulation: the power to adopt trade regulations that control imports. The nation is an economic union so provinces can’t limit trade across their borders.

Climate and trade policies often go hand-in-hand because nations that limit carbon emissions worry they will lose industry to nations that do not. After all, if emissions merely shift to other nations, a phenomenon known as “carbon leakage”, a single nation’s carbon policies won’t do much to help the global climate. One way around this problem is to charge a “carbon tariff” on imports that were produced in nations that do not have similar limits on carbon emissions. This charge is calculated by estimating how much carbon was emitted to produce the imported product and then multiplying that quantity by the importing country’s carbon price. These tariffs are sometimes called “border adjustments” because, in theory, they are supposed to level the playing field between domestically regulated producers and unregulated foreign ones.

You can’t set up a customs house between Manitoba and Ontario, so provinces can’t charge a regular carbon tariff. But states and provinces have found a roundabout way to do more-or-less the same thing. For instance, California and Quebec both have cap-and-trade systems that force power plants to purchase a permit for each ton of carbon that they emit into the atmosphere. Crucially, these cap-and-trade systems also apply to power plants in other states that export electricity to California and Quebec. The effect is the same as the customs house: when a purchaser imports electricity into California or Quebec it must pay a charge for all the carbon that was emitted elsewhere to produce that electricity.

So can states and provinces place a charge on imports that accounts for how much carbon was emitted elsewhere to produce them? It’s a crucial question because such charges could apply to all kinds of goods, not just to electricity. Provinces like British Columbia and states like California are already setting standards for motor fuels that effectively charge imported fuels for the greenhouse gases that were emitted elsewhere in their production. And in theory the same charges could apply to any kind of good. You would just add a surcharge to every item based on the greenhouse gases that were emitted elsewhere to produce it: television sets, fruit, toys, you name it.

In fact, state and provincial climate regulations across North America are increasingly adopting exactly these kind of controls, adding urgency to the underlying legal question: may energy importers export their regulation to cover emissions outside their borders? In the absence of national action on climate change, provinces are looking for creative ways to make sure that they don’t lose industry to provinces that don’t regulate, so they’re regulating imports based on carbon emissions elsewhere.

Canada’s Ecofiscal Commission is recommending provincial action on climate but it has little to say on this crucial topic, and what it says is confusing. The report’s section on “competitiveness” has a subheading titled “Border adjustments could level the playing field,” which sounds promising. It then says “border adjustments could not be implemented by a single province, but would require involvement by the federal government,” which is a major qualification. But then it states that, after all, such adjustments are possible for “specific emissions that fall under provincial jurisdiction” and cites the example of Quebec’s electricity imports. For this proposition it cites a white paper on a U.S. cap-and-trade system written by U.S. law students.

This issue is too important to gloss over. If states and provinces are going to lead the fight against climate change, many legal decisions and many academic pieces will be written on the topic before it is resolved. This post merely flags some of the key rules and arguments that will be in play.

The normal rule has been that states and provinces may not adopt regulations for pollution emitted in other states. These forbidden rules are known as “extraterritorial” regulations. In Interprovincial Co-Operatives Ltd. v. Dryden Chemicals Ltd, [1976] 1 SCR 477, the Supreme Court of Canada held that Manitoba could not make a law punishing companies that lawfully emitted pollutants in Saskatchewan and Ontario, even if those pollutants made their way into Manitoba. The rule in the United States is more complicated, but under what is known as the “dormant commerce clause”, the U.S. Supreme Court has held that states cannot adopt a law “if the practical effect of the regulation is to control conduct beyond the boundaries of the State.”

One important reason for the normal rule is that if provinces or states began banning products that were produced elsewhere in ways that they didn’t like, they would quickly run afoul of international trade laws. For example, if Ontario banned all products made by laborers that were not paid its $11 per hour minimum wage that would, as a practical matter, end imports from the developing world. It would also conflict with the General Agreements on Tariff and Trade that govern international trade.

On the other hand, the traditional rule against extraterritorial regulation is on somewhat tenuous footing. In Canada, Interprovincial Co-Operatives involved a 3-1-3 split, which makes the primary ruling open to debate. The decision is also four decades old and has been heavily criticized, including by one of Canada’s leading constitutional scholars. See Peter Hogg, Constitutional Law of Canada, 5th ed., (2007) at 13-10. Similarly, in the United States, scholars and judges have suggested that limits on extraterritorial regulation should be abandoned.

Suffice it to say that import regulations may have a better chance of being upheld where their extra-provincial effects are deemed incidental to their primary purpose, or “pith and substance” in Canadian jurisprudential terms (Reference re Upper Churchill Water Rights Reversion Act, [1984] 1 SCR 297. See also Shi-Ling Hsu and Robin Elliot, “Regulating Greenhouse Gases in Canada: Constitutional and Policy Dimensions” (2009) 54 McGill LJ 463).

And perhaps the normal rule should bend in the case of provincial climate regulation. For one thing, even if carbon emissions occur in Alberta, they still affect the global climate, which could harm Ontario, Quebec, and every other place in the world. For the same reason, it is vital that climate regulation doesn’t just shift carbon emissions to other provinces: few will want to regulate if the provinces that do lose jobs without securing any net benefit for the climate. If we want provinces to set a model for eventual national regulations, maybe they need the same trade powers.

States and provinces also have long-standing authority to manage the mix of sources providing power to their electrical grid, which includes regulating contracts for electricity imports. This helps to ensure that power will always be available at reasonable prices. But there are limits to this authority as well: a province certainly could not prescribe the wages or working conditions for employees at power plants in other provinces. Can provinces prescribe carbon standards for power plants elsewhere under their traditional authority over electricity markets? That remains an open question.

So far, the U.S. courts are divided on whether states may regulate based on carbon emissions elsewhere. An appellate court said that California could regulate fuels based on emissions elsewhere and a district court said that Minnesota could not regulate electricity based on emissions elsewhere. The Canadian courts have not yet addressed the question. And the first two Canadian cap-and-trade systems are poor test cases because both Quebec and Ontario import far less electricity than they export. But the question will become unavoidable as more provinces adopt the kind of policies recommended in the Ecofiscal Commission’s report.

Finally, these questions will grow more pressing as long as national governments delay action to address climate change. As with recent provincial efforts to improve environmental impact assessments of interprovincial pipelines, the federal policy vacuum is pushing provinces to act on their own. In the United States, one interim solution could be for the federal government to allow non-discriminatory state regulation of energy imports. If Canada’s government is serious about sticking with provincial climate policy, it may have to consider similarly creative solutions. In the meantime, these policies will continue to present difficult and novel legal questions about the boundaries of state and provincial authority.

This post originally appeared on James Coleman’s blog Energy Law Prof.

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Uber Lives to Ride Another Day

Wed, 04/15/2015 - 10:00am

By: Theresa Yurkewich

PDF Version: Uber Lives to Ride Another Day

Case Commented On: Edmonton (City) v Uber Canada Inc., 2015 ABQB 214

As a result of Uber’s activation in Edmonton, the City of Edmonton brought an application for a statutory interlocutory injunction, enjoining Uber Canada Inc. (“Uber Canada”) from conducting business in Edmonton without a valid business license or taxi broker license. The City did not name Uber B.V. or Rasier Operations B.V. (collectively, “Uber Companies”), the larger corporate affiliates associated with Uber Canada, in the action. In short, the City’s application was dismissed as it failed to establish a clear and continuing breach of the relevant Bylaws by Uber Canada, and it neglected to name the right entity to be enjoined (see Edmonton (City) v Uber Canada Inc., 2015 ABQB 214). This was one of the first legal challenges to the crowd favoured App within Canada and it will likely have a wide impact on the development and approach of Uber in other municipalities.

Background

Uber operates a software application (or “App”) based business. This App is a digital platform which enables riders to request rides, track their drivers, pay electronically and automatically, and rate their service upon conclusion. For more information on Uber and its services, see my earlier post “Uber & Calgary – A Modern Day Romeo & Juliet”.

In this case, the City of Edmonton considered Uber to be operating as a taxi broker, and thus in violation of City bylaws as it did not have a taxi or business license.

Section 7 of the Municipal Government Act, RSA 2000, c M-26 permits a municipality to pass bylaws for municipal purposes such as transport, transportation services, business, and business activities.

On the above application, there were two issues before the Court:

  1. Whether the City had established that Uber Canada Inc. has prima facie engaged in activities that are in clear and continuous breach of the referenced bylaws.
  2. Whether the City had named the right entity to be enjoined.

Arguments

The City of Edmonton

The City argued that Uber Canada causes and permits the operation of vehicles for hire and acts as a dispatching taxi service, both actions requiring a license. The City argued that because Uber Canada has the power to deactivate driver accounts, it should be enjoined from conducting business in Edmonton and forced to deactivate those accounts so that drivers could not receive ride requests.

The City further argued that it was adequate to name Uber Canada as the sole party because it was a registered business within Canada, and the Uber Companies were operating through it.

Uber Canada Inc.

Uber Canada argued it does not operate a business or provide dispatch services as it does not control the activities of drivers, is not party to affiliate agreements, and does not actually pair drivers with riders. Riders request rides through the App and a driver is automatically and electronically designated. Uber Canada cannot control whether the driver chooses to provide the service.

Uber Canada argued the City was dutifully informed regarding the existence of the Uber Companies and their role in contracting and licensing with drivers. Each driver is the owner of their vehicle, not Uber Canada, nor does Uber Canada own the computer servers used to operate the App network.

Analysis

In her opening analysis, Madam Justice M.G. Crighton stated (at para 23) that:

It is trite to say that individuals worldwide rely every day on the power of the Internet and the speed with which it adapts and responds to changes in its environment. It is not surprising, therefore, that legislation drafted to accommodate a more static, paper and people driven environment, sometimes lags behind the technological response to individual preferences and demands. The City’s bylaws may be no different.

The Court reviewed the evidence in regards to collecting fees, bylaw definitions, and the role of Uber Canada in the operation of the App’s network.

Collecting Fees

There was no evidence that Uber Canada receives fees in relation to rides within Edmonton. Both the request for a ride and the payment for that service occurs through a computer server which Uber Canada does not own. Uber Canada and the Uber Companies are separate legal entities, and there was no evidence that either entity controls the other.

Bylaws

The City of Edmonton argued that Uber Canada was in violation of sections 2 and 4 of Bylaw 13138 (Business Licence Bylaw), and sections 4, 67, and 68 of Bylaw 14700 (Vehicle for Hire Bylaw).

City of Edmonton Bylaw 13138 requires a person to hold a business license if they engage in or operate a business in the City (section 4). The definition of “business” includes “an activity providing goods or services…” (section 2(a)(iii)). The Court stated that although the Bylaw does not require a business to make a profit through providing goods and services, the activities of providing support, recruitment, and advertising do not constitute carrying on business within the Bylaw’s definition (at para 27).

The Court cited Club Resorts Ltd v Van Breda, 2012 SCC 17 at para 87, in regards to internet businesses carrying on business in a jurisdiction, stating, “…Active advertising in the jurisdiction…would not suffice to establish that the defendant is carrying on business there. The notion of carrying on business in the jurisdiction requires some form of actual, not only virtual, presence in the jurisdiction” (at para 30). There was no evidence to indicate how often, or if at all, an employee from Uber Canada is present in Edmonton.

In sum, there was no evidence that Uber Canada received a fee in relation to Edmonton rides, payment occurred through a server that Uber Canada did not own, and Uber Canada merely trained drivers on how to use the App. Furthermore, there was no evidence that this training or recruitment occurred after December 2014. Therefore, the City did not meet its burden to demonstrate, prima facie, that Uber Canada was in clear and continuing breach of Bylaw 13138.

Section 4 of Bylaw 14700 states “a person shall not operate, cause or permit the operation of a Vehicle for Hire unless it is a Taxi, Limited Taxi, Accessible Taxi, Limousine or Shuttle.”

Section 67 states “a person shall not provide dispatch services to any Taxi, Limited Taxi, or Accessible Taxi unless they are a Taxi Broker.”

Although the parties did not dispute that Uber Canada did not drive or have care of the vehicles, the City argued that the definition of “cause” included “to induce”.

Uber performs marketing and promotion, App support, and recruitment. It recruits drivers and trains them to use the App. However, they do not induce or cause the downloading of the App, nor do they have care and control of the decisions of each driver. As a result, the Court found that Uber Canada is not operating or causing a driver to operate for hire (at para 37).

The Court stated that facilitating communication does not amount to “causing” the action to occur. Uber Canada does not own the servers that transmit the rider’s messages. The software is owned by the Uber Companies and Uber Canada at best facilitates its transmission through App support. Once this communication occurs, the driver still makes the ultimate decision. Therefore, Uber Canada does not dispatch or “send anyone anywhere” (at para 44).

On this basis, the City did not meet its burden to demonstrate, prima facie, that Uber Canada is in clear and continuing breach of Bylaw 14700.

The Parties

The Court stated that the City “fail[ed] to fully appreciate and account for the actual role played by Uber Canada in the Uber [C]ompanies’ App-based “peer to peer” transportation service” (at para 45). Uber Canada is affiliated, but it does not contract with drivers or have control over the Uber Companies. The Court stated that the City’s approach to excluding the Uber Companies ignored the nature and scope of an internet business and the basic principles of corporate law.

In terms of bylaw enforcement, the City had made little effort to enforce its bylaws against drivers, and failed to name or give notice to the parties that own and license the App itself. The Court interpreted the action as the City asking it to take judicial notice of the fact that drivers who use the App are in contravention of the bylaws, and that through supporting and advertising the App, Uber Canada is also in contravention (at para 50). Even though the City was aware its requested relief would affect interests beyond Uber Canada, it failed to name the Uber Companies or drivers known to it.

Calgary Bylaws

How would this scenario play out in Calgary?

It is of note that the Calgary Livery Transport Bylaw 6M2007 uses the language “no Person shall operate a motor vehicle in a manner which suggests the Motor Vehicle is for hire…”. “Operate” is defined as “includes having care or control of a Motor Vehicle” (in section 12(jj)). This is a much narrower provision than Edmonton Bylaw 14700, and based on Uber Canada’s argument and success above, it strongly suggests that if Uber Canada was to begin operating in Calgary, it would not be acting in contravention of Bylaw 6M2007 as it does not operate the vehicles, rather, drivers do.

Similar to Bylaw 13813, Calgary’s Business License Bylaw 32M98 defines “business” as an activity providing goods or services, and “carrying on” means to operate for a fee (sections 2(f) and 2(g)). It states that “a person shall not carry on a business listed in Part II of this Bylaw unless that person has a valid and subsisting license” (section 3(1)). Again, applying Justice Crighton’s reasoning, Uber Canada would likely be successful in any challenge by the City, as it does not receive a fee and there has been no evidence that it acts as agent for the Uber Companies. As such, its activities would not meet the definition of “carrying on” a business.

Conclusion

The City’s application was dismissed on the basis that it failed to prove a clear and continuing breach of Bylaw 13138 or 14700 by Uber Canada. Promoting, advertising, and recruiting for use of an App do not amount to carrying on a business, especially when the corporation does not receive a fee and lacks any final control over the user.

This is an important case in that the Court mentions the fact that the Bylaws may be out of date, including those relating to the taxi industry. It is clear that the outcry for Uber is becoming louder and more prominent each day, and perhaps this is an example of the Court taking an active approach in attempting to reflect changing social values.

Although the Court dismissed the City’s application, it noted a substantial lack of evidence provided to establish the City’s arguments. It is questionable whether this evidence exists, or whether the outcome would be the same had the City been able to produce it.

For now, it seems Uber has received its first Canadian break and Edmontonians can use the App to ride another day.

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Summary Judgment on Contested Amounts Owing under Natural Gas Processing and Related Agreements

Mon, 04/13/2015 - 10:00am

By: Nigel Bankes

PDF Version: Summary Judgment on Contested Amounts Owing under Natural Gas Processing and Related Agreements

Case Commented On: SemCAMS ULC v Blaze Energy Ltd, 2015 ABQB 218

This is an important judgment on the interplay between the rules for the interpretation of contracts and the post Hryniak law on summary judgment: see Hryniak v Mauldin, 2014 SCC 7. The short version of the holding is that a producer cannot avoid summary judgment for outstanding amounts owing under a natural gas processing or related agreement on the basis that the producer has called for an audit of the operator’s accounts or otherwise disputes the amounts owing – at least where the agreements in question clearly oblige producers to settle invoices promptly, notwithstanding the existence of a dispute as to whether the invoices properly reflect the amounts owing.

Blaze was the successor in interest to a number of agreements pursuant to which SemCAMS provided gas transportation, gas processing and contract operating services. These agreements all provided, as one might expect, that producers such as Blaze would promptly settle their accounts once properly invoiced. Given the challenges involved in both assessing actual costs and allocating those costs to particular gas streams, the agreements in question provided both a means for truing up accounts (13th month adjustment) and a means for allowing producers to question the accounts by way of audit.

The action related to invoices served by SemCAMS between July 2012 and April 2013 for a total of $6.9 million; remarkably (at para 11) “Blaze has made no payments whatsoever to SemCAMS, despite the fact that SemCAMS has been processing its gas since June 2012.” Blaze had filed a counterclaim, alleging, inter alia, wrongful shutting in of its wells.

Some, but importantly not all, of the agreements expressly stated (at para 13) that the “Producer shall not be allowed to withhold payment of any portion of the bill presented by the Operator, due to a protest or question relating to such bill”; and others provided that the Operator can maintain an action for unpaid amounts “as if the obligation to pay such amount and the interest thereon were liquidated demands due and payable on the relevant date such amounts were due to be paid, without any right or resort of such Producer to set-off or counterclaim”.

The evidence before the Court on this application for summary judgment consisted of affidavits by an official of each company and the transcripts from the questioning on those affidavits. Justice Jo’Anne Strekaf summarized (at para 24) the tests for summary judgment drawing on the Court of Appeal’s decision in Windsor v Canadian Pacific Railway Ltd, 2014 ABCA 108 as follows:

Summary judgment is now an appropriate procedure where there is no genuine issue requiring a trial:

There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.

The modern test for summary judgment is therefore to examine the record to see if a disposition that is fair and just to both parties can be made on the existing record.

On this record, SemCAMS sought judgment for the full invoiced amount (subject to one adjustment) on the basis that the contracts contemplated immediate recovery notwithstanding the potential for subsequent adjustments (at para 38). Blaze on the other hand argued that SemCAMS’ interpretation of the contracts led to an absurdity since it “suggests that Blaze would be obligated to pay whatever SemCAMS invoiced and that underpinning the obligation to make a payment under the Agreements is the requirement that the invoices reasonably reflect the goods or services that were provided” (at para 40).

Justice Strekaf rejected Blaze’s absurdity argument. She concluded (at para 48) that:

It can be inferred that the Operator needs to be able to rely on a reliable cash flow. If there was a dispute between the Operator and a Producer as to the amounts owing, the parties could have decided to allocate the risk so that either the disputed amount could be withheld by the Producer pending resolution of that dispute, or that it would be paid and subsequently adjusted following resolution of that dispute. The language used in this case suggests that they chose the latter approach. This arrangement is not an unreasonable allocation of risk.

In doing so Justice Strekaf immediately acknowledged (at para 49) that this was perhaps an unusual situation:

Typically in order for a party who provides services under an agreement to collect on an unpaid account that they must satisfy the Court that the amounts are ultimately owing under the agreement, not that they have simply been billed. It is unusual that a party would be able to obtain summary judgment on the basis of amounts billed, subject to subsequent adjustment following an audit. However, in this case the language used by the parties in the Agreements in the context of an Operator providing gas processing and transportation services to numerous parties supports that interpretation as reflecting the true intention of the parties.

Justice Strekaf’s judgment clearly turns on the language of the particular contracts; but, given that similar language will be used in the many different types of agreements adopted by the oil and gas industry in western Canada, the implications of this judgment are potentially very far reaching. To the extent that the judgment will make it difficult for a producer to postpone or dodge its obligations to pay, even any amount owing, simply by triggering the audit provisions of the relevant agreements, I suspect that the judgment will be broadly welcomed; and if upheld on appeal it certainly provides useful guidance as to the type of contractual language that operators need to insist upon as part of obtaining effective remedies to secure necessary cash flow in return for services provided.

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Alberta Arbitration Decision Embraces Broadening Trend on Family Status Discrimination

Thu, 04/09/2015 - 10:00am

By: Linda McKay-Panos

PDF Version: Alberta Arbitration Decision Embraces Broadening Trend on Family Status Discrimination

Case Commented On: SMS Equipment Inc v Communications, Energy and Paperworkers Union, 2015 ABQB 162

The definition of discrimination on the basis of family status has recently been extended in federal and provincial human rights law to mean not only one’s relationship to another person, but also to include recognition of childcare responsibilities. The leading case, Canada v Johnstone, 2014 FCA 111, was discussed in previous ABlawg posts (see here). The decision SMS Equipment Inc v Communications, Energy and Paperworkers Union, 2015 ABQB 162, demonstrates that Alberta labour arbitrators have joined the “family”.

SMS Equipment applied for judicial review of the arbitration award of Arbitrator Lyle Kanee. Arbitrator Kanee concluded that the employer, SMS, must accommodate Ms. Cahill-Saunders, a single mother of two children. She first worked as a labourer for SMS, and was required to work rotating seven night and seven day shifts, after moving from Newfoundland to Fort McMurray. Cahill-Saunders had one son when she was hired, and he remained in Newfoundland with his grandmother for the first nine months she worked in Fort McMurray, joining her later. At that time, the baby’s father lived in Fort McMurray and provided some childcare while Cahill-Saunders worked, although they did not cohabit (at para 5).

Cahill-Saunders gave birth to her second son (with a different father) in 2012. While she was on maternity leave, Cahill-Saunders applied for a position with SMS as a first-year apprentice welder, and she was successful, actually returning to work several months prior to the expiry of her maternity leave. The position had shifts of seven days followed by seven nights. After the first night shift tour, Cahill-Saunders requested that her shift be changed to straight days, as the older son’s father’s work schedule had changed and he was no longer providing any significant childcare; the father of her younger son had no involvement with his child, and there was no extended family in Fort McMurray (at paras 6-7).

Cahill-Saunders’ request was refused by SMS. She had explained to the human resources department that while she had childcare during her night shifts, she would have to pay for childcare in the days, too, so that she could sleep. She explained that this was too expensive. If she did not obtain childcare, she did not get sufficient sleep. The fathers were not contributing to childcare or childcare expenses (at paras 8-10).

Cahill-Saunders’ Union requested that she and another welding apprentice modify their shifts so that she worked exclusively days and the other worked exclusively nights, but SMS also denied that request (at para 11). The Union proceeded to arbitration.

The Arbitrator relied on Alberta Human Rights Tribunal decisions (Rawleigh v Canada Safeway Limited, 2009 AHRC 6; Rennie v Peaches and Cream Skin Care Limited, 2006 AHRC 13) and Johnstone (above) to conclude that family status under the Alberta Human Rights Act, RSA 2000 c A-25.5 includes childcare responsibilities. He concluded that SMS’s rule requiring welders to work night shifts had the effect of imposing a burden on Cahill-Saunders due to her childcare responsibilities that is not imposed on other welders who do not share her status. Further, SMS had tried to defend by arguing that the rule was a bona fide occupational requirement. Arbitrator Kanee held that this defence had not been made out, as SMS had not provided evidence to justify the rule requiring workers to rotate night and day shifts, or evidence that accommodating Cahill-Saunders would cause SMS undue hardship (at paras 15-16).

SMS applied for judicial review of all three aspects of the Arbitrator’s decision. The issues on judicial review may be summarized as follows (at para 18):

  1. whether “family status” includes the duties and responsibilities of childcare;
  2. whether the Union has established a prima facie case of discrimination; and
  3. whether the Employer has established that its rule or policy is a bona fide occupational requirement.

Madam Justice June Ross first addressed the standard of review. She concluded that the reasonableness standard of review applied to all three aspects of the Arbitrator’s decision. First, Justice Ross concluded that the Arbitrator’s inclusion of childcare responsibilities as part of family status clearly fell within a range of possible, acceptable outcomes defensible in facts and law (at para 50). Second, it was reasonable that the Arbitrator had indicated that there is a range in the case law of the tests required to establish a prima facie case of discrimination (see Hoyt v Canadian National Railway, 2006 CHRT 33 and Health Sciences Association of British Columbia v Campbell River and North Island Transition Society, 2004 BCCA 260). The Arbitrator concluded that, regardless of which test was used, discrimination was made out. The Arbitrator’s assessment of Cahill-Saunders’ self-accommodation efforts was reasonable, as SMS had not provided any self-accommodation case that held that a single parent must seek government benefits or commence legal proceedings against the biological parents of her children before seeking a workplace accommodation (at para 67).

In case Justice Ross was incorrect in her assessment of the reasonableness standard for the first two issues, she performed a correctness analysis and determined that she would have arrived at the same conclusion as the Arbitrator (at para 69).

There was no dispute as to the use of the reasonableness standard for the third issue. The Arbitrator applied the three-part test from British Columbia (Public Service Employee Relations Commission) v BCGSEU, [1999] 3 SCR 3 (“Meiorin”, at para 54):

An employer may justify the impugned standard by establishing on the balance of probabilities:

(1)    that the employer adopted the standard for a purpose rationally connected to the performance of the job;

(2)    that the employer adopted the particular standard in an honest and good faith belief that it was necessary to the fulfilment of that legitimate work-related purpose; and

(3)    that the standard is reasonably necessary to the accomplishment of that legitimate work-related purpose.  To show that the standard is reasonably necessary, it must be demonstrated that it is impossible to accommodate individual employees sharing the characteristics of the claimant without imposing undue hardship upon the employer.

Justice Ross held that the Arbitrator had reasonably concluded that the extent of Cahill-Saunders’ self-accommodation efforts might have been found insufficient if SMS had provided some evidence in support of its rule or some evidence of undue hardship. In addition, Cahill-Saunders had provided evidence that she had found another employee who was prepared to work nights exclusively and that other employees had been permitted to work nights exclusively. SMS had provided no reasons for rejecting her request for accommodation. Thus, the Arbitrator’s decision on this (and all three issues) was reasonable (at paras 92-93).

Commentary

A few features of this case merit comment. First, some who read the facts may have wondered why Cahill-Saunders accepted a job that required night shift work when she knew or should have known it would probably require accommodation. This may be easily answered: SMS never provided any evidence as to why it used rotating shifts or why it would be an undue hardship to accommodate Cahill-Saunders. Further, the job involved work (welding) for which she was trained. Perhaps when she applied for the job she thought she could manage or that the fathers would be involved more in the care of her children. Once she encountered a difficulty, she attempted to assist in her accommodation by working out a shift trade with a co-worker.

Moreover, during the arbitration, Cahill-Saunders provided expert evidence about the circumstances of working women with children. In Communications, Energy, and Paperworkers Union, Local 707 v SMS Equipment Inc, 2013 CanLII 71716 (AB GAA), the Arbitrator referred to an expert opinion of Karen D. Hughes, PhD, to the effect that (at para 27):

  • Women face unique challenges and disadvantages in the labour market.
  • Women are significantly underrepresented in the trades and blue-collar work representing just 4% of all construction trades in Canada.
  • Women typically carry greater responsibility for and devote more time to childcare than men, limiting their economic opportunities and return. Family responsibilities, explain, in part, their lower participation in occupations like the building trades.
  • Traditional workplace practices such as hours and schedules are often not aligned with contemporary family life.
  • Access to reliable, quality childcare is an important facilitator of women’s employment.  There is a shortage of regulated childcare spaces throughout Canada, including Fort McMurray.  Childcare costs are so high that many mothers choose to withdraw from the workforce when children are young to provide unpaid care at home. It is particularly challenging to find childcare for non-standard work schedules.
  • There is a strong consensus in published academic research that high levels of work-family conflict are linked to a number of negative outcomes including poor job and life satisfaction. Some recent studies show a linkage between mother’s non-standard work schedules and  lower outcomes for children ‘s academic outcomes due to decreased family time and reduced  parental involvement  in children’s lives.
  • Single mothers face unique constraints due to their need to earn income and provide care singlehandedly.
  • Single mothers who work evenings or rotating shifts face greater difficulties and stress arranging childcare and heightened parental concern over their children’s well-being.

These conclusions provide ample support for the broader recognition of childcare responsibilities as part of “family status”.

Finally, it is interesting that SMS suggested that the Arbitrator should have been influenced by the fact that Cahill-Saunders did not ask the boys’ fathers to assist with childcare, either financially or otherwise, or that she did not apply for child support or childcare subsidies. However, the Arbitrator noted that even if she had tried to obtain some financial support for the boys, she would still have been required to spend additional monies for childcare and this would not prevent the adverse effect of SMS’ rule. SMS’s argument actually helps make Cahill-Saunders’ case as it demonstrates that she had extraordinary childcare responsibilities together with a significant legal obligation to support her family.

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