Damages claim against provincial energy board a ‘dramatic jurisprudential development:’ Judge

A recent Supreme Court of Canada decision leaves “open the possibility that members of a quasi-judicial regulatory board could be sued for damages” by someone accusing that board of violating their constitutional rights, a constitutional law professor told Canadian Underwriter this week.

Section 24 (1) of the Charter of Rights and Freedoms gives Canadians the ability to apply to a court for “remedy” if their rights have been infringed or denied.

One Canadian who was successful in using that section was Alan Ward, who had been arrested in Vancouver in 2002.  Provincial corrections officers ordered Ward to remove his clothes in preparation for a strip search and the City of Vancouver seized his car. In 2010, the Supreme Court of Canada upheld a lower court finding that both the province of British Columbia and the City of Vancouver violated Ward’s right to be free from unreasonable search and seizure. Police had earlier suspected that Ward was intending to throw a pie at then-Prime Minister Jean Chretien.

On Jan. 13, 2017, the Supreme Court of Canada ruled against Jessica Ernst, who also made a claim under Section 24 (1) of the Charter. Ernst claimed that her right to free expression was violated by the Alberta’s Energy Resources Conservation Board. She sought remedy of $50,000.

Although Ernst was unsuccessful, the ruling “does leave open the possibility that members of a quasi-judicial regulatory board could be sued for damages under section 24(1) of the Charter,” University of Calgary Law Professor Jennifer Koshan wrote in an e-mail to Canadian Underwriter. Koshan’s areas of research include constitutional law.

Ernst, an Alberta landowner, had filed a lawsuit against EnCana Corp. and also complained about EnCana to the Energy Resources Conservation Board. The board “licenses gas wells and enforces legislative and regulatory provisions that are intended to protect the groundwater supply from interference or contamination due to oil and gas development,” wrote Madam Justice Rosalie Silberman Abella of the Supreme Court of Canada. The board also “has detailed procedures for receiving and investigating public complaints, conducting compliance inspections, and taking appropriate enforcement and remedial action when necessary,” Justice Abella added.

Ernst claimed that because she was prohibited from communicating with the board for a while, she was “unable to properly register her concerns” about EnCana, which was conducting hydraulic fracturing in the area.

Section 43 of the Alberta Energy Resources Conservation Act stipulates that “no action or proceeding may be brought” against either the board itself or a member of the Energy Resources Conservation Board “in respect of any act or thing done purportedly in pursuance” of any act or regulation that the board administers or any decision, order or direction of the board.

The Alberta government had intervener status in Ernst’s appeal, and was successful in its argument that Ernst had not given proper notice of the constitutional challenge. That constitutional challenge “is a dramatic jurisprudential development with profound implications for judicial and quasi-judicial decision-makers across Canada,” Justice Abella noted.

Related: Alberta Energy Resources Conservation Board immune from $50,000 lawsuit alleging Charter rights violations: Supreme Court

In its Jan. 13 ruling against Ernst, the Supreme Court of Canada upheld an Alberta Court of Appeal decision, which upheld the ruling of a case management judge with the Alberta Court of Queen’s Bench, who found that Ernst could not challenge the constitutionality of the immunity clause in the Energy Resources Conservation Act. The Court of Queen’s Bench found that Ernst had not submitted a Notice of Constitutional Question to either the provincial or federal attorney general, which is required by Alberta law.

At the Supreme Court of Canada, three separate rulings were issued – two rulings by four judges each and one by Justice Abella.

“Granting Charter damages may vindicate Charter rights, provide compensation and deter future violations,” wrote Mr. Justice Thomas Cromwell on behalf of himself, Madam Justice Andromache Karakatsanis, Mr. Justice Richard Wagner and Mr. Justice Clément Gascon.  “But awarding damages may also inhibit effective government, and remedies other than damages may provide substantial redress for the claimant without having that sort of broader adverse impact.” Those four judges concluded that damages “could not be an appropriate remedy” against the board and dismissed Ernst’s appeal.

Justice Abella concurred in her separate ruling that Ernst’s appeal should be dismissed.

Dissenting were Mr. Justice Michael Moldaver, Chief Justice Beverley McLachlin, Mr. Justice Michael Brown and Madam Justice Suzanne Cote, who would have allowed her appeal.

Only four of the nine judges who heard the appeal “said that damages ‘could never be an appropriate and just remedy for Charter breaches’ against the Board,” Koshan stated to Canadian Underwriter. “Moreover, this ruling appears to be obiter, because these four judges also based their decision on Ernst’s failure to discharge her burden of proving that the immunity clause at issue was unconstitutional (at paras 21-23).”

The option of applying for judicial review, of a ruling of a quasi-judicial board, could provide relief against Charter breaches and also “clarify the law so as to prevent similar future breaches,” wrote Justice Cromwell on behalf of himself and Justices Karakatsanis, Wagner and Gascon.

Justice Abella agreed that that judicial review “was the appropriate mechanism of redress for Ernst,” Koshan wrote, but added that Justice Abella “left open the possibility that statutory immunity clauses could be constitutionally challenged in future.”

Justice Abella found that “there must be a judicial determination of the constitutional validity, and therefore the constitutional applicability, of the provision” in the Energy Resources Conservation Act restricting actions or proceedings against the board.

“Since Ms. Ernst did not seek to challenge the constitutionality of s. 43 in the prior proceedings, there is no record either to justify or impugn the provision,” Justice Abella wrote. “This means that for the time being, the provision’s constitutionality is intact, which means that the Board’s immunity is intact, which means that Ms. Ernst cannot, under these circumstances, legally sustain a claim that the Board is vulnerable to a damages claim, either under the Charter or otherwise.”

Justice Abella added that immunity clauses protecting judicial and quasi-judicial bodies are found in many statutes in Canada. In addition to judges, there are laws providing immunity for, among others: case management masters; justices of the peace; tribunals; members, officers, employees and adjudicators of the Manitoba Human Rights Commission; mediators and the industrial inquiry commission of B.C.; members of the Ontario Workplace Safety and Insurance Board; members of the Ontario Environmental Review Tribunal; and commissioners conducting public inquiries.