Alberta Energy Regulator – Statutory Immunity for Administrative Decision Making Bodies – Availability of Charter Remedies Against Regulatory Bodies
In Ernst v Alberta Energy Regulator, the SCC considered an appeal of the Alberta Court of Appeal (“ABCA”) decision Ernst v. Encana Corp., 2014 ABCA 285 (the “ABCA Decision”). The ABCA Decision affirmed an Alberta Court of Queen’s Bench (“ABQB”) decision striking Jessica Ernst’s claim against the Alberta Energy Regulator (the “AER”) for an alleged breach of Ms. Ernst’s right to freedom of expression under section 2(b) of the Charter of Rights and Freedoms (the “Charter”).
Specifically, the SCC considered whether:
1. Ms. Ernst’s pleadings made out a claim for a breach of her right to freedom of expression under Charter section 2(b); and
2. If so, whether the statutory immunity conferred on the AER under section 43 of the Energy Resources Conservation Act (“ERCA”) barred Ms. Ernst’s claim for damages under Charter section 24(1).
Section 2(b) of the Charter provides:
2. Everyone has the following fundamental freedoms:
…
(b) freedom of thought, belief, opinion and expression, including freedom of the press and other media of communication;
Section 24(1) of the Charter provides for broad remedies where a person’s rights or freedoms have been infringed. Section 24(1) stated:
24. (1) 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 remedy as the court considers appropriate and just in the circumstances.
ERCA section 43 provided the Energy Resources Conservation Board (the predecessor to the AER) with broad immunity. It states:
43 No action or proceeding may be brought against the Board or a member of the Board or a person referred to in section 10 or 17(1) in respect of any act or thing done purportedly in pursuance of this Act, or any Act that the Board administers, the regulations under any of those Acts or a decision, order or direction of the Board.
ABQB and ABCA Decisions
In the ABQB decision (2013 ABQB 537) (the “ABQB Decision”), the case management judge struck both Ms. Ernst’s negligence and Charter claims against the AER as being barred by ERCA section 43.
On appeal, the ABCA affirmed the ABQB’s decision striking Ms. Ernst’s claim on the basis that her claim for Charter damages was barred by ERCA section 43. The ABCA did not consider whether Ms. Ernst’s pleadings made out a claim for a breach of Charter section 2(b).
Ms. Ernst appealed the ABCA Decision to the SCC. Ms. Ernst submitted that ERCA section 43 is unconstitutional to the extent that it purports to bar a person’s Charter claim against the AER and a remedy in damages under section 24 of the Charter.
Ms. Ernst did not appeal the part of the ABCA Decision striking Ms. Ernst’s negligence claim on the basis that the AER owed no private duty of care to Ms. Ernst.
SCC Affirming ABCA Decision
The SCC rendered a 4-4-1 split decision. Five of the nine SCC justices agreed that the claim should be struck. The appeal was therefore denied.
However, only four of the nine justices (Cromwell J., with Karakatsanis J., Wagner J, and Gascon J. concurring) decided the question of the constitutionality of ERCA section 43, holding that Ms. Ernst failed to establish that the immunity provision was unconstitutional.
Justice Abela was the deciding vote dismissing the appeal. However, she would have dismissed the appeal on the grounds that Ernst failed to provide the required notice of a constitutional challenge. For this reason, there was not a majority determination as to the constitutionality of ERCA section 43.
The remaining four justices, in a dissenting opinion, would have allowed the appeal but declined to answer the constitutional question.
Reasons of Justice Abela
Justice Abela would have dismissed the appeal on the basis that Ms. Ernst failed to provide the required notice of a constitutional challenge under section 24 of Alberta’s Judicature Act. Justice Abela also held that ERCA section 43, on its face, barred Ms. Ernst’s claim. Therefore, in Justice Abela’s opinion, Ms. Ernst’s claim failed to disclose a reasonable cause of action.
Justice Abela held that it would not be appropriate to address the constitutionality of ERCA section 43 given Ms. Ernst’s failure to provide the required notice and expressly denying in the lower court proceedings that she was challenging the validity of the legislation itself.
Justice Abela noted that notice requirements are not just a procedural technicality. Rather, the notice requirement serves a “vital purpose” when constitutional questions arise in litigation. Notice ensures “that courts have a full evidentiary record before invalidating legislation and that governments are given the fullest opportunity to support the validity of legislation.”
Reasons of Justice Cromwell (with Justices Karakatsanis, Wagner, and Gascon concurring)
Justice Cromwell held that ERCA section 43, on its face, barred Ms. Ernst’s Charter claim. This left only the question of whether Ms. Ernst had successfully challenged the constitutionality of section 43. Justice Cromwell held that she had not.
Justice Cromwell noted that there was no dispute between the parties that ERCA section 43, on its face, purports to bar Ms. Ernst’s claim for Charter damages. He noted that Chief Justice McLachlin et al would have allowed the appeal on the basis that it was not plain and obvious that the immunity provision barred Ernst’s claim. Justice Cromwell found the dissenting justices’ reasoning problematic for a number reasons, including:
1. the fact that Ernst argued in her submissions the contrary position – that ERCA section 43, on its face, did bar her claim;
2. that although the Court is not bound by parties’ positions on questions of law, no party cited authority to suggest Ms. Ernst’s position was wrong in law – nor was Cromwell aware of any; and
3. that it would therefore be unfair to the AER to find otherwise, as the AER had no reason to expect that this issue was in question, let alone that the appeal might turn on it.
Justice Cromwell held that Ernst had failed to establish that section 43 is unconstitutional on the grounds that she had not provided an adequate factual basis on which the court could decide the challenge. Cromwell held that, contrary to the result reached by the four dissenting justices, a court cannot refuse to rule on the immunity clause’s constitutionality, yet also refuse to apply it. Because there is a presumption of constitutionality, Justice Cromwell held that the immunity clause must be applied and therefore the appeal should be dismissed.
Justice Cromwell further held the Charter damages could never be an appropriate remedy for Charter breaches by the AER.
Justice Cromwell noted that Charter damages may provide compensation and deter future violations. However, in the case of a regulatory board such as the AER, awarding monetary damages to an individual may inhibit effective government. There are other remedies available for a claimant to seek redress for a Charter breach, without having such a broad adverse impact on the public interest and ability of regulators to fulfill their respective mandates. In this case, Justice Cromwell held that judicial review was an alternative effective remedy for any AER breach of a claimant’s Charter rights.
Justice Cromwell, citing the SCC decision Ward v. Vancouver (City), 2010 SCC 27, held that damages under section 24(1) of the Charter would not be an appropriate remedy because in this case there was an effective alternative remedy. Awarding damages for a claim against the AER would be contrary to the demands of good governance.
Reasons of McLachlin C.J. and Moldaver and Brown (Cote J. concurring)
Justices McLachlin et al. explained that, to determine whether a claim for Charter damages should be struck out on the basis of a statutory immunity clause, a court must:
1. first determine whether it is plain and obvious that Charter damages could not be an appropriate and just remedy; and
2. if it is not plain and obvious that Charter damages could not be appropriate and just, then the court must determine whether it is plain and obvious that the immunity clause, on its face, applies to the plaintiff’s claim for Charter damages.
If it is plain and obvious that the immunity clause applies, a plaintiff must successfully challenge the clause’s constitutionality. Otherwise, a court must give effect to the immunity clause and strike the claim.
Chief Justice McLachlin held that it was not plain and obvious that Charter damages could not be an appropriate and just remedy. McLachlin found that Ms. Ernst’s pleadings raised two possible infringements on her section 2(b) rights, namely:
1. by the AER directing Ms. Ernst to stop expressing herself to the media and the public or else it would not consider her complaints; and
2. by the AER prohibiting Ms. Ernst from participating in the AER public complaints and enforcement process.
The Chief Justice characterized the first as an allegation that the AER acted with the purpose of limiting Ms. Enrst’s expressive activity in the public sphere. The second she characterized as the AER’s action having the effect of limiting Ms. Ernst’s expression. Specifically, the AER’s prohibition limited Ernst’s freedom of expression in the context of her participation in social and political decision making relating to oil and gas development in Alberta.
With reference to the first part of the Ward test (alternative remedy) discussed above, McLachlin et al. stated:
At the very least, it would be premature to conclude, based on the pleadings alone, that judicial review would provide an effective alternative remedy to Charter damages in this case, let alone in all cases, against the Board. We note that, under the Alberta Rules of Court, damages are not available through judicial review.
Chief Justice McLachlin et al. went on to consider the second part of the Ward test, namely, whether awarding Charter damages would be contrary to the demands of good governance. The dissenting justices noted that while the common law recognizes absolute immunity for judges in the exercise of their adjudicative function, the AER was not acting in such a capacity when it informed Ernst that she could not longer write to the Board until she ceased her public criticisms.
McLachlin et al. concluded that it was not plain and obvious that Charter damages could not be a just and reasonable remedy in the circumstances.
McLachlin et al. went on to consider whether it was plain and obvious that ERCA section 43, on its face, applied to bar Ms. Ernst’s claim. McLachlin noted that the Court is not bound by the positions of the parties on questions of law. She went on to find that the circumstances of this case were exceptional and, in her view, compelled the Court to consider an issue not raised by the parties.
McLachlin et al. explained that Ms. Ernst raised a novel and difficult legal problem involving the interplay between legislative immunity clauses and s. 24(1) of the Charter. She went on to state that the complexity of the issues “understandably resulted in submissions which have not comprehensively addressed the issues in this case.”
McLachlin et al. noted that the lower courts and Ms. Ernst herself assumed that, by its terms, ERCA section 43 plainly and obviously barred Ms. Ernst’s entire claim. While the justices acknowledged that those assumptions may ultimately prove correct, in their opinion, it was not plainly and obviously so at this stage given the evidence on the record.
On reaching this conclusion, McLachlin et. al would have allowed the appeal without having to consider the constitutionality of ERCA section 43.
