POLICY MATTERS BEFORE OUR COURTS. YOU CAN AGREE OR DISAGREE WITH THE POLICY IN PLAY, BUT REGARDLESS…  IT MATTERS. Our laws are not applied simply by rote, oblivious to social, economic and other needs  and  considerations. They are applied after stopping, listening and looking both ways.  All that by way of segueing into the January 13, 2017 decision of the Supreme Court of Canada in Ernst v. Alberta Energy Regulator.

Many of us are familiar with the facts, which I will summarize.  Jessica Ernst lives near Rosebud, Alberta. Encana drilled close to Ms. Ernst’s property   and   conducted hydraulic fracturing. Ms. Ernst started complaining in 2004 about the effects this development was having on her home (principally on her water supply) both to what is now the AER and publicly and eventually sued the AER on two fronts. First was in negligence claiming the AER had negligently administered its regulatory functions and oversight. Second was that the AER had breached her Section 2(b) Charter right to freedom of expression by “arbitrarily, and without legal authority” restricting her communications with the AER. Fueling the second claim was the fact that Ms. Ernst maintained, because of her public criticisms, the AER prohibited her from communicating with it.  In fact, the AER staff was instructed to avoid contact with Ms.  Ernst.  This was for the period 2005-2006. In March 2007, Ms. Ernst was informed by the AER that she was again able to communicate with AER staff.

Ms.  Ernst filed her statement of claim in December 2007 claiming, amongst other things “damages in the amount of $50,000.00 under Section 24(1) of the Canadian Charter of Rights and Freedoms” for the AER’s actions which she maintained were done to punish her.  All in the face of Section 43 of the Energy Resources Conservation Act, (Alberta) which provided (1):

Protection from action

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 decision, order or direction of the Board.

The AER applied to strike out portions of Ms.  Ernst’s claim for failing to disclose a reasonable cause of action relying on the Section 43 immunity clause as a complete bar to both the negligence and Charter damage claims.
As to the negligence claim, that was dismissed at trial on the basis that the AER does not owe any individual a common-law duty of care. That ruling was upheld on appeal and the issue was not appealed for the benefit of the Supreme Court of Canada.

As to the Charter claim, although not without some controversy at the Supreme Court of Canada, it became “common ground” as between the parties that the Section 43 immunity clause operated as a complete bar to Ms. Ernst’s claim for Charter damages if (and it’s a big if), Section 43 was constitutional. Which constitutionality issue then and became the sole issue before the Supreme Court of Canada (at least to the minds of most Justices).  If Section 43 was constitutional, the Court was obligated to give effect to it and strike Ms. Ernst’s claim.
To that end, Ms.  Ernst argued Section 43 to be unconstitutional because it purported to bar her claim for Charter damages. Leaping ahead to the conclusion of the Supreme Court of Canada in a 5 to 4 decision and returning (finally?) to the importance of policy considerations before the Court, the majority determined that Charter damages could never be an appropriate and just remedy for Charter breaches by the AER and therefore a provision such as Section 43 did not limit the remedy and there-fore could not be unconstitutional.

Circling back now as to why damages could never be an appropriate remedy for Charter breaches by the AER and the broader issue underlying that question being how to strike an appropriate balance to protect two important pillars of our democracy, being constitutional rights and effective government, as observed by Cromwell, J. for the majority:

Granting Charter damages may vindicate Charter rights, provide   compensation   and   deter   future   violations. 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.

The “remedies other than damages” would include seeking judicial review of the AER’s decision to stop communicating with Ms. Ernst. The Supreme Court of Canada observed that while the list of reasons why damages are not an appropriate remedy is not closed, one reason concerns good governance and the fact that granting damages would “undermine the effectiveness of the Board and inhibit effective governance”.  While the AER has, of course, an obligation to be Charter compliant, it can’t spend its working day looking back over its shoulder in fear of a series of damage claims by those who feel aggrieved (my words not the Supreme Court’s). As stated by Cromwell J.:

Section 3 of the Energy Resources Conservation Act required the Board to undertake its duties respecting proposed energy resource projects considering the public interest and about the social, economic, and environmental effects of the project.  The Board had the public duty of balancing several potentially competing rights, interests and objectives.  Allowing claimants to bring claims for damages against the Board has the potential to deplete the Board’s resources, with respect to both funds and time.  Allowing a claimant to bring a damage claim against the Board may also result in defensive actions by the Board, which would “chill” its ability to otherwise carry out its statutory duties effectively and in the public interest. Likewise, the Board is required to balance public and private interests in the execution of its quasi-judicial duties, and this responsibility is inconsistent with being liable to an individual claimant for damages.

By way of summary, reverse-engineer all this. For the benefit of it constituents, the effectiveness of the AER is worthy of protection. Permitting those claimed to have been aggrieved to bring damage claims as against the AER when other remedies are available to them runs afoul of the policy of protecting effectiveness.  So, a  statutory immunity clause barring such damage claim cannot be unconstitutional because no such claim was available in the first place.

  1. Now Section 27 of the Responsible Energy Development Act which provides:

Protection from action 27 No action or proceeding may be brought against the Regulator, a director, a hearing commissioner, an officer or an employee of the Regulator, or a person engaged by the Regulator, in respect of any act or thing done or omitted to be done in good faith under this Act or any other enactment.


Published: The Negotiator, May 2017

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