Canada: Supreme Court Of Canada Dismisses Appeal Challenging The Alberta Energy Regulator's Immunity Provisions

On January 13, 2017, the Supreme Court of Canada released its judgment in Ernst v Alberta Energy Regulator, dismissing the appellant's claim against the Alberta Energy Regulator (AER) for damages for alleged breaches to her right to freedom of expression under section 2(b) of the Charter. Nevertheless, as we note below, there was no clear majority view on the Court with respect to the issue of whether the AER's immunity provision is constitutional and the final resolution of that issue may need to wait for another case.

Background

Ms. Ernst brought her claim against the AER for allegedly punishing her because she publicly criticized the AER, and for preventing her from speaking to key offices within the AER organization for a period of 16 months. Ms. Ernst had also alleged that the AER was negligent in the administration of a regulatory regime allowing hydraulic fracturing and drilling close to her property, and for preventing her from speaking to the AER. Her statement of claim alleged that the AER's restrictions limited her ability to lodge complaints, register concerns and to participate in the AER's compliance and enforcement process, thereby constituting a breach of her right to freedom of expression under section 2(b) of the Charter.

 The AER applied to strike Ms. Ernst's claim on the basis that section 43 of the Energy Resources Conservation Act (ERCA) barred her claim. Section 43 provides as follows:

Protection from action

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.

The Alberta Court of Queen's Bench in Ernst v. EnCana Corporation, and the Alberta Court of Appeal in Ernst v Alberta (Energy Resources Conservation Board),  determined that the AER did not owe Ms. Ernst a duty of care, and thereby dismissed the claims in negligence. Both courts had also determined that the immunity clause, on its face, barred Ms. Ernst's claim against the AER for Charter damages.

Ms. Ernst's constitutional question before the Supreme Court was articulated by Cromwell J as follows:

Is s. 43 of the Energy Resources Conservation Act, R.S.A. 2000, c. E-10, constitutionally inapplicable or inoperable to the extent that it bars a claim against the regulator for a breach of s. 2(b) of the Canadian Charter of Rights and Freedoms and an application for a remedy under s. 24(1) of the Canadian Charter of Rights and Freedoms?

The "Majority"

Cromwell J, with Karakatsanis, Wagner, and Gascon JJ held that section 43 of the ERCA was a plain and obvious bar to the Charter claim. While four judges cannot form a majority on a nine-judge court, Abella J agreed with them in the result and their opinion accordingly prevailed. For the sake of convenience, we will refer to Cromwell J's reasons as representing the "majority" opinion on the Court.

Cromwell J's judgment centered on what he characterized as Ms. Ernst's central position in the appeal; namely, that section 43 of the ERCA, on its face, barred her claim entirely. Ms. Ernst argued that the immunity granted by section 43 was therefore unconstitutional. While Ms. Ernst had previously argued that the AER owed her a common law duty of care, that claim (which is of interest to many statutory and quasi-judicial bodies) had been dismissed by the Alberta Court of Appeal and was not pursued here.

Applying the test established in Vancouver (City) v Ward,  the majority held that Charter damages could not be an appropriate remedy for Ms. Ernst's claim. In Ward, the Court held that Charter damages are not an appropriate and just remedy where there is an effective alternative remedy, or where damages would be contrary to the aim of good governance. Charter damages can be found to be appropriate and just remedy where they would serve a compensatory, vindicatory or deterrent purpose supporting a particular remedy.

The majority found that the availability of judicial review of the AER's decisions and conduct towards Ms. Ernst would substantially address the alleged Charter breach, since the immunity clause itself cannot bar access to judicial review. With respect to the second test in Ward – the "good governance" test – the majority held that awarding damages in a situation such as this might undermine and inhibit the effectiveness of the AER and induce a chilling effect on the AER's exercise of its statutory duties and discretion. Immunity from civil claims, in the majority's view, allows decision-makers to "fairly and effectively make decisions by ensuring freedom from interference, which is necessary for their independence and impartiality"and allows them to do so without the distraction of potential litigation in the future.

The majority further differentiated between an "elevated liability threshold" and complete immunity. The majority held that the availability of judicial review as an alternative remedy to Charter relief from decisions of quasi-judicial regulatory boards was a compelling ground to establish complete immunity for decision makers.

Abella J's Separate Reasons

Abella J, in separate reasons, held that the appeal should be dismissed on the ground that Ms. Ernst had not provided the proper notice in raising the Charter claim. Abella J characterized the appeal as an improper collateral attack on section 43 of the ERCA. As a consequence of Ms. Ernst's failure to provide notice, Abella J found that the Attorney General of Alberta had lost the opportunity to meet the case against it with a fulsome record. Abella J's reasons also centered on Ms. Ernst's own position and pleadings before the courts below, which stressed that Ms. Ernst was not challenging the constitutionality of section 43. On that basis, Abella J refused to entertain the constitutional argument on whether section 43 of the ERCA was inapplicable or inoperable, and dismissed the appeal accordingly.

Interestingly, at paragraph 123 of her reasons, Abella J noted that pursuant to a Ward analysis, Charter damages are not an appropriate and just remedy, but stated that a determination of the constitutionality of the immunity clause was needed before embarking on such an analysis.

The "Dissent"

McLachlin CJ, Moldaver and Brown JJ (with Côté J), dissented, holding that section 43 of the ERCA was not an obvious bar to the Charter claim, as it was arguable that the "punitive" conduct of the AER, which prevented her from speaking to key offices within the AER organization for a period of 16 months, fell outside the scope of the immunity granted by section 43 of the ERCA. The dissent therefore held that Ms. Ernst's claim could not be struck on the basis of section 43 of the ERCA.

Since the dissenters found that it was not plain and obvious that section 43 of the ERCA barred Ms. Ernst's claim, and that her claim alleged that section 43 of the ERCA itself was unconstitutional, it was not necessary to consider the constitutionality of that section at this stage of the proceedings.

Conclusions

Both Cromwell J's reasons and the dissent reaffirmed the Court's protection of public regulators and decision makers from claims in negligence, whether or not those decisions were made in the regulator's adjudicative capacity, since the Alberta Court of Queen's Bench and Alberta Court of Appeal both found that the AER did not owe Ms. Ernst a common law duty of care and the finding was not the subject of the appeal. However, the dissent disagreed vehemently with Cromwell J's reasons that a negation of any negligence law duty of care could "support an absolute immunity from Charter damages claims".

While the Court dismissed the appeal of the order striking Ms. Ernst's claim by a margin of 5 to 4, it split with no clear majority on the issue of whether the immunity in section 43 of the ERCA was constitutionally inoperable or inapplicable. Abella J dismissed the appeal on the grounds that Ms. Ernst did not provide proper notice of a constitutional challenge, thereby declining (along with the dissenting justices) to determine the constitutionality of the immunity clause.

Therefore, while the Supreme Court of Canada dismissed Ms. Ernst's appeal, effectively striking out her claim, the Court's three-way split may leave open the question of whether the unqualified immunity clause in section 43 of the ERCA is constitutionally valid as an absolute bar to claims under the Charter, as five justices effectively declined to consider the constitutionality of section 43 of the ERCA.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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