Supreme Court of Canada Will Hear “Charter Damages” Case Against Alberta’s Energy RegulatorErnst v Alberta (Energy Resources Conservation Board), 2014 ABCA 285 (CanLII)
On April 30, 2015, the Supreme Court of Canada granted leave to appeal to Jessica Ernst in her ongoing claim against the Energy Resources Conservation Board (predecessor to the Alberta Energy Regulator)(the “Board”) and others relating to the damages allegedly caused to Ms. Ernst and her property by a coal bed methane shallow drilling program. In September, 2014 (found here) we commented on the Alberta Court of Appeal’s decision in Ernst v Alberta (Energy Resources Conservation Board) in which the dismissal of Ms. Ernst’s claims against the Board were upheld by the Alberta Court of Appeal.
Ms. Ernst sought leave to appeal to the Supreme Court of Canada only with respect to her claim for damages under section 24 of the Charter, which isbased on her allegation that the Board breached her Charter right to freedom of expression by failing to accept further communications from her. In granting leave to appeal (without reasons), the Supreme Court of Canada has indicated that it will address the issue of whether or to what extent a legislative provision protecting the Board from civil actions and remedies is constitutional if it purports to limit Ms. Ernst’s remedies under section 24 for breach of Charter rights. This decision will have significant impact on the Board, the Alberta Energy Regulator, any other regulatory tribunal that has statutory protection from civil liability or actions, and any potential future claimants who may consider bringing an action against a statutory body that has legislative protection. We look forward to the guidance from the Supreme Court as to the proper framework for addressing the interplay between statutory immunity provisions and Charter damages claims against state actors.
Ms. Ernst (“Ernst”), owned land near Rosebud, Alberta, sued the defendant EnCana Corporation (“EnCana”) for damage to her fresh water supply allegedly caused by hydraulic fracturing and other related activities by EnCana in the region. Ernst also sued the Board a) for “negligent administration of a regulatory regime” related to her claims against EnCana (the “Negligence Claim”); and b) for breach of her right to freedom of expression under s. 2(b) of the Canadian Charter of Rights and Freedoms (the “Charter”) as a result of the refusal by the Board to accept further communications from her (the “Charter Claim”). Although not relevant to this appeal, Ernst also sued Her Majesty the Queen in right of Alberta, alleging that Alberta Environment and Sustainable Resource Development (“AESRD”) owed her a duty to protect her water supply, and that it failed to respond adequately to her complaints about EnCana’s activities. Ernst claimed damages from EnCana, the Board and AESRD totaling in excess of $33 million.
Queen’s Bench Decision
In the Alberta Court of Queen’s Bench, the Board successfully applied to strike certain portions of Ernst’s pleading for failing to disclose a reasonable cause of action [decision found here].
The case management judge who heard the Board’s application, Chief Justice Wittmann, found that the Negligence Claim was unsupportable at law, since no private law duty of care was owed by the Board to Ernst. Alternatively, he found that any claim against the Board was barred by section 43 of the Energy Resources Conservation Act, RSA 2000, c. E-10 (the “ERCA”), which stated, in part, that “No action…may be brought against the Board…in respect of any act or thing done purportedly in pursuance of this Act...”. Section 43 has since been repealed and replaced by s. 27 of the Responsible Energy Development Act, SA 2012, c. R-17.3 (“REDA”), which has similar wording.
Although the Chief Justice concluded that the Charter Claim was not so unsustainable that it could be struck out summarily, he found that this claim was also barred by section 43 of the ERCA. As is seen below, it is this finding that is the basis for the Supreme Court of Canada deciding to hear the appeal.
Court Of Appeal Decision
The Court of Appeal dismissed Ernst’s appeal.
The Negligence Claim
With respect to the Negligence Claim, in finding that the Chief Justice correctly concluded that the Board did not owe a private law duty of care to Ernst, the Court of Appeal stated that the regulatory duties of the Board are owed to the public, and not to any individual, and that there exist “strong policy considerations against finding regulators essentially to be insurers of last resort for everything that happens in a regulated industry”. We discussed this considerations in more detail in our earlier blog post [found here].
The Board had argued, in the alternative, that even if there existed a private law duty of care, any action was foreclosed by section 43 of the ERCA. Interestingly, Ernst argued that section 43 should only protect the Board from claims arising from “any act or thing done”, and not from “omissions”, something which is now specifically mentioned in section 27 of REDA. In agreeing with the Board, the Court of Appeal found (at para 21) that the Chief Justice correctly concluded that “such a narrow interpretation of the section is inconsistent with its broader purpose within the legislation” and that “the distinction between acts and omissions is, in any event, illusory.” The Court of Appeal held (at para 22) that the inclusion of “omissions” in REDA “should be seen as an effort to provide certainty in this area, and does not declare the previous state of the law: Interpretation Act, RSA 2000, c. I-8, s. 37.”
The Charter Claim
With respect to the Charter Claim, the Chief Justice declined to strike out the related portions of the claim, finding that this area of the law was sufficiently novel and undeveloped. He went on, however, to conclude that even if such a claim was potentially available, it too was barred by section 43 of the ERCA.
On appeal, Ernst argued that section 43 cannot bar a claim under the Charter. In dismissing this argument, the Court of Appeal held that in determining whether a Charter remedy is “appropriate and just” in accordance with section 24 of the Charter, the court will have regard to traditional limits on remedies, including limitation periods and requirements for leave to appeal or to seek judicial review. The Court further held (at para 28) that the legislatures have a legitimate role in specifying the broad parameters of remedies that are available, on the following basis:
Having well established statutory rules about the availability of remedies is much more desirable than leaving the decision to the discretion of individual judges. Any such ad hoc regime would be so fraught with unpredictability as to be constitutionally undesirable. If the availability of a remedy were only known at the conclusion of a trial, it would defeat the whole point of protecting administrative tribunals from the distraction of litigation over their actions, and the consequent testimonial immunity.
The Court referred (at para 29) to Vancouver (City) v Ward, 2010 SCC 27 at para. 20,  2 SCR 28 [found here]:
…the state must be afforded some immunity from liability in damages resulting from the conduct of certain functions that only the state can perform. Legislative and policy-making functions are one such area of state activity. The immunity is justified because the law does not wish to chill the exercise of policy-making discretion.
The Court went on to find that limits on Charter remedies do not offend the rule of law, so long as there remain some effective avenues of redress. The long standing remedy for improper administrative action has been judicial review, and there is nothing in section 43 that would have prevented Ernst from seeking an order in the nature of mandamus or certiorari to compel the Board to receive communications from her. Further, she could have appealed any decisions of the Board to the Court of Appeal, with leave.
The Court of Appeal concluded that section 43 of the ERCA barred Ernst’s Charter Claim.
The Leave to Appeal Decision
Ernst sought leave to appeal [Ernst’s application materials can be found here] on these two issues, both related to the Charter Claim:
- Can a general “protection from action” clause contained within legislation bar a Charter claim for a personal remedy made pursuant to section 24(1) of the Charter?
- Can legislation constrain what is considered to be a “just and appropriate” remedy under section 24(1) of the Charter?
The Supreme Court of Canada granted leave.
It is important to note that Ernst did not seek leave to appeal the dismissal of the Negligence Claim, so the decision of the Court of Appeal on that issue remains and will continue to provide certainty and protection to the Alberta Energy Regulator in the future.
It is also important to note that Ernst has not yet established that her Charter rights have been breached.
The Supreme Court of Canada’s decision to hear this matter illustrates its desire to further develop the law surrounding claims for damages under section 24(1) of the Charter, something that is ongoing, topical, and will be of interest to many regulatory and administrative tribunals. We note that earlier this month the Supreme Court of Canada rendered its decision in Henry v British Columbia, 2015 SCC 24 (“Henry”) [found here], which addressed the question as to whether malice was required in order to establish a claim of Charter damages against a Crown prosecutor for wrongfully failing to disclose information to an accused in a criminal case. We look forward to the guidance from the Supreme Court as to the proper framework for addressing the interplay between statutory immunity provisions and Charter damages claims against state actors.
This article originally appeared on The Resource: BLG Energy Law Blog on May 26, 2015.