Limiting Charter Damages – Ernst v. Alberta Energy Regulator, 2017 SCC 1

In its first decision of the year, Ernst v. Alberta Energy Regulator, 2017 SCC 1, the Court released its reasons for dismissing the appeal of Jessica Ernst, an Albertan who was suing, amongst others, the Alberta Energy Regulator for breaching her Charter-protected freedom of expression and seeking Charter damages for that alleged breach. At issue before the Supreme Court was whether the immunity clause in s. 43 of the Alberta Energy Resources Conservation Act had the effect of barring her claim for Charter damages. In a strange 4:1:4 split, a majority of the Court held that it did.

Ms. Ernst owned land in Alberta and drew her water from an aquifer-fed well. She was highly and publicly critical of the Alberta Energy Regulator the “Regulator”) for allowing the practice of fracking which, she claimed, led to so much natural gas being co-mingled with the water coming from her well that she could actually set her tap water aflame. At some point, apparently due to her continuous and public criticism and commentary, the Regulator instructed its staff to cease having contact with Ms. Ernst, to cease taking her communications and to not reply to any communications from her. She claimed that this step was a breach of her freedom of expression, that it was done to punish her and that the Regulator should be ordered to pay her Charter damages for having breached her rights.

Section 43 of the Alberta Energy Resources Conservation Act provides for an immunity to the Regulator and its members:

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 Regulator brought an application to strike, amongst other things, Ms. Ernst’s claim for Charter damages on the basis that s. 43 provided full immunity against such a claim. Ms. Ernst submitted in the Court of Queens Bench and in the Alberta Court of Appeal that she was not challenging the constitutionality of s. 43. She simply stated that it did not apply to her claim for Charter damages. She gave no notice to the Attorneys General of any constitutional challenge as a result of her position.  Only when she came to the Supreme Court of Canada was the constitutional “applicability” clearly put at issue.

The Court split along three lines. Cromwell J (reasons concurred in by Karakatsanis, Wagner and Gascon JJ) held that, properly construed, s. 43 operated to bar Ms. Ernst’s claim for Charter damages and that a claim for Charter damages could never succeed in the circumstances of her case and thus, her claim for Charter damages must be struck. McLachlin CJ, Moldaver and Brown JJ (Cote J concurring) held that it was not plain and obvious that  Ms. Ernst’s claim for Charter damages could never succeed, that s. 43 operated to limit a claim for Charter damages and that Ms. Ernst’s claim should not be struck. Finally, Abella J held that s. 43 on its face applied to a claim for Charter damages and because Ms. Ernst had not given proper notice to the Attorneys General of her intent to challenge the constitutional applicability of s. 43, the Court had no record before it with which to judge the constitutionality of that provision and so it must be presumed constitutional. Accordingly, Abella J also struck Ms. Ernst’s claim, providing the extra vote needed to dispose of the case.

The ratio of the case, I think, is best described as follows:

  1. Section 43 applies on its face to claims for Charter damages (ie. properly construed, it extends so as to apply to such claims) (Cromwell and Abella JJ in agreement on this point); and
  2. No notice of constitutional question having been given, and therefore no record upon which to assess the constitutionality of the provision for the Court, section 43 must be presumed to be constitutional (Abella J – Cromwell J and McLachlinCJ/Moldaver J/Brown J cancelling each other’s reasoning out on whether to assess the constitutionality of the provision).

Justice Cromwell agrees with Justice Abella that it is plain and obvious that s. 43, properly construed, bars a claim for Charter damages (see para. 15).  He apparently did not agree with her, however, that the Court should not assess the constitutionality of s. 43 because of her failure to give notice to the Attorneys General which would thereby have assured a proper record. He proceeds without that record.

[21]                          When a court is faced with an immunity clause that bars a plaintiff’s claim (as this one does), the court cannot refuse to rule on the law’s constitutionality and yet also refuse to apply the clause. Having had more than ample opportunity to do so, Ms. Ernst has failed to discharge her burden of showing that the law is unconstitutional, a burden sometimes described as a presumption of constitutionality: Manitoba (Attorney General) v. Metropolitan Stores Ltd., [1987] 1 S.C.R. 110, at pp. 124-25.

[22]                          Where a person challenging a law’s constitutionality fails to provide an adequate factual basis to decide the challenge, the challenge fails. As Cory J. put it on behalf of the Court in MacKay v. Manitoba, [1989] 2 S.C.R. 357, at p. 366, “the absence of a factual base is not just a technicality that could be overlooked, but rather it is a flaw that is fatal to the appellants’ position” (emphasis added).

[23]                          It follows that if, as Ms. Ernst maintains, the immunity provision clearly purports to bar her damages claim, and if the record before the Court is not adequate to permit a decision on its constitutionality, then the immunity clause must be applied, Ms. Ernst’s claim for Charter  damages struck out and the appeal dismissed.

He first reviewed Vancouver (City) v. Ward, 2010 SCC 27. He applied the countervailing factors of the existence of an alternate remedy (here, judicial review) and concerns for good governance (the inappropriateness of damages for the exercise of quasi-judicial powers). He stated (paras. 26-31):

[26]                          The leading case about when Charter  damages are an appropriate and just remedy is Vancouver (City) v. Ward, 2010 SCC 27, [2010] 2 S.C.R. 28. Applying the principles set out in that case, damages are not an appropriate and just remedy for Charter  violations by this Board. Not every bare allegation claiming Charter  damages must proceed to an individualized, case-by-case consideration on its particular merits. Ward held that Charter  damages will not be an appropriate and just remedy where there is an effective alternative remedy or where damages would be contrary to the demands of good governance. These considerations, taken together, support the conclusion that the proper balance would be struck by holding that damages are not an appropriate remedy.

[27]                          Section 24(1)  of the Charter  confers on the courts a broad remedial authority. As has been said, “[i]t is difficult to imagine . . . a wider and less fettered discretion”: Mills v. The Queen, [1986] 1 S.C.R. 863, at p. 965. This broad discretion should not be narrowed by “casting it in a straight-jacket of judicially prescribed conditions”: Ward, at para. 18. But this does not mean that Charter  breaches should always, or even routinely, be remedied by awards of Charter  damages. The remedy of damages is limited to situations in which it is “appropriate and just” because it serves one or more of the compensatory, vindicatory and deterrent purposes which support that choice of remedy: Ward, at para. 32. Countervailing factors may establish that damages are not an appropriate and just remedy even though they would serve these ends: Ward, at para. 33.

[28]                          The list of countervailing factors is not closed. So far, two have been identified: the existence of alternative remedies and concerns for good governance: (Ward, at para. 33; see also para. 42). I conclude, therefore, that Ward does not preclude the immunity of the Board to Charter  damages. Rather, Ward set out two countervailing factors that could negate the appropriateness of Charter  damages and specifically left open the development of others.

[29]                          The jurisprudence does not require that every pleaded claim for Charter  damages be assessed on an individualized, case-by-case basis. Ward, for example, specifically contemplates the development of new defences to Charter  damages claims and these defences are not limited to enhanced liability thresholds. Countervailing factors against granting Charter  damages may be of a more generalized nature, reflecting the availability of other remedies, the accumulated wisdom of the common law and strong indications of public policy.

[30]                          First, there is an alternative remedy — judicial review — that substantially addresses the alleged Charter  breach. Judicial review is available to vindicate Charter  rights and to clarify the law so as to prevent similar future breaches. Second, good governance concerns are also engaged as granting damages undermines the effectiveness of the Board and inhibits effective governance. Third, to determine the appropriateness of Charter  damages against this type of board on a case-by-case basis in a highly factual and contextual manner largely undermines the purposes served by an immunity.

[31]                          When these countervailing factors are considered collectively — that is, when one looks at their cumulative effect — they negate the appropriateness of an otherwise functionally justified award of Charter  damages against this Board. In short, damages are not an appropriate and just remedy for the Board’s Charter  breaches

The minority on this issue would not have struck Ms. Ernst’s claim. They do not rule on the constitutionality of s. 43 or on its proper interpretation. Instead, looking only at the pleadings, the minority simply argues that it is not plain and obvious that the claim must fail.

I find Justice Abella’s judgment interesting. Her position hearkens back to that taken by Justice Pigeon speaking only for himself in Calder v. British Columbia (Attorney General), [1973] SCR 313 because the plaintiff in that case had not obtained a fiat before suing the Crown (a 3:1:3 split in that case). I will reproduce only part of her judgment here but her admonition of the failure to give notice in this case should be noted by all counsel seeking to challenge the constitutionality of any legislation:

[98]                          All the provinces have statutes that require notice to be given to the Attorney General of that province in any proceeding where the constitutionality of a statute is in issue. Most provinces require that notice be given to the Attorney General of Canada as well. In Alberta, this requirement is found in s. 24 of Alberta’s Judicature Act:

24(1) If in a proceeding the constitutional validity of an enactment of the Parliament of Canada or of the Legislature of Alberta is brought into question, the enactment shall not be held to be invalid unless 14 days’ written notice has been given to the Attorney General of Canada and the Minister of Justice and Solicitor General of Alberta.

 (2) When in a proceeding a question arises as to whether an enactment of the Parliament of Canada or of the Legislature of Alberta is the appropriate legislation applying to or governing any matter or issue, no decision may be made on it unless 14 days’ written notice has been given to the Attorney General of Canada and the Minister of Justice and Solicitor General of Alberta.

 (3) The notice shall include what enactment or part of an enactment is in question and give reasonable particulars of the proposed argument.

 (4) The Attorney General of Canada and the Minister of Justice and Solicitor General of Alberta are entitled as of right to be heard, either in person or by counsel, notwithstanding that the Crown is not a party to the proceeding.

[99]                          Notice requirements serve a “vital purpose” when constitutional questions arise in litigation. They ensure “that courts have a full evidentiary record before invalidating legislation and that governments are given the fullest opportunity to support the validity of legislation” (Guindon v. Canada, [2015] 3 S.C.R. 3, at para. 19; see also Bell ExpressVu Limited Partnership v. Rex, [2002] 2 S.C.R. 559, at paras. 58-59; R. v. Aberdeen (2006), 384 A.R. 395 (C.A.); TransCanada Pipelines Ltd. v. Beardmore (Township) (2000), 186 D.L.R. (4th) 403 (Ont. C.A.), at paras. 160-62; R. v. Lilgert (2014), 16 C.R. (7th) 346 (B.C.C.A.), at paras. 7-22).

[100]                      In Alberta, the Court of Appeal has emphasized that it requires strict adherence to the notice provisions regarding constitutional questions found in the Judicature Act (Aberdeen; Broddy v. Alberta (Director of Vital Statistics) (1982), 142 D.L.R. (3d) 151 (Alta. C.A.), at para. 41; Seweryn v. Alberta (Appeals Commission for Alberta Workers’ Compensation), 2016 ABCA 239, at paras. 3-5 (CanLII); R. v. Redhead (2006), 384 A.R. 206 (C.A.), at paras. 46-47). In Aberdeen, the Crown appealed a determination made as to the constitutionality of the retrospective application of the Sex Offender Information Registration Act, S.C. 2004, c. 10 , on the ground that proper notice under the Judicature Act was not given to the Attorneys General of Alberta and Canada. The Court of Appeal allowed the appeal in language of relevance to our case:

     The requirement of notice is to ensure that governments have a full opportunity to support the constitutional validity of their legislation, or to defend their action or inaction, and to ensure that courts have an adequate evidentiary record in constitutional cases. The notice requirements depend on whether a constitutional remedy is sought and whether the remedy falls under s. 52(1)  of the Constitution Act, 1982  or ss. 24(1)  or 24(2)  of the Charter .

      That raises the question, what is the nature of the constitutional remedy sought here? The respondents submit that the remedy being sought is under s. 24(1)  of the Charter  and therefore the notice is not required. We disagree. The nature of the relief sought is essentially a s. 52(1)  remedy. We find the reasoning adopted by the court in R. v. Murrins (D.) (2002), 201 N.S.R. (2d) 288 [C.A.], persuasive. In Murrins, supra, the court considered the retrospective application of a DNA order in the face of the same s. 11 (i) Charter  argument as is made before us. The court held that if the retrospective application of a DNA order resulted in a Charter  infringement of Murrins’ rights, it would violate the s. 11 (i) Charter  right of every offender who is subject to such an application and who committed the designated offence prior to its enactment. Thus, the issue was not simply whether Murrins’ right under s. 11 (i) Charter  was infringed, but whether the provision was constitutionally valid.

      That logic applies with equal force to the appeals before us. Despite the attempt by defence counsel to characterize the issue as a s. 24(1)  Charter  remedy, it is in effect a s. 52(1)  Charter  remedy that challenges the constitutional validity of the retrospective application of [the Sex Offender Information Registration Act, S.C. 2004, c. 10 ].

      The argument that de facto notice was received is not supported by the evidence. The practical effect of the absence of notice was addressed in Eaton v. Board of Education of Brant County, [1997] 1 S.C.R. 241, where the court favoured the view that in the absence of notice, the decision is ipso facto invalid. Were we in error on the approach to be taken, the record itself establishes prejudice to the Crown: no one appeared for the federal Crown and hence it had no opportunity to make submissions or to supplement the record. Secondly, there was no opportunity to put forward an evidentiary record in support of a s. 1  Charter  argument on the part of either Attorney General.

 (Aberdeen, at paras. 12-15, per Paperny J.A.)

[101]                      This approach is precisely the route Ms. Ernst took almost a decade after the Alberta Court of Appeal impugned it, arguing that her claim was a s. 24(1)  Charter  remedy and that notice was therefore not required. As in Aberdeen, hers is a veiled s. 52  Charter  claim.

And at para. 120-123:

[120]                      The analogous functions between courts and quasi-judicial decision-makers mean that extra caution should be exercised before this Court nibbles away at the immunity clause in this case. There are profound and obvious implications for all judges and tribunals from such a decision, and it should not be undertaken without a full and tested evidentiary record. It may or may not be the case that governments will be able to justify immunity from Charter  damages, but until the s. 1  justificatory evidence is explored, this Court should not replace the necessary evidence with its own inferences.

[121]                      This Court said in Vancouver (City) v. Ward, [2010] 2 S.C.R. 28, that “granting damages under the Charter  is a new endeavour, and an approach to when damages are appropriate and just should develop incrementally” (para. 21). It is worth noting that this Court has found Charter  damages to be available on only two occasions: in response to a Charter  breach resulting from abusive police conduct towards a detained suspect (Ward), and in response to a Charter  breach resulting from a prosecutor’s inadequate evidentiary disclosure to a criminal accused (Henry v. British Columbia (Attorney General), [2015] 2 S.C.R. 214). In both cases, the conduct justifying damages was committed by individuals who were under the direction of the state. Charter  damages have never been awarded against independent judicial or quasi-judicial decision-makers. This does not mean that such damages are beyond reach, but they are tied to the question of the constitutionality of immunity clauses and the extent to which they should be read down.

[122]                      Moreover, it is important to note that in Ward and Henry, this Court had the benefit of significant contributions from various Attorneys General when deciding the s. 24(1)  damages claims. In Ward, the Attorney General of British Columbia was directly involved in the litigation from the trial stage onwards, and before this Court, the Attorneys General of Canada, Ontario and Quebec intervened. Similarly in Henry, the Attorneys General of British Columbia and Canada were involved from the trial stage onwards, and before this Court, eight other provincial Attorneys General intervened.

[123]                      I agree that an analysis pursuant to Ward likely leads to the conclusion that Charter  damages are not an “appropriate and just” remedy in the circumstances, but in my respectful view the question of whether such damages are appropriate requires a prior determination of the constitutionality of the immunity clause. If the clause is constitutional, there is no need to embark on a Ward analysis. If, on the other hand, it is found to be unconstitutional, only then does a Ward analysis become relevant.

The result is that, at least for the time-being, Charter damages are not available as against the Alberta Energy Regulator because of the presumed constitutional validity and applicability of s. 43.  But the bigger lesson to me is to ensure that you give notice of any constitutional challenge and that you build the record you need for that challenge.

I remain

Constitutionally yours

Arthur Grant

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