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Legal Innovation, Access to Justice, and the University of Calgary’s Family Law Incubator

Mon, 03/06/2017 - 10:00am
By: Kyle Gardiner PDF Version: Legal Innovation, Access to Justice, and the University of Calgary’s Family Law Incubator Matter Commented on: The University of Calgary’s Family Law Incubator Family law litigants are increasingly experiencing difficulty with access to justice that compounds … Continue reading →

Reasons, Respect and Reconciliation

Fri, 03/03/2017 - 10:00am
By: Nigel Bankes PDF Version: Reasons, Respect and Reconciliation Case Commented On: Kainaiwa/Blood Tribe v Alberta (Energy), 2017 ABQB 107 (CanLII) Reconciliation between Canada’s settler society and First Nations and other indigenous communities certainly requires mutual respect but it should also … Continue reading →

An Update on The Right to Trial Within a Reasonable Time

Thu, 03/02/2017 - 10:00am
By: Drew Yewchuk PDF Version: An Update on The Right to Trial Within a Reasonable Time Cases Commented On: R v Lam, 2016 ABQB 489 (CanLII); R v Regan, 2016 ABQB 561 (CanLII); R v Lavoie, 2017 ABQB 66 (CanLII) It … Continue reading →

Supreme Court of Canada Protects Freedom of Expression of Individuals During Election Campaigns

Wed, 03/01/2017 - 10:00am
By: Linda McKay-Panos PDF Version: Supreme Court of Canada Protects Freedom of Expression of Individuals During Election Campaigns Case Commented On: BC Freedom of Information and Privacy Association v British Columbia (Attorney General) 2017 SCC 6 (CanLII) In this case, which … Continue reading →

Criminal Negligence and the Reasonable Parent

Tue, 02/28/2017 - 10:00am
By: Erin Sheley PDF Version: Criminal Negligence and the Reasonable Parent Case Commented on: R v Lovett, 2017 ABQB 46 (CanLII) In R v Lovett the Alberta Court of Queen’s Bench added a new entry to the rapidly developing jurisprudence on … Continue reading →

Seeking Leave to Appeal a Statutory Tribunal Decision: What Principles Apply?

Fri, 02/24/2017 - 10:00am
By: Shaun Fluker and Drew Yewchuk PDF Version: Seeking Leave to Appeal a Statutory Tribunal Decision: What Principles Apply? Case Commented On: Bokenfohr v Pembina Pipeline Corporation, 2017 ABCA 40 (CanLII) Statutory provisions which provide for an appeal from a statutory … Continue reading →

The Sixties Scoop & the Duty to Consult: A New Frontier in Aboriginal Litigation?

Thu, 02/23/2017 - 10:00am
Case Commented On: Brown v Canada (Attorney General), 2017 ONSC 251 (CanLII) PDF Version: The Sixties Scoop & the Duty to Consult: A New Frontier in Aboriginal Litigation? By: Elysa Hogg and Alex Darling *Note on terminology: “Indian” is used to … Continue reading →

Independent Operations, Holdings and Common Ownership: A Letter Decision of the Alberta Energy Regulator

Tue, 02/21/2017 - 10:00am
By: Nigel Bankes and Heather Lilles PDF Version: Independent Operations, Holdings and Common Ownership: A Letter Decision of the Alberta Energy Regulator Decision Commented On: AER, Request for Regulatory Appeal by Westbrick Energy Ltd., Regulatory Appeal No. 1852713, 25 May 2016 … Continue reading →

Mennillo v Intramodal inc.: The Supreme Court of Canada Revisits the Oppression Remedy

Fri, 02/17/2017 - 3:23pm
By: Jassmine Girgis PDF Version: Mennillo v Intramodal inc.: The Supreme Court of Canada Revisits the Oppression Remedy Case Commented On: Mennillo v Intramodal inc., 2016 SCC 51 (CanLII) Mennillo v Intramodal inc. is the first oppression remedy case since BCE … Continue reading →

Residential Tenancy Agreements, Options to Purchase, In Terrorem Clauses, and Relief from Forfeiture

Thu, 02/16/2017 - 10:00am

By: Jonnette Watson Hamilton 

PDF Version: Residential Tenancy Agreements, Options to Purchase, In Terrorem Clauses, and Relief from Forfeiture

Case Commented On: Dreamworks Ventures Ltd v Dye, 2017 ABPC 20 (CanLII)

This residential tenancy case, arising in the context of a rent-to-own arrangement, is light on the law. The dispute was primarily about the tenants’ responsibility for cleaning and painting after they left the house and this decision assesses the damages. Nevertheless, the case raised one interesting legal point. Judge Allan H. Lefever mentioned an in terrorem clause in connection with the Option to Purchase that had been granted to the tenants in return for a non-refundable $5,000 deposit that was part of the rent-to-own arrangements. While he mentions the clause, he did not discuss it because it was not relevant to the dispute. The in terrorem clause tried to scare the tenants to stop them from filing a caveat to protect their interest under the Option to Purchase. Can this in terrorem clause possibly be valid? This, it seems, is a difficult question to answer.

The lawsuit was started by Dreamworks Ventures Ltd. According to their website, Dreamworks Ventures Ltd is in the “Residential Property Matchmakers” business; it is an online third-party service that links home buyers with home sellers through a rent-to-own program: “Our home buyers consist of people who cannot purchase a home through conventional methods, for various reasons. Our home sellers are people who are having a hard time selling their house, or people who want to make money in selling their house” (at Who We Are). In this case, Mandy and Kevin Dye were home buyers (although Kevin Dye was not named in the law suit, presumably because he filed for bankruptcy in 2015). We are not told who the home sellers were.

Five documents, all dated July 19, 2013 and all made between Mandy and Kevin Dye and Dreamworks, set out the legal relationships between the two parties. The details of these documents that are set out in the judgment are sketchy because of the focus of the decision.

The first document was a Lease for a house in Medicine Hat, showing Dreamworks as the landlord and Mandy and Kevin Dye as the tenants. The monthly rent was $1650. This Lease would have been a residential tenancy agreement regulated by the Residential Tenancies Act, SA 2004, c R-17.1.

The second document was an Option to Purchase the house between August 1, 2013 and July 31, 2015 for the sum of $285,000. This Option to Purchase, granted to the Dyes, stated that it amended the lease by providing that, if the option was exercised, $400 of each monthly “lease” payment would be credited toward the purchase price of the house.

The third document acknowledged that Mandy and Kevin Dye had paid a deposit of $5,000 on July 19, 2013. It also stated that the $5,000 deposit and the $400 per month credit from the lease payment were “non-refundable”.

The fourth document was entitled “The Purchase Process” and the fifth document was a “Move In/Move Out Inspection Checklist”, which was incorporated by reference into the Lease.

What we see in the Lease and the Option to Purchase appears to be, for the most part, a rather standard residential rent-to-own arrangement in terms of its structure, payment amounts, etc. See, for example, “Rent-To-Own Homes: How the Process Works”, Investopedia (16 September, 2016); Mark Weisleder, “Rent-to-own works, but beware the pitfalls”, The Star (30 July 2013); Gordon Powers, “Is Rent to Own Housing Ever a Good Idea?Money Wise (8 December 2014).

However, this rent-to-own arrangement had at least one non-standard feature: the in terrorem clause. It was a provision in one of the documents that stated that, if a caveat was filed at the Land Titles Office to protect the interest of Mandy and Kevin Dye under the Option to Purchase, then both the Lease and the Option to Purchase were automatically terminated and any monies paid towards the Option to Purchase ? the $5,000 deposit and the $400 per month credit ? would be forfeited to Dreamworks (at para 7).

We do not know whether the in terrorem clause had any impact on the Dyes. They do not appear to have filed a caveat. But neither did they exercise their option to buy the house. They paid their monthly rent of $1,650 from August 1, 2013 until June 30, 2015. Then they served a Notice of Termination on Dreamworks, effective July 31, 2015, and vacated the property.

In terrorem” is Latin for “into/about fear”. It is a legal threat, usually given to force someone to act or refrain from acting without the need to resort to a lawsuit or criminal prosecution to compel them to act or not act. This type of clause is used, for example, in wills when a provision is inserted that forfeits the gifts made to any beneficiaries who contest the will and lose. They are often upheld by the courts in that context: see Gerry W Beyer, Rob G Dickinson, and Kenneth L Wake, “The Fine Art of Intimidating Disgruntled Beneficiaries with In Terrorem Clauses” (1998) 51 SMU Law Review 225 (including a brief review of the history of these clauses over the past 2,000 years).

It is true that it appears to be common in residential rent-to-own arrangements to provide in the Option to Purchase that the tenant will forfeit the right to buy the property and forfeit any deposit if they fail to make a rent or option payment: see Jemima Codrington, “Caveat emptor, warn rent-to-own landlords”, Canada Real Estate Wealth (12 February 2013). And if a tenant fails to pay rent, they can also be evicted under the Residential Tenancies Act. But the in terrorem clause in the Dyes’ arrangement is very different. It purports to automatically terminate both their Lease and their Option to Purchase the house, and to forfeit their option money to Dreamworks, if they file a caveat in the Land Titles Office.

Under section 130 of the Land Titles Act, RSA 2000, c L-4, a person claiming an interest in land may file a caveat with the Land Title Office. Having done so, anyone coming along later who claims to have an interest in the same land is subject to the caveator’s claim (section 135, Land Titles Act. The purpose of and reason for filing a caveat is to give notice to the world of what is claimed by the caveator: Ruptash and Lumsden v Zawick, 1956 CanLII 67 (SCC), [1956] SCR 347 at 355. Had the Dyes seen a lawyer about their rent-to-own arrangement, one of that lawyer’s first pieces of advice probably would have been to file a caveat to protect themselves from Dreamworks or the owners selling the house to someone else before the Option to Purchase expired on July 31, 2015.

It was settled law in Canada from 1959 to 1996 that an option to purchase land for a named consideration is an equitable interest in land: see Frobisher Ltd v Canadian Pipelines and Petroleums Ltd, 1959 CanLII 47, [1960] SCR 126 at 171-72. As the Supreme Court of Canada put it in Canadian Long Island Petroleums Ltd et al v Irving Industries Ltd, 1974 CanLII 190, [1975] 2 SCR 715 at 731: “An option to purchase land is specifically enforceable. This gives the option-holder an equitable interest in the land; this interest is contingent upon his election to exercise the option.” And further, in the same case at 731: “[T]he essence of an option to purchase is that forthwith upon the granting of the option, the optionee, upon the occurrence of certain events, solely within his control can compel a conveyance of the property to him.” If the Dyes’ Option to Purchase was an interest in land, it could have supported a caveat: section 130 of the Land Titles Act.

However, in 1996 the Supreme Court of Canada precipitously changed the law of specific performance in the context of an agreement for the sale and purchase of real property by saying specific performance would no longer “be granted as a matter of course absent evidence that the property is unique to the extent that its substitute would not be readily available”: Semelhago v Paramadevan, 1996 CanLII 209 (SCC), [1996] 2 SCR 415 at paras 20-22. As a result, the question arises whether an option to purchase is still specifically enforceable and therefore an equitable interest in land capable of supporting a caveat in Alberta?

It has been more than twenty years since Semelhago changed the law, and ten years since 1244034 Alberta Ltd v Walton International Group Inc, 2007 ABCA 372 (CanLII) made it clear what kind of impact this change had on the ability to caveat agreements for the sale and purchase of lands. However, as far as I can tell, there is no Alberta case specifically considering the application of Semelhago and Walton to options to purchase, but one case has come close.

That case ? Mylonas Enterprises Ltd v Foundation Place Inc, 2013 ABQB 385 (CanLII) ? involved an option to purchase as well as a vendor’s right to repurchase. Rights of repurchase are not options to purchase because they depend on the occurrence of a future event ? usually performance or non-performance by the purchaser ? that is not solely within the control of the vendor, which means they are properly characterized as rights of first refusal: Wetaskiwin Stock Car Club v Draeger, 2016 ABQB 144 (CanLII), at para 10. And a right of first refusal is deemed to be an equitable interest in land by section 63(1)(a) of the Law of Property Act, RSA 2000, c L-7. Justice Keith Yamauchi in Mylonas (at para 22) asserted that no one could challenge the proposition that options to purchase real property create interests in land given the Canadian Long Island description of their nature. But because Canadian Long Island pre-dated Semelhago, Justice Yamauchi went on to consider the changes in the law made by the latter decision. He distinguished Semelhago because it dealt with an agreement for purchase and sale and he was dealing with “a right of repurchase which, once the vendor complies with its obligations, will be an option to purchase” and that allowed him to conclude the right to repurchase “created an interest in the Lands …” (at para 47).

It therefore appears that the question of whether the Dyes’ Option to Purchase would support a caveat is unsettled. There is at least a suggestion in Mylonas that an option to purchase is still an interest in land, as it was prior to Semelhago. This seemingly illogical conclusion is perhaps driven by what the dissenting judgment of Justice Slatter in Walton (at paras 37-28) called the “inconsistency” of the statutory deeming of the “lesser” right of first refusal to be an interest in land. See also the reservations expressed in Draeger at paras 16-18.

If the Dyes had registered a caveat to protect their option to purchase (assuming for the moment that it is an interest in land), it would have protected them, for example, against Dreamworks or the owners selling the house to a third party after agreeing to sell it to the Dyes for $285,000 if the Dyes wanted to buy it during their two-year window of opportunity. Without a caveat registered against the title, Dreamworks or the owners could have sold the house out from under the Dyes. Dreamworks did not sell the property out from under the Dyes and neither did the owners. But, because the Dyes did not file a caveat, Dreamworks could have.

Is there any remedy against such a heavy-handed in terrorem clause? If a person breaches a clause in a contract, they can ask a court to provide them with relief from forfeiture. In this case, if the Dyes had filed a caveat to protect their interest under the Option to Purchase, they would have breached their contract and that contract provided that the Dyes’ would then forfeit their tenancy, their Option to Purchase, and their $5,000 deposit and $400 per month credits.

Section 10 of the Judicature Act, RSA 2000, c J-2, provides for relief from forfeiture in the following terms:

  1. Subject to appeal as in other cases, the Court has power to relieve against all penalties and forfeitures and, in granting relief, to impose any terms as to costs, expenses, damages, compensation and all other matters that the Court sees fit. (emphasis added)

In equity, the term “forfeiture” has a limited definition. Snell’s Equity, 30th ed at 599, speaks of “forfeiture for breach of covenant or condition where the primary object of the bargain is to secure a stated result and the provision for forfeiture is added as security for the production of that result.” In the Dyes’ case, what result does the provision for forfeiture secure? The primary object of all of the documents appears to be the sale of the house to the Dyes for $285,000 within two years. How does providing for forfeiture if a caveat is filed to protect their right to buy the house secure that object? Arguably, it does the opposite. There is no argument to be made that the forfeiture was anything other than a penalty.

Note that the court “has the power” and may impose any terms “it sees fit.” A court’s power to grant relief from forfeiture is discretionary: Saskatchewan River Bungalows Ltd v Maritime Life Assurance Co1994 CanLII 100 (SCC), [1994] 2 SCR 490 at 504. Following Saskatchewan River Bungalows, courts consider, first, whether there is a forfeiture and then three factors in deciding whether or not to exercise their discretion to provide relief from forfeiture: Bowlen v Digger Excavating (1983) Ltd., 2001 ABCA 214 (CanLII) at para 31; Saskatchewan River Bungalows at Part IV.B.

In the Dyes’ case, there would be no question that the in terrorem clause provided for a forfeiture, because more than money was to be forfeited. Then a court would consider:

1) Was the conduct of the plaintiff reasonable in the circumstances?
The Dyes have the legal right under section 130 of the Land Titles Act to file a caveat to protect their interest in land (assuming that an option to purchase is still an interest in land post-Semelhago). Exercising a legal right to protect the interest in land granted by the contract with Dreamworks is reasonable conduct. It prevents fraud.

2) Was the object of the right of forfeiture essentially to secure the payment of money?
In the Dyes’ situation, the purpose of Dreamworks’ right of forfeiture is to terminate the Option to Purchase, leaving them free to sell the house again, and to terminate the tenancy, leaving them free to rent or sell the house, as well as to secure the payment of money.

3) Was there a substantial disparity between the value of the property forfeited and the damage caused the seller by the breach?
The Dyes would have been forfeiting their right to buy the house for $285,000, their right to live in the house as tenants, and their $5,000 deposit and $400 per month credits. What possible damage would they have caused by filing a caveat (assuming for the moment that an option to purchase is an interest in land)?

Although not relevant to the Dyes’ case because they did not file a caveat, there is also an interesting question about whether the courts’ general power to relieve from forfeiture under section 10 of the Judicature Act applies to residential tenancy agreements under the Residential Tenancies Act. The question arises because the power to relieve from forfeiture does not apply to penalties or forfeitures that are imposed by statute: R v Canadian Northern Railway, 1923 CanLII 444 (UK JCPC), [1923] 3 DLR 719 (PC); Tamglass American Inc. v Richter, Allen & Taylor, Inc., 2005 ABCA 341 (CanLII) at para 22.

The British Columbia Court of Appeal has determined that relief from forfeiture is not available to residential tenants in that province. See Ganitano v Metro Vancouver Housing Corporation, 2014 BCCA 10 (CanLII) and see the comment on this decision by Scott Symthe: “What a Relief! BC Court of Appeal decides that equitable relief from forfeiture not available to residential tenants.” See also Sereda v Ni, 2014 BCCA 248 (CanLII) at para 64.

In Ganitano, the BC Court of Appeal held that “the [BC Residential Tenancy Act] provides a comprehensive scheme for dealing with matters relating to the non-payment or late-payment of rent in residential tenancy situations” (at para 40) and “[i]n a residential tenancy, the tenant’s obligation to pay rent is not merely a matter of contract, but an obligation imposed by statute” (at para 41). The BC Court of Appeal specifically notes that “s. 26(3) precludes a landlord from resorting to the common-law remedy of distress to assist in obtaining arrears of rent” (at para 41). The BC Act has also abolished the common-law right of a landlord to treat a tenancy as forfeited when a tenant fails to pay rent; instead the landlord must follow procedures set out in the statute in order to have the tenancy terminated. Thus, the BC Court of Appeal concluded: “Such a termination is a statutory forfeiture (i.e., a taking back of the remainder of the term of the tenancy) and is beyond the reach of [relief from forfeiture]” (at para 44).

The question of whether section 10 of the Judicature Act applies to residential tenants appears to be an open one in Alberta. The result in BC would not necessarily apply here. Alberta’s Residential Tenancies Act is not “a comprehensive scheme”. In Alberta, unlike BC, it is taken for granted (and procedurally provided for in section 104 of the Civil Enforcement Act, RSA 2000, c C-15) that landlords still have the common-law remedy of distress for rent available to them for non-payment of rent. The BC Court of Appeal’s reasons for finding relief from forfeiture was unavailable to residential tenants therefore does not apply in Alberta.

On the other hand, the only way to terminate a residential tenancy in Albert is provided for in the Residential Tenancies Act. A residential tenancy cannot be terminated because a tenant files a caveat to protect an Option to Purchase. That is not one of the reasons prescribed in the statute and its regulations for terminating a tenancy: see sections 6, 26, 27, 29-36.

So … to return to the question and answer at the beginning of this post: Can this in terrorem clause that requires the forfeiture of the remaining term under the residential tenancy agreement, the opportunity to buy the rented property for $285,000, and the deposit and the monthly credits if a caveat to protect the option to purchase is filed, possibly be valid? It seems that is a very difficult question to answer. Is an option to purchase an interest in land that will support a caveat? That would affect whether filing a caveat would be seen as reasonable conduct and whether it might cause damage to the seller, both points to consider in an application for relief from forfeiture. Is relief from forfeiture available to residential tenants in Alberta? Can a residential tenancy be forfeited “automatically”, as demanded by the in terrorem clause, instead of through the prescribed procedures in the Residential Tenancies Act, in light of section 3 of that statute?

Are there any more of these “no caveating” in terrorem clauses out there in other rent-to-own arrangements? If so, perhaps we might one day have some answers to these questions.

(With thanks to my colleague, Nigel Bankes, for his comments on earlier drafts of this post. All errors are, of course, my sole responsibility.)

This post may be cited as: Jonnette Watson Hamilton “Residential Tenancy Agreements, Options to Purchase, In Terrorem Clauses, and Relief from Forfeiture” (16 February, 2017), online: ABlawg, http://ablawg.ca/wp-content/uploads/2017/02/Blog_JWH_Dreamworks_Dye.pdf

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The Relationship Between Declarations Under the Optional Clause of the Statute of the International Court of Justice and Part XV of the Law of the Sea Convention

Mon, 02/13/2017 - 10:00am

By: Nigel Bankes

PDF Version: The Relationship Between Declarations Under the Optional Clause of the Statute of the International Court of Justice and Part XV of the Law of the Sea Convention

Case Commented On: Maritime Delimitation in the Indian Ocean (Somalia v Kenya), Preliminary Objections, Judgment, 2 February 2017

Somalia instituted proceedings against Kenya in the International Court of Justice (ICJ or the Court) in August 2014 concerning a dispute in relation to “the establishment of the single maritime boundary between Somalia and Kenya in the Indian Ocean delimiting the territorial sea, exclusive economic zone . . . and continental shelf, including the continental shelf beyond 200 nautical miles” (Somalia’s Application). In so doing Somalia relied upon Optional Declarations made by both states pursuant to Article 36(2) of the Statute of the Court. Kenya raised a preliminary objection as to the jurisdiction of the Court and also argued that the Court should treat Somalia’s application as inadmissible. On 2 February 2017, the Court released its judgment in respect of these preliminary objections.

This post explains the basis of Kenya’s arguments in respect of the jurisdiction of the Court and the admissibility of Somalia’s claim. It reviews the Court’s Judgment and dissenting opinions and declarations and offers some concluding remarks focussing on the relationship between declarations under the optional clause of the Statute of the International Court of Justice and Part XV of the Law of the Sea Convention (LOSC).

Kenya’s arguments

Kenya’s declaration read as follows:

…the Republic of Kenya . . . accepts, in conformity with paragraph 2 of Article 36 of the Statute of the International Court of Justice until such time as notice may be given to terminate such acceptance, as compulsory ipso facto and without special Agreement, and on the basis and condition of reciprocity, the jurisdiction over all disputes arising after 12th December, 1963, with regard to situations or facts subsequent to that date, other than:

1.Disputes in regard to which the parties to the dispute have agreed or shall agree to have recourse to some other method or methods of settlement. (emphasis added, and hereafter “the Kenyan reservation”)

Kenya’s objection to jurisdiction had two branches. The first branch was to the effect that Kenya and Somalia had agreed “to have recourse to some other method or methods of settlement” with respect to the dispute between them and that therefore the matter was covered by the Kenyan reservation. Kenya based this argument on the terms of an agreement between the parties entitled “Memorandum of Understanding between the Government of the Republic of Kenya and the Transitional Federal Government of the Somali Republic to grant to each other No-Objection in respect of submissions on the Outer Limits of the Continental Shelf beyond 200 Nautical Miles to the Commission on the Limits of the Continental Shelf” (the MOU) (reproduced in its entirety at para. 37 of the 2 February 2017 Judgment).

The second branch of Kenya’s objection to jurisdiction (assuming it could not rely on the terms of the MOU) was that in ratifying LOSC neither Kenya nor Somalia had made a declaration concerning the choice of means of compulsory dispute resolution under section 2 of Part XV and therefore both parties must be taken to have elected to refer any dispute that could not be settled by negotiation or other means to arbitration under Annex VII of LOSC (pursuant to Article 287(3) of LOSC) and this too fell within the terms of Kenya’s reservation. In Kenya’s view, Article 282 of LOSC does not trump this reasoning because in this case the Kenyan reservation was broader than that of the Somalia reservation and the two declarations therefore did not constitute “an agreement, under Article 282, to submit a dispute concerning the interpretation or application of the Convention to this Court.”

Kenya’s objections to admissibility were also two-fold. First, Kenya objected that the MOU precluded resolution of delimitation questions until the Commission on the Limits of the Continental Shelf (Commission or CLCS) had concluded its process. Second, Kenya objected that Somalia’s application should be treated as inadmissible because Somalia had breached the terms of the MOU by raising objections to the Commission’s consideration of Kenya’s submission.

The objection to jurisdiction based on the Memorandum of Understanding

Kenya had to demonstrate two things in order to successfully argue its objection to jurisdiction based on the language of the MOU. First it had to show that the MOU was an agreement within the meaning of the Kenyan reservation, and second that it was an agreement as to a method of settling the dispute.

While titled a MOU, this seven paragraph agreement was couched in legal terms, dealt with legal issues and in its final operative paragraph indicated that it would enter into force upon signature. The MOU was executed by the Minister for Foreign Affairs of the Government of Kenya and the Minister for National Planning and International Cooperation of the Transitional Federal Government of Somalia and contained a declaration to the effect that both signatories were “duly authorized by their respective governments”.

The Court took the view (Somalia actually considered it (at para. 41) unnecessary to determine “the status of the MOU under international law”) that the MOU could only affect its jurisdiction if the MOU was a treaty in force between the Parties. The Court had little difficulty concluding that the MOU was a treaty. As the Court observed it was (at para. 42) “a written document, in which Somalia and Kenya record their agreement on certain points governed by international law” and the “inclusion of a provision addressing the entry into force of the MOU is indicative of the instrument’s binding character”. The MOU was executed by Ministers who, in accordance with Article 7 of the Vienna Convention on the Law of Treaties (VCLT), are assumed to be capable of binding their states “by virtue of their functions and without having to produce full powers” (at para. 43). Neither State is a party to the VCLT but the Court was of the view that this provision codified customary law. In any event, the evidence showed (at para. 43) that the Prime Minister of the Somali Transitional government had signed a document affording the Minister full powers. Finally, the MOU expressed on its face that it was to enter into force upon signature, and (at para. 45) “Under customary international law as codified in Article 12, paragraph 1 (a), of the Vienna Convention, a State’s consent to be bound is expressed by signature where the treaty so provides.” Neither could Somalia escape the binding effect of the MOU by relying on the provisions of “the Transitional Federal Charter of the Somali Republic, applicable between 2004 and 2012, which ‘made the President’s authority to sign binding international agreements conditional upon subsequent ratification by Parliament’, and that such ratification did not take place” (at para. 39). Article 46 of the VCLT generally precludes reliance on the provisions of domestic law and in this case there was no reason to suppose that Kenya was aware of, or should have been aware of, any constitutional impediment to the exercise of full powers by the Minister.

However, the conclusion that the agreement was a binding agreement was not enough to exclude the jurisdiction of the Court under the terms of Kenya’s reservation. It was also necessary for Kenya to show that the MOU constituted an agreement to settle the dispute by an alternative method. That required the interpretation of the MOU and in particular its paragraph 6 which provided as follows:

The delimitation of maritime boundaries in the areas under dispute, including the delimitation of the continental shelf beyond 200 nautical miles, shall be agreed between the two coastal States on the basis of international law after the Commission has concluded its examination of the separate submissions made by each of the two coastal States and made its recommendations to two coastal States concerning the establishment of the outer limits of the continental shelf beyond 200 nautical miles.

The Court observed (at paras 63 – 64) that interpretation should be in accordance with the terms of Articles 31 and 32 of the VCLT which reflect customary international law (at para. 63) and these terms require attention to ordinary meaning, context and object and purpose and “together with the context” any relevant rules of international law, as well as, and where appropriate, the travaux.

In this case, the context required that attention be given not only to the entire MOU, but also Article 76(8) of LOSC which contemplates that a party to LOSC can only establish final and binding outer limits (the exercise of delineation) to its continental shelf following submissions to the Commission and on the basis of the recommendation of the CLCS. Referencing the Court’s own judgment in Question of the Delimitation of the Continental Shelf between Nicaragua and Colombia beyond 200 nautical miles from the Nicaraguan Coast (Nicaragua v. Colombia), Preliminary Objections, Judgment of 17 March 2016, paras 107-108, the Court here again emphasised (at para. 67) that delineation is different from delimitation: “The two tasks are distinct and the delimitation of the continental shelf ‘can be undertaken independently of a recommendation from the CLCS’.” (pinpoint references from Nicaragua v. Colombia omitted).

The purpose of a treaty may be evidenced, inter alia by its title and in this case (at para. 70), “The MOU’s title suggests that its purpose is to allow Somalia and Kenya each to make a submission on the outer limits of the continental shelf to the CLCS without objection from the other, so that the Commission could consider those submissions and make its recommendations, in accordance with Annex I to the CLCS’s Rules of Procedure.” The title, reinforced by the first five paragraphs of the MOU, was thus designed to allow the CLCS to consider submissions in relation to the delineation of the shelf notwithstanding the existence of a dispute as to delimitation. These provisions of the MOU thus preserved (at para. 75) “the distinction between the ultimate delimitation of the maritime boundary and the CLCS process leading to delineation.”

That said, and having maintained that distinction, the real issue was whether any of these provisions supported Kenya’s contention that the MOU and its paragraph 6 represented an agreement as to the “method for settling the dispute relating to the delimitation of the Parties’ maritime boundary” (at para. 77). The Court saw nothing in that contention in relation to the first five paragraphs (at paras 70 – 87).

The Court reviewed paragraph 6 of the MOU. In light of Article 31(3)(c) of the VCLT, and in light of the fact that both Kenya and Somalia are parties to LOSC, the provisions of Article 83 of LOSC on the delimitation of the continental shelf are relevant to the interpretation of paragraph 6 of the MOU especially given (at para. 90) the “similarity in language between Article 83, paragraph 1, of UNCLOS and the sixth paragraph of the MOU.” Perhaps the Court’s crucial conclusion on this point was that (at para. 91) “the reference to delimitation being undertaken by agreement on the basis of international law, which is common to the two provisions, is not prescriptive of the method of dispute settlement to be followed and does not, as indeed Kenya appeared to accept during the oral proceedings, preclude recourse to dispute settlement procedures in case agreement could not be reached.” While paragraph 6 of the MOU goes beyond Article 83 (at para. 92) insofar as it suggests that delimitation as to the extended shelf should be agreed after the Commission had concluded its examination and made its recommendations, that did not, in the view of the Court (at para. 95), preclude “the Parties from reaching an agreement on their maritime boundary, or either of them from resorting to dispute settlement procedures regarding their maritime boundary dispute, before receipt of the CLCS’s recommendations.” The wording in paragraph 6 “shall be agreed” did not mean that the Parties were obliged to reach an agreement. It actually meant (at ibid.) “that the Parties are under an obligation to engage in negotiations in good faith with a view to reaching an agreement.” But negotiations were not the only means of reaching an agreement, especially in light of the commitments of both parties under Part XV of LOSC and under their Optional Clause declarations. Absent express language, the Court did not consider that the Parties could “be taken to have excluded recourse to such procedures until after receipt of the CLCS’s recommendations” (at ibid.). In sum (at para. 98), paragraph 6 “neither binds the Parties to wait for the outcome of the CLCS process before attempting to reach agreement on their maritime boundary, nor does it impose an obligation on the Parties to settle their maritime boundary dispute through a particular method of settlement.” The Court confirmed this interpretation by reference to the travaux which reinforced the proposition that the MOU was concluded for the limited purpose of facilitating consideration of the Parties’ submission by the Commission. Had paragraph 6 been intended to have the far-reaching consequences suggested by Kenya it would in all likelihood (at paras 102 & 103) have been the subject of additional discussions between the parties.

The objection to jurisdiction based on Part XV of the Law of the Sea Convention

Kenya’s second argument was that even if the MOU did not constitute an agreement “to have recourse to some other method or methods of settlement” within the meaning of the Kenyan reservation then Part XV of LOSC surely constituted such an agreement pursuant to which the Parties, by default of any other election, had committed to resolve any dispute by means of Annex VII arbitration.

The short answer to this argument from the perspective of the Court is that Annex VII arbitration is referenced in section 2 of Part XV and section 2 only becomes relevant “where no settlement has been reached by recourse to section 1” and section 1 contains, inter alia, Article 282 which preserves the compulsory jurisdiction of the ICJ arising from complementary optional declarations. The Court put the point this way (at para. 126):

Article 282 makes no express reference to an agreement to the Court’s jurisdiction resulting from optional clause declarations. It provides, however, that an agreement to submit a dispute to a specified procedure that applies in lieu of the procedures provided for in Section 2 of Part XV may not only be contained in a “general, regional or bilateral agreement” but may also be reached “otherwise”. The ordinary meaning of Article 282 is broad enough to encompass an agreement to the jurisdiction of this Court that is expressed in optional clause declarations.

The Court went on to note that this interpretation was confirmed (at paras 127 – 128) by the travaux which made it clear that the “or otherwise” language was intended to embrace declarations under Article 36(2) of the Statute. Thus, in the event of broadly framed complementary declarations under the Optional Clause, it must follow that it is the ICJ that has jurisdiction in relation to a dispute as to the interpretation or application of LOSC and not a Part XV, section 2 tribunal, unless, as the final words of Article 282 state, “the parties to the dispute agree otherwise”. A specific reservation in an Optional Clause declaration as to a class of disputes (e.g., disputes relating to maritime delimitation) would lead to a different result and thus confer jurisdiction to the extent of the reservation on a Part XV section 2 tribunal (provided that neither party had made a similar reservation under Article 298(1)(a) of LOSC). The same reasoning did not follow with respect to Kenya’s reservation on “[d]isputes in regard to which the parties to the dispute have agreed or shall agree to have recourse to some other method or methods of settlement.”

The Court seems to give two reasons to support this last conclusion. The first is the “ordinary meaning” of the “or otherwise language” referenced above. The second, draws on the travaux but also on the Court’s understanding with respect to the practice of states in relation to optional clause declarations. The Court noted that reservations of the type filed by Kenya were very common at the time of the adoption of LOSC and remain common (at para. 129). In effect, given the express references in the travaux to the optional clause declarations, the Court simply could not believe (at para. 129) that the parties to LOSC did not intend to preserve the existing jurisdiction of the Court under Article 36(2) of its Statute (for the contrary view see the Dissenting Opinion of Judge Robinson discussed below). In effect, therefore, the Court gave short shrift to Kenya’s arguments (at para. 120) based on both lex specialis and lex posterior to the effect that the agreement under LOSC to use a section 2 tribunal (i.e. in this case, and by default, an Annex VII tribunal), trumped jurisdiction under the Optional Clause. The Court concluded as follows (at para. 130):

Article 282 should therefore be interpreted so that an agreement to the Court’s jurisdiction through optional clause declarations falls within the scope of that Article and applies “in lieu” of procedures provided for in Section 2 of Part XV, even when such declarations contain a reservation to the same effect as that of Kenya. The contrary interpretation would mean that, by ratifying a treaty which gives priority to agreed procedures resulting from optional clause declarations (pursuant to Article 282 of UNCLOS), States would have achieved precisely the opposite outcome, giving priority instead to the procedures contained in Section 2 of Part XV. Consequently, under Article 282, the optional clause declarations of the Parties constitute an agreement, reached “otherwise”, to settle in this Court disputes concerning interpretation or application of UNCLOS, and the procedure before this Court shall thus apply “in lieu” of procedures provided for in Section 2 of Part XV.

Kenya’s objections as to admissibility

Kenya’s first argument with respect to admissibility was based upon an interpretation of the MOU which precluded resolution of delimitation questions until the Commission had concluded its process. The Court had already rejected that interpretation of the MOU and accordingly (at para. 138) this objection as to admissibility necessarily failed.

Kenya’s second argument was that Somalia’s application should be treated as inadmissible because Somalia had breached the terms of the MOU by raising objections to the Commission’s consideration of Kenya’s submission (even though it subsequently withdrew those objections). While Kenya relied at least in part on the clean hands doctrine (at para. 139) the Court preferred to dismiss the objection on narrower grounds (at para. 143):

The Court observes that the fact that an applicant may have breached a treaty at issue in the case does not per se affect the admissibility of its application. Moreover, the Court notes that Somalia is neither relying on the MOU as an instrument conferring jurisdiction on the Court nor as a source of substantive law governing the merits of this case. (at para. 142)

Declarations and Dissenting Opinions

Judges Gaja and Crawford filed a Joint Declaration in which they took issue with the manner in which the majority concluded that the MOU did not trigger the application of Kenya’s reservation. In their view the majority paid too much attention to the legal status of the MOU and too little attention to the proposition that paragraph 6 was not an agreement to a “method or methods of settlement” (emphasis added). However it does appear that Judges Gaja and Crawford did consider that paragraph 6 would have precluded (at para. 7) either party from unilaterally triggering binding dispute resolution before the CLCS had made its recommendations had the Parties not agreed by their conduct to modify paragraph 6 by mutually engaging in negotiations to try and resolve the delimitation issues. Judge Guillaume is critical of this particular conclusion in his Dissenting Opinion.

Vice-President Yusuf’s Declaration seemingly questions the manner in which the Court used the travaux to the MOU to assist it in its deliberations. Clearly Vice-President Yosuf finds this quite anomalous (and Judge Bennouna makes the same point in his Dissenting Opinion) given that the text of the MOU was not drafted by either or both parties but by the Norwegian Ambassador Longva as part of Norway’s assistance to African countries in meeting the deadlines imposed by LOSC and the CLCS on the filing of claims.

The most trenchant of the Dissenting Opinions is that filed by Judge Robinson. While Judge Robinson dissented from all aspects of the majority’s judgment he focuses his attention on the relationship between Kenya’s reservation and dispute settlement under Part XV of LOSC. While Judge Robinson accepts that the “or otherwise” language of Article 282 clearly contemplates reciprocal declarations under the Optional Clause, he contends that not every form of declaration can qualify. The majority of the Court accepts that qualification in some cases (see comments above with respect to a declaration that contains a reservation as to matters related to delimitation) but Judge Robinson argues that the majority was too quick to conclude that a declaration of the type made by Kenya fits within Article 282. In his view the only declarations that might qualify under Article 282 should be (at para. 26) declarations “without reservations”. Finally he notes (at para. 34) that one of the consequences of the majority’s broad understanding of the “or otherwise” language is to privilege the position of the ICJ which he suggests is incompatible with the intentions of the LOSC drafters who “did not wish to give any particular prominence to the ICJ”.

By contrast Judge Bennouna focused his attention on paragraph 6 of the MOU. In his view the plain meaning of this provision was clear (and he criticizes the way in which the majority applies the VCLT rules on interpretation by jumping too quickly to context) and it provided a procedure for the settlement of the dispute between the parties by negotiations and agreement once the CLCS has made its recommendation. Judge Ad Hoc Guillaume in his Dissenting Opinion (in French only) makes similar points especially with reference to the manner in which the majority applied Article 31 of the VCLT.

Neither Judge Bennouna nor Judge Ad Hoc Guillaume dissent from the views of the majority in relation to Part XV of LOSC (Article 282).

Comment

This decision offers an important clarification as to the choice of judicial forum with respect to disputes as to the interpretation or application of LOSC where the parties to the dispute also have extant Optional Clause declarations under Article 36(2) of the Statute. The decision stands for the proposition that where the dispute, properly characterized, falls within the terms of relevant Optional Clause declarations, the matter must be litigated before the ICJ under the Optional Clause jurisdiction and not before a Part XV, section 2, tribunal. Article 282 trumps the choice of forum under Article 287 of LOSC and this is the case even where the declaration in question includes a reservation in the form of the Kenyan reservation which reserves out disputes that the parties have agreed to resolve by some other mode of settlement. In effect the Court has concluded that the selection of a preferred tribunal under Part XV, section 2 by election or by default is not a relevant agreement. It is not relevant because the structure of Part XV accords priority to section 1 and its emphasis on the freedom of parties to choose their preferred means of dispute settlement.

The same logic must apply to the jurisdiction of the Court arising under a regional dispute settlement agreement such as the Pact of Bogotá. Such an agreement, if applicable to disputes in relation to the interpretation or application of LOSC, and if qualifying under Article 282, must equally serve to preclude the choice of a dispute resolution mechanism under Part XV, section 2.

The choice is a jurisdictional choice and not a choice of convenience or preference. This is because, as the Court emphasises (at paras 128 & 130) the procedure before the ICJ under the terms of the Optional Clause declarations applies “in lieu” of the procedures provided by Part XV (see Articles 282 and 286). A tribunal empanelled under section 2 of Part XV can have no jurisdiction (and see the Court’s rather odd comment at para. 132 as to the consequences were the Court to decline jurisdiction) “unless the parties to the dispute otherwise agree”. Accordingly, parties who might have thought (on the basis of either lex specialis or in at least some cases lex posterior) that their choice of tribunal under LOSC Part VX, section 2 (either expressly or by default) should prevail over the general acceptance of the Court’s jurisdiction through their Optional Clause declarations (or similar), will need to confirm that they are both of the same mind (i.e., they will need a further agreement as referenced in the closing words of Article 282).

This post originally appeared on JCLOS, The blog of the K.G. Jebsen Centre for the Law of the Sea

 This post may be cited as: Nigel Bankes “The Relationship Between Declarations Under the Optional Clause of the Statute of the International Court of Justice and Part XV of the Law of the Sea Convention” (13 February, 2017), online: ABlawg, http://ablawg.ca/wp-content/uploads/2017/02/Blog_NB_ICJ_Somalia_Kenya.pdf

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Canadian Mining Operators Abroad – Corruption as a ‘Real Risk’ Factor in Forum Non Conveniens Applications

Thu, 02/09/2017 - 10:00am

By: Rudiger Tscherning

PDF Version: Canadian Mining Operators Abroad – Corruption as a ‘Real Risk’ Factor in Forum Non Conveniens Applications

Case Comment On: Garcia v Tahoe Resources Inc., 2017 BCCA 39 (CanLII)

In Garcia v Tahoe Resources Inc., 2017 BCCA 39 (CanLII) the Court of Appeal of British Columbia reversed an order which had granted Tahoe Resources Inc. (Tahoe) a stay of proceedings on grounds of forum non conveniens. The claim brought against Tahoe concerned the shooting of local protesters by security guards at Tahoe’s Guatemalan mining operation. The Court of Appeal held that the possibility of corruption in the Guatemalan legal system raised a real risk that the claimants would not obtain a fair trial, and therefore concluded that British Columbia was the “more appropriate forum”.

The decision raises a number of important issues, particularly for the Canadian energy and natural resources sector. The decision has the potential to undermine the attractiveness of Canadian jurisdictions as preferred venues for the registration of mining companies that engage in international activities. Tahoe’s registered office is in Vancouver which gave rise to jurisdiction simpliciter. The decision is also noteworthy from a private international law perspective. Firstly, the effect of the judgment is that serious doubt has been cast over the reliability of the legal system of an entire country, thereby raising issues of comity upon which the functioning of private international law depends. Secondly, the case marks the acceptance of the English test of ‘real risk’ of judicial unfairness as a factor in Canadian forum non conveniens analysis. Lastly, the BCCA focused on the close alignment between international resources companies and their host state governments and considered that the context of extensive local opposition to a mining project was a factor that pointed to British Columbia as the more appropriate forum.

Background

The Canadian claim in Tahoe involves a civil claim for damages (including punitive damages) for battery and negligence arising from the fatal shooting of Mr. Garcia and injuries to six other members of the local community (referred to collectively as “Garcia”) by a private security officer employed at a mine wholly owned by a Guatemalan subsidiary of Tahoe. Criminal proceedings had commenced against the security manager in Guatemala and, as permitted by the laws of Guatemala, a derivative civil claim was joined to that proceeding. But no charges had been brought against Tahoe or its Guatemalan subsidiary.

In the British Columbia Supreme Court proceedings, Tahoe was successful in its forum non conveniens application on the basis that Guatemala was the ‘clearly more appropriate’ forum (per Club Resorts Ltd. v Van Breda, 2012 SCC 17 (CanLII)). The BCSC noted that all the facts (i.e., that the claimants resided in Guatemala, the alleged injuries and losses occurred in Guatemala, the evidence was in Guatemala and in Spanish, and Tahoe’s subsidiary is a wholly-owned Guatemalan company) pointed towards Guatemala.

On appeal, the BCCA disagreed. Holding that British Columbia, not Guatemala, is a clearly more appropriate forum to dispose fairly and efficiently of the appellants’ claim, it dismissed Tahoe’s application, allowing the civil claim to proceed.

Extensive evidence had been adduced with respect to alleged judicial corruption, lack of independence of judges and the overall risk that Garcia would not receive a fair trial in Guatemala. Justice Garson of the BCCA undertook a detailed discussion of the shortcomings of the Guatemalan legal system, which included a consideration of new evidence. At the time the dispute was before the BCSC, the criminal proceedings were ongoing in Guatemala. This was considered by the BCSC as “a significant, if not pivotal, point” (at para 61) in the court’s decision that the Guatemalan forum would effectively resolve the civil claim.

New evidence before the BCCA, however, indicated that the manager had absconded to Peru and there was uncertainty over his likely extradition to Guatemala. This change in circumstances, effectively, was held by Justice Garson to mean that the original “adequate extant proceeding” had fallen away, casting doubt over whether the criminal proceeding would move forward in a timely manner, if at all (at para 68). This was considered relevant new evidence by the BCCA in its conclusion that Guatemala was no longer the more appropriate forum to adjudicate the dispute (at paras 70-71).

Deficiencies in Guatemalan civil procedure also meant that Garcia would be unlikely to obtain a fair trial. According to the BCCA, the lower court had not given “adequate consideration to the difficulties that the appellants [would] face in bringing a stand-alone civil suit against Tahoe in Guatemala” (at para 79). This would require a complex and time-consuming process of discovery to obtain corporate documentation from Tahoe in British Columbia, including a petition of a Guatemalan judge. In light of the new evidence on the Guatemalan criminal proceedings, Justice Garson concluded that closer scrutiny should be given to the difficulties of pursuing a civil suit in Guatemala. The BCCA was mindful of placing too much emphasis on “procedural variances between Canada and other jurisdictions” (at para 80, per Van Breda), but the court was also acutely aware of the evidence regarding civil discovery in Guatemala. This would “point away” from finding that Guatemala was the more appropriate forum for pursuing a claim against a British Columbia corporate defendant (at para 80).

Furthermore, under Guatemalan law, Garcia had one year to commence a civil suit against Tahoe, and this period had long expired. The BCCA concluded that by bringing their claim in British Columbia, Garcia sought “legitimate juridical advantages” (at para 94) in avoiding this limitation period. Failure to sue Tahoe in Guatemala within the limitation period should not “militate against attaching any weight to this advantage factor” (at para 94). In the court’s view, this was a serious issue which suggested that Garcia may not be able to pursue a civil claim against Tahoe in Guatemala at all.

Legal Test for Risk of Unfairness in the Foreign Judicial System

Before the BCCA, the case concerned whether the Guatemalan legal system was suitable to hear Garcia’s claim, owing to allegations of corruption, intimidation and serious procedural deficiencies, which would limit the quest for legal redress. The case turned on whether the test for determining the risk of unfairness in a foreign legal system, as one of the factors for the court’s forum non conveniens analysis, should be “whether the foreign legal system is capable of providing justice” (as stated by the BCSC, at para 34) or whether “there is a real risk of an unfair process in the foreign court” (as stated by the BCCA, at para 115).

The “real risk” articulation has its origins in the English decision of AK Investment CJSC v Kyrgyz Mobil Tel Ltd, [2012] 1 WLR 1804. Garcia’s factum summarized this to mean that “the burden can be satisfied by showing that there is a real risk that justice will not be obtained…by reason of incompetence or lack of independence or corruption” (at para 115).

Application of the correct legal test is of course essential to any consideration of forum non conveniens. Justice Garson noted that there are significant differences between the English and Canadian approaches. English courts undertake a ‘two-step’ process, which first requires a defendant to establish that the proposed alternate forum is more appropriate. Second, once this burden is met, a stay will “ordinarily be granted” (at para 118) unless the plaintiff can also establish that there are other circumstances which would make the granting of a stay adverse to the interests of justice (per Spiliada Maritime Corp. v Cansulex Ltd., [1987] AC 460). As the BCCA correctly noted, one such circumstance is the ‘real risk’ that a plaintiff will not obtain justice in the proposed alternate forum (per AK Investments). The English forum non conveniens process therefore undertakes any consideration of corruption or injustice in the proposed forum “at the secondary stage with a reverse onus on the plaintiff to show that granting a stay would be adverse to the interests of justice” (at para 118).

By contrast, the Canadian forum non conveniens analysis involves “a more unified approach” (at para 119). The BCCA referred to Justice Sopinka’s analysis in Amchem Products Incorporated v British Columbia (Workers’ Compensation Board), [1993] 1 SCR 897, where the Supreme Court of Canada examined the loss of ‘juridical advantage’ and held that it should be included in the other factors that are weighted to consider the appropriate forum (at para 119). As per Amchem, the consideration of a ‘juridical advantage’ is a function of a party’s connection to the jurisdiction in question and, provided that there is a real and substantial connection with the forum, a party may avail of the advantages that that forum provides. As set out by Justice Garson in the BCCA, the Supreme Court of Canada in Van Breda affirmed the Amchem forum non conveniens analysis as “a weighing of all relevant concerns and factors” (at para 120). This manifests itself in a single-step analysis that places the overall burden on the defendant to establish that the proposed alternate forum is “in a better position to dispose fairly and efficiently of the litigation” (at para 120). According to the BCCA, Tahoe failed to establish that Guatemala would be the more suitable forum.

Drawing on the difference between the English and Canadian forum non conveniens approaches, Justice Garson noted that she would find it ‘unhelpful’ to frame the issue more narrowly as one of capability for assessing evidence of corruption and injustice. The BCCA noted that “it is more appropriate to frame the issue as whether the judge correctly defined a factor which she was required to consider in the overall forum non conveniens analysis” (at para 121). It was therefore not a question of the “capability” of the Guatemalan judicial system to provide justice, but one of considering the “likelihood” that the alternate forum would provide justice – in other words, “whether there was a real risk that justice would not be done” (at para 121).

According to the BCCA, the lower court had wrongly viewed the issue of alleged corruption and injustice as part of the secondary step in the analysis. This placed the burden on Garcia “to rebut [the lower court’s] prima facie determination that Guatemala was the more appropriate forum” (at para 123). The lower court also erred in making the inquiry about the ‘capability’ of the Guatemalan courts to provide justice (at para 123).

The Consideration of Evidence of Corruption and Injustice

As noted, the Canadian forum non conveniens analysis undertakes a search for an alternate forum that is “better equipped than Canada to dispose of the litigation fairly and efficiently” (at para 124). In light of this, Justice Garson held that it would be inadequate to ask whether the foreign jurisdiction is capable of providing justice, as this inquiry would offend basic principles of comity in private international law. On this basis, the ‘real risk’ standard as articulated in AK Investment was considered ‘helpful’ and was adopted by the BCCA. Where a plaintiff presents evidence of corruption or injustice in the defendant’s proposed alternate forum, the ‘real risk’ test asks a court to determine whether the evidence suggests “a real risk that the alternative forum will not provide justice” (at para 124).

In her review of decisions of the English courts on the ‘real risk’ test, Justice Garson noted that the evidentiary standard to establish the test “is a high bar in England” (at para 125). This is directly related to the fact that the English forum non conveniens analysis, as discussed above, entails a two-step test and the court is asked, in the first part of the test, to make a finding that the alternate forum is “prima facie more appropriate for the dispute” (at para 125). By contrast, the unified Canadian approach does not require such a high evidentiary threshold to determine a risk of unfairness. A risk of unfairness is just one factor of many to be weighed. The weight attached to the evidence is dependent on its quality, with “detailed and cogent evidence of corruption” attracting significant evidentiary weight (at para 125).

Commentary

In Tahoe, the BCCA adopted the English test of ‘real risk’ of judicial unfairness as an important factor to consider in Canadian forum non conveniens analysis. In my view, this clarifies the Canadian private international law position. Given the significant emphasis by Canadian courts (e.g., Chevron Corporation v Yaiguaje, 2015 SCC 42 (CanLII)) on the importance of comity, the ‘real risk’ approach is better suited to dealing with the issue of judicial corruption than an inquiry as to the capability of a foreign legal system.

However, the decision does raise some issues for the Canadian energy and natural resources sector. One concern is that the decision may undermine the attractiveness of Canada for the registration of mining companies that operate internationally. This is because jurisdiction to hear the case was established on grounds of jurisdiction simpliciter (arising from the corporate registration of Tahoe in Vancouver). If the decision is upheld, corporate companies may therefore reconsider their venues of registration and may potentially relocate out of Canada. Another is that the judgment has effectively cast doubt over the reliability of the legal system of an entire country, Guatemala, thereby undermining the principles of comity that are fundamental to the operation of private international law. This conclusion has the potential to be far-reaching. Does this now mean that whenever an application is brought in a Canadian court that involves a civil claim in Guatemala (with all jurisdictional requirements met), the Canadian court will never grant a forum non conveniens application? It is hard to predict this with any degree of certainty.

Lastly, some uncertainty is also raised by the BCCA’s consideration of the “context” of local opposition to the mining project (which gave rise to the alleged shootings). As noted, this was a significant factor in the court’s conclusion that British Columbia was the more appropriate forum. Moreover, the court expressed concern that Garcia would encounter difficulties in obtaining a fair trial “against a powerful international company whose mining interests…align with the political interests of the Guatemalan state” (at para 130). This contextual approach strongly suggests that resources companies should be acutely aware that Canadian courts will likely look very closely at the company’s interactions with host governments and local communities in deciding whether or not to decline jurisdiction on grounds of forum non conveniens.

This post may be cited as: Rudiger Tscherning “Canadian Mining Operators Abroad – Corruption as a ‘Real Risk’ Factor in Forum Non Conveniens Applications” (9 February, 2017), online: ABlawg, http://ablawg.ca/wp-content/uploads/2017/02/Blog_RT_Garcia_Tahoe.pdf

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Announcing a New Resource for the Letter Decisions of the Alberta Energy Regulator

Wed, 02/08/2017 - 10:00am

By: Nigel Bankes, Amy Matychuk, and David Rennie

PDF Version: Announcing a New Resource for the Letter Decisions of the Alberta Energy Regulator

Decisions Commented On: The Participatory/Procedural Decisions of the AER

Several years ago now, ABlawg published a series of posts that were critical of the failure of the Alberta Energy Regulator (AER) and its predecessor the Energy Resources Conservation Board to publish its letter decisions in a systematic way: see herehere and here. Whether in response to that criticism, or for its own good reasons, the AER began posting what it refers to as participatory/procedural decisions (presumably a sub-set of a broader category of letter decisions) in the fall of 2015. When this venture began, the decisions were simply listed with no attached descriptor whatsoever. Now the AER does provide a brief description of the matter at hand but it is still a laborious task to click and retrieve each document and assess its significance.

Having asked the AER to provide this information it accordingly seemed appropriate to try and present it in a more usable and accessible form. Hence this project. The project has three steps. Step one is to provide a digest of each decision. Given the number of these decisions (already over 170) we have not attempted to synthesise or précis these decisions, rather the exercise has been more of a cut-and-paste job hewing closely to the AER’s actual text. We have added key words which are listed below. There is no additional commentary. The result of that exercise has been collated into a PDF document which is available here and is fully searchable. Step two will be to present this information as a set of web-pages. That is a work in progress. Step three will be to write what we anticipate will become a short annual survey of these decisions, assessing trends and perhaps highlighting some of the more important decisions. That too is a work in progress. It goes without saying that while step one is complete until the end of January 2017 we also aim to populate it with new decisions from time to time.

David Rennie (JD 2017) began this work as a summer student in 2016 preparing digests of the first 85 decisions and Amy Matychuk (JD 2018), also a summer student in 2016, continued the work for the latter part of the summer and through the fall. Nigel Bankes provided direction and supervision.

We hope that readers of ABlawg and other researchers will find this tool useful and we welcome your feedback, either by way of a comment on this post or to ndbankes@ucalgary.ca

Alphabetical List of Key Words

abandonment

abandonment costs

Aboriginal Consultation Office

Aboriginal rights

administrative penalty

advance of funds

agenda

agricultural land

air quality

alternative dispute resolution

amendment application

animal habitat

appealable decision

application scope

bias

CAPL operating procedure

common ownership

confidentiality

confidentiality application

conservation

constitutional questions

consultation

consultation area

costs

cross-examination

decision definition

directly and adversely affected

disclosure

drainage

dust

earthquake

eligible person

emergency planning zone

emissions

environmental impact assessment

environmental protection order

equipment spacing

erosion

evidence

expert evidence

filing deadline

filing extension

First Nations/Métis

flaring

gas injection

gas over bitumen

gas storage

groundwater

health

hearing attendance

hearing date

hearing timing

holding

horses

industry vs. industry

information request

injection well

irreparable harm

joint ownership

joint review panel

jurisdiction

land use

landowner

LARP

late filing

licence amendment

licence extension

licence transfer

light

LNG facilities

maps

MDR report

mineral rights

mitigation

municipality

noise

non-routine application

non-routine status

notice of hearing

observation well

odours

oil sands exploration

oral submissions

participation scope

pilot project

pipeline

pipeline diameter

pollution

pool name

pooling order

pre-hearing meeting

prescribed decision

privilege

procedural direction

procedural fairness

procedural items

project timeline

property values

public record

reclamation

reclamation certificate

reconsideration request

records

recusal request

regulatory appeal

regulatory requirements

removal application

renewal application

request for stay

request to participate

reservoir integrity

reservoir pressure

resolution agreement

right to appeal

safety

schedule

scope of appeal

setbacks

settlement

site visit

sound attenuation equipment

surface rights

technical competency

traditional knowledge

traditional lands

traffic

trapping

treaty rights

trespass

undue harm

unmarked graves

venting

waste disposal

wastewater disposal

water

water quality

wetlands

wildlife

without prejudice

written submissions

This post may be cited as: Nigel Bankes, Amy Matychuk, & David Rennie “Announcing a New Resource for the Letter Decisions of the Alberta Energy Regulator” (8 February, 2017), online: ABlawg, http://ablawg.ca/wp-content/uploads/2017/02/Blog_NB_etal_AER_digest.pdf

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Alberta Agrees to Amend Human Rights Legislation to Expand Prohibitions Against Age Discrimination

Tue, 02/07/2017 - 10:00am

By: Jennifer Koshan

PDF Version: Alberta Agrees to Amend Human Rights Legislation to Expand Prohibitions Against Age Discrimination

Case Commented On: Ruth Maria Adria v Attorney General of Alberta, Court File No 1603 05013, Consent Order filed 13 January 2017

Human rights legislation exists in every province and territory in Canada, and at the federal level, but protection against discrimination varies amongst jurisdictions with respect to what grounds and areas are protected. Until recently, the Alberta Human Rights Act, RSA 2000, c A-25.5, only protected against age discrimination in the areas of publications and notices (section 3), employment practices and advertisements (sections 7 and 8), and membership in a trade union, employers’ organization or occupational association (section 9). Age was not a protected ground in relation to the provision of goods, services, accommodation or facilities customarily available to the public (section 4), or in relation to tenancies (section 5).

In January 2017, the Alberta government agreed to expand the Alberta Human Rights Act to include age as a protected ground under sections 4 and 5. This development was prompted by an application brought in March 2016 by Ruth Maria Adria under section 15 of the Charter, the constitutional equality rights guarantee, to have the omission of age declared unconstitutional and to have age read in to these sections. The Adria case is similar to Vriend v Alberta, [1998] 1 SCR 493, 1998 CanLII 816, where a section 15 challenge went all the way to the Supreme Court of Canada before a reading in remedy was granted to add sexual orientation to Alberta’s human rights legislation (see ABlawg posts on Vriend here and here). Unlike Vriend, however, the government did not fight the challenge in the Adria case. As noted in the consent order signed by Justice R.P. Belzil of the Alberta Court of Queen’s Bench, the Minister of Justice and Solicitor General of Alberta consented to the reading in remedy, which will be suspended for one year (presumably to allow parties who are covered by the new prohibition against age discrimination to amend existing policies and practices as needed). The Alberta Human Rights Commission will begin accepting complaints on the ground of age under sections 4 and 5 when the government amends the legislation or on January 6, 2018, whichever occurs first.

There is one important caveat to this significant legal development. Age is defined in the Alberta Human Rights Act to mean 18 years of age or older (section 44(1)). Therefore, service providers and landlords will still be able to deny goods, services, accommodations, facilities and tenancies to persons under the age of 18 years without facing a human rights complaint. Ms. Adria’s application was motivated by concerns about discrimination against the elderly in the areas of services and tenancies (Adria is affiliated with the Elder Advocates of Alberta Society). This is certainly a valid concern, as a previous ABlawg post on the treatment of elderly condominium residents makes clear, as do the case studies on the Elder Advocates website. However, now that it is looking at this issue, the government might consider extending the protection against age discrimination to include youth under the age of 18.

Alberta is not the only province to exclude youth from protection against discrimination based on age – for example, Ontario and Saskatchewan also define age as over 18 years old (Human Rights Code, RSO 1990, c H.19, section 10(1); Saskatchewan Human Rights Code, SS 1979, c S-24.1, section 2), and in British Columbia, age discrimination is only prohibited for those 19 years and older (see Human Rights Code, RSBC 1996, c 210, section 1). In Ontario, however, youth who are 16 or 17 years old and who have withdrawn from parental control have “a right to equal treatment with respect to occupancy of and contracting for accommodation without discrimination because the person is less than eighteen years old” (Human Rights Code, section 4). This type of provision recognizes that some youth live independently and have housing needs that should not be denied simply on the basis of their age. Youth homelessness has been recognized as a problem in Alberta (which has a youth homelessness initiative; so does the Calgary Homeless Foundation and other municipalities). Amending the Alberta Human Rights Act to protect against age discrimination without any limits, or at the very least in the context of housing for independent youth, would be one positive step forward in this context. It would also recognize that youth under 18 are employable, and should have the same right to be free from discrimination  in the employment context as those over 18 (see Alberta Human Right Review Panel, Equal in Dignity at 57).

The government’s rationale for excluding age discrimination claims from youth may be to avoid a flood of claims, given that age is a common basis for limiting entitlements in society (driving, voting, working, admission to facilities serving alcohol, etc.). Other provinces have dealt with this issue by creating specifically tailored limits on age discrimination protections in their human rights statutes. For example, the Manitoba Human Rights Code, CCSM c H175, provides in section 13(2) that “Nothing … prevents the denial or refusal of a service, accommodation, facility, good, right, licence, benefit, program or privilege to a person who has not attained the age of majority if the denial or refusal is required or authorized by a statute in force in Manitoba”, with an equivalent exception for employment discrimination in section 14(10) (see also New Brunswick’s Human Rights Act, RSNB 2011, c 171, which has similar provisions in sections 4(7), 5(5) and 6(3)). These sorts of carefully tailored provisions would be much more likely to withstand scrutiny under section 1 of the Charter, the reasonable limits clause, than the blanket exclusion of discrimination against youth that currently exists in the Alberta Human Rights Act, if it were to be constitutionally challenged.

In 1994, the Alberta Human Right Review Panel recommended that age be added to Alberta’s human rights legislation for all areas of discrimination, with no limits on age (see Equal in Dignity at 16). The Alberta government has now agreed to the first recommendation; it is time for it to implement the second.

This post may be cited as: Jennifer Koshan “Alberta Agrees to Amend Human Rights Legislation to Expand Prohibitions Against Age Discrimination” (7 February, 2017), online: ABlawg, http://ablawg.ca/wp-content/uploads/2017/02/Blog_JK_AHRA_Age.pdf

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Assessing Adaptive Management in Alberta’s Energy Resource Sector

Thu, 02/02/2017 - 10:00am

By: Martin Olszynski

PDF Version: Assessing Adaptive Management in Alberta’s Energy Resource Sector

Research Commented On: “Failed Experiments: An Empirical Assessment of Adaptive Management in Alberta’s Energy Resources Sector” (UBC L Rev) (Forthcoming)

It was three years and six months ago – almost to the day – that I published my first ABlawg post. The Joint Review Panel (JRP) assigned to conduct the environmental assessment of Shell’s then-proposed Jackpine oil sands mine expansion project had just released its report. That report was notable for several reasons, including that it was the first to conclude that an oil sands mine was likely to result in “significant adverse environmental effects” pursuant to the Canadian Environmental Assessment Act 2012, SC 2012, c 19 (CEAA, 2012). In Shell Jackpine JRP Report: Would the Real “Adaptive Management” Please Stand Up?, however, I focused on the role that adaptive management had played in the Joint Review Panel’s determination of the project’s environmental effects. Briefly, adaptive management is defined by the Canadian Environmental Assessment Agency as “a planned and systematic process for continuously improving environmental management practices by learning about their outcomes.” The concern that I have expressed over the past few years is that, as practiced in Canada, adaptive management appears to be seldom planned or systematic. The problem was that I couldn’t show this to be the case – until now.

In a recent paper, I examine the implementation and effectiveness of adaptive management in Alberta’s energy resources sector. Using freedom of information processes, publicly available documents, and communication with the relevant regulator, I collected the environmental impact statements, environmental assessment reports (e.g. the Shell Jackpine JRP Report), statutory approvals and required follow-up reports for thirteen energy projects in Alberta: two coal mines, three oil sands mines, and eight in situ oil sands operations. In each case, the proponent proposed adaptive management for at least one environmental issue or problem. I then analyzed these various documents to determine the conception, implementation, and, to the extent possible, effectiveness of adaptive management with respect to each project throughout the regulatory cycle (i.e. from the proposal stage through to approval and reporting). Simply put, I set out to determine how adaptive management was actually being applied in this context.

Unfortunately, the results confirm longstanding concerns about the implementation of adaptive management in natural resources development. Conceptions of adaptive management vary, with most proponents erroneously invoking it as a routine strategy that guarantees effective mitigation (see Figure 1, below).

At the same time, little or no attention is being paid to experimental design, especially at the environmental assessment stage. Whereas genuine adaptive management involves a six step cycle of (i) defining the problem (ii) plan design, (iii) plan implementation, (iv) monitoring, (v) evaluation, and (vi) revision and adaptation, each of which consists of several sub-steps (e.g. defining the problem includes identifying management objectives and indicators of success), almost all of these steps were missing or incomplete for the projects considered (Figure 2, below).

There is also often a yawning gap between the number and type of issues for which proponents propose adaptive management and what is ultimately required per the terms of their regulatory approval (Figure 3, below) (the one exception being Suncor’s Fort Hills project). Moreover, where adaptive management has been required, the relevant approval terms have generally been vague and seemingly unenforceable. At the reporting stage, implementation is either non-existent or barely distinguishable from basic compliance monitoring (e.g. whether noise levels comply with regulatory standards). Not surprisingly, then, none of the projects assessed had much to show in terms of actual learning.

These results are concerning. With respect to Alberta’s oil sands, adaptive management has been – and continues to be – invoked in dealing with a number of significant environmental problems, from the restoration of peatlands and the protection of caribou to the creation of end-pit lakes (which are expected to number around thirty by the middle of this century). With respect to Canada more broadly, roughly 90% of the projects currently listed on the Canadian Environmental Assessment Registry make at least one reference to adaptive management in the context of effects mitigation. In my paper, I make several recommendations for law and policy reform, especially the need for additional legislative guidance and increased transparency and accountability.

This post may be cited as: Martin Olszynski “Assessing Adaptive Management in Alberta’s Energy Resource Sector” (2 February, 2017), online: ABlawg, http://ablawg.ca/wp-content/uploads/2017/02/Blog_MO_Adaptive_Management.pdf

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The Efficiency Plank in Alberta’s Climate Leadership Plan

Mon, 01/30/2017 - 10:00am

By: Nigel Bankes

PDF Version: The Efficiency Plank in Alberta’s Climate Leadership Plan

Report Commented On: Getting it Right: A More Energy Efficient Alberta, Final Report of the Alberta Energy Efficiency Advisory Panel, released 23 January 2017 and related press release

As reported in previous posts, Alberta’s Climate Leadership Plan (CLP) released in November 2015 following receipt of the Leach Report has four key planks: (1) phasing out emissions from coal-generated electricity and developing more renewable energy, (2) implementing a new carbon price on greenhouse gas emissions, (3) a legislated oil sands emission limit, and (4) employing a new methane emission reduction plan.

The government introduced legislation to implement an economy-wide carbon price in June 2016 (the Climate Leadership Implementation Act) with the results of that in the form of the carbon levy coming into force on January 1 of this year (2017). The fall session of the legislature (2016) saw the introduction and passage of Bill 25, The Oil Sands Emission Limit Act to implement the third objective, a legislated oil sands emission limit (I commented on Bill 25 here) and followed this up with Bill 27, the Renewable Electricity Act to implement the second half of the first plank – developing more renewable energy. I commented on Bill 27 here. Then there were subsequent developments with respect to transforming Alberta’s “energy only” market which I commented on here. This last post also commented on the first half of the first plank of the CLP, i.e. the agreement between the province and the owners on the phase-out of coal generating facilities and the level of compensation payable.

As part of the plan to replace coal generation the province has also been looking at energy efficiency policies and micro or distributed generation. Although energy efficiency measures do not result in more generation they do suppress load and avoid (or at least postpone) the need to build or run new generation. While energy efficiency has a lower public profile than new generation, most commentators suggest that energy efficiency and demand side management policies are usually among the most cost effective measures for meeting load and for reducing greenhouse gas emissions – especially where the current energy mix, as in Alberta, is carbon intensive. For a recent review see Julia-Maria Becker and Sara Hastings-Simon, Kick-Starting Energy Efficiency in Alberta: Best practices in the use of efficiency as an energy resource, Pembina Foundation (January 2017) and for a paper that looks at energy efficiency from a legal perspective see Barry Barton, “The Law of Energy Efficiency” in Donald N Zillman et al (eds), Beyond the Carbon Economy: Energy Law in Transition, Oxford, OUP, 61 – 81.

While most if not all Canadian jurisdictions already have comprehensive policies to address energy efficiency, Alberta has none. This is one more example of how a succession of Conservative governments in Alberta failed to adopt even the most obvious and cost-effective policies for reducing greenhouse gas emissions. It is true that the goal of efficiency lies at the heart of the Specified Gas Emitters Regulation, Alta Reg 139/2007 which required covered entities to reduce emissions measured against their units of production (not energy), but the province failed to generalize this approach to energy consumption across the economy. For a listing of sector specific programs see Appendix F of the current report. Hence, as in so much else, the current New Democrat administration has had to play catch-up.

One of the government’s first steps in developing energy efficiency programs was to create Energy Efficiency Alberta under the terms of the Energy Efficiency Alberta Act, SA 2016, c. E-9.7. This Act establishes Energy Efficiency Alberta as a corporation with the mandate: (a) to raise awareness among energy consumers of energy use and the associated economic and environmental consequences, (b) to promote, design and deliver programs and carry out other activities related to energy efficiency, energy conservation and the development of micro?generation and small scale energy systems in Alberta, and (c) to promote the development of an energy efficiency services industry. (at subsection 2(2)) It is important to observe that despite the title, the agency’s mandate under clause (b) extends beyond energy efficiency and conservation to include “the development of micro?generation and small scale energy systems”. The province has committed to invest $645 million in these programs over five years from the economy wide carbon levy. In addition, Minister Phillips, the Minister of Environment and Parks and the Minister Responsible for the Climate Change Office, established the Energy Efficiency Advisory Panel in June 2016 with an aggressive timeline of reporting out by the fall of 2016. The Panel was asked to advise on:

  • A long-term vision for the goals and outcomes for Energy Efficiency Alberta;
  • First-stage energy efficiency and community energy programs; and
  • Initial education and outreach initiatives.

The Panel’s report is now available. The report includes 13 recommendations as well as some reference to other policies and initiatives. In this post I will provide a short summary of the recommendations and then highlight some issues which may be of more interest to the legal community insofar as they reference the need for regulatory changes.

Recommendation 1 dealt with the Panel’s responsibility to advise on a vision for the agency, and to that end the panel recommended that “Energy Efficiency Alberta is a catalyst for saving money, creating jobs and reducing emissions – all at the same time”. Recommendation 2 addressed the topic of agency oversight and recommended that the government provide for clear reporting and that the agency should track outcomes against performance targets. Funding (Recommendation 3) should be provided on the basis of a minimum rolling five year budget “to enable effective planning cycles”. The Agency should (Recommendation 4) devote a portion of its budget to education and outreach and benchmark itself against other jurisdictions. As for “initial programs” (Recommendation 5), the Panel recommended four programs that would be “low risk, and have immediate, measurable gains to generate public interest and uptake.” The four programs are:

  • A Direct Install (DI) Program which would provide for low-cost energy efficiency products to be installed in single and multi-family dwellings at all income levels at no cost to consumers. Examples might include LED lighting, LED night lights, smart power bars, and low-flow showerheads (reduced water heating)
  • Consumer Products Program which would offers incentives at point-of-sale for purchase of energy efficient appliances and electronics that are independently certified to save energy without sacrificing features or functionality. Examples of eligible consumer products might include: appliances and electronics, insulation and draft-proofing products, water heaters and products included in the Direct Install program.
  • Business, Non-Profit, Institutions (BNI) Incentives which would assist non-residential buildings (including businesses, non-profits, institutions, and cooperatives) to reduce emissions and energy use by offering incentives on products and installation. Examples of eligible products might include lighting, heating, ventilation, air conditioning systems and water heating.
  • Small Solar Photovoltaic (PV) Program which would provide financial incentives to support the installation of solar photovoltaic systems on buildings, including homes, businesses, and community structures, under Alberta’s Micro-Generation Regulation.

Future programming (Recommendation 6) in the short run should draw on the experience of other jurisdictions pending the results of Alberta-specific market research. In addition, and as early as possible, the government (Recommendation 7) should identify targets for community owned energy systems. Transportation (Recommendation 8) should also be the target of early outreach and awareness activities including information on no-cost and low-cost ways to save fuel. Recommendation 9 stressed the importance of working with Indigenous communities (First Nation and Metis) while Recommendation 10 pointed to the importance of access to relevant data while recognizing privacy concerns. Access to innovative financing forms the core of Recommendation 11. Recommendation 12 addresses what is surely a crucial issue insofar as it deals with the need to think about how to integrate the relevant utilities within both efficiency and community energy initiatives. The final recommendation, Recommendation 13, stresses the need to develop “governance and operational links” between Energy Efficiency Alberta and other agencies and task forces of government engaging with innovation, research and development within these fields.

It is evident that the implementation of many of these recommendations will not require any changes in law or regulation but others may. The balance of this post refers to areas where the Panel identified the potential need for regulatory change or regulatory harmonization.

Community energy owned systems. The Panel suggested that regulatory changes might be required both to incent community-owned energy systems and to simplify and reduce the regulatory burden. The panel’s text suggests that it considers that most of the difficulties lie (at 50) with the “relatively complex approval and grid connection process” and therefore suggests engagement with the Alberta Electric System Operator (AESO) (at 49) and (at 50) that efforts continue “to enable community-owned renewable energy system either through updates to the existing Micro-Generation Regulation, Alta Reg 27/2008 or through new regulations.”

Access to data. Recommendation 10 on access to data also occasioned some comment on regulatory issues from the Panel. Here the issue seems to be access to user-specific energy consumption data to assist in the design and delivery of effective programs, to enhance outreach and increase program participation, and in order to measure the impact of programs. However, it is clear that such access will raise privacy concerns, and this issue, especially in the context of smart meters (a term used in the main report on only one occasion!), has been contentious in other jurisdictions notably in British Columbia. On this issue therefore the Panel simply recommends (at 54) that “the Government of Alberta develop mechanisms, including the development of a regulation, to enable Energy Efficiency Alberta to employ user-specific energy consumption data to enhance program design and delivery while maintaining appropriate privacy controls.”

Integration with the utility system. Recommendation 10 (at 57) notes that in most jurisdictions energy efficiency and community energy systems are dealt with (at 57) “holistically within the oversight of the utility system”. This is generally achieved “by including demand-side management within the mandate of regulators and electric system operators. This enables those entities to give full consideration to energy efficiency and community energy system benefits and opportunities, and make available tools used in other jurisdictions to support their uptake in a way that is in the interests of consumers.” This is certainly the case with respect to vertically integrated systems. It may be more challenging in unbundled systems in which there is competition with respect to both generation and retail functions. Evidently these issues will require careful thought and leadership. The Panel recommended that government consider according both the AESO and the Utilities Consumer Advocate a mandate with respect to energy efficiency and community energy systems but it is also possible that the Alberta Utilities Commission will need to play a role in working these issues through.

Finally, and going beyond its formal recommendations, the Panel offered comments (at 61 – 62) with respect to what it referred to as “Complementary Policies and Initiatives”. First, the Panel noted that while its mandate did not include large industry it was clearly of the view that there is untapped potential for efficiency gains within large industry. Second, the Panel referred again to the ongoing review of the Micro-Generation Regulation. Third, the Panel emphasized the importance of building codes in ensuring a minimum level of efficiency in new construction. The fourth matter, the allocation of system costs as between fixed and variable charges, will likely be of most interest to the regulatory bar. Here the Panel noted (at 62) that

… many stakeholders suggested authorities investigate the potential for greater adoption of energy efficiency and community energy systems by reducing the ratio of fixed versus variable charges on utility bills. Increasing the amount of variable charges associated with electricity transmission costs, for example, can help reduce electricity consumption and the demand for transmission infrastructure thus creating system-wide cost savings. It is recognized, however, that the cost of utility infrastructure must be spread among the consumers that are benefiting from it and without overly burdening vulnerable Albertans. The continued evolution of this conversation will be important for both consumers and Energy Efficiency Alberta as the structure of utility charges has significant bearing on how the utility system is used and its associated economic impacts.

The fifth and sixth “complementary” matters addressed by the panel were energy performance reporting and disclosure for buildings, and the need for the Agency to ensure its alignment with other government programs and agencies.

In sum, while this report and the related announcements may be of less interest to corporate energy lawyers in the city than the announcements with respect to renewable energy procurements, they are likely of widespread interest to the general public. This is because, by and large, these announcements and recommendations are directed at individuals and community groups. They are designed to galvanize the energy and interest of individual citizens and encourage them to participate in meeting Alberta’s emission reductions targets. I’m in.

This post may be cited as: Nigel Bankes “The Efficiency Plank in Alberta’s Climate Leadership Plan” (30 January, 2017), online: ABlawg, http://ablawg.ca/wp-content/uploads/2017/01/Blog_NB_Efficiency_Plank_Climate.pdf

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Legal Designation of the New Castle Wilderness Protected Areas

Wed, 01/25/2017 - 10:00am

By: Shaun Fluker

PDF Version: Legal Designation of the New Castle Wilderness Protected Areas

Orders in Council commented on:

Order in Council 020/2017 (amendments to South Saskatchewan Regional Plan under Alberta Land Stewardship Act)

Order in Council 021/2017 (amendments to Forest Provincial Recreation Areas Order)

Order in Council 022/2017 (designation of the Castle Provincial Park under Provincial Parks Act)

Order in Council 023/2017 (designation of the Castle Wildland Provincial Park under Provincial Parks Act)

Order in Council 024/2017 (amendments to the Public Lands Administration Regulation)

On January 20, 2017 the Lieutenant Governor in Council issued 5 Orders in Council and thereby followed thru on Alberta’s commitment announced back in September 2015 to legally protect the area in southwestern Alberta known as the Castle wilderness with a new wildland provincial park and a new provincial park. What remained to be seen back in September 2015 was what this legal protection would exactly amount to, and these Orders in Council provide us with the important details. At the time of the announcement back in September 2015 I provided some context for these new designations in At Long Last – Legal Protection for the Castle Wilderness. Collectively these Orders in Council create the Castle Wildland Provincial Park and the Castle Provincial Park effective February 16, 2017, and implement consequential amendments to existing regulations to accommodate these new designations.

Orders in Council 022/2017 and 023/2017 designate the new Castle Provincial Park and Castle Wildland Provincial Park under section 6 of the Provincial Parks Act, RSA 2000, c P-35. The wildland park designation offers stronger legal protection than a provincial park designation under the legislation, and it is thus noteworthy that the Castle Wildland Provincial Park is the larger of the two protected areas and encompasses all of the castle river watershed with the exception of lands for the existing castle ski resort. In comparison to what was proposed in the 2014 South Saskatchewan Regional Plan (at pages 140-142), this is a vastly expanded version of the wildland park. The Castle Provincial Park encompasses much of the remaining public land in the Castle that is relatively more developed, and importantly replaces the Castle Special Management Area designation that the 2014 SSRP retained. The Castle Special Management Area was managed by a large swath of non-transparent discretionary power and affectionately known as a ‘multiple-abuse’ zone by conservationists. The demise of the Castle Special Management Area and its stakeholder committees is surely welcomed by the environmental community.

The relationship between the Provincial Parks Act and the Alberta Land Stewardship Act, SA 2009, c A-26.8 effectively means the details on legal protection for these new Castle protected areas is found in the amendments to the 2017 South Saskatchewan Regional Plan (2017 SSRP). These amendments are implemented by Order in Council 020/2017. To begin with, the amendments to the 2017 SSRP provide a much more conservation-orientated statement of intent for the Castle region. To illustrate this compare what the 2014 SSRP had to say about the proposed new Castle Wildland Provincial Park with what is now in the 2017 SSRP for both the wildland park and the Castle Provincial Park.

Order in Council 020/2017 strikes the following narrative from the 2014 SSRP:

Castle Area

With an approximate area of 170,000 hectares, the Castle area borders Waterton Lakes National Park and is located within the Crown of the Continent (the area of the Rocky Mountains where Alberta, British Columbia and Montana meet). This unique ecosystem is internationally recognized for its biodiversity and landscape form. Known for its scenic beauty and natural diversity, the Castle area includes mountains, foothills and prairie landscapes and is home to rare plant communities and wildlife. The headwaters of the Oldman River basin are located within the Castle area contributing one third of all water in the Oldman watershed and providing other benefits including natural mitigation of flooding and drought conditions.

With its numerous archeological, historical and First Nations traditional use sites, the Castle area also has cultural and historical significance for First Nations and all Albertans. These cultural and historic values and diversity of environmental settings provide the Castle area with many opportunities for land and water based recreation. Hunting and fishing are popular pursuits in the area as well as camping, hiking, off-highway vehicle use, horseback riding and cross-country skiing.

In recognition of the importance of this area, a wildland provincial park will be established. It will include lands in the prime protection zone under the Eastern Slopes Policy (1984) and will also extend into adjacent lower valley areas as shown (see Map 11). This will protect the integrity of this significant area’s headwaters, biodiversity and landscapes through the use of a designation under legislation. It also secures an important connection between the Alberta provincial parks system to the north, the British Columbia parks system to the west and Waterton-Glacier International Peace Park to the south.

The Castle Wildland Provincial Park will be managed to provide low-impact backcountry recreation opportunities and nature-based tourism products and services. Recreational leases will be considered based on the management intent of conservation areas and existing recreational leases will be honoured (see Appendix L – SSRP Land Uses).

Additionally, the existing Castle Special Management Area that extends beyond the wildland provincial park remains in place. An access management plan for the Castle was developed and put in place in 1992. The purpose of the access management plan was to address and provide operational level direction for recreational use of on and off-highway vehicles in the Castle River area. The Castle Special Management Area was established in 1998 in order to better manage motorized access and to protect ecologically sensitive backcountry areas from adverse effects. Permitted uses include off-highway vehicle and snow mobile use in certain locations and on designated trail systems. Random camping, hiking, horseback riding and cross-country skiing are also permitted uses in the area.

Order in Council 020/2017 replaces the above narrative with the following in the 2017 SSRP (at pages 142 and 143):

Castle area

With an approximate area of 170,000 hectares, the Castle area borders Waterton Lakes National Park and is located within the Crown of the Continent (the area of the Rocky Mountains where Alberta, British Columbia and Montana meet). This unique ecosystem is internationally recognized for its biodiversity and landscape form. Known for its scenic beauty and natural diversity, the Castle area includes mountains, foothills and prairie landscapes and is home to rare plant communities and wildlife. The headwaters of the Oldman River basin are located within the Castle area contributing one third of all water in the Oldman watershed and providing other benefits including natural mitigation of flooding and drought conditions.

With its numerous archeological, historical and First Nations traditional use sites, the Castle area also has cultural and historical significance for First Nations and all Albertans. These important cultural and historic values and diversity of environmental settings provide the Castle area with many opportunities for land and water based recreation. Hunting and fishing are popular pursuits in the area as well as camping, hiking, off-highway vehicle use, horseback riding and cross-country skiing.

In recognition of its importance, the Castle area is protected using a mix of Wildland Provincial Park and Provincial Park designations under the Provincial Parks Act. The existing public land lease area and private lands at the end of Highway 774 have not been included (see Schedule C: South Saskatchewan Regional Plan Map). Combined, this approach helps support conservation and connectivity of landscapes for species at risk such as wolverine, grizzly bear, limber pine and whitebark pine, and also includes important fish habitat for the westslope cutthroat trout and other fish species.  It also ensures the integrity of this significant area’s headwaters, protects and enhances biodiversity and landscapes for future generations and supports the continued practice of traditional activities by First Nations. Protection of the Castle area also supports continued opportunities for a diversified economy through outdoor recreation and tourism development. A Castle Region Tourism Strategy will be developed to provide recommendations on how government can develop a stronger and more dynamic tourism industry in the region. Protection of the Castle area also maintains landscape connectivity between the Alberta provincial parks system to the north, the British Columbia parks system to the west and Waterton-Glacier International Peace Park to the south.

The management intent for the Castle Wildland Provincial Park is conservation while providing low-impact backcountry outdoor recreation opportunities and nature-based tourism products and services. The management intent for the Castle Provincial Park is conservation while providing for appropriate nature-based tourism and outdoor recreation opportunities, which may include trail, staging area, campgrounds, and other tourism-based activities and infrastructure. Specific trail and infrastructure developments will be determined through the parks management planning process and will support the outdoor recreation, conservation, nature-based tourism, and education mandates of the Parks system.

A park management plan will be developed to provide direction for both the Provincial Park and Wildland Provincial Park. The plan will contain information on environmental, social and economic values and provide clear and concise development and management direction for the parks. Once approved, the plan will guide management for the Castle Wildland Provincial Park and the Castle Provincial Park for ten years, unless significant policy or legislative changes requires an earlier review.

Both the Castle Provincial Park and the Castle Wildland Provincial Park will be managed for conservation. The land disturbance associated with petroleum and natural gas, mining, cultivated agriculture and commercial forestry operations are generally not considered compatible with the management intent of conservation areas. Existing grazing activities will continue. Existing petroleum and natural gas agreements will be honoured and new agreements will be sold with a ‘no surface access’ restriction – See Note 1 of Appendix M for more information. Freehold rights within the Castle Parks will be honoured.

The 2017 SSRP recognizes the Castle region is Alberta’s most significant area for biodiversity and endangered species protection, and the first sentence of the last paragraph in this revised narrative says it all. The Castle protected areas will be managed for conservation. Alberta environmental groups have advocated relentlessly for decades to see these words written into government policy. This is backstopped with the Provincial Parks (Dispositions) Regulation, Alta Reg 241/1977 which generally precludes dispositions for the exploration and development of subsurface mines and minerals in the Castle Wildland Provincial Park.

Curiously though, the amendments to the Regulation (Regulatory Details) included in the SSRP (at pages 161-206) implemented by Order in Council 020/2017 seem to fall short of expressly prohibiting forestry in the Castle Wildland Provincial Park and non-forestry resource dispositions in the Castle Provincial Park (see in particular sections 18, 19, 43, 43.1 of the 2017 SSRP as amended by Order in Council 020/2017). But then elsewhere, resource dispositions are noted as a prohibited activity in both protected areas (see Appendix M of the 2017 SSRP at page 195). I spent a fair amount of time trying to sort this out to no avail. This oversight in the Regulation (which is serious if it is one – since the only legally binding aspects of the SSRP are the provisions in the Regulation or ‘Regulatory Details’) seems odd and out of place with the policy intention here. Then again, an oversight is entirely possible given that the complexity of the legal steps needed to create these Castle protected areas borders on the ridiculous. This complexity is one of the reasons why I suggested in At Long Last – Legal Protection for the Castle Wilderness that Alberta should enact dedicated legislation to protect the Castle wilderness instead of incorporating this protection into what has to be one of the most convoluted and difficult to follow protected area legislative frameworks anywhere in the world.

Another significant policy shift for the Castle is the announcement that off-road vehicle use in these areas will be transitioned out over the next 3 years. The transition period for the phasing out of off-road vehicles is no doubt an attempt to somewhat appease the off-road vehicle users who will not be pleased with these new designations. However, off-road vehicle use has been documented as a significant threat the ecological integrity of the region and, more particularly, as a threat to the westslope cutthroat trout which is listed as a threatened species under the Species at Risk Act, SC 2002, c 29. The University of Calgary Public Interest Law Clinic filed legal proceedings in Federal Court back in September 2015 on behalf of local environmental groups seeking to have the federal Minister of Fisheries and Oceans issue the critical habitat protection order for the native populations of westslope cutthroat trout that remain in the Castle. These new protected areas include several locations of critical habitat for the trout which are now set out in the federal critical habitat order, including the west castle river, the south castle river and their tributaries. These new designations, along with the proposed management plan, should significantly enhance legal protection for this species and other threatened species clinging to existence in the Castle region.

This post may be cited as: Shaun Fluker “Legal Designation of the New Castle Wilderness Protected Areas” (25 January, 2017), online: ABlawg, http://ablawg.ca/wp-content/uploads/2017/01/Blog_SF_Protection_for_Castle.pdf

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Co-Owners and Adverse Possession – The Uniqueness of Alberta?

Tue, 01/24/2017 - 10:00am

By: Nickie Nikolaou

PDF Version: Co-Owners and Adverse Possession – The Uniqueness of Alberta?

Case Commented On: Verhulst Estate v Denesik, 2016 ABQB 668 (CanLII)

In an earlier post, I concluded that Master Schlosser was correct in finding that a co-owner will typically not be able to claim their co-owner’s interest in the property through the doctrine of adverse possession. In this appeal upholding that decision, Justice D.L. Shelley queries whether a co-owner in Alberta can ever make a claim for adverse possession against a co-owner. This leads her on an interesting journey across Canada which suggests, but does not conclude, that Alberta might be unique in its treatment of co-owners and adverse possession.

Background

The land in question comprised of a 159-acre parcel (the “larger parcel”) and two smaller river lots (the “river lots”) totalling 96 acres. There was approximately 6 kilometres between the larger parcel and the river lots. The land had been acquired by Mr. Denesik and the late Mr. Verhulst as tenants in common as part of a joint venture. After logging operations ceased on the lands, Mr. Denesik moved a mobile home onto the larger parcel where he lived for more than 10 years. The late Mr. Verhulst lived in the city with his family, but continued to hold his interest in the lands for investment purposes. In 2014, the Estate of Mr. Verhulst brought an application for an order for partition and sale of the lands. In response, Mr. Denesik applied for a declaration that he was entitled to his co-owner’s share through the doctrine of adverse possession.

Master Schlosser heard the applications together (see my earlier post). He granted the application for sale of the property and dismissed the claim for adverse possession. He noted that because tenants in common have equal rights to use and possess the entire property (and because possession is typically not adverse when it refers to lawful title), the burden on a co-owner to establish a claim for adverse possession is much heavier than in other cases. He concluded that the circumstances would have to be “exceptional” for one co-owner to dispossess another. On the facts, Master Schlosser concluded that at no time was Mr. Verhulst dispossessed of the lands, or dispossessed to the point where he should have realized that he had to seek an order to recover possession of the lands. He held that Mr. Denesik’s decision to live in a trailer on a portion of the larger parcel was not enough to establish a claim in adverse possession to the entirety of the larger parcel, much less to the distant river lots.

Issues on Appeal

The main issue on appeal was whether Master Schlosser had erred in dismissing Mr. Denesik’s application and granting the order for sale of the lands. But rather than simply deciding the case on this basis, Justice Shelley considered a sub-issue that had been raised by the parties (but not addressed in the Master’s decision). That sub-issue concerned whether a tenant in common in Alberta can acquire another tenant in common’s interest through adverse possession. (at para 12) Although not ultimately necessary to decide the appeal, it is this sub-issue that took Justice Shelley on a journey through Canadian law, a journey which revealed some interesting differences between Alberta and the rest of the country.

Adverse Possession and Co-ownership in Alberta

Justice Shelley began her analysis by noting that adverse possession is really an aspect of limitation of actions legislation. Alberta’s Limitations Act, RSA 2000, c L-12, bars an action to recover possession of real property after 10 years. Because an action to recover land is statute-barred at that time, someone who has taken possession may seek a declaration of title to that land. Sections 39 and 74 of the Land Titles Act, RSA 2000, c L-4 detail the process for registering an adverse claim in the Land Titles office. Once met, the title of the registered owner is extinguished and title is granted to the new (adverse) possessor. (at paras 14-17)

The case law on adverse possession in Alberta, reviewed by Justice Shelley in detail, is clear that to make out a good claim, the law does not require the adverse possessor to intend to oust or dispossess the owner. Adverse possession can be made out where: (a) the true owner is out of possession of the claimed lands; (b) the claimant is in actual use and occupation of the lands; and (c) the claimant’s use and occupation is exclusive, continuous, open or visible and notorious for the requisite 10-year period. Further, the fact of use and occupation by the claimant is the only determinant while the belief, ignorance, mistake or intention of the claimant is immaterial (at paras 18-19; citing Rinke v Sara2008 ABQB 756 (CanLII) at para 19). Nonetheless, as the Court of Appeal in Reeder v Woodward, 2016 ABCA 91 (CanLII) has held, “a claim to adverse possession must be ‘adverse’… if the claimant is in possession of the land with the permission or consent of the registered owner, then that possession is not ‘adverse’.” (at para 23, citing Reeder at para 10).

Tenants in common are co-owners who hold interests in land that are separate and distinct from each other in shares that might not be equal. Nonetheless, any form of co-ownership is characterized in law by unity of possession. This means that each co-owner’s share is undivided in the sense that each is entitled to possession and use of the whole property. As Justice Shelley noted, the fact that tenants in common (and joint tenants as well) hold undivided shares in the entire property makes it difficult to envision how one tenant in common might put the other tenant “out of possession” or claim “exclusive” possession for purposes of making out a claim in adverse possession. Moreover, there is a reciprocal implied permission of one co-owner for the other to be in possession. Justice Shelley’s review of the case law in Alberta suggested “that an adverse possession claim by one tenant in common against another cannot succeed.” (at para 24).

But Mr. Denesik relied on a comment by Professor Bruce Ziff to rebut this conclusion. In his Principles of Property Law, 6th ed. (Toronto: Thomson Reuters Canada Ltd., 2014), Professor Ziff suggests that such claims are indeed possible. He states that even a co-owner may make out a claim in adverse possession “against other persons with whom the right to possession is shared” (at para 25). He adds, however, that there is a “heavy onus” on a co-owner to show that the person in possession intends to exclude his or her co-owners.

Adverse Possession and Co-ownership in Other Jurisdictions

Justice Shelley noted that Professor Ziff’s comments were supported by non-Albertan case law. She decided to see if the law in those jurisdictions was the same as in Alberta.

 

She traced the modern doctrine of adverse possession to an old English statute entitled An Act for the Limitation of Actions and Suits relating to Real Property and for simplifying the Remedies for trying the Rights thereto, (1833) 3 & 4 Will IV, c 27 (the Real Property Limitation Act). This Act provided for the extinguishment of a landowner’s right in land once the limitation of actions barred his or her remedy for bringing a claim to recover possession of that land.

Significantly, section 12 of that Act dealt directly with co-owners, both joint tenants and tenants in common. As summarized by Justice Shelley (at para 29, emphasis added), it provided that:

when any one or more of several persons entitled to any land as joint tenants or tenants in common were in possession of the entirety, or more than his or their undivided share or shares of such land, for his or their own benefit, or for the benefit of any person or persons other than the person or persons entitled to the other share or shares of the same land, such possession would not be deemed to have been the possession of or by any such last-mentioned person or persons.

But what does this convoluted language mean exactly? In Bentley v Peppard (1903), 33 SCR 444, relied upon by Professor Ziff and reviewed by Justice Shelley (at para 31), the Supreme Court of Canada explained the effect of this provision as follows:

At common law […], the actual and exclusive possession of a tenant […] could not work to the detriment of his [sic] co-tenant […]. His possession was theirs and could be invoked not only as against the alleged title of a trespasser, but in aid of their own.

(But this principle has long since been changed by statute both in England and Nova Scotia.)

Since this change, therefore, exclusive possession by one of such co-owners is regarded as adverse against the others.

Given what we know about the unity of possession inherent in co-ownership, this last statement is odd and surprising. While Justice Shelley does not expose the rationale behind it, she does conclude that section 12 is a provision that was subsequently incorporated into the limitation of actions legislation of many Canadian provinces. All the Maritime provinces, as well as Ontario, have similar provisions, and the courts of those jurisdictions have allowed for successful adverse possession claims by co-owners against each other. Still, some of that case law has suggested that co-owners face a “higher standard than a typical squatter” (at para 36) and that exceptional circumstances must exist for one co-owner to be found to have excluded another.

The Uniqueness of Alberta?

Justice Shelley correctly observes that Alberta legislation does not have a similar provision to section 12 of the Real Property Limitation Act. Although it was received in Alberta in 1870, that Act was repealed in 1935 and replaced with Alberta-specific limitation of actions legislation which did not contain any analogous provision. Thus, she concludes that Alberta is the only common law province in Canada that “does not have a section 12 analogue in its statutory scheme but that also recognizes adverse possession” (at para 39). Although such a provision is also absent in other Torrens jurisdictions (such as British Columbia and Saskatchewan), she notes that those provinces do not allow for adverse possession claims at all. Alberta is unique in that regard as well.

This absence of a comparable statutory provision explicitly authorizing an adverse possession claim by one co-owner against another leads Justice Shelley to conclude that “there is little legal basis for an adverse possession claim by one tenant in common against another in Alberta.” (at para 40). She states that, in Alberta, the “unity of possession inherent in a tenancy in common will generally preclude an adverse possession claim” and that “it is unlikely that a claim for adverse possession will succeed” (at para 50). More specifically, she says that

[t]he fact that two tenants in common are both registered on title and have the right to undivided possession of the whole suggests that, by the very nature of a tenancy in common, one co-owner would never be on the property without the “knowledge” and “permission” of the other co-owner. As the Alberta Court of Appeal recently affirmed, adverse possession must be “adverse”, and consent of the registered owner will preclude a claim. (at para 50)

Justice Shelley concludes that “it is extremely difficult, if not impossible, to establish such a claim in Alberta.” (at para 51).

Commentary

With these words, Justice Shelley comes close, very close, to concluding that adverse possession is not available in Alberta amongst co-owners. Indeed, one expected her to reach this conclusion given her analysis. But the law is rarely that clear-cut.

Instead, at the end of her judgment, Justice Shelley abruptly changes direction and says that it is “not necessary” for her to “determine the broader issue of whether Alberta law precludes a successful adverse possession claim by a co-tenant in all cases.” (at para 53; emphasis added). Were that so, one wonders why she bothered at all with the Canadian journey in the first place, unless the ultimate destination turned out to not be what she had expected.

In the end, she decides the case narrowly, stating that on the evidence Master Schlosser was correct in concluding that Mr. Denesik had failed to satisfy the burden of proving that he had adversely possessed his co-owner’s interest for the requisite period. She said that even if an adverse possession claim is possible amongst co-owners in Alberta, for it to succeed “it is likely that the actions of one tenant in common would need to rise to the level of something akin to ouster” (at para 52). There was no evidence of that here. Although Mr. Verhulst had become indifferent to using the lands as an investment vehicle, there was no indication that he had given up either possession or an ownership interest.

As to whether Alberta is really unique from the rest of the country with respect to its law on co-owners and adverse possession, it may or may not be. While Justice Shelley’s analysis certainly seems to point in that direction, it ultimately falls short of providing a definite answer. Even where a statutory provision explicitly allowing for adverse possession claims between co-owners exists, the case law suggests that the burden is high and exceptional circumstances must exist. Justice Shelley’s ultimate conclusion in this case takes the same view for Alberta, signalling that it may not be that unique after all.

Thanks to Professor Nigel Bankes for his helpful review of this post.

This post may be cited as: Nickie Nikolaou “Co-Owners and Adverse Possession – The Uniqueness of Alberta?” (24 January, 2017), online: ABlawg,
http://ablawg.ca/wp-content/uploads/2017/01/Blog_NN_Denesik.pdf

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Recent Analysis Shows Canada was Losing Fish Habitat Before 2012 Budget Bills

Mon, 01/23/2017 - 10:00am

By: Martin Olszynski and Brett Favaro

PDF Version: Recent Analysis Shows Canada was Losing Fish Habitat Before 2012 Budget Bills

Matter commented on: Standing Committee on Fisheries and Oceans’ Review of the Fisheries Act RSC 1985, c F-14

Back in October of last year, we appeared before the Standing Committee on Fisheries and Oceans (FOPO) in the context of its review of the 2012 changes to the habitat protection provisions of the Fisheries Act. Shortly after our appearance it occurred to us that it would be useful, using the best evidence available in the short time that was left, to provide FOPO – indeed all Canadians – with some quantifiable estimate of the state of fish habitat protection in Canada (the deadline for public submissions was November 30th, 2016).

Consequently, we returned to Professor Olszynski’s original access to information request from 2015 that provided the evidentiary basis for his article “From ‘Badly Wrong’ to Worse: An Empirical Analysis of Canada’s New Approach to Fish Habitat Protection Laws” (2015) 28(1) J Env L & Prac 1). Briefly, Professor Olszynski obtained all of the subsection 35(2) authorizations issued by DFO’s two largest regions (Pacific, Central and Arctic) over a six-month period (May 1 to October 1) for the years 2012, 2013, 2014. Generally speaking, each authorization contains information about the project proponent, project type (e.g. a bridge, a mine, a dam), project location, the size and kind of impacts to habitat, and the amount of compensation or offsetting habitat required – if any. We recorded the total area that each project was authorized to impact (in m2), as well as the total amount of compensation habitat required. Of the 86 authorizations in 2012, eight authorized impacts that were not described in terms of area (e.g. the proponent was authorized to destroy 1,500 eelgrass plants, or to dewater a stream killing all its fish); these were excluded from our analysis, leaving us with 78 authorizations.

The results can be found in a paper recently accepted for publication by the Canadian Journal of Fisheries and Aquatic Science (and a draft of which we sent to FOPO before the November 30th deadline). Our analysis suggests that during the six month period in 2012 alone, DFO authorized a net loss of almost 3,000,000 m2 of fish habitat (based on 78 authorizations). We found that 67% of projects were assigned “compensation ratios” less than one (meaning they were required to create or enhance less habitat than they were allowed to impact). Further, we found that there was no clear relationship between project size (as measured by impact area) and compensation ratio, meaning that there was no evidence that small projects were being unfairly targeted by the previous law. Notably, previous research has recommended a compensation ratio of 2:1 – meaning that regulators should require projects to compensate twice as much as they were allowed to impact. The projects we examined fell far short of that recommendation.

To put this in context, during our appearance Mr. Robert Sopuck (Member of Parliament for Dauphin-Swan River-Neepawa) indicated that between 2013 and 2016 the Recreational Fisheries Conservation Partnerships Program (RFCPP) resulted in the restoration of an estimated 2,400,000 m2 of habitat, and a further 2,000 linear kilometers. Within a six month period in 2012 alone, the likely losses due to just the projects we examined (just 78) would have more than offset the gains produced by this program. Bearing in mind that DFO has issued roughly 5,000 authorizations in the past decade, the potential loss of fish habitat in Canada is staggering.  

Our findings are cause for considerable concern, and confirm that even under the previous law, Canada was not adequately protecting fish habitat. Within our paper, we include four key recommendations to improve Canada’s ability to protect fish habitat and ensure sustainability of Canadian fisheries:

  1. Restore the previous, unambiguous language of subsection 35(1) of the Fisheries Act, so that harmful alteration, disruption, or destruction of fish habitat is unambiguously disallowed without the Minister’s or regulatory approval;
  2. Establish a public registry of authorizations, so that ATIP requests are not required to assess the state of Canadian fish habitat;
  3. The Government of Canada should recommit to the principle of no net loss of productive capacity of fish habitat, with a high priority placed on minimizing impacts on intact habitat;
  4. A further commitment should be made to public education on the importance of fish habitat and how to protect it, and to support community groups who are engaging in this activity.

We provide additional context, reasoning, and justification for each of these recommendations in our paper.

This post may be cited as: Martin Olszynski & Brett Favaro “Recent Analysis Shows Canada was Losing Fish Habitat Before 2012 Budget Bills” (23 January, 2017), online: ABlawg, http://ablawg.ca/wp-content/uploads/2017/01/Blog_MO_BF_LosingFishHabitat.pdf

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Lost and Found? – The Captive Audience Doctrine Returns in Canadian Centre for Bio-Ethical Reform v The City of Grande Prairie (City)

Thu, 01/19/2017 - 10:00am

By: Ola Malik

PDF Version: Lost and Found? – The Captive Audience Doctrine Returns in Canadian Centre for Bio-Ethical Reform v The City of Grande Prairie (City)

Case Commented On: Canadian Centre for Bio-Ethical Reform v The City of Grande Prairie (City), 2016 ABQB 734 (CanLII)

Does your freedom to express yourself include forcing me to listen? This question invokes the captive audience doctrine, a concept previously discussed at some length here. The doctrine lies at the heart of a decision in which the Canadian Centre for Bio-Ethical Reform (CCBR) argued that the City of Grande Prairie’s refusal to post CCBR’s pro-life advertisement on the sides of the City’s buses infringed upon its freedom of expression. The Alberta Court of Queen’s Bench decision in Canadian Centre for Bio-Ethical Reform v The City of Grande Prairie (City), 2016 ABQB 734 (CanLII) (CCBR) follows on the heels of American Freedom Defence Initiative v Edmonton (City), 2016 ABQB 555 (CanLII ) (AFDI), blogged about here, which similarly dealt with the limits of advertising on city buses. Taken together, the CCBR and AFDI decisions are most helpful to municipalities seeking to limit the placement of controversial advocacy messaging in public places.

Facts

The CCBR is an educational, “pro-life” activist organization devoted to making Canada abortion-free. Its current advocacy campaign is called EndtheKilling and aims to expose as many Canadians as possible to images of, and to engage directly in conversations about, abortion.

In February 2015, the CCBR applied to post an advertisement on the sides of City of Grande Prairie buses. The ad was divided into 3 separate sections: the first, with an image of a fetus at 7 weeks with the caption “GROWING”; the second, with an image of a fetus at 16 weeks with the caption “GROWING”; the final section, a blank image containing the caption “GONE”. The ad contained the words “ABORTION KILLS CHILDREN” and provided the online address for the CCBR and a link to its EndtheKilling campaign. The City informed the CCBR that it would not post the advertisement. In the City’s view, the advertisement was “disturbing” and, because of its content, would not have been allowed pursuant to the City’s agreement with its bus advertiser or in accordance with clause 14 of the Canadian Code of Advertising Standards (the Code) (at para 13).

The CCBR argued that the City was not justified in declining the advertisement based on its content, disturbing or otherwise (at para 18). Further, whether the advertisement contravened the City’s agreement with its advertising contractor or with the Code was irrelevant to the discussion regarding the CCBR’s freedom of expression as guaranteed by section 2(b) of the Charter (at paras 17-18). In reply, the City argued that it had acted reasonably in refusing to post the CCBR advertisement. In its view, the CCBR advertisement constituted hate speech and promotes hatred towards women who were choosing to exercise their legal right to an abortion (at paras 21, 76). Allowing the CCBR advertisement would have frustrated the City’s objectives of creating a welcoming transit system and promoting a safe and viable community which the City believed it had a statutory obligation to fulfill. The City further argued that the CCBR advertisement would have created a captive audience and been psychologically harmful to people seeing it, especially young children (at para 22).

When the matter was finally heard in court, it was brought by the CCBR as a judicial review application of the City’s decision. The question to be determined was whether the City, acting in its capacity as administrative decision maker, disproportionately, and therefore unreasonably, limited CCBR’s freedom of expression as protected by section 2(b) of the Charter (at para 26).

There appears to have been agreement (at para 28) that the analytical framework which applied to the City’s decision was that which the Supreme Court of Canada articulated in the case of Doré v Barreau du Québec, 2012 SCC 12 (CanLII). This approach requires a two-step analysis. First, what are the statutory objectives which the decision maker is seeking to achieve? Second, do those statutory objectives accommodate the protection of Charter rights and, if they interfere with those rights, is that interference proportional (CCBR at para 32)?

The Decision

What are the statutory objectives the City was seeking to achieve?

With respect to the applicable statutory objectives, the Court (Madam Justice C.S. Anderson) acknowledged the broad jurisdiction granted to municipalities pursuant to section 3(c) of the Municipal Government Act, RSA 2000, c M-26, which states that one of the purposes of a municipality is to develop and maintain safe and viable communities (at paras 44-45). As in the previous decisions in Greater Vancouver Transportation Authority v Canadian Federation of Students – British Columbia Component, 2009 SCC 31 (CanLII) (GVTA) and AFDI, where courts concluded that a valid statutory objective for municipalities was to provide a safe and welcoming transit system, the Court agreed with the City that prohibiting hateful advertisements or propaganda on City property “…will ensure a tranquil, smoothly functioning transit system, with no risk of danger due to inflamed emotions or devastated psyches” (at para 46). The Court had no difficulty applying clause 14 of the Code and concluded, as in the previous decisions of GVTA and AFDI, that “…all ads must comply with the Code, they must not be offensive to the general public, and they must be free of demeaning, derogatory, exploitative or unfair comment or representation of any person or group of persons” (at para 47). Finally, the Court seems to have accepted that municipal policies or contractual agreements entered into between municipalities and third party advertising contractors might also apply to set the boundaries of the statutory objectives (at para 50). In all, the Court’s conclusion that “…the statutory objectives generally relate to protecting the public from harm and providing a safe environment within the municipality, but particularly on municipal transit” (at para 51) is consistent with the previous decisions in GVTA and AFDI.

Do these statutory objectives interfere with CCBR’s freedom of expression and if so, is that interference proportional?

In accordance with the GVTA decision, the Court rightly concluded that advertising space on buses was a type of public space which attracted the protection of section 2(b) of the Charter (at para 52). However, the Court was also mindful of the core values which freedom of expression seeks to protect (at paras 54-55) and hinged its decision regarding proportionality to three factors: the hateful nature of the CCBR advertisement, the captive audience doctrine, and the harmful impact on society of the CCBR advertisement.

i. Was the CCBR advertisement hateful? 

The City argued that the CCBR advertisement constituted hateful propaganda because it compared women who have exercised their legal right to abortion to “killers or murderers” and because the advertisement “incites anger and revulsion towards these women” (at para 76). In assessing the true purpose behind the CCBR advertisement, the Court took a similar contextual approach as in AFDI and examined the content of the CCBR website. The Court concluded that the various statements on the website which characterized abortion as killing or as evil “…are strong statements that vilify women who have chosen, for their own reasons, to have an abortion; they are not [contrary to what the CCBR argued] merely informative and educational” (at para 80). The Court concluded that it did not have to decide whether the advertisement constituted hate speech because in all respects the City had exercised its discretion reasonably in refusing to post the advertisement (at para 82).

Taken together, the courts’ decisions in AFDI and CCBR clearly establish that advertising which singles out specific groups of people for vilification or disparaging characterization is not protected speech. This makes good sense – speech which targets certain groups of people, especially those who are otherwise exercising their legal rights (in this case, women seeking abortions) cannot be said to promote the objectives which underlie freedom of expression (at para 55). 

ii. The Captive Audience Doctrine?

While this doctrine has been the subject of academic discussion and jurisprudence in the United States, it has found little application in Canada. I have always found this puzzling. In my view, freedom from unwanted speech is a necessary corollary to the freedom to speak. If the underlying purpose of freedom of expression is to encourage a civil society in which everyone can freely participate as equals in the exchange of ideas without being made to feel marginalized, then precluding a listener’s freedom from unwanted speech distorts the careful equilibrium between the freedoms of both the speaker and listener:

…Much has been said and written, throughout the captive-audience controversy, on the relations between “freedom of speech” and “freedom from unwanted speech.” The question whether the former includes the latter, as a matter of sound construction, is a technical one of great difficulty. What is perfectly clear is that the claim to freedom from unwanted speech rests on grounds of high policy and on convictions of human dignity closely similar to if not identical with those classically brought forward in support of freedom of speech in the usual sense. Forced listening destroys and denies, practically and symbolically, that unfettered interplay and competition among ideas which is the assumed ambient of the communicating freedoms… (Charles L. Black Jr. “He Cannot Choose But Hear: The Plight of the Captive Auditor” (1953) Faculty Scholarship Series Paper 2585, at page 967

In CCBR, the Court endorsed the captive audience doctrine and cited with approval a passage from the case of Ontario (Attorney General) v Dieleman, 1994 CanLII 7509 (ON SC), 117 DLR (4th) 449, which explains the captive audience doctrine in the following terms (CCBR at para 57, citing Dieleman at para 640, which in turn quoted from Lehman v City of Shaker Heights, 418 US 298 (1974) at 306-7):

…if we are to turn a bus or streetcar into either a newspaper or a park, we take great liberties with people who because of necessity become commuters and at the same time captive viewers or listeners.

In asking us to force the system to accept his message as a vindication of his constitutional rights, the petitioner overlooks the constitutional rights of the commuters. While the petitioner clearly has a right to express his views to those who wish to listen, he has no right to force his message upon an audience incapable of declining to receive it. In my view the right of the commuters to be free from forced intrusions on their privacy precludes the city from transforming its vehicles of public transportation into forums for the dissemination of ideas upon this captive audience.

In Canada, the most comprehensive treatment of the captive audience doctrine occurred in the case of R v Breeden, 2009 BCCA 463 (CanLII), where the BC Court of Appeal confirmed that political protest in the lobby of a courthouse, municipal hall or a fire station did not attract Charter protection. At paragraph 34, the Court of Appeal held that the values which underlie freedom of expression, namely democratic discourse, truth finding and self-fulfillment, are undermined when observers are not given a practical choice to avoid witnessing the expressive activity. The approach in Breeden is very similar to that taken in CCBR where the Court agreed that “…forced listening is antithetical to the principles underlying freedom of expression, since it denies the competition of ideas that is assumed to be foundation of free communication” (at para 58; the Court cites Breeden at para 56).

While the captive audience doctrine has not been applied as frequently in Canada as it has in the U.S., this is not for lack of appropriate opportunities. I have previously argued here and in a blog post about R v Booyink, 2013 ABPC 185 (CanLII) that the captive audience doctrine should be invoked more often. In Booyink, members of the CCBR held signs, handed out pamphlets and sought to engage passengers in conversation about the evils of abortion at the luggage carousel of the Calgary airport. My co-authors and I argued that the captive audience doctrine could well have applied given that passengers picking up their luggage would not have been able to avoid the placards bearing images of bloody fetuses which were being waved about in very close proximity. The same argument could have been made for applying the captive audience doctrine to the facts in the AFDI case.

In American jurisprudence, one of the hallmark characteristics of a captive audience is that the message must be thrust on an audience in such a manner that the listener cannot reasonably avoid it. Consequently, a listener who can take reasonable steps to avoid the offending speech cannot be said to be harmed and therefore does not require the use of the doctrine. It is unlikely that a captive audience exists if the listener can avoid the message by averting their eyes, turning away, or crossing the street. In Breeden, the BC Court of Appeal distinguished the case of a truly captive listener who is confronted with a signboard in a confined building such as a foyer with someone in a sidewalk or concourse area (at para 34). The argument was that sidewalks and concourses allow an unwilling listener to take evasive action and avoid the unwanted message. One might have thought that this reasoning would similarly have applied to members of the public of Grande Prairie who might have happened to see the CCBR advertisement – they could just as easily have averted their eyes or turned away from the bus. However, in CCBR, the Court was not prepared to recognize this distinction:

…ads on city buses are viewed in very close proximity by those who have no other means of transportation. They are also viewed in close proximity by other users of the road, be they drivers of passengers in their own private vehicles or taxis, cyclists, or pedestrians, etc. City bus ads can also be seen from inside homes, while playing at playgrounds, or simply walking on city sidewalks. (at para 69)

…Everyone sees a city bus, from the youngest to the oldest citizens of a municipality. Consequently, the messages carried on city buses must be appropriate for such a diverse audience. (at para 70)

There is a good reason for the Court’s finding on this point, and it has to do with the nature of the CCBR advertisement. Had the advertisement been what the CCBR argued it was intended to be, “merely informative and educational” (at para 77), then the Court may have been less prepared to use the captive audience doctrine. But what clearly animated the Court’s decision was its view of the advertisement’s harmful nature and the fact that the images, when viewed by the general public, would cause psychological harm, especially to vulnerable groups such as young, unprepared, viewers.

iii. Was the CCBR Advertisement Harmful to the Community?

In CCBR, the Court acknowledged GVTA’s reference to a community standard test for controversial advertising (at para 62). In the post on the AFDI decision, I questioned the court’s adoption of a community moral standards test notwithstanding its (obiter) endorsement in GVTA. In my view, such a test is vague, impossible to quantify, and precludes controversial, but otherwise legitimate forms of speech. Realistically, how do you apply a community standard of tolerance test to a public policy issue as divisive as abortion?

The AFDI post suggests that a better way to assess restrictions on controversial speech in public places is to apply an objective, harm-based assessment which recognizes that controversial messaging advertised on municipal property must be considered in its unique context:

  • Messages placed in public spaces such as existing advertising signs or billboards located on municipal infrastructure, buildings, buses, are likely to be viewed by a large number of people given their privileged location.
  • Anyone reading these messages may believe that these advertisements are condoned by their public officials and reflect a municipality’s official views.
  • Victims of these messages will be made to feel inadequate, shameful, and vulnerable and will likely feel powerless or marginalized. Supporters of the messages will feel vindicated in their views and will likely be emboldened to perpetuate the messages through thoughts and acts.

It does not appear that the Court in CCBR applied the community standards test as had previously been done in AFDI. Rather, the Court accepted that ads placed on the sides of city buses have an elevated impact because of their unique location and unavoidably large viewership:

A critical aspect of the context in this case is the public nature of the City’s buses…buses are operated on city streets and form an integral part of the public transportation system. The general public using the streets, including but not limited to those who become bus passengers, is exposed to the messages placed on buses. (at para 67)

…A bus exterior is a location where it is almost impossible to avoid the expression…If the same message were being expressed along a city sidewalk, for example, only those in the vicinity would see or hear it, and any person seeking to avoid the expression could cross the street to the other side…This is not the case with a city bus. (at para 69)

Having distinguished the difference between an advertisement placed on city property and a private sign held by someone on a sidewalk, it was but a short stretch for the Court to consider the harmful psychological impact that the CCBR advertisement would likely have for general public viewership:

If it is acceptable and justifiable to restrict the audience for certain types of content, then the corollary is that it must be acceptable and justifiable to restrict the content when it is impossible to restrict the audience, so as to protect the same vulnerable groups. Children should not be forced to view potentially upsetting images and phrases in a public place. (at para 72)

I find the ad is likely to cause psychological harm to women who have had an abortion or who are considering an abortion. It is also likely to cause fear and confusion among children who may not fully understand what the ad is trying to express. They may not be familiar with the word abortion, but they can read and understand that “something” kills children. Expression of this kind may lead to emotional responses from the various people who make use of public transit and other users of the road, creating a hostile and uncomfortable environment. The creation of such an environment is antithetical to the statutory objective of providing a safe and, in particular, a welcoming transit system, within the greater context of providing services and developing and maintaining a safe and viable community. (at para 82)

In CCBR, the Court recognized that hateful or offensive expressive activity in a prominent public space can have a harmful psychological impact on the well-being of civil society. While I agree completely, I would hasten to add that such a conclusion needs to be arrived at with care. Here, when the City refused to post the CCBR advertisement, no public complaints had yet been received. Assessing the advertisement’s harmful impact is, to a certain extent, speculative, and we need to be careful that we’re not underestimating society’s tolerance for controversial and provocative messaging. And, we need to be mindful that a test which references community harm doesn’t turn into a test of community censorship.

This post may be cited as: Ola Malik “Lost and Found? – The Captive Audience Doctrine Returns in Canadian Centre for Bio-Ethical Reform v The City of Grande Prairie (City)” (19 January, 2017), online: ABlawg,
http://ablawg.ca/wp-content/uploads/2017/01/Blog_OM_GrandePrairie.pdf

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