Canada v. Canada (Ship-Source Oil Pollution Fund)

Canada v. Canada (Ship-Source Oil Pollution Fund)
Court (s) Database
Federal Court Decisions
Date
2022-09-21
Neutral citation
2022 FC 1310
File numbers
T-1094-21, T-1104-21
Notes
Reported Decision
Decision Content
Date: 20220921
Dockets: T-1094-21
T-1104-21
Citation: 2022 FC 1310
Ottawa, Ontario, September 21, 2022
PRESENT: The Honourable Madam Justice Strickland
Docket: T-1094-21
BETWEEN:
HER MAJESTY THE QUEEN IN RIGHT OF CANADA
Appellant
and
THE ADMINISTRATOR OF THE SHIP-SOURCE OIL POLLUTION FUND
Respondent
Docket: T-1104-21
AND BETWEEN:
HER MAJESTY THE QUEEN IN RIGHT OF CANADA
Applicant
and
THE ADMINISTRATOR OF THE SHIP-SOURCE OIL POLLUTION FUND
Respondent
JUDGMENT AND REASONS
Overview
[1] These proceeding involve statutory appeals brought pursuant to s 106(2) of the Marine Liability Act, SC 2001 c 6 [MLA] and, applications for judicial review, all arising from two decisions of the Administrator [Administrator] of the Ship-source Oil Pollution Fund [SOPF] disallowing claims made by the Canadian Coast Guard [CCG]. The CCG claims were made pursuant to s 103(1) of the MLA and sought compensation for costs and expenses incurred by the CCG to prevent anticipated oil pollution damage from incidents involving two vessels: the Miss Terri and the Stelie II. The Administrator found that the claims were made outside of the limitation period established by s 103(2)(a) of the MLA and disallowed them.
[2] The Applicant/Appellant [Canada] brought two appeals, one in respect of each vessel, pursuant to s 106(2) of the MLA, and also two applications for judicial review, one in respect of each vessel, challenging the Administrator’s decisions. By orders of Prothonotary Aalto, dated July 16, 2021, both appeals were consolidated as Court File No. T-1094-21 and both applications for judicial review were consolidated as file Court File No. T-1104-21. It was also ordered that that Court Files Nos. T-1094-21 and T-1104-21 would be heard together.
Factual Background
Miss Terri
[3] According to the claim submission of the CCG to the Administrator, on February 23, 2018, the Harbour Master for Discovery Harbour, at Campbell River, British Columbia, reported to the CCG that the Miss Terri’s bilge pump was operating continuously due to an ingress of water. The Harbour Master, assisted by the CCG, installed additional bilge pumps to keep the vessel afloat. Initial efforts to contact the vessel owner were not successful and the Harbour Master continued to maintain a watch on the vessel. The bilge pumps were reported as pumping water for 30 minutes a day, twice a day. When the vessel owner was contacted, he was informed that he was responsible for mitigating the risk of a discharge of oil pollution and that he must submit a plan for doing so. The owner did not provide any mitigation plan.
[4] On September 11, 2018, a CCG Environmental Response [CCG ER] crew were at the Discovery Harbour marina responding to another incident. They observed the bilge pumps of the Miss Terri running 30 minutes of every hour. The vessel owner was advised of the situation but did not respond. On September 18, 2018, the Harbour Master reported that the bilge pumps were continuously pumping water and he could not continue to monitor the vessel and maintain the pumps. Due to the imminent threat of the Miss Terri sinking and polluting the marine environment, the CCG ER retained Saltair Marine [Saltair] which towed the Miss Terri to a facility at Ladysmith, British Columbia on September 19, 2018. The CCG ER also retained a marine surveyor, Building Sea Marine, to attend on the vessel.
[5] Further efforts to have the vessel owner take measures to mitigate the threat of marine pollution were unsuccessful. On November 1, 2018, Saltair reported to the CCG that the Miss Terri required constant pumping to keep it afloat. On November 6, 2018, the CCG instructed Saltair to remove the Miss Terri from the marine environment. On removal, the vessel was found to have significant hull damage below the waterline. The Miss Terri was deconstructed by Saltair between November 29, 2018 and December 14, 2018 at the CCG’s expense. The CCG made a claim to the Administrator, by letter dated August 27, 2020, in the amount of $88,576.24. The submission’s supporting materials included invoices from Saltair and a survey report entitled “‘Miss Terri’ Survey for Condition & Salvage Value” prepared by Building Sea Marine [Miss Terri Survey Report].
[6] By letter dated February 23, 2020, the Administrator wrote to the CCG informing it that the subject matter of the claim involved a novel issue of mixed fact and law. The Administrator stated that although the materials submitted by the CCG “do not directly document the discharge of oil from the vessel…a careful review of the evidence suggests that a discharge did occur. As a result of that probable determination, the claim was likely submitted to the Administrator after the applicable prescription date and should therefore be rejected”. The Administrator attached a 24-page draft decision and invited the CCG to provide any submissions or feedback on the expected determination that the Miss Terri had discharged oil, as well as how the limitation period ought to be applied on the facts. By letter dated March 30, 2021, the CCG provided submissions in response to the Administrator’s draft reasons.
[7] The Administrator issued a “Letter of Disallowance” on May 17, 2021 with respect to the CCG’s Miss Terri claim. This is one of the decisions that is the subject of an appeal and an application for judicial review now before me.
Stelie II
[8] According to the claim submission of the CCG to the Administrator, on March 23, 2016, Transport Canada [TC] was informed by the Royal Canadian Mounted Police [RCMP] that the Stelie II had broken free of its mooring at Northern Boat Repair Ltd.’s [NBR] facility in Port Saunders, Newfoundland and Labrador, during high winds and was starting to sink in the ice. The vessel was resting against an adjacent dock causing damage and a concern had also been raised about pollutants on board. TC contacted the CCG ER to inform it of the pollution potential.
[9] The CCG ER personnel attended on the vessel on March 25, 2016. The vessel was found with no mooring lines and a substantial starboard list. The CCG narrative reported that upon entry, a strong odour of diesel fuel was noted. The engine room was three-quarters full of water, and pollutants consisting of lube oil, hydraulic oil, diesel oil and debris were described as scattered everywhere. There were open trays with oil, buckets of oil, paint cans, fire extinguishers on deck, flares scattered about and other pollutants were reported as clearly visible even though the vessel had no lights or power. The CCG ER determined that the vessel posed an immediate potential pollution threat and the best immediate course of action would be to pump the ingress water out of the vessel. The CCG ER commenced dewatering the vessel on March 25, 2016. This was completed on March 26, 2016 at which time the vessel was lifted out of the water and stored at the CCG’s expense.
[10] Various efforts to have the vessel owner take measures to mitigate the threat of marine pollution and assume financial and other responsibility for the vessel were unsuccessful.
[11] On March 29, 2016, and April 7, 2016, the CCG corresponded with the Administrator, alerting it to the situation. On March 8, 2018, at the request of the CCG, the Administrator wrote to the CCG advising, based on the CCG’s representations that the Stelie II was not the source of a discharge of pollutants and the actions taken by the CCG were taken in regard to a threat of pollution, that the applicable limitation period before which the CCG could bring a claim to SOPF was five years from the date of the occurrence, represented as being March 24, 2016. Accordingly, the CCG’s claim would be admissible until March 25, 2021.
[12] The CCG sent an “interim” submission to the Administrator on April 30, 2018, to be held in abeyance until such time as the response operations had been resolved. By email of July 5, 2018, the Administrator advised the CCG that the interim claim had not suspended or otherwise affected the limitation period. By reply email, counsel for the CCG confirmed that they shared this understanding.
[13] The Stelie II remained in storage for some time, in part due to an ownership dispute. The CCG retained TriNav Marine Design Inc. [TriNav] to conduct a vessel survey. TriNav completed its assessment of the vessel on August 18, 2016 and prepared a report entitled “‘Stelie II’ Vessel Survey” dated September 23, 2016 [Stelie II Survey Report]. On October 26, 2016, the CCG ER hired vacuum trucks from Pardy’s Waste Management and Industrial Service Limited [Pardy’s] to remove pollutants on board the Stelie II. On February 14, 2018, the CCG deemed the vessel to be an unacceptable risk and that its deconstruction was the only feasible option to prevent future oil pollution to the marine environment. The Stelie II was deconstructed in August 2019 at the CCG’s expense. The CCG made a claim to the Administrator in respect of its costs and expenses incurred with respect to the Stelie II in the amount of $114,897.43 on October 7, 2020.
[14] By email dated February 26, 2021, counsel for the Administrator wrote to counsel for the CCG, advising that the Administrator had concerns about the CCG’s submission that the Administrator wished to bring to the CCG’s attention and, that the concerns resulted in an invitation to submit supplementary documentation. The email states that “it appears to the Administrator that the STELIE II probably did in fact cause a discharge of oils at some point in late March of 2016”. Counsel for the Administrator stated that while the evidence did not expressly record any such discharge, one might be reasonably inferred because the CCG’s narrative reported that the Stelie II was listing severely with open trays and buckets of oil on its deck. This list may have caused some quantity of these oils to enter the water. Further, the CCG’s documentation offered no explanation as to what was done with the presumably large volume of oily water pumped from the Stelie II on March 25 and 26, 2016. Without any evidence showing that this contaminated water was isolated and disposed of through appropriate waste streams, it appeared likely that some or all of it ended up in the waters of the harbour. This discharge would probably have resulted in oil pollution damage, which would engage the two-year limitation period. This period would have expired in late March 2018. As a result, the claim might not be eligible for compensation. Counsel for the Administrator invited the CCG to present all relevant documentation in its possession, as well as any comment it may have, by March 31, 2021.
[15] Counsel for the CCG provided a response submission by email dated March 31, 2021.
[16] The Administrator issued a “Letter of Disallowance” dated May 26, 2021 with respect to the CCG’s Stelie II claim. This is one of the decisions that is the subject of an appeal and application for judicial review now before me.
Relevant Legislation
Marine Liability Act, SC 2001 c 6* (*version in force from 2015-06-08 to 2018-12-12, the time period relevant to these matters)
103 (1) In addition to any right against the Ship-source Oil Pollution Fund under section 101, a person who has suffered loss or damage or incurred costs or expenses referred to in section 51, 71 or 77, Article III of the Civil Liability Convention or Article 3 of the Bunkers Convention in respect of actual or anticipated oil pollution damage may file a claim with the Administrator for the loss, damage, costs or expenses.
103 (2) Unless the Admiralty Court fixes a shorter period under paragraph 111(a), a claim must be made
(a) within two years after the day on which the oil pollution damage occurs and five years after the occurrence that causes that damage; or
(b) if no oil pollution damage occurs, within five years after the occurrence in respect of which oil pollution damage is anticipated.
105 (1) On receipt of a claim under section 103, the Administrator shall
(a) investigate and assess it; and
(b) make an offer of compensation to the claimant for whatever portion of it that the Administrator finds to be established.
…
105 (3) When investigating and assessing a claim, the Administrator may consider only
(a) whether it is for loss, damage, costs or expenses referred to in subsection 103(1); and
(b) whether it resulted wholly or partially from
(i) an act done or omitted to be done by the claimant with intent to cause damage, or
(ii) the claimant’s negligence.
106 (2) A claimant may, within 60 days after receiving an offer of compensation or a notification that the Administrator has disallowed the claim, appeal the adequacy of the offer or the disallowance of the claim to the Admiralty Court, but in an appeal from the disallowance of a claim, that Court may consider only the matters described in paragraphs 105(3)(a) and (b).
Canada Shipping Act, SC 2001, c 26 [CSA]
180 (1) If the Minister of Fisheries and Oceans believes on reasonable grounds that a vessel or an oil handling facility has discharged, is discharging or may discharge a pollutant, he or she may
(a) take the measures that he or she considers necessary to repair, remedy, minimize or prevent pollution damage from the vessel or oil handling facility, including, in the case of a vessel, by removing — or by selling, dismantling, destroying or otherwise disposing of — the vessel or its contents;
(b) monitor the measures taken by any person or vessel to repair, remedy, minimize or prevent pollution damage from the vessel or oil handling facility; or
(c) if he or she considers it necessary to do so, direct any person or vessel to take measures referred to in paragraph (a) or to refrain from doing so.
[17] Unless otherwise specified, all references to the MLA in these reasons are to the version that was in force at the time of the Miss Terri and Stelie II incidents, as set out above.
Decisions Under Review
The Miss Terri
[18] In the May 17, 2021 Letter of Disallowance, the Administrator determined that the limitation period under s 103(2)(a) of the MLA applied and had expired prior to the submission of the CCG’s claim. Therefore, the submission was not admissible under s 103(1) of the MLA.
[19] After reviewing the narrative of the incident as submitted by the CCG, the Administrator stated that in determining which limitation period applied, it was important to first determine if there was a discharge of oil from the vessel. The Administrator noted the absence of an “explicit observation” of oil in the water originating from the vessel. However, this did not mean that no discharge occurred. There was indirect evidence of a discharge, or more likely multiple discharges, occurring prior to September 4, 2018. The Administrator stated it was more probable than not that rain water would have regularly entered the vessel, become contaminated with oil, and then been pumped overboard.
[20] The Administrator stated that the layout of the vessel and its physical condition provided important evidence. The Miss Terri Survey Report found that most of the paying compound was missing, many of the (deck) planks had gone soft or were rotted entirely and that rain water could have penetrated most of the areas of the deck that were exposed to the elements. The Administrator found that that the surveyor’s observations and conclusions with respect to the deck were likely correct and, on a balance of probabilities, that rain would have penetrated the deck and entered the below-deck spaces throughout the vessel, including the forward spaces.
[21] Further, the Miss Terri Survey Report also noted that the vessel’s machinery space and forecastle bilges were “moderately fouled with oil” and photographs from that report showed oily bilges in the main engine, forecastle and stern gland areas of the vessel. Based on this, as well as photographs from Saltair, the Administrator stated that it was accepted that both the machinery space and the forecastle space were contaminated with oil such that water coming into contact with those spaces would be contaminated with oil. The Administrator noted that there was no evidence that the oily state of the vessel had changed between February 23, 2018 (when the CCG had first installed additional bilge pumps) and when it was inspected by Building Sea Marine (on September 18, 2018).
[22] Although there was no direct evidence as to what happened to the vessel between those dates, the Administrator had already determined that it was more likely than not that when rain fell on the vessel, the rain water penetrated the deck, became contaminated with oil and was then discharged from the aft pumps. Further, that it was “accepted” that between February 23 and September 3, 2018 there had been significant and multiple rainfalls. The Administrator received the CCG’s submission on September 4, 2020 but concluded that the discharges of oil occurred prior to September 4, 2018.
[23] As the claim was not submitted within two years of those discharges, the Administrator stated that the shortest of the limitation periods under s 103(2) might apply and that an examination of whether the claim could be admitted under s 103(1) was required. The Administrator then embarked on a lengthy exercise of statutory interpretation of s 103(2)(a) and concluded that the provision imposes a limitation period of two years after the oil pollution damage occurs as a result of an initiating incident. It further concluded that all claims stemming from the same facts, and all claimants were therefore subject to the same limitation period.
[24] The Administrator stated that the final determination to be made was whether the discharges that occurred caused “oil pollution damage” as defined in s 91(1) of the MLA and, based on its prior findings of fact, concluded that the discharges prior to September 4, 2018 likely caused oil pollution damage. As a result, the s 103(2)(a) limitation period expired prior to September 4, 2020 and the CCG’s claim was inadmissible under s 103(1).
[25] The Administrator then reviewed the response received from the CCG to the Administrator’s February 23, 2021 correspondence providing its draft decision. The Administrator understood the CCG to make two primary points. First, that the CCG handled the incident in accordance with threat assessment criteria in accordance with the CSA and there was no evidence that a discharge occurred. The Administrator stated that the CCG’s use of the CSA threat assessment was understandable but the Administrator did not agree that those criteria had any bearing on when the limitation period began to run. As such, the CCG’s response did not alter the Administrator’s factual determinations in that regard. Second, the CCG submitted that it was problematic for a claimant not to know when the limitation period begins to run. To this the Administrator agreed that under its interpretation, a claimant might lose the right to claim as a result of not being aware of when the limitation period began to run and a claim might even be barred before a claimant suffers damage. However, in the Administrator’s view, an alternative interpretation of s 103(2) allowing consideration of a claimant’s knowledge and subjective beliefs in determining when the limitation period begins to runs was not available. The relevant limitation period is focused on events affecting the subject ship, rather than a claimant’s role in those events. The Administrator concluded that its factual determinations and determinations of mixed fact and law did not change in light of the CCG’s response.
The Stelie II
[26] In the May 26, 2021 Letter of Disallowance concerning the Stelie II, the Administrator determined that that the limitation period under s 103(2)(a) of the MLA applied and had expired prior to the submission of the CCG’s claim. Therefore, the claim was not admissible under s 103(1) of the MLA.
[27] In support of that determination, the Administrator set out the exchanges between it and the CCG prior to its claim submission on October 8, 2020, including photographs provided by the CCG. The Administrator also noted the Stelie II Survey Report, which had been included with the CCG’s claim submission, finding that certain passages of that report were relevant to the determinations of the Administrator. In particular, references to the presence of oily water in various spaces on board the vessel. The Administrator also noted that the CCG notes submitted with its claim indicated that a pumper truck had been on standby for March 25, 2016.
[28] The Administrator then described its February 26, 2021 letter to the CCG outlining the Administrator’s concerns with the CCG’s claim and the CCG’s March 31, 2021 response. The Administrator described its investigation into whether a discharge had occurred, which was comprised of calls to the RCMP, who advised that none of its personnel were on scene, to the proprietor of the NBR facility who did not recall whether oil was visible in the harbour or on the ice around the Stelie II and, to Pardy’s who neither confirmed nor denied having been on scene and refused to discuss its CCG contracts without authorization to do so.
[29] According to the Administrator, whether the claim was submitted within the limitation period was an issue that required significant factual and legal determinations. The Administrator noted that there was some ambiguity in s 103(2)(a) of the MLA, but that it would first address whether the incident resulted in a “discharge” of oil, because “oil pollution damage” as defined in the MLA cannot occur without a discharge of some volume of oil.
[30] The Administrator determined that it was probable that a discharge of oil occurred as a result of the incident and the response to the incident. The Administrator first found that it was likely that some oil from the open containers on the vessel’s deck had escaped into the water. The Stelie II had begun to list on March 23 or March 24, 2016, and continued to do so until the pumping operation on March 25, 2016. Photographs on the record showed nothing in the vessel’s configuration that would have prevented oil stored in open containers on deck from escaping into the water while the vessel leaned heavily to starboard. Further, the containers themselves would have inevitably slid and jostled as the vessel listed. Second, stormy weather, which the Administrator stated it had determined was violent enough to sever the vessel’s mooring lines, caused the vessel to drift through ice and impact the other side of the dock facility. The Administrator noted that none of the photographs depicting the vessel’s starboard side and adjacent harbour ice appeared to show signs of escaped oils, however, that the absence of visual evidence was not wholly determinative of the issue. The Administrator stated that if a discharge had occurred, any resulting hydrocarbon staining may not be readily apparent from photographs taken from a distance and that any discharge may have been somewhat dispersed during the storm.
[31] In addition to the likely discharge from the containers on deck, the Administrator pointed to the fact that there had been significant water ingress into the Stelie II’s engine room (and other below-deck spaces) which was pumped directly from the engine room into the harbour. Referring to the CCG narrative, the Stelie II Survey Report, and photographs showing that sorbent materials were used in deconstruction, the Administrator found that the volume of water pumped overboard would have been substantial, that the water levels would have largely submerged the vessel’s machinery, and that the water within the vessel’s engine room must have been contaminated. While the CCG had submitted that the intake hose was placed deep within the vessel during dewatering so as not to discharge the oil which was floating on the surface of the water within the vessel, the Administrator stated that it did not have the benefit of a direct witness’s account as to what was done. Further, the CCG had claimed deconstruction costs, which are allowable if the vessel itself poses a threat of oil pollution, such as when a wooden vessel is so saturated with oil that, if submerged, its timbers would discharge oil. That being the case, submerging a hose deep into the water inside the engine room would not necessarily be sufficient to avoid a discharge of oil. The Administrator found that even if the oil on the surface of the water inside the Stelie II had been successfully avoided, it would not be safe to conclude that no discharge occurred.
[32] The Administrator stated that, notwithstanding the CCG’s position as to a lack of observation of a discharge and the positioning of the intake hose during dewatering, given the large volume of water pumped out and the contaminated state of the Stelie II, it was determined that a discharge occurred during the pumping operation. The oil in the open containers also had to be taken into account and this bolstered the determination that a discharge occurred during or before the CCG’s response on March 25 and 26, 2016.
[33] The Administrator then referenced its interpretation of s 103(2)(a) in the Miss Terri matter. First noting that the appropriate reading of s 103(2)(a) results in a limitation period of two years after the first instance of “oil pollution damage” that occurs as a result of an underlying incident and all claims stemming from the same facts are therefore subject to the same limitation period. Second, that the appropriate threshold for determining whether “oil pollution damage” as having occurred is very low.
[34] The Administrator determined, on the balance of probabilities, that the discharge or discharges that that occurred between March 23 and 26, 2016, caused oil pollution damage. Therefore, the s 103(2)(a) limitation period expired at some time between March 23 and 26, 2018. As the claim was not submitted within two years of those dates, the claim was inadmissible under s 103(1), and was disallowed.
Issues
[35] In my view, the issues in these matters can be appropriately framed as follows:
Are challenges to the decisions of the Administrator disallowing the claims, based on the limitation periods in s 103(2) of the MLA, properly taken as applications for judicial review or, as statutory appeals under s 106(2) of the MLA?
What is the applicable standard of review?
Did theAdministrator commit a reviewable error in finding that the s 103(2)(a) limitation period applied and that the CCG was out of time to file a claim pursuant to s 103(1) with respect to either or both of the Miss Terri or the Stelie II claims?
Issue 1: Are these matters properly heard as applications for judicial review or as statutory appeals pursuant to s 106(2) of the MLA?
[36] Given the uncertainty as to the appropriate procedure, and erring on the side of caution, Canada filed both applications for judicial review (one in respect of each vessel), and appeals (one in respect of each vessel). The parties submit that direction from the Court is required to determine whether Canada’s challenges to the decisions of the Administrator – and future challenges to decisions disallowing claims based on the limitation periods – should proceed as applications for judicial review or as appeals.
[37] I agree with the parties that this issue requires resolution as, on an immediate basis, it impacts the standard(s) of review applicable to the substantive issue of whether the Administrator erred in finding that the CCG’s claims were not made within the applicable limitation period. I also agree with Canada that resolving this issue now may prevent future claimants from missing the 30-day filing timeframe for judicial review on the belief that the 60 day timeframe for a statutory appeal applies.
Canada’s position
[38] Canada submits that many statutes provide for both appeal and judicial review mechanisms in different contexts, indicating two roles for reviewing courts. Further, it is notable that statutory appeal mechanisms are often circumscribed, limiting the types of questions on which a party may appeal, and that the existence of such a circumscribed right of appeal does not preclude judicial review of those aspects of such decisions to which the appeal mechanism does not apply. On review of such questions to which the statutory appeal does not apply, the presumptive standard of review of reasonableness applies (citing Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65 at para 52 [Vavilov]).
[39] Canada submits that on a plain reading the appeal mechanism in s 106(2) of the MLA allows the Court to consider “only” the matters listed in s 105(3), which do not include consideration of a challenge to the Administrator’s determination on a time limitation. Canada submits that it therefore appears that such a challenge would properly proceed as a judicial review on the reasonableness standard.
The Administrator’s position
[40] The Administrator submits that s 106(2) of the MLA is ambiguous and therefore requires statutory interpretation.
[41] The Administrator states that on a “strictly literal interpretation” of s 106(2), an appeal can be taken following either an offer of compensation or the disallowance of a claim. However, that the right of appeal under s 106(2) is not restricted – only the issues the Court can consider are restricted. That is, the right of appeal appears to be broader than the scope of review during an appeal. The Administrator submits that this is potentially problematic as, in the normal course, the right to judicial review arises only when a party has exhausted all other avenues of review. Under s 106(2), the right of statutory appeal covers all conceivable issues arising with respect to a disallowance but, ultimately, given the restricted scope of review, the Court may lack jurisdiction to afford the remedy sought. Thus, the only recourse is judicial review, which must be commenced within 30 days, as opposed to the 60-day period for filing an appeal. The Administrator submits that these deadlines mean that claimants erring on the side of caution would need to pre-empt the possible failure of an as-yet unfiled appeal by filing a judicial review application within 30 days – but doing so would, as noted above, be technically premature.
[42] The Administrator submits that an interpretation which would allow issues for which no remedy appears to be available by way of s 106(2) (i.e. those issues that required consideration of matters outside the s 105(3) factors) to proceed immediately to judicial review is also problematic as the same fact set could lead to dismissal for two different reasons – one of which might be covered by the right of appeal and the other by judicial review. This, in turn, could lead to two different proceedings reviewing the administrative decision, and potentially the same facts, on different standards of review.
[43] The Administrator submits that a purposive reading of ss 103 to 106 of the MLA can avoid this uncertainty in the application of s 106(2). This would entail reading the reference in s 105(3) to “loss, damage, costs or expenses referred to in subsection 103(1)” as also including the limitation periods in s 103(2) on the basis that s 103(2) is intrinsically linked to s 103(1) in that it specifies when “loss, damage, costs or expenses” may be claimed. In turn, this would avoid any uncertainty concerning s 106(2).
[44] The Administrator also suggests that there is some historic support for its proposed interpretation. This is because before the MLA came into force, the SOPF was governed by the CSA. Subsection 710(1) of the version of the CSA then in effect was analogous to MLA sections 103(1) and (2). In the CSA, the predecessor of ss 103 and 105 were built into a single section. Thus, the restriction on the Administrator’s authority when investigating and assessing a claim did not give rise to difficulty in the context of a limitation period because the claims provision which it pointed to, s 710(1), included the limitation periods. In turn, the appeal provision, s 711(2), therefore also permitted an appeal of claims dismissed due to missed limitation periods. The Administrator submits that a review of Hansard does not indicate that there was an intention by Parliament to change how the former s 710 was to function when it was removed from the CSA to the MLA and suggests that this change, that is, the removal of the limitation period provisions from the claims provision, may have been inadvertent.
[45] The Administrator submits that “[a]n interpretation that treats subsection 103(2) as modifying 103(1), such that it comes within the jurisdictional provision [s 105(3)] and therefore the appeal provision [s 106], therefore has considerable merit”.
Analysis
[46] The principles of statutory interpretation that have application in this matter are well established by the jurisprudence of the Supreme Court of Canada. When interpreting a statute, “the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament” (Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 SCR 27 at para 21, 1998 CanLII 837 (SCC), referencing Elmer Driedger in Construction of Statutes, 2nd ed (Toronto: Butterworths, 1983) 87; Bell ExpressVu Limited Partnership v Rex, 2002 SCC 42 at para 26 [Bell ExpressVu]).
[47] This was subsequently restated and elaborated upon in Trustco v Canada, [2005 SCC 54 [Trustco]:
10 It has been long established as a matter of statutory interpretation that “the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament”: see 65302 British Columbia Ltd. v. Canada, [1999] 3 S.C.R. 804, at para. 50. The interpretation of a statutory provision must be made according to a textual, contextual and purposive analysis to find a meaning that is harmonious with the Act as a whole. When the words of a provision are precise and unequivocal, the ordinary meaning of the words play a dominant role in the interpretive process. On the other hand, where the words can support more than one reasonable meaning, the ordinary meaning of the words plays a lesser role. The relative effects of ordinary meaning, context and purpose on the interpretive process may vary, but in all cases the court must seek to read the provisions of an Act as a harmonious whole.
[48] Further, any ambiguity must be “real”, that is, the words of the provision must be reasonably capable of more than one meaning. However, the entire context of a provision must also be considered before it can determined if it is reasonably capable of multiple interpretations. “It is only when genuine ambiguity arises between two or more plausible readings, each equally in accordance with the intentions of the statute, that the courts need to resort to external interpretive aids” (Bell ExpressVu at para 29 citing Canadian Oxy Chemicals Ltd v Canada (Attorney General), [1999] 1 SCR 743 at para 14, 171 DLR (4th) 733, emphasis added in Bell ExpressVu). In every case, the Court must undertake a contextual and purposeful approach and then determine if there is ambiguity (Bell ExpressVu at para 30). The Court should therefore “suspend judgment on the precise scope” of the words at issue until the words can be “weighed in the light of successive circles of context” (Bristol-Myers Squibb Co v Canada (Attorney General), 2005 SCC 26 at paras 43-44).
[49] In this matter, s 106(2) of the MLA provides that a claimant may appeal the adequacy of a settlement offer or the disallowance of a claim but, in an appeal from the disallowance of a claim, the Court “may consider only the matters described in paragraphs 105(3)(a) and (b)”.
[50] Section 105 concerns the Administrator’s duties when a claim for compensation is received under s 103(1). Under s 105(1) the Administrator must do two things: investigate and assess the claim; and make an offer of compensation to the claimant for whatever portion of the claim the Administrator finds to be established. The Administrator is explicitly limited by s 105(3) in what factors or matters it may consider when doing so:
(3) When investigating and assessing a claim, the Administrator may consider only
(a) whether it is for loss, damage, costs or expenses referred to in subsection 103(1); and
(b) whether it resulted wholly or partially from
(i) an act done or omitted to be done by the claimant with intent to cause damage, or
(ii) the claimant’s negligence.
[51] I first admit to some initial doubt as to whether all of the potential procedural uncertainties raised by the Administrator serve to make s 106(2) as ambiguous as the Administrator asserts. However, concern as to the operation of s 106(2) is demonstrated by the very fact that Canada in these matters filed both appeals and applications for judicial review to err on the side of caution.
[52] I also agree with Canada that on a plain reading of s 106(2), it is clear that on appeal the Court can only consider the two matters specified in s 105(3) – and that these do not include limitation periods – which are found in s 103(2). On its face, and read in isolation, this would suggest that these proceedings should be heard as applications for judicial review. However, this is not necessarily sufficient to dispose of the matter, as demonstrated by the Supreme Court of Canada’s decision in McLean v British Columbia (Securities Commission), 2013 SCC 67:
[42] Beginning with the ordinary meaning of “the events”, on the surface it would appear that “the even[t]” giving rise to a proceeding under s. 161(6)(d) is the fact of “ha[ving] agreed with a securities regulatory authority” to be subject to regulatory action. By ordinary meaning, I refer simply to the “natural meaning which appears when the provision is simply read through” (Canadian Pacific Air Lines Ltd. v. Canadian Air Line Pilots Assn., [1993] 3 S.C.R. 724, at p. 735). The ordinary meaning would thus appear to support the Commission’s interpretation.
[43] However, satisfying oneself as to the ordinary meaning of the phrase “is not determinative and does not constitute the end of the inquiry” (ATCO Gas and Pipelines Ltd. v. Alberta (Energy and Utilities Board), 2006 SCC 4, [2006] 1 S.C.R. 140, at para. 48). Although it is presumed that the ordinary meaning is the one intended by the legislature, courts are obliged to look at other indicators of legislative meaning as part of their work of interpretation. That is so because [w]ords that appear clear and unambiguous may in fact prove to be ambiguous once placed in their context. The possibility of the context revealing a latent ambiguity such as this is a logical result of the modern approach to interpretation.
(Montréal (City) v. 2952-1366 Québec Inc., 2005 SCC 62, [2005] 3 S.C.R. 141, at para. 10)
[44] That possibility is realized here. Though the ordinary meaning seems apparent enough, digging deeper into the context and purpose of the provision casts some doubt on that conclusion — and introduces the possibility of another reasonable interpretation.
[53] Ultimately, I am persuaded that s 106(2), viewed in the context of related provisions in s 105(3) and 103(1) and (2), gives rise to latent ambiguity. That is, the “matters” referred to in s 106(2) are explicitly only those described in s 105(3)(a) and (b). Paragraph 105(3)(a) concerns whether a claim is “for loss, damage, costs or expenses referred to in subsection 103(1)”. The ambiguity pertains to whether s 103(2), which contain