100193 P.E.I. Inc. v. Canada

100193 P.E.I. Inc. v. Canada
Court (s) Database
Federal Court Decisions
Date
2015-07-30
Neutral citation
2015 FC 932
File numbers
T-378-07
Decision Content
Date: 20150730
Docket: T-378-07
Citation: 2015 FC 932
Ottawa, Ontario, July 30, 2015
PRESENT: The Honourable Mr. Justice Boswell
BETWEEN:
100193 P.E.I. INC., 100259 P.E.I. INC., 100412 P.E.I. INC., ROBERT ARSENAULT, JOSEPH AYLWARD, WAYNE AYLWARD, B & F FISHERIES LTD., BERGAYLE FISHERIES LTD., JAMES BUOTE, BULLWINKLE FISHERIES LTD., C.D. HUTT ENTERPRISES LTD., CODY-RAY ENTERPRISES LTD., DALLAN J. LTD., RICHARD BLANCHARD, EXECUTOR OF THE ESTATE OF MICHAEL DEAGLE, PAMELA DEAGLE, BERNARD DIXON, CLIFFORD DOUCETTE, FISHING 2000 INC., KENNETH FRASER, FREE SPIRIT INC., TERRANCE GALLANT, BONNIE GAUDET, DEVIN GAUDET, NORMAN GAUDET, PETER GAUDET, RODNEY GAUDET, TAYLOR GAUDET, GAVCO FISHING ENTERPRISES LTD., CASEY GAVIN, JAMIE GAVIN, LEIGH GAVIN, SIDNEY GAVIN, GRAY LADY ENTERPRISES LTD., DONALD HARPER, HARPER'S FISH HOLDINGS LTD., JAMIE HUSTLER, CARTER HUTT, KRISTA B FISHING CO. LTD., LAUNCHING FISHERIES INC., TERRY LLEWELLYN, IVAN MACDONALD, LANCE MACDONALD, WAYNE MACINTYRE, DAVID MCISAAC, GORDON L. MACLEOD, DONALD MAYHEW, MEGA FISH CO. LTD., AUSTIN O'MEARA, PAMELA RICHARDS AND TRACEY GAUDET, ADMINISTRATORS OF THE ESTATE OF PATRICK ROCHFORD, TWIN CONNECTIONS INC., W.F.M. INC., WATERWALKER FISHING CO. LTD. AND BOYD VUOZZO
Plaintiffs
And
HER MAJESTY THE QUEEN
Defendant
ORDER AND REASONS
I. Introduction [1] The Defendant brings this motion pursuant to subsection 213(1) of the Federal Courts Rules, SOR/98-106 [Rules], requesting a summary judgment dismissing the Plaintiffs’ action in its entirety. The Defendant argues that there is no genuine issue for trial with respect to any of the Plaintiffs' claims.
[2] The Plaintiffs dispute that argument and contend the Defendant's motion is an abuse of process. They argue that there are genuine issues for trial, and that their action - which seeks compensation for losses they allegedly sustained because of how the Defendant has managed the commercial snow crab fishery in the southern region of the Gulf of St. Lawrence since 2003 - should proceed to trial as soon as possible.
[3] The circumstances giving rise to the Plaintiffs’ action have been described in Arsenault v Canada, 2008 FC 299 at paragraphs 2-10, 330 FTR 8 [Arsenault (Martineau)], aff’d 2009 FCA 242 at paragraph 2, 395 NR 377 [Arsenault (FCA)], leave to appeal to SCC refused, 33385 (January 13, 2011)). These circumstances do not warrant repetition at length at the outset of these reasons as they will be discussed in detail when addressing the evidence below. For now, it suffices to outline some of the background allegations in support of the Plaintiffs’ claims.
II. Background [4] The individual Plaintiffs are residents of Prince Edward Island who have benefitted from licences to fish snow crab at some point during the last 12 years (or, in some cases, the personal representatives of those fishers’ estates). The corporate Plaintiffs are companies that operate or have operated the fishing enterprises of some of those fishers.
[5] Before the 1990s, the snow crab fishery was competitive, meaning that the 30 P.E.I. fishers licenced in Crab Fishing Areas [CFAs] 25 and 26 (sometimes called the “traditional inshore fishermen”) and the 130 fishers from New Brunswick, Quebec and Nova Scotia who were licenced to fish in CFA 12 (sometimes called the “traditional mid-shore fishermen”) were allowed to catch as many snow crabs as they could until the Total Allowable Catch [TAC] for their respective CFAs had been reached for the fishing season. Following a crisis in the snow crab stock, the competitive system was replaced by an individual quota system whereby each P.E.I. licence-holder received an equal share in the TAC of CFAs 25 and 26. The Plaintiffs allege that this change happened in 1993 through an oral agreement with the federal Department of Fisheries and Oceans [DFO] which guaranteed the P.E.I. fishers their share of the TAC in exchange for giving up the competitive fishery and agreeing to finance research and conservation measures.
[6] In 1997, CFAs 25 and 26 were integrated into CFA 12 and the fishers agreed to a five-year co-management approach. This approach established percentage shares of the TAC for the traditional fishers and a formula for sharing abundant stock once certain monetary thresholds were exceeded. It also involved an agreement whereby the fishers would contribute significant sums of money to DFO’s management activities, including trawl surveys and other scientific monitoring of the fishery.
[7] In 1999, the Supreme Court of Canada decided that some First Nations in Atlantic Canada had a treaty right to earn a moderate livelihood from the fishery (R v Marshall, [1999] 3 SCR 456, 177 DLR (4th) 513 [Marshall]). One way DFO attempted to introduce First Nations to the commercial fishery was by enticing fishers to voluntarily give up their licences in exchange for substantial sums of money. The Plaintiffs refer to this as a “buy-back” initiative, while the Defendant says DFO offered the traditional fishers “financial assistance in exchange for their voluntary retirement from the snow crab fishery.” It is not necessary for the purposes of this motion to decide the legal significance of these characterizations, but the Plaintiffs' terminology is more convenient and reflects the language commonly used at the time.
[8] At that time, fishers from Prince Edward Island held 30 of the 160 licences issued to fish snow crab and their combined share of the TAC was allegedly about 5.325%. Two of those licences were eventually “bought out” by DFO in an attempt to comply with the Marshall decision. Collectively, the Plaintiffs have stakes in 27 of the remaining licences issued to the traditional inshore fishermen.
[9] The present dispute originates from a three-year management plan which the Minister of Fisheries and Oceans [Minister] approved in 2003. This plan, according to the Plaintiffs, ultimately reduced each P.E.I. licence-holder’s share in the TAC in three ways: (1) by integrating CFA 18 with CFAs 12, 25, and 26, 4.7081% of the combined TAC was allocated to those fishers who had previously been licenced in only CFA 18; (2) by allocating about 15.8% of the TAC to First Nations, even though only about 5% of that quota had been freed up through voluntary agreements with existing fishers; and (3) by reserving an additional 15% of the TAC for new entrants, which reduced the share fished by the traditional fishers proportionately. Management plans since 2003 have essentially retained these allocations, although the Plaintiffs allege their shares of the TAC have been further reduced.
[10] The Defendant also began setting aside part of the snow crab resource to finance research activities that had previously been funded by the fishing industry. Fifty tonnes were set aside in 2003, and that number had increased to 1000 tonnes by the time the Federal Court of Appeal ruled that this practice was illegal in 2006 (Larocque v Canada (Minister of Fisheries and Oceans), 2006 FCA 237 at paragraphs 26-27, 270 DLR (4th) 552 [Larocque]).
[11] The Plaintiffs now seek compensation for the financial impact the above actions have had on them, and they allege the following causes of action in their thrice amended statement of claim:
• Breach of contract: The Plaintiffs claim that in 1999, following the Marshall decision, DFO contracted with them to ensure that the only way First Nations would gain access to the commercial fishery would be through a program where DFO “bought out” the existing licences of commercial fishers [Marshall Agreement]. The Plaintiffs allege that the Defendant breached that agreement in 2003 when they allocated about 15.8% of the TAC to First Nations, which was substantially more than the portion that had been freed up through the voluntary “buy-back” initiative.
• Expropriation: By allocating portions of the TAC to other groups, the Plaintiffs say the Defendant expropriated their shares in the resource without compensating them.
• Breach of fiduciary duty: Because the fishery is their sole source of income, the Plaintiffs claim the Defendant owes them a fiduciary duty to manage it well. In their view, the Defendant breached this duty by its actions and by failing to conserve and protect the snow crab stock in CFAs 12, 18, 25 and 26.
• Negligence: For similar reasons, the Plaintiffs assert that the Defendant owed them a duty of care which was breached when DFO negligently managed the fishery and made misrepresentations which induced the Plaintiffs to relinquish certain rights and invest in their fishing enterprises.
• Misfeasance in public office: The Plaintiffs claim that the Defendant’s actions were illegal and done in bad faith.
• Unjust enrichment: By reducing the Plaintiffs’ share of the TAC to meet extrinsic obligations which it would otherwise have had to pay for, the Plaintiffs allege that the Defendant has unjustly enriched itself.
III. Litigation History [12] In 2006, DFO had not spent all of the money it had been allocated to retire existing snow crab licences under the “buy-back” initiative. The Minister decided to offer a “voluntary payment” of $72,481.00 to each P.E.I. fisher in exchange for relinquishing their “eligibility to receive 14.6427% of the snow crab allocation” related to their licences. This offer included a release of liability though, and all but two of the P.E.I. fishers refused to accept the offer. Many of those fishers asked this Court to order the payment without requiring them to sign the release, but that application for judicial review was ultimately unsuccessful (Canada (AG) v Arsenault, 2009 FCA 300, 395 NR 223 [Arsenault (JR)]). Consequently, very few of the Plaintiffs received any money from this initiative.
[13] As for the present action, the Defendant originally moved to strike out the statement of claim, primarily arguing that the action could not proceed until after the Plaintiffs had challenged the legality of the Minister’s decisions by way of judicial review (citing Canada v Grenier, 2005 FCA 348, [2006] 2 FCR 287 [Grenier]). Prothonotary Morneau agreed with the Defendant and stayed the action (Arsenault v Canada, 2007 FC 876), but the Plaintiffs successfully appealed the Prothonotary’s decision to Justice Martineau (Arsenault (Martineau) at paragraphs 34, 43 and 61). Justice Martineau's decision, which allowed the action to proceed, was upheld by the Federal Court of Appeal (Arsenault (FCA) at paragraph 11), and leave to appeal to the Supreme Court of Canada was refused in January, 2011. Since then, various procedural steps have been completed and documentation exchanged.
IV. Summary Judgment [14] Although the parties disagree about whether summary judgment should be granted, they do not really dispute the test for summary judgment. Sections 213-219 of the Rules (the relevant portions of which are reproduced in Annex “A”) govern this issue, and subsection 215(1) provides as follows:
215. (1) If on a motion for summary judgment the Court is satisfied that there is no genuine issue for trial with respect to a claim or defence, the Court shall grant summary judgment accordingly.
215. (1) Si, par suite d’une requête en jugement sommaire, la Cour est convaincue qu’il n’existe pas de véritable question litigieuse quant à une déclaration ou à une défense, elle rend un jugement sommaire en conséquence.
[15] This rule has been applied liberally in this Court “so as to secure the just, most expeditious and least expensive determination of every proceeding on its merits” (Rules, s 3; Garford Pty Ltd v Dywidag Systems International, Canada, Ltd, 2010 FC 996 at paragraph 5, 375 FTR 38 [Garford (FC)], aff'd 2012 FCA 48 at paragraphs 7 and 9, 428 NR 306). Summary judgment should be granted if the case is “so doubtful that it does not deserve consideration by the trier of fact at a future trial” (Garford (FC) at paragraph 2, citing Granville Shipping Co v Pegasus Lines Ltd, [1996] 2 FCR 853 at paragraph 8, 111 FTR 189 (TD) [Granville Shipping]). Summary judgment is not, however, an all-or-nothing matter; some claims in an action can be summarily dismissed even if there is a genuine issue for trial with respect to other claims (Rules, s 213(1), 215(1), 215(3)(b)).
[16] The onus is on the moving party, here the Defendant, to establish that there is no genuine issue for trial with respect to every cause of action. While each party must “put its best foot forward” (Canada (AG) v Lameman, 2008 SCC 14 at paragraph 11, [2008] 1 SCR 372; Rules, s 214), the “burden on a plaintiff responding to a motion for summary dismissal of a claim is not, and is not intended to be, as onerous as the plaintiff's burden in a trial. It is an evidentiary burden only” (TPG Technology Consulting Ltd v Canada, 2013 FCA 183 at paragraph 4, 363 DLR (4th) 370). The Court can make some findings of fact, but that depends on the strength of the record and on whether it would be just to make such findings by a summary process. Serious credibility issues and true disputes should usually be reserved for trial (Garford (FC) at paragraph 10; Granville Shipping at paragraph 8; Society of Composers, Authors and Music Publishers of Canada v Maple Leaf Sports & Entertainment, 2010 FC 731 at paragraph 15 [SOCAN]).
[17] Both parties rely to some extent on Hryniak v Mauldin, 2014 SCC 7, [2014] 1 SCR 87 [Hryniak], the Defendant more so than the Plaintiffs insofar as Hryniak arguably established a more intensive fact-finding role for a judge hearing a summary judgment motion. However, Hryniak was about the summary judgment rule in Ontario; judges in that jurisdiction have powers of examination which judges of this Court would only have on a motion for summary trial (Rules, s 216; Manitoba v Canada, 2015 FCA 57 at paragraph 16, 470 NR 187 [Manitoba]). The Federal Court of Appeal has therefore cautioned that Hryniak “does not materially change the procedures or standards to be applied in summary judgment motions brought in the Federal Court under Rule 215(1)” (Manitoba at paragraph 11).
[18] Even if there is a genuine issue for trial though, the Court has the power to “determine that issue by way of summary trial and make any order necessary for the conduct of the summary trial” (Rules, s 215(3)(a)). In SOCAN, Mr. Justice Michael Phelan stated (at paragraph 40) that this rule imposes a duty on the Court to consider whether a summary trial is appropriate at the end of a summary judgment motion, even if the parties do not ask for one.
V. Issues [19] The Defendant argues that there is no genuine issue for trial with respect to any of the Plaintiffs' claims. The Plaintiffs dispute that, and they also contend that the Defendant's motion is an abuse of process.
[20] At the hearing of this matter, the Plaintiffs acknowledged that their causes of action in negligence and for breach of fiduciary duty would not be advanced at trial, so it is not necessary to address the Defendant's written arguments in this regard. It is necessary, however, to consider whether the Plaintiffs' remaining claims relating to expropriation (or taking without compensation), unjust enrichment, breach of the Marshall Agreement, and misfeasance in public office, do raise genuine issues for a trial.
[21] Accordingly, I will address the issues raised by this motion in the following order:
1. Is this motion for summary judgment an abuse of process?
2. Have some of the Plaintiffs relinquished any cause of action they might have?
3. Are there any material facts in dispute?
4. Does the Plaintiffs' breach of contract claim raise a genuine issue for trial?
5. Does the Plaintiffs' expropriation claim (or taking without compensation) raise a genuine issue for trial?
6. Does the Plaintiffs' misfeasance in public office claim raise a genuine issue for trial?
7. Does the Plaintiffs' unjust enrichment claim raise a genuine issue for trial?
8. If there are any genuine issues for trial, can they be resolved by a summary trial?
9. Should costs be awarded and to whom?
VI. Analysis A. Is this motion for summary judgment an abuse of process? (1) Parties’ Arguments [22] The Plaintiffs contend that the Defendant's motion for summary judgment is an abuse of process for three reasons: (1) the Defendant has revived the same arguments which were dismissed in its motion to strike out the statement of claim; (2) the Defendant lost a virtually identical motion for summary judgment in the similar case of Anglehart Sr v Canada, 2012 FC 1205 [Anglehart]; and (3) the Defendant's position that a licence is not property and there is no right to renewal contradicts the position it took in Canada v Haché, 2011 FCA 104, 417 NR 231 [Haché]. Accordingly, the Plaintiffs argue that “allowing the litigation to proceed would … violate such principles as judicial economy, consistency, finality and the integrity of the administration of justice” (citing Toronto (City) v CUPE, Local 79, 2003 SCC 63 at paragraph 37, [2003] 3 SCR 77 [Toronto]).
[23] The Defendant argued at the hearing of this matter that it was not making a collateral attack upon or re-litigating the motion to strike the statement of claim, and that the Plaintiffs’ reliance upon Anglehart is misguided inasmuch as that case is distinguishable on the basis there is no breach of contract claim in that case and the record there was not as comprehensive as the one here.
(2) Analysis [24] Abuse of process is a flexible doctrine unencumbered by any specific requirements (see: Toronto at paragraph 42). It is not limited to precluding re-litigation, and “it exists to ensure that the administration of justice is not brought into disrepute” (see: Behn v Moulton Contracting Ltd, 2013 SCC 26 at paragraph 41, [2013] 2 SCR 227).
[25] However flexible this doctrine is though, I fail to see how or why the Defendant's present motion is an abuse of process. The fact the Defendant's motion to strike the statement of claim was dismissed has little, if any, bearing on the issues now before the Court. A motion to strike asks only whether “it is plain and obvious, assuming the facts pleaded to be true, that the pleading discloses no reasonable cause of action” (R v Imperial Tobacco Canada Ltd, 2011 SCC 42 at paragraph 17, [2011] 3 SCR 45). A decision dismissing such a motion is not final because it only means that the action will not inevitably fail; the facts upon which the decision was premised must still be proven. In contrast, a motion for summary judgment permits the introduction of evidence, and that evidence could affect the viability of whatever legal claims are being advanced. As Mr. Justice Michel Beaudry said when rejecting a very similar argument in Anglehart (at paragraph 53), “[t]he fact that a motion to strike has been filed does not prevent the defendant from filing a motion for summary judgment, so long as it meets the conditions of subsection 213(1) of the Rules. Ultimately, one does not bar the other.”
[26] Moreover, the Defendant is not re-litigating anything, since neither Justice Martineau nor the Court of Appeal decided the legal issues now raised by the Defendant. Most of Justice Martineau’s reasoning focused on whether Grenier applied to preclude this Court's jurisdiction to consider this action. That argument has not been advanced again, nor could it be since Grenier was overruled by the Supreme Court of Canada in Canada (AG) v TeleZone Inc, 2010 SCC 62 at paragraphs 32-78, [2010] 3 SCR 585 [TeleZone]. Although the Defendant did make some arguments on the motion to strike that it now repeats, Justice Martineau declined to offer any conclusive opinion about them. On the contrary, he repeatedly said he was “not in a position to decide” those issues without evidence since they involved complex questions of fact and law (Arsenault (Martineau) at paragraph 54). After striking out the Plaintiffs’ claim for specific performance, Justice Martineau stated (at paragraph 61) that “[t]his is not to suggest the plaintiffs’ remaining claims in damages are likely to succeed,” and he expressly noted that a motion for summary judgment would be available once the Defendant filed its defence. It is not an abuse of process for the Defendant to bring the very motion suggested by Justice Martineau.
[27] The Plaintiffs also contend that the Defendant’s present motion is an abuse of process because a similar motion was dismissed in Anglehart. That decision is certainly relevant. However, I do not see how the administration of justice is brought into disrepute to permit this motion to proceed. As the Defendant accurately points out, a motion for summary judgment ultimately succeeds or fails based on the strength of the record. The fact the plaintiffs in Anglehart had enough evidence to raise a genuine issue for trial does not automatically mean that the Plaintiffs’ similar allegations in this case also raise a genuine issue for trial. The Defendant is entitled to test the Plaintiffs' case by way of the present motion.
[28] As to the Plaintiffs' argument that the Defendant cannot argue that fishing licences do not accord their bearers a right to renewal because it advanced the opposite position in Haché, and that this about-face is an abuse of process, this argument is without merit. The Plaintiffs' reliance upon the principle of approbation and reprobation (sometimes called the doctrine of election in litigation) is misguided.
[29] Haché only decided whether a snow crab licence was “property” within the meaning of subsection 248(1) of the Income Tax Act, RSC 1985, c 1 (5th Supp) (as it appeared on 17 March 2011), which stated as follows:
248. (1) In this Act,
248. (1) Les définitions qui suivent s’appliquent à la présente loi.
…
…
“property” means property of any kind whatever whether real or personal or corporeal or incorporeal and, without restricting the generality of the foregoing, includes
« biens » Biens de toute nature, meubles ou immeubles, corporels ou incorporels, y compris, sans préjudice de la portée générale de ce qui précède :
(a) a right of any kind whatever, a share or a chose in action,
a) les droits de quelque nature qu’ils soient, les actions ou parts;
(b) unless a contrary intention is evident, money,
b) à moins d’une intention contraire évidente, l’argent;
(c) a timber resource property, and
c) les avoirs forestiers;
(d) the work in progress of a business that is a profession;
d) les travaux en cours d’une entreprise qui est une profession libérale.
[30] This is a broad, statutory definition (see e.g. Manrell v Canada, 2003 FCA 128 at paragraphs 48-54, [2003] 3 FCR 727). As the Supreme Court said with respect to a different statutory definition of property, the fact that “a fishing licence may not qualify as 'property' for the general purposes of the common law does not mean that it is also excluded from the reach of the statutes. For particular purposes Parliament can and does create its own lexicon” (Saulnier v Royal Bank of Canada, 2008 SCC 58 at paragraph 16, [2008] 3 SCR 166 [Saulnier]). It is not an abuse of process for the Defendant to advance a different conception of property in the present action, since its position is not necessarily inconsistent with the one advanced in Haché.
B. Have some of the Plaintiffs relinquished any cause of action? [31] As mentioned above, DFO offered compensation for lost quota but most P.E.I. fishers rejected that offer. Two of the Plaintiffs, however, did accept the offer of compensation: namely, Boyd Vuozzo; and Richard Blanchard, on behalf of the estate of Michael Jos Deagle. They both signed agreements which included the following provision:
9. In consideration for the payments herein, the Recipient here releases Her Majesty the Queen in Right of Canada and Her Ministers, officers, employees and agents from any and all claims, suits, actions or demands of any nature that the Recipient has or may have and that are related to or arise from this Agreement.
[32] This release of liability could also affect the claims of B&F Fisheries Ltd. (which has operated Mr. Vuozzo's fishing enterprise since 2006), and Pamela Deagle (who received Mr. Deagle's licence in 2010).
[33] Apart from mentioning that these agreements were signed though, the Defendant has not argued that the action insofar as it relates to these Plaintiffs should be dismissed. In this regard, although some of the plaintiffs in Anglehart had signed similar agreements, Justice Beaudry nonetheless held (at paragraph 131) that there were still genuine issues for trial for the following three reasons:
First of all, the Court does not know which plaintiffs were compensated or exactly how much was paid out. No list was provided. Second, the document on which the defendant relies, namely, the [TRANSLATION] “Financial Aid Agreement to Give Aboriginal Fishers Access to the Snow Crab Fishery – Areas 12, 18, 25/26”, is not so clear on this point that it can be determined whether the compensation was for the past or the future. Third, the Court cannot determine for what portion of the 35% reduction the plaintiffs were allegedly compensated.
[34] The first rationale above does not apply in this case since the evidence shows which Plaintiffs accepted the offer and how much they received. The other two reasons, however, could apply in this case. The agreement here is written in the future tense when it states that the Recipient “will … relinquish his or her eligibility to receive 14.6427% of the snow crab allocation” (underlining added, bold in original). These releases signed in this case might not apply to extinguish any claims from 2003 to the dates they were signed and, also, may not have relinquished all of the claims now asserted by these Plaintiffs.
[35] As Justice Martineau said in Alyafi v Canada (Citizenship and Immigration), 2014 FC 952 at paragraph 45: “a judge should follow a decision on the same question of one of his or her colleagues, unless the previous decision differs in the facts, a different question is asked, the decision is clearly wrong or the application of the decision would create an injustice.” Accordingly, the interests of judicial comity require that I find there is a genuine issue for trial as to whether these Plaintiffs may have relinquished any or all of their claims. The words of a release take their meaning from the context in which they are used and the intent of the parties. In considering what was in the contemplation of the parties, a court should consider the context, including the circumstances surrounding the execution of the document and evidence of the intention of parties (see: Arcand v Abiwin Co-Operative Inc, 2010 FC 529 at paragraphs 40-42, 368 FTR 145, aff'd 2011 FCA 170 at paragraph 2, 423 NR 268). This is something which cannot be ascertained on the basis of the record now before the Court and should be addressed by way of a trial.
C. Are there any material facts in dispute? [36] The Defendant submits that most of the material facts are not disputed, and that the only ones which are have not been substantiated by the Plaintiffs. Specifically, the Defendant states the Plaintiffs have not provided evidence to support any of the following allegations:
• The switch to an individual quota system in 1993 was done through an oral agreement with DFO;
• In 1997, DFO agreed to grant P.E.I. fishers a permanent 5.325% share in the TAC of CFAs 12, 25, and 26;
• Following the Marshall decision, DFO and other officials promised the Plaintiffs that the only way that First Nations would gain access to the fishery was through a voluntary buy-back system;
• The Plaintiffs were told that First Nations would only get between 1-2% of the TAC;
• DFO's distribution of quota in 2003 endangered the viability of the Plaintiffs' crab fishing enterprises and put the resource in peril;
• DFO set a low TAC in 2003 contrary to the recommendations of DFO's own scientists; and
• The integration of CFA 18 reduced the Plaintiffs' quota by 4.7081%.
[37] The Plaintiffs argue that the factual claims of the parties are far more divergent than the Defendant admits, and they disagree on all but the most non-contentious historical facts. The two affiants, Jim Jones on behalf of the Defendant, and Carter Hutt, on behalf of all the Plaintiffs, are diametrically opposed on many issues, and the Plaintiffs therefore submit that a credibility assessment at trial is the only way to resolve those inconsistencies. The Plaintiffs also challenge the Defendant's assertion that they have supplied no proof for many of their claims, saying that all are clearly supported by the documents attached to Carter Hutt's affidavit.
[38] I will deal with the issue of whether there are material facts in dispute shortly below in addressing the remaining issues.
D. Does the Plaintiffs’ breach of contract claim raise a genuine issue for trial? (1) Parties’ Arguments [39] The Plaintiffs argue there are material issues of fact regarding whether the Defendant breached its agreement to pay fair market value for licences before allocating any share in the TAC to First Nations. While the Defendant denies DFO would ever make a contract to govern how it allocates the TAC, the Plaintiffs point out that the Defendant admits it has entered into several negotiated agreements with First Nations in its own memorandum of fact and law. The Plaintiffs contend there are many examples in the record of contracts which require the Minister to deliver quota in the future. Furthermore, the Plaintiffs emphasize that the Minister at the time said in 1999 that “if conservation's a priority you don't want to put pressure on an existing resource that's fully subscribed. If you want new entrants you'll have to buy new licences. I think that's common sense.” In the Plaintiffs’ view, the Defendant has not even tried to justify breaking that commitment.
[40] In addition to issues of fact, the Plaintiffs argue there are significant legal issues which also require a trial. The Plaintiffs dispute the Defendant’s argument that it cannot possibly be liable for any contracts it entered since that would fetter the Minister's discretion. According to the Plaintiffs, the law on the anti-fettering doctrine is still in a state of flux (citing Andrews v Canada (AG), 2014 NLCA 32 at paragraphs 34-42, 376 DLR (4th) 719). While this doctrine may preclude some remedies for breach of contract such as specific performance, they contend that does not mean the government can escape the consequences of making such contracts altogether (citing Wells v Newfoundland, [1999] 3 SCR 199 at paragraph 41, 177 DLR (4th) 73).
[41] The Plaintiffs further point out that duties of good faith and honesty arise in contractual dealings (citing Bhasin v Hrynew, 2014 SCC 71, [2014] 3 SCR 495 [Bhasin]), and the Defendant led the Plaintiffs to believe the agreements it was making were legally binding. The Plaintiffs also contend that both the Fisheries Development Act, RSC 1985, c F-21, s 3(4), and the Atlantic Fisheries Restructuring Act, RSC 1985, c A-14, expressly authorize the Minister to make contracts, and a full trial is required to determine whether those provisions apply to the Marshall Agreement.
[42] The Defendant argues there never was any so-called Marshall Agreement. That claim is based only on supposed representations from DFO officials, and the Defendant says there is no evidence as to any intention to contract, any negotiations, or any consideration provided by the Plaintiffs. DFO officials, including the Minister, had expressed a desire not to increase access to the fishery at the expense of the traditional fishers, but those comments were about a policy initiative and did not create a contract. Nor could it have, according to the Defendant, because the executive cannot agree to any contractual term which would fetter its statutory discretion, and no such term could ever be enforced by a court (citing e.g. Pacific National Investments Ltd v Victoria (City), 2000 SCC 64 at paragraphs 59, 65-66, 74, [2000] 2 SCR 919; and Happy Adventure Sea Products (1991) Ltd v Newfoundland and Labrador (Minister of Fisheries and Aquaculture), 2006 NLCA 61 at paragraphs 1 and 27-28, 277 DLR (4th) 117).
(2) Analysis [43] Following the Marshall decision, it is undisputed that DFO wanted to find a way to give First Nations access to the commercial fishery without affecting the existing fishers, and the record shows that it frequently said so. For instance, on October 21, 1999, the Minister at the time said in the House of Commons that: “the long term solution in terms of the treaty right will not be at the expense of traditional commercial fishermen or their families” (Plaintiffs’ motion record at page 982); and on February 11, 2001, the Minister told the Maritime Fishermen's Union that: “any increase in Aboriginal participation in the commercial fishery will not come at the expense of fairness to other users of the resource” (Plaintiffs’ motion record at page 1212, emphasis omitted). One way DFO endeavoured to do this was through the “buy-back” initiative.
[44] The Plaintiffs also properly point out that DFO encouraged fishers to show patience, restraint, and goodwill. For example, the Minister said at a meeting on February 21, 2001, that the “patience and calm you demonstrated in the face of last year's tension bears testament to this fact [Canada’s ability to peacefully and harmoniously build a diverse population]. And more of the same is needed in the time ahead.”
[45] The primary factual dispute between the parties is whether the representations made by the Minister and other DFO officials formed a contract, and therefore the question to decide is whether that issue deserves a trial. For the following reasons, I conclude that it does not.
[46] In Scotsburn Co-Operative Services v WT Goodwin Ltd, [1985] 1 SCR 54 at 63, 16 DLR (4th) 161, the Supreme Court stated that, in general, an enforceable agreement is “manifested by an offer by one party accepted by the other with the intention of creating a legal relationship, and supported by consideration.” In Allergan, Inc v Apotex Inc, 2015 FC 367 (at paragraph 41), Mr. Justice Roger Hughes reviewed the jurisprudence on formation of a contract and concisely stated four governing principles. Of those, the first two are pertinent to the question at hand:
• for there to be a binding contract, there must be an offer and acceptance wherein the terms of the offer are matched by the terms of the acceptance;
• the acceptance must be unequivocal;
[47] In Bhasin, the Supreme Court confirmed (at paragraph 45) that the “primary object of contractual interpretation is … to give effect to the intentions of the parties at the time of contract formation,” and the same is true when deciding if a contract was formed. The test is objective, however, and it “does not depend on an inquiry into the actual state of mind of the parties or on the parole evidence of one party's subjective intention. Rather, it depends on whether the words or acts of the parties, judged by a reasonable standard, manifest an intention to agree with respect to the matter in question” (Chippewas of Mnjikaning First Nation v Ontario (Minister Responsible for Native Affairs), 2010 ONCA 47 at paragraph 192, 265 OAC 247; Saint John Tug Boat Co Ltd v Irving Refining Ltd, [1964] SCR 614 at 621-622, 46 DLR (2d) 1; Ehler Marine & Industrial Service Co v M/V Pacific Yellowfin (Ship), 2015 FC 324 at paragraphs 26-28).
[48] Therefore, the following question must be answered: “would an objective, reasonable bystander conclude that, in all the circumstances, the parties intended to contract?” (UBS Securities Canada, Inc v Sands Brothers Canada, Ltd, 2009 ONCA 328 at paragraph 47, 95 OR (3d) 93; Remington Energy Ltd v British Columbia (Hydro and Power Authority), 2005 BCCA 191 at paragraph 31, 210 BCAC 293; Jeffrie v Hendriksen, 2015 NSCA 49 at paragraph 36). The only direct evidence of the so-called Marshall Agreement is supplied by Carter Hutt in his affidavit:
31. DFO represented to the traditional fishers from the outset that the integration of aboriginal fishers into the snow crab fishery would not be accomplished “on the backs” of the traditional fishers and was to be achieved only by a process of voluntary buy-back of existing licences. In exchange, DFO asked the traditional fishers to exercise restraint in the pursuit of their legal options and to cooperate in the integration of aboriginal fishers into the commercial crab fishery. We were assured that no increase in the number of fishing licences, or in the total fishery itself, would result from the integration. We were told by DFO that only a small portion of the TAC would be required. DFO initially told us 1% to 2% would be required but that number rose quickly as aboriginal access agreements were negotiated. It is my understanding that this range was stated to representatives of the traditional fishers by Mr. Jones, by Monique Baker and by Gilles Theriault, all senior DFO employees. In reliance on these covenants and on DFO’s assurances and representations, we the Plaintiffs herein, or their predecessors in title, continued to invest in our enterprises and pay DFO amounts due under the Co-management Agreement. We cooperated with patience and restraint in the integration of aboriginals into the snow crab fishery. In short, we lived up to our side of the bargain (the “Marshall Agreement”).
[49] Even taken at face value, this evidence immediately raises many questions. For instance: were these alleged representations made at one time or at different times? Which representations constituted the offer? Did the offer have any terms when it was made? Did any negotiations take place? Was the offer accepted? When did the Plaintiffs accept the offer? Was anyone appointed as an agent of the fishers, or did they all individually accept the offer? How did they communicate their acceptance of the offer? If the agreement was made orally, where did they accept the offer? What “legal options” did the commercial fishers give up?
[50] None of the documentary evidence in the record reveals any answers to such questions. During his cross-examination, Mr. Hutt identified the date of the Marshall agreement as December 6, 1999, when Minister Dhaliwal gave a speech to the mid-shore Southern Gulf fishery in Moncton that touched on the impact of the Marshall decision. Minister Dhaliwal said during that speech that: “[t]his problem will not be resolved on the backs of traditional commercial fishermen and their families. But we will do it through negotiations, sitting at the table, and that that's [sic] the way to resolve this issue” (Plaintiffs’ motion record at page 1006). At a media scrum afterward, he explained that: “if conservation's a priority you don't want to put pressure on an existing resource that's fully subscribed. If you want new entrants you'll have to buy new licences. I think that's common sense” (Plaintiffs’ motion record at page 1008).
[51] The transcript of Minister Dhaliwal's speech reveals nothing which could reasonably be construed as an offer capable of acceptance. While the Minister emphasized the voluntary buy-back program and was encouraging fishers to be calm, this speech included no terms and merely expressed a policy objective. If there was any doubt about that, the fact the Minister says these issues will be negotiated indicates they have not been negotiated or finalized yet. As for the alleged representation that a voluntary buy-back was the only option on the table, the Minister plainly said at the meeting: “license buy-out is one of the options that we have to look at but we have to look at all the options available out there to deal with it but I don't want to prejudge the process. I don't want to impose. This is something that will have to be settled through negotiations an