9255-2504 Québec Inc. v. Canada

9255-2504 Québec Inc. v. Canada
Court (s) Database
Federal Court of Appeal Decisions
Date
2022-03-09
Neutral citation
2022 FCA 43
File numbers
A-70-20
Notes
Reported Decision
A correction was made on May 17th, 2024.
Decision Content
Date: 20220309
Docket: A-70-20
Citation: 2022 FCA 43
[ENGLISH TRANSLATION]
CORAM:
PELLETIER J.A.
DE MONTIGNY J.A.
LOCKE J.A.
BETWEEN:
9255-2504 QUÉBEC INC.
and
142550 CANADA INC.
and
GRAND BOISÉ DE LA PRAIRIE INC.
Appellants
and
HER MAJESTY THE QUEEN
Respondent
Heard at Montréal, Quebec, on September 29, 2021.
Judgment delivered at Ottawa, Ontario, on March 9, 2022.
REASONS FOR JUDGMENT BY:
PELLETIER J.A.
CONCURRED IN BY:
DE MONTIGNY J.A. LOCKE J.A.
Date: 20220309
Docket: A-70-20
Citation: 2022 FCA 43
CORAM:
PELLETIER J.A.
DE MONTIGNY J.A.
LOCKE J.A.
BETWEEN:
9255-2504 QUÉBEC INC.
and
142550 CANADA INC.
and
GRAND BOISÉ DE LA PRAIRIE INC.
Appellants
and
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT
PELLETIER J.A.
I. Introduction [1] The appellants are in the real estate development business. They acquired land on the South Shore of Montréal to build a six-phase residential project. In order to do so, they obtained the required authorizations from Ville de La Prairie, which included conditions imposed on the city by Quebec’s Ministry of the Environment. In addition, they were granted a certificate for their project pursuant to section 22 of the Environment Quality Act, C.Q.L.R., c. Q-2. Having completed the first four phases, they were about to initiate phases 5 and 6 when, on June 17, 2016, the Governor in Council made an emergency order under the Species at Risk Act, S.C. 2002, c. 29 (the Act) to protect the habitat of the Western Chorus Frog, thereby ending the project. Since that time, the appellants have sought compensation for the losses that they suffered as a result of not being able to complete their project. These losses were recorded at some $22,000,000; the respondent is not disputing this amount, although she is disputing her civil liability.
[2] Subsection 64(1) of the Act provides that the Minister may, in accordance with the regulations, provide fair and reasonable compensation to any person for losses suffered as a result of any extraordinary impact of the application of an emergency order, while subsection 64(2) of the Act requires the Governor in Council to make the necessary regulations to govern such compensation. The issue is that the Governor in Council did not make any regulations, leading the Minister to consider that she could not provide any compensation. At least, that was the position that she took for several years until the Federal Court rendered its decision in Groupe Maison Candiac Inc. v. Canada (Attorney General), 2018 FC 643 (Groupe Maison Candiac), which was affirmed by this Court in Groupe Maison Candiac Inc. v. Canada (Attorney General), 2020 FCA 88, [2020] 3 F.C.R. 645. Since then, the Minister is of the opinion that she has the jurisdiction to compensate the appellants, despite the absence of regulations, in the event of a claim by them. The appellants point out that this is what they have been seeking since the emergency order was made.
[3] The appellants brought their claim for compensation before the Federal Court. First, they argued that the actions of the Governor in Council (in failing to make a regulation) and of the Minister (in failing to fulfill her duty to compensate them) constituted a fault within the meaning of the Crown Liability and Proceedings Act, R.S.C. 1985, c. C-50 (the CLPA), which makes the Crown civilly liable; second, they alleged that the lack of compensation for the loss of the economic value of their land is, in effect, a disguised expropriation entitling them to compensation.
[4] The Federal Court dismissed the appellants’ action (2020 FC 161, the Decision) on the basis that the conditions for Crown liability set out in the CLPA had not been met. The Court also ruled that the theory of disguised expropriation had no application in a case such as this, where the Act provides for a compensation plan. The appellants are appealing the Decision.
[5] For the following reasons, I would dismiss the appeal. The appellants have not met the conditions with respect to extracontractual civil liability on the part of the Crown, in particular, the presence of a fault by a servant of the Crown. Furthermore, the appellants failed to demonstrate that the making of the emergency order was akin to a disguised expropriation.
II. Facts [6] As early as 2013, the appellants—related companies whose directing mind is Mr. Quint—wanted to carry out a residential real estate development project in Ville de La Prairie. This project was to have six phases and was to be completed in 2019 (the Symbiocité Project).
[7] The land on which the Symbiocité Project was to be built was known by all to be the habitat of a population of Western Chorus Frogs (the frog). In 2001, the frog was classified as a “vulnerable wildlife species” pursuant to the Act respecting threatened or vulnerable species, C.Q.L.R., c. E-12.01. In 2008, Ville de La Prairie obtained a certificate of authorization from the Government of Quebec pursuant to section 22 of the Environment Quality Act. This certificate authorized backfilling of the wetlands where the appellants’ project was to be built. In return, it required certain measures to address the environmental impacts of these activities.
[8] In July 2012, the appellants signed a memorandum of understanding with Ville de La Prairie. This memorandum of understanding considered the entirety of the appellants’ project, that is, phases 1 to 6. The work covered by the certificate of authorization granted to Ville de La Prairie and some other work of the same nature was contemplated within it and was to be carried out by the appellants. The Federal Court described the nature and extent of this work:
These measures, at the expense of the [appellants], ... included expanding the existing conservation park by 5 million square feet, bypassing a stream crossing the Symbiocité Project area and developing four breeding ponds for the Western Chorus Frog. ...
The certificates of authorization issued in relation to the Symbiocité Project also oblige the [appellants] not to carry out any work during the reproduction period of the Western Chorus Frog, that is, between March and July.
Decision, paras. 45 and 46
[9] The memorandum of understanding also provided for an exchange of land, such that the appellants were to purchase from the city most of the land on which phases 5 and 6 of their project would be built.
[10] In the months following the negotiation of the memorandum of understanding, an environmental advocacy group initiated the process to seek the making of an emergency order, as provided for in the Act, in relation to the frog habitat on Ville de La Prairie territory. Ultimately, the then federal Minister of the Environment, Leona Aglukkaq, declined to recommend the making of an emergency order to the Governor in Council. This decision was set aside by the Federal Court (2015 FC 773), which referred the matter back to the Minister for reconsideration.
[11] Six months later, in December 2015, the new Minister, Catherine McKenna, announced that she proposed to recommend to the Governor in Council that an emergency order be made. On June 17, 2016, the Governor in Council made an emergency order with conditions, which the Federal Court summarized in paragraph 25 of its Decision as follows:
The Order gives a precise description of the area to which it applies and states that it is prohibited to
remove, compact or plow the soil;
remove, prune, damage, destroy or introduce any vegetation, such as a tree, shrub or plant;
drain or flood the ground;
alter surface water in any manner, including by altering its flow rate, its volume or the direction of its flow;
install or construct, or perform any maintenance work on, any infrastructure;
operate a motor vehicle, an all-terrain vehicle or a snowmobile anywhere other than on a road or paved path;
install or construct any structure or barrier that impedes the circulation, dispersal or migration of the Western Chorus Frog;
deposit, discharge, dump or immerse any material or substance, including snow, gravel, sand, soil, construction material, greywater or swimming pool water; and
use or apply a pest control product as defined in section 2 of the Pest Control Products Act or a fertilizer as defined in section 2 of the Fertilizers Act.
[12] It is not surprising that this order effectively ended the appellants’ project, resulting in significant losses. All that remained was the issue of compensation.
[13] The Act provides for compensation to persons who suffer losses as a result of any extraordinary impact of an emergency order. The legislative scheme has two components. The Minister may, in accordance with the regulations provided for under subsection 64(2), compensate persons who suffer losses as a result of the making of an emergency order. Furthermore, the Governor in Council shall make regulations that the Governor in Council considers necessary for carrying out the purposes and provisions of subsection 64(1). Despite this mandatory language, the Governor in Council has not, to date, made the regulation(s) set out in subsection 64(2) of the Act. This inaction has led to the difficulties experienced by the appellants, which gave rise to this appeal.
[14] As soon as the Minister announced her intention to recommend to the Governor in Council that an emergency order be made, that is, in December 2015, the appellants were informed that “although compensation was possible under the Act, the question was premature at this stage since the adoption of such an order remained hypothetical. Mr. Quint was also informed that, for the moment, there were no regulations allowing compensation to be paid”: Decision, para. 75. The Minister maintained this position until the Federal Court rendered its decision in Groupe Maison Candiac in 2018, a case brought by another real estate developer.
[15] That case involved an application to cancel the emergency order on the grounds that subparagraph 80(4)(c)(ii) of the Act—which authorizes the making of an emergency order—is ultra vires Parliament. In the alternative, Groupe Maison Candiac argued that the fact that they were not compensated constituted a disguised expropriation of their land. Groupe Maison Candiac’s application was dismissed, but along the way, the Court ruled on the effect of the lack of regulations. At paragraph 207 of Groupe Maison Candiac, the Federal Court wrote:
It is well established that an administrative decision-maker cannot invoke the absence of a regulation to not act when this inaction is equivalent to stripping a law or countering its application. We want to avoid creating a legal vacuum, thereby giving rise to an abuse of power by conferring to the regulatory authority [translation] “a dimension that allows the Administration to indefinitely strip the legislature’s express will” (Patrice Garant, Droit Administratif, 7th Ed., Montreal, Yvon Blais, 2017 [Garant], at pages 215-216). The principles only apply to the exercise of regulatory power, be it facultative or imperative, like in this case (Garant, at page 215). They are particularly useful in the absence of a regulation, if it was interpreted as having prevented the application of the legislation, or depriving the offender of a benefit conferred by it (Irving Oil Ltd. et al. v. Provincial Secretary of New Brunswick, 1980 CanLII 176 (SCC), [1980] 1 SCR 787, at page 795).
[16] On appeal of the Federal Court decision, Groupe Maison Candiac argued that the absence of the regulations provided for in subsection 64(2) of the Act created a legal vacuum that justified the use of provincial law on a suppletive basis. This argument was rejected by this Court at paragraph 74 of its reasons:
I find this argument to be without basis, and the Federal Court correctly rejected it. As the Supreme Court stated in Irving Oil Ltd. et al. v. Provincial Secretary of New Brunswick, 1980 CanLII 176 (SCC), [1980] 1 S.C.R. 787, [1980] S.C.J. No 23 (QL), (at page 795), a regulatory authority cannot nullify the application of a law and deprive the litigants of a benefit or remedy to which they would be entitled by refraining from adopting the regulation which conditions its existence. According to this logic, the Minister could not cling to the fact that no regulation was adopted pursuant to subsection 64(2) of the Act in order to deny a claim for compensation.
[17] As a result of these decisions, the Minister stated that she had changed her mind and that she was prepared to consider compensating the appellants, provided that a claim be presented to her. The appellants replied that they had made numerous claims for compensation and had not yet received any compensation.
III. The decision under appeal [18] The Federal Court began its analysis with an overview of the law and the case law on the extracontractual civil liability of the Crown. The CLPA provides that the Crown’s liability is only vicarious, that is, it is based on the personal liability that servants of the Crown would have for damage resulting from their faults. Relying on Hinse v. Canada (Attorney General), 2015 SCC 35, [2015] 2 S.C.R. 621 (Hinse), the Federal Court expressed the view that it is now established that a minister is considered to be a servant within the meaning of the CLPA, but that the status of the Governor in Council has not been definitively decided.
[19] However, not all acts attributed to the Crown engage extracontractual civil liability since the Crown enjoys relative immunity as regards its “policy” decisions. These decisions are those that are “based on considerations of public interest, such as economic, social or political factors”: Decision, para. 144. The exercise of legislative power, even delegated or subordinate power, enjoys this immunity (legislative immunity). However, Crown immunity is not absolute; irrational or bad faith decisions are not protected in any way.
[20] Bad faith is not limited to intent to harm others; it also includes decisions that are so markedly inconsistent with the legislative context that a court cannot reasonably conclude that they were performed in good faith: Entreprises Sibeca Inc. v. Frelighsburg (Municipality), 2004 SCC 61, [2004] 3 S.C.R. 304 (Sibeca).
[21] Furthermore, the fact that a servant of the Crown fails to fulfill a legal obligation does not necessarily lead to a finding of fault within the meaning of the law of the CLPA. Even if a discretionary decision of a decision-maker has been declared invalid or unlawful, that in itself does not create a cause of action in extracontractual civil liability (in Quebec) or in tort liability (in provinces where the common law applies). That is, a decision, even if it is determined to be invalid, is not by that very fact a fault.
[22] Moreover, as in private law, “the alleged damage must have been the logical, direct and immediate consequence of the fault (Hinse at para. 132)”: Decision, para. 149.
[23] Following this overview of the law, the Federal Court considered the issue of the civil liability of the Governor in Council and the Minister. The Court examined the issue of the civil liability of the Governor in Council from four perspectives, the fourth of which is not relevant to this case. These perspectives are (1) immunity in relation to the power to legislate, (2) the absence of bad faith, and (3) the absence of a causal link. The Court then considered the Minister’s civil liability.
[24] The Federal Court began this part of its analysis by recalling the principle of immunity. Legislative immunity applies equally to decisions not to legislate and to decisions to legislate. The same is true of the decision to make or not to make a regulation. In stating this principle, the Federal Court relied on what Justice Wagner wrote in Bernèche v. Canada (Attorney General), 2007 QCCS 2945, at paragraph 108:
[translation]
The State cannot engage civil liability for having adopted laws or regulations, whether or not they are declared ultra vires. Similarly, the failure to adopt certain rules cannot automatically give rise to a finding of civil liability on the part of the State.
[25] The Federal Court turned to the parliamentary debates to identify the context in which the Act was adopted. This context included the desire, expressed in those debates, to develop regulations on the basis of experience with providing compensation in an ex-gratia way.
[26] In considering the allegation of bad faith, the Federal Court took note of the fact that Cabinet deliberations are confidential pursuant to section 39 of the Canada Evidence Act, R.S.C. 1985, c. C-5; therefore, there was no evidence in the record to shed light on the reasons for which the Governor in Council did not make the regulation set out in subsection 64(2) of the Act. However, there was nothing to suggest that the Governor in Council was motivated by an intention to harm the appellants. Moreover, the specific context—in particular, the fact that this was the first time that this legislation had been applied to private land and the fact that there was only one other example of an emergency order being made—did not allow the Court to conclude that the delay in acting was so inconsistent with the legislative context that a finding of bad faith was required: Decision, para. 194.
[27] According to the Federal Court, the direct and immediate cause of the damage suffered by the appellants was not the decision of the Governor in Council not to make a regulation “given the role and responsibilities of the Minister in the implementation of said plan”: Decision, para. 193.
[28] The reasoning that led the Court to find the Minister liable is the same as that set out by the Federal Court in Groupe Maison Candiac, namely, that the inaction of the person responsible for exercising regulatory power cannot “serve as a justification for neutralizing the compensation plan established by the Act”: Decision, para. 155. The Federal Court concluded that in order to give section 64 the effect intended by Parliament, the Minister had the right to compensate the appellants despite the absence of a framework to be provided by the Governor in Council through regulations. To conclude otherwise would give the Governor in Council the power to “neutralize” the Act by failing to adopt the regulations set out in the Act.
[29] The Minister’s decision not to compensate the appellants was therefore the cause of the losses that they suffered: Decision, para. 156. However, it was important to emphasize that this reasoning dealt only with the cause of these losses and not with the extracontractual civil liability that might be attached to them.
[30] On this point, the Federal Court relied on the case law according to which an act or decision that proves to be ill-founded does not in itself engage civil liability: Canada (Attorney General) v. TeleZone Inc., 2010 SCC 62, paras. 25 and 29 (TeleZone); see also R. v. Saskatchewan Wheat Pool, 1983 CanLII 21 (SCC), [1983] 1 S.C.R. 205 (Saskatchewan Wheat Pool); Welbridge Holdings Ltd. v. Greater Winnipeg, 1970 CanLII 1 (SCC), [1971] S.C.R. 957 at 969.
[31] To the extent that the Minister erred in law in acting as she did before the decision in Groupe Maison Candiac was rendered, this would not in itself be sufficient to engage extracontractual civil liability in the absence of bad faith. However, there was no evidence of bad faith.
[32] With respect to the lack of compensation since the Federal Court’s decision in Groupe Maison Candiac, the Federal Court was of the view, given the particular context, that in compensating the appellants, the Minister would have to define the formal and substantive parameters that the Act reserved for the Governor in Council. The Federal Court considered that the Minister, if she acted in this way, would not be a mere public servant, but would be granted immunity since she would be “in the antechamber ... of the policy decision, being called in to decide whether she, on her own, could assume this responsibility, which is moreover protected by Crown immunity”: Decision, para. 201.
[33] In sum, the Federal Court was of the view that an error of law committed in good faith in a context such as the one in this case did not amount to a fault. The Minister’s error of law in not compensating the appellants in the absence of regulations could have been subject to a review based on administrative law without giving rise to a remedy based on the extracontractual civil liability of the Crown.
[34] The Federal Court summarized its findings on extracontractual civil liability in paragraphs 193 to 194 of the Decision:
In sum, I find that the defendant’s extracontractual civil liability is not engaged because the Governor in Council has still not adopted the regulations implementing the compensation plan established by section 64 of the Act. Indeed, even assuming that this defect results from faulty conduct, the damage alleged by the plaintiffs was not the direct, logical and immediate cause, given the role and responsibilities of the Minister in the implementation of said plan.
In the alternative, I find that the absence of regulations, when considered in light of all the evidence, and in particular the parliamentary debates preceding the adoption of the Act and the context in which section 80 was implemented, does not disclose any evidence of bad faith, whether direct or indirect, in the conduct of the Governor in Council. In other words, while this conduct can theoretically give rise to recourse and remedies under public law, it is not such as to justify compensation under the CLPA.
[35] Before the Federal Court, the respondent argued that the losses suffered by the appellants were not compensable because they resulted from the business risk that the appellants had assumed in carrying out their project despite their knowledge of the existence and status of the frog. The Federal Court did not consider this issue given its finding on the issue of Crown civil liability: Decision, para. 215. This argument can be summarily dismissed. The risk that gave rise to the damage claimed by the appellants was not the making of the emergency order, but rather the risk that order would be made without the possibility of compensation on the advice of the Minister. This risk was hardly conceivable since it is so inconsistent with Canadian notions of “fair dealing.”
[36] As it did with civil liability, the Federal Court began its analysis of disguised expropriation with an overview of the relevant legal principles. The appellants had based their allegation of disguised expropriation on the fact that, since the emergency order was made, they had been unable to use their land for the purposes for which it was purchased from Ville de La Prairie or for any other economic purpose, without being paid or even offered any form of compensation for their losses.
[37] The Federal Court noted the presumption from the common law that no one may be dispossessed of their property without compensation unless the legislature has, in clear and unequivocal terms, decided otherwise: Decision, para. 217. Similarly, section 6 of the Charter of human rights and freedoms, C.Q.L.R., c. C-12 (the Quebec Charter) guarantees every person a right to the peaceful enjoyment and free disposition of his or her property. Moreover, article 952 of the Civil Code of Québec, CCQ-1991, c. 64 (CCQ) provides that it is sufficient to demonstrate that a measure taken by a public authority entails the suppression of the reasonable uses of the property in order to establish the disguised expropriation: Decision, paras. 216–219.
[38] However, it is established that Parliament—that is, the federal legislature—can derogate from Quebec civil law in exercising its legislative authority, just as it is open to the Quebec legislature to restrict or set aside the principle established in article 952 of the CCQ, as long as it does so in express terms: Decision, para. 223.
[39] For its part, the Federal Court was of the view that since Parliament, through section 64 of the Act, had expressly provided a mechanism for compensation for losses suffered as a result of the making of an emergency order, the concept of disguised expropriation did not apply: Decision, paras. 233, 237.
[40] For these reasons, the Federal Court dismissed the appellants’ action.
IV. Issues [41] What is surprising about this case is that it is presented as an extracontractual civil liability case rather than an administrative law issue. The Act provides for the possibility to compensate those who have suffered losses as a result of the making of an emergency order, which has not yet occurred in this case. The courts apply administrative law principles on a daily basis to issues of non-compliance with the legislation and the exercise of discretion (or lack thereof) that violates the framework of its enabling statute.
[42] The appellants have chosen to proceed by way of action under the CLPA, which brings its own set of problems. In Quebec, the extracontractual civil liability of the federal government is engaged by the damage caused by the fault of a servant of the Crown. It follows that the appellants, in order to succeed, must show that one or more servant(s) of the Crown caused them damage through their fault(s). However, not every damaging act of a Crown representative necessarily constitutes a fault of a servant of the Crown that engages his or her extracontractual civil liability, even if it is possible to remedy this act based on administrative law.
[43] Since there is no dispute that the Minister is a servant of the Crown, the only remaining issue is whether the Governor in Council is also a servant of the Crown; the Federal Court did not address this issue. The appellants argue that the Federal Court erred when it failed to consider the possibility that the servants in question were the Governor in Council in conjunction with the Minister. This is an issue that will have to be examined.
[44] With respect to the second criterion, that of fault, two issues must be considered. First, it must be asked what behaviour is alleged against the servant of the Crown. Second, it must be determined whether that behaviour is a fault and whether the actor is exempt from extracontractual civil liability by virtue of some privilege or immunity. A decision or a lack of a decision cannot be a fault within the meaning of the CLPA if it is sheltered from all legal condemnation.
[45] The third criterion is the cause of the damage suffered. The Federal Court exonerated the Governor in Council and held that the cause of the damage was the Minister’s failure to compensate the appellants as provided for in the Act. It remains to be seen whether this finding is erroneous.
[46] In the alternative, the appellants argue that the fact that they were not compensated when the making of the emergency order deprived them of the benefit of their land constituted a disguised expropriation. This issue will be examined if the action in extracontractual civil liability is unsuccessful.
V. Analysis [47] Since this Court is hearing an appeal from a Federal Court judgment rendered after a trial, the standard of review is that set out in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235: correctness for questions of law and palpable and overriding error for questions of fact and questions of mixed fact and law, except for extricable questions of law, for which the standard of correctness is also applicable.
A. The extracontractual civil liability of the Crown (1) Is the Governor in Council a servant of the Crown? [48] At paragraph 141 of its Decision, the Federal Court noted that there has not yet been a judicial pronouncement to the effect that the Governor in Council is a servant of the Crown, but that some have taken the view that this is not the case. The Federal Court cited a decision of the Supreme Court of British Columbia to that effect, Pacific Shower Doors (1995) Ltd. v. Osler, Hoskin & Harcourt, L.L.P., 2011 BCSC 1370, in which it is simply stated at paragraph 111 that the Governor in Council is not “a servant of the Crown”.
[49] The Federal Court did not dwell on the issue of the status of the Governor in Council because it was of the view that, in any event, the Governor in Council enjoyed relative immunity for economic, social or political decisions: Decision, paras. 141, 144.
[50] The appellants, for their part, challenged the finding regarding the relative immunity of the Governor in Council (see, in particular, paras. 46–47), but without addressing the issue of the status of the Governor in Council. Moreover, the appellants argued that [translation] “the actions of the Governor in Council and the Minister, taken individually and cumulatively, constitute a fault and an abuse of power entailing the civil liability of the respondent”: memorandum of the appellants, para. 42.
[51] It seems clear to me that the Governor in Council can only have committed a fault within the meaning of the CLPA, individually or cumulatively, if it is a servant of the Crown, which is an issue that the appellants have avoided. However, the answer to this question is not self‑evident. The fact that the appellants have not addressed this issue does not prevent me from doing so, since it arises before the issue of immunity even presents itself.
[52] The appellants argued that, by failing to fulfill the duty to make regulations, the Governor in Council [translation] “has acted out of synch with [the Act]” and has “neutralized the power granted to the Minister to compensate the appellants”: memorandum of the appellants, para. 39. In so doing, the appellants have intermingled the principles of administrative law and extracontractual civil liability. In administrative law, the fact that the holder of a power failed to comply with the law justifies the intervention of the courts, whereas in Crown civil liability, the courts can intervene only if the holder of the power is a servant of the Crown. As I have just mentioned, this element is absent from the arguments put forward by the appellants.
[53] For her part, the respondent bases her argument on the definitions of Governor General and Governor in Council in section 35 of the Interpretation Act, R.S.C. 1985, c. I-21:
Governor, Governor General or Governor of Canada means the Governor General of Canada or other chief executive officer or administrator carrying on the Government of Canada on behalf and in the name of the Sovereign, by whatever title that officer is designated;
gouverneur, gouverneur du Canada ou gouverneur général Le gouverneur général du Canada ou tout administrateur ou autre fonctionnaire de premier rang chargé du gouvernement du Canada au nom du souverain, quel que soit son titre.
Governor General in Council or Governor in Council means the Governor General of Canada acting by and with the advice of, or by and with the advice and consent of, or in conjunction with the Queen’s Privy Council for Canada;
gouverneur en conseil ou gouverneur général en conseil Le gouverneur général du Canada agissant sur l’avis ou sur l’avis et avec le consentement du Conseil privé de la Reine pour le Canada ou conjointement avec celui-ci.
[54] Section 3 of the CLPA, which is the basis of the appellants’ claims, reads as follows in relation to Quebec:
3 The Crown is liable for the damages for which, if it were a person, it would be liable
3 En matière de responsabilité, l’État est assimilé à une personne pour :
(a) in the Province of Quebec, in respect of
a) dans la province de Québec :
(i) the damage caused by the fault of a servant of the Crown, or
(i) le dommage causé par la faute de ses préposés,
(ii) the damage resulting from the act of a thing in the custody of or owned by the Crown or by the fault of the Crown as custodian or owner;
(ii) le dommage causé par le fait des biens qu’il a sous sa garde ou dont il est propriétaire ou par sa faute à l’un ou l’autre de ces titres;
[55] It follows from this text that the extracontractual civil liability of the Crown is vicarious in the sense that the Crown is liable solely for the faults of its servants: Hinse, para. 58, Baird v. Canada, 1983 CanLII 5027 (FCA).
[56] The definition of “servant” (revised 2021) in the Oxford English Dictionary online is as follows: “A person who is engaged … to perform specified tasks or functions … ; a person who is in the service of another”. This definition sets out the ordinary meaning of the word. The context and purpose of the legislation, which are well set out in the Federal Court’s Decision, confirm that this is the meaning intended by Parliament:
... the Crown, at common law, was in principle sheltered from any extracontractual civil liability since it was considered that, being the source and fountain of justice, it could not act contrary to law. Over time, however, it had become technically possible to take legal action against the Crown in a case of extracontractual civil liability, but this could only happen if the alleged fault was attributable to one of its employees and if it gave its consent to filing the proceedings ... . (Citations omitted.)
[57] The control factor is one element, if not the primary element, in assigning liability for the fault of others: see London Drugs Ltd. v. Kuehne & Nagel International Ltd., 1992 CanLII 41 (SCC), [1992] 3 S.C.R. 299; 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., 2001 SCC 59, [2001] 2 S.C.R. 983; Civil Code of Québec, article 1463; Murray v. 9197-5748 Québec Inc., 2021 QCCA 153 at para. 35.
[58] In reviewing the two definitions from the Interpretation Act above, one can only conclude that the Governor General is at the top of the Government of Canada on behalf of the Queen and that the Governor in Council is merely the Governor General acting in concert with the Queen’s Privy Council, which includes the federal Cabinet. This means that the Governor in Council is at the top of the federal administration and is not subject to any control that would make the Governor in Council a servant of the Crown.
[59] What about the fact that the Act imposes a duty on the Governor in Council to make regulations? Does the obligation imposed on the Governor in Council by Parliament demonstrate that the Governor in Council is subject to the control of Parliament and is therefore a servant of the Crown? Under the principles of administrative law, the courts require the Governor in Council to do what the Act imposes on him or her, but this does not make the Governor in Council a servant of Parliament or of the courts. The fact that the Governor might be accountable to Parliament should not be likened to the degree of direction and control implied by the word “servant” as used in the CLPA. The former is a question of political and electoral accountability, while the latter is a question of operational control.
[60] I find that the Governor in Council is not a servant of the Crown within the meaning of the CLPA. It follows that the failure of the Governor in Council to make regulations, even assuming that this could constitute a fault, does not open the door to extracontractual civil liability on the part of the Crown. This being the case, the appellants’ position that it is the actions of the Governor in Council and the Minister, cumulatively, that engage the Crown’s civil liability does not hold water because the actions of the Governor in Council are not likely to engage his or her civil liability.
[61] Since it is not disputed that the Minister is the only servant of the Crown involved, the next issue that must be reviewed is whether her actions constitute faults within the meaning of the CLPA.
(2) The Minister’s fault [62] The appellants argue that, both before and after the decision in Groupe Maison Candiac was rendered, the Minister was wrong in not compensating them. It should be recalled that in Groupe Maison Candiac, the Federal Court determined that the Minister could not rely on the lack of regulations to legitimize her refusal to exercise the discretion conferred on her pursuant to subsection 64(1) of the Act; to find otherwise, according to the Federal Court, would allow the holder of the regulatory power to neutralize the legislation by failing to exercise the power conferred under the Act.
[63] The Federal Court noted that harm resulting from an act or omission does not necessarily lay the basis for a private cause of action:
... insofar as the Minister, according to Groupe Maison Candiac, erred in law by taking the position that the absence of regulations deprived her of the power to exercise her discretion under subsection 64(1) of the Act. In my opinion, only proof of bad faith can engage the liability of the federal Crown in connection with this error. However, this proof has not been made.
Decision, para. 200. See also para. 202.
[64] With respect to the Minister’s inaction since Groupe Maison Candiac was rendered, the Federal Court rejected the appellants’ argument that the Minister had failed to implement a judicial decree and therefore could not rely on the protection afforded by the principles of Crown immunity. Rather, the Federal Court was of the view that the judgment in Groupe Maison Candiac did not impose anything on the Minister. There was no conclusion in its disposition creating any obligation whatsoever on the Minister: Decision, paras. 210–211. This conclusion is unassailable.
[65] The appellants challenge the finding that the position taken by the Minister did not engage the liability of the Crown because:
[translation]
the Minister never decided not to pay compensation to the appellants;
the Minister always considered that the lack of regulations precluded her from paying compensation; and
in doing so, the Minister never exercised her jurisdiction pursuant to subsection 64(1) [of the Act], contrary to the intent clearly evidenced by Parliament in enacting the [Act].
Memorandum of the appellants, para. 51
[66] Moreover, the appellants do not agree that, since the decision in Groupe Maison Candiac was rendered, the Minister can consider a claim for compensation. In addition, they emphasize that the Minister has not done anything whatsoever to implement Groupe Maison Candiac: memorandum of the appellants, paras. 52–53.
[67] Furthermore, the appellants do not accept that they must make a claim for compensation now, after all the steps that they have taken to assert their rights, including making oral submissions to the Minister’s office, presenting a formal notice, and suing. This being the case, it appears that the appellants have indeed made a claim for compensation, which has yet to be answered.
[68] For her part, the respondent cites the Federal Court’s findings with approval.
[69] Assuming that the law would allow the Minister to exercise her discretion and compensate the appellants in the absence of regulations, is the failure to do so a fault that engages the Crown’s extracontractual civil liability? The basic principle was set out in Holland v. Saskatchewan, 2008 SCC 42 (CanLII), [2008] 2 S.C.R. 551 at para. 9:
... The law to date has not recognized an action for negligent breach of statutory duty. It is well established that mere breach of a statutory duty does not constitute negligence: The Queen in right of Canada v. Saskatchewan Wheat Pool, 1983 CanLII 21 (SCC), [1983] 1 S.C.R. 205. The proper remedy for breach of statutory duty by a public authority, traditionally viewed, is judicial review for invalidity. ...
[70] This does not preclude a civil liability action from succeeding, but it must be based on something other than the mere breach of a duty:
Negligence is also alleged by TeleZone. Tort liability, of course, is b