Date:
20120801
Docket:
T-2037-11
Citation: 2012
FC 948
Ottawa, Ontario,
August 1, 2012
PRESENT: The
Honourable Mr. Justice Phelan
BETWEEN:
|
|
ATTAWAPISKAT FIRST NATION
AS REPRESENTED BY CHIEF AND
COUNCIL
|
|
|
|
Applicant
|
|
and
|
|
|
HER MAJESTY THE QUEEN IN RIGHT
OF CANADA, AS REPRESENTED BY THE MINISTER OF ABORIGINAL AFFAIRS AND NORTHERN
DEVELOPMENT CANADA
|
|
|
|
Respondent
|
|
|
|
|
REASONS FOR
JUDGMENT AND JUDGMENT
I. OVERVIEW
[1]
The
Applicant, Attawapiskat First Nation [AFN], seeks judicial review of the Respondent Minister of
Aboriginal Affairs and Northern Development’s [Minister] decision to appoint a
Third-Party Manager [TPM] to AFN due to an alleged default by AFN under its
Comprehensive Funding Agreement.
[2]
This
judicial review confirms, if such confirmation were needed, that decisions made
in the glare of publicity and amidst politically charged debate do not always
lead to a reasonable resolution of the relevant issue.
[3]
The
housing situation at Attawapiskat was extensively covered in the media. This
case started with accusations of political motive and retribution by the
federal government, in the person of the Prime Minister and some Cabinet
Ministers, against the AFN for the public embarrassment the housing situation
caused. Those allegations were largely withdrawn and to the extent that they
linger, the Court finds that there is no evidence that the Prime Minister or
the Cabinet engaged in such reprehensible conduct. The problem in this case
does not lie at the feet of the political masters but in the hands of the
bureaucracy.
[4]
While
there was a “default” under the Comprehensive Funding Agreement, the remedy
selected – the appointment of a Third Party Manager – was unreasonable. The
decision to appoint did not respond in a reasonable way to the root of the
problems at Attawapiskat nor to the remedies available upon default under the
Comprehensive Funding Agreement. The Respondent invoked a financial management
remedy without considering more reasonable, more responsive or less invasive
remedies available.
[5]
The Applicant
previously brought a Motion for several forms of interlocutory relief including
an injunction against the Minister from appointing a TPM. By Order dated
February 3, 2012, this Court dismissed the Applicant’s Motion subject to
compliance by the Minister and his TPM with the terms of the Order.
[6]
At the time
of the injunction hearing, the most pressing matter was the movement of
22 “trailer” homes [modular homes] over a winter road and their installation.
The Court’s Order refusing the injunction was conditioned by terms that were to
make such movement and installation possible. Absent such conditions in the
Order and compliance therewith, some form of injunctive relief would have been
granted.
[7]
Of
significance to the injunction hearing and to this judicial review is that it
was the AFN who obtained a quote for the modular homes and who had secured the
assistance of De Beers Canada Ltd., the mining company operating a mine near
the reserve and who are experienced in the installation of such housing, as
project manager.
[8]
On
April 5, 2012, and effective April 19, 2012 (five days before the judicial
review application was scheduled to be heard), the Respondent withdrew the TPM
and subsequently brought a Motion to Dismiss on the basis that the judicial
review was moot. That Motion was heard on the same day as the judicial review
application, dismissed and the judicial review proceeded.
[9]
The
parties were advised that more fulsome reasons for dismissal of the Respondent’s
Motion to Dismiss would be contained in the Reasons issued on the judicial
review application. For the reasons that follow, the Court dismissed the
Respondent’s Motion and concludes that the application for judicial review
should be allowed.
II. BACKGROUND
[10]
Attawapiskat
First Nation is one of seven Mushkegowuk Cree communities near James Bay in
northern Ontario. The AFN have 300 housing units, most of which have reached or are
near the end of their useful life with the result that last year, the AFN
experienced a serious and unprecedented housing crisis on the reserve.
[11]
Many
AFN members were living in overcrowded and unsafe conditions in uninsulated and
unserviced dwellings or in tents where sanitation was a bucket and where mold
was rampant. The Applicant filed numerous letters from medical professionals
that address the types of diseases and other conditions on the Reserve due to
the shortage of proper housing. The situation was an embarrassment to a country
as rich, strong and generous as Canada.
[12]
In
August 2011, the AFN’s Housing Manager expressed concern to the AFN Chief,
Chief Spence, that band members were requesting construction materials to
fortify their tents and shacks, and that no funds or resources were available
for that purpose.
[13]
On
October 28, 2011, after consultation with AFN’s Chief and Council, Grand Chief
Stan Louttit of the Mushkegowuk Council declared a state of emergency as a
result of the housing crisis developing in several Mushkegowuk First Nation
communities including Attawapiskat, particularly in the face of the upcoming
winter weather.
[14]
Notably,
five families living in tents in the Attawapiskat community were identified by
the AFN Council as a priority. It would appear that officials assumed initially
that these were the only people facing a crisis whereas, to the AFN, they were
not the only people in need but they were the most critical of those in need.
[15]
By
a letter dated November 4, 2011, the AFN submitted a proposal for
emergency funding from Aboriginal Affairs and Northern Development Canada
(AANDC) totaling $499,500 to renovate condemned houses on the reserve and
render them safe and habitable for families that were living in tents and
shacks.
[16]
On November 9,
2011, AANDC confirmed that it would advance funds of approximately $500,000 for
that purpose and authorized an emergency draw of $350,000 from the existing
funding. AANDC requested that the AFN identify the names of the five families
currently living in tents who would be the priority families to move into the renovated
houses.
[17]
On
November 12, 2011, the AFN issued its own declaration of emergency with respect
to the housing crisis.
[18]
The
AFN’s plans and identified needs expanded over the period to the end of 2011 as
further requirements arose. On November 21, 2011, Chief Spence advised AANDC
officials that there were (in addition to those in tents) 17 families living in
shacks whose needs had become urgent and she requested a further $1.5 million.
In response, AANDC asked Chief Spence to submit a further proposal for funds.
[19]
On
November 25, 2011, during a conference call to discuss the declarations of
emergency, Chief Spence informed AANDC officials that the Chief and Council
lacked the resources and capacity to address the housing crisis. The evidence
is that the Chief and Council meant that they did not have the operational
capacity to handle the crisis, not that they could not manage the problem or
that there was some issue of financial management.
[20]
Finally,
on November 28, 2011 (after officials had been invited by the Chief since
November 4, 2011), AANDC officials visited Attawapiskat in order to assess the
housing crisis. The following day, the Senior Assistant Deputy Minister [ADM] responsible
for Regional Operations of AANDC emailed the AANDC Associate Regional Director
who was still at the AFN Reserve and first referred to the possible appointment
of a TPM to Attawapiskat. This was not made known to the AFN.
[21]
At
no time prior to the appointment of the TPM did departmental officials indicate
that there was any problem with Band management. The Band was already under a
co-management regime and no issue of Band management or financial
administration was raised.
[22]
On
November 2, 2011 and then again on November 17, 21, 25, 28 and 29, 2011, the
Minister and his Parliamentary Secretary were questioned in the House by
Opposition members concerning the status of the Government’s response to the
Attawapiskat housing crisis which, by that time, had attracted significant
media attention and public criticism.
[23]
This
culminated in statements made by the Prime Minister in the House of Commons on
November 30, 2011 to the effect that the government had invested more than $90
million in the Attawapiskat community and that the current results were
unacceptable. The Prime Minister indicated that the government would take
action to provide immediate assistance and to improve the long-term management
of the community.
[24]
Despite
the comments about management, the Respondent has not produced evidence of
mismanagement or incorrect spending. In fact, the reference by the Prime
Minister as to the $90 million could not have related exclusively to the funds
made available for housing repair or reconstruction.
[25]
Further,
despite the declaration of emergency, until the announcement of the appointment
of the TPM, neither the Chief or Council were advised that there was a default
under the Comprehensive Funding Agreement.
[26]
It
would be inaccurate to suggest that officials were insensitive or uncaring
about the situation at Attawapiskat. The record shows that officials were
concerned about the crisis and the need to address the housing situation. The
problem seems to have been a lack of understanding of the AFN’s actual needs
and an intention on the part of officials to be seen to be doing something.
[27]
What
is striking about this case is the paucity of contemporaneous records by the
ADM. In an environment where note taking is a virtual art form, where the
subject matter was caught in media headlights and Hansard is replete with
Question Period behaviour, there is little written evidence of the
communications flowing from the ADM’s office both up and down the chain of
command.
[28]
That
same day, November 30, 2011, the ADM notified Chief Spence that the AFN was in
default of its Comprehensive Funding Agreement and that a TPM had been
appointed. The letter stated:
I am writing to advise you of Aboriginal Affairs and
Northern Development Canada’s intent to proceed from your current co-management
agreement to third-party management.
The Department considers the Attawapiskat First
Nation to be in default of its Aboriginal Recipient Funding Agreement per
section 9.1(d) and, in particular, that the health, safety or welfare of
members or recipients is at risk of being compromised.
Section 10.2.1 of your 2011/12 funding agreement
further states that in the event the Council is in default under this
Agreement, Canada may ‘appoint, upon providing notice to the Council, a Third
Party Funding Agreement Manager.’
This letter constitutes notice of Canada’s intent to place you under third-party management. I will notify you once a
third-party manager has been identified to ensure the delivery of AANDC
programs and services and to ensure the health and safety of your community.
[29]
Canada, through
Aboriginal Affairs and Northern Development Canada, provides transfer payments
to First Nations to enable them to deliver essential services, including
housing, to their members. This funding is provided by way of a Comprehensive
Funding Agreement signed by both Canada and the First Nation. The most recent
Agreement with Attawapiskat was signed on March 14, 2011 and is effective
April 1, 2011 to March 31, 2013 [CFA]. It was the CFA in effect at the time of
the appointment of the TPM.
[30]
Section
9.0 of the CFA contains the default provisions. In this instance, the
Respondent relied on section 9.1(d):
9.0
Default
9.1
The Council will be in default of this Agreement in the event:
(a)
the Council defaults on any of its obligations set out in this Agreement
or any other agreement through which a Federal Department provides funding to
the Council;
(b)
the auditor of the Council gives a denial of opinion or adverse opinion
on the Consolidated Audited Financial Statements of the Council in the course
of conducting an audit under section 4.4 (Reporting) or section 10.3 (Where
Financial Statements Not Provided) of this Agreement or the corresponding
clauses in its predecessor;
(c) in
the opinion of the Minister of Indian Affairs and Northern Development or any
other Minister that represents Her Majesty the Queen in Right of Canada in this
Agreement, having regard to Council’s financial statements and any other
financial information relating to the Council reviewed by the Minister, the
financial position of the Council is such that the delivery of any program,
service or activity for which funding is provided under this Agreement is at
risk;
(d)
in the opinion of the Minister of Indian Affairs and Northern Development
or any other Minister that represents Her Majesty the Queen in Right of Canada
in this Agreement, the health, safety or welfare of Members or Recipients is at
risk of being compromised.
(Emphasis by Court)
[31]
In
the event of default the Minister has a number of remedies from which to choose
as set out in section 10.0:
10.0
Remedies on Default
10.1
Parties Will Meet
10.1.1 Without
limiting any remedy or other action Canada may take under this Agreement, in
the even the council is in default, the parties will communicate or meet to
review the situation.
10.2
Actions Canada May Take
10.2.1
In the event the Council is in default under this Agreement, Canada may take
one or more of the following actions as may reasonably be necessary, having
regard to the nature and extent of the default:
(a) require the Council to
develop and implement a Management Action Plan within sixty (60) calendar days,
or at such other time as the parties may agree upon and set out in writing;
(b) require the Council to
seek advisory support acceptable to Canada;
(c)
appoint, upon
providing notice to the Council, a Third Party Funding Agreement Manager;
(d)
withhold any
funds otherwise payable under this Agreement;
(e)
require the
Council to take any other reasonable action necessary to remedy the default;
(f)
take such
other reasonable action as Canada deems necessary, including any remedies which
may be set out in any Schedule;
(g)
terminate the
Agreement.
[32]
Section
1.1.1 of the CFA defines “Third Party Funding Agreement Manager” as “a third
party, appointed by Canada, that administers funding otherwise payable to the Council
and the Council’s obligations under this Agreement, in whole or in part, and
that may assist the Council to remedy default under the Agreement.”
[33]
Decisions
regarding the imposition of Third-Party Management are normally made by the
Regional Director General because they are familiar with the details of default
prevention and management for a specific First Nation. However, in this case, the
ADM’s evidence is that he alone made the decision given the exigent
circumstances and his knowledge of the file.
[34]
In
the ADM’s subsequent explanation of his rationale for appointment of a TPM, he
relied on the fact that the AFN was already in co-management and therefore the
next level of intervention (according to corporate policy) was third party
management. The ADM did not refer to, rely upon or contemplate the remedies
available under Clause 10 of the CFA, including requiring the Council to seek
advisory support acceptable to the government.
[35]
The
Chief and Council immediately objected to AANDC’s appointment of a TPM by Band
Council Resolution and by letter dated December 2, 2011. The AFN also invited
immediate discussions.
[36]
In
response, AANDC asserted that its decision to appoint a TPM was a direct result
of AANDC taking into account the AFN declaration of the state of emergency and
the ensuing AANDC assessment which had determined that urgent health and safety
issues demand immediate action.
[37]
The
Respondent appointed as TPM a person who had been an advisor to the AFN
previously but who had been fired by the Council. There appears to be no
consideration of the reaction this particular appointment would have on the AFN
– a reaction that ought to have been contemplated.
[38]
The
suitability of the particular person is not a relevant issue here. However, it
does explain, in part, the atmosphere of distrust and animosity surrounding the
whole TPM process.
[39]
More
germane to the issues in this case is that the TPM had financial management
experience but none relevant to the handling of this housing crisis. Moreover,
the mandate of the TPM was that of financial control (approval of invoices and
similar matters) in a situation where financial management was not an issue.
[40]
In
December 2011, the Applicant brought this application for judicial review of
the Minister’s decision to appoint a TPM. In their submissions, they allege
that the Minister erred when he found the AFN to be in default of the CFA and
thus appointed a TPM without first finding the Council to be at fault with
respect to compromising the health, safety or welfare of AFN members, which the
Applicant argues the Minister was required to do in accordance with s 9.1(d). Alternatively,
they argue that the Minister erred in choosing to appoint a TPM as a remedy to
the housing crisis.
III. PRELIMINARY ISSUE
[41]
On
April 5, 2012, the Respondent notified the AFN of its intention to withdraw the
TPM, effective April 19, 2012. The Respondent subsequently filed a Motion to
Dismiss on the basis that the judicial review application was moot.
[42]
The
leading authority on the issue of mootness is Borowski v Canada (Attorney General), [1989] 1 S.C.R. 342 (available on
QL) [Borowski]:
15 The
doctrine of mootness is an aspect of a general policy or practice that a court
may decline to decide a case which raises merely a hypothetical or abstract
question. The general principle applies when the decision of the court will not
have the effect of resolving some controversy which affects or may affect the
rights of the parties. If the decision of the court will have no practical
effect on such rights, the court will decline to decide the case. This
essential ingredient must be present not only when the action or proceeding is
commenced but at the time when the court is called upon to reach a decision.
Accordingly if, subsequent to the initiation of the action or proceeding,
events occur which affect the relationship of the parties so that no present
live controversy exists which affects the rights of the parties, the case is
said to be moot. The general policy or practice is enforced in moot cases unless
the court exercises its discretion to depart from its policy or practice. The
relevant factors relating to the exercise of the court's discretion are
discussed hereinafter.
16 The approach in
recent cases involves a two-step analysis. First it is necessary to determine
whether the required tangible and concrete dispute has disappeared and the
issues have become academic. Second, if the response to the first question is
affirmative, it is necessary to decide if the court should exercise its discretion
to hear the case. The cases do not always make it clear whether the term
"moot" applies to cases that do not present a concrete controversy or
whether the term applies only to such of those cases as the court declines to
hear. In the interest of clarity, I consider that a case is moot if it fails to
meet the "live controversy" test. A court may nonetheless elect to
address a moot issue if the circumstances warrant.
[43]
According to Borowski,
above, it is necessary to consider, first, whether the proceeding is moot and
then, if it is moot, whether a decision should be rendered despite the
mootness.
A proceeding becomes
moot when circumstances have changed so that there is no longer a “live
controversy” between the parties that can be resolved by a decision in that
proceeding.
[44]
Relying
on the fact that the TPM had been withdrawn, the Respondent argued that there
can be no practical effect to any order that the appointment be set aside and
declaratory relief would be similarly meaningless. The Court disagrees.
[45]
While
a significant element of the relief previously sought is no longer at issue
given the withdrawal of the TPM, this Court’s determination of the legality of
the Minister’s decision to appoint the TPM will have a “practical effect” on
the rights of the parties, for example, with respect to who should undertake
the fees drawn by the TPM from the AFN’s CFA funding for the provision of
management services.
And,
as the Applicant notes, a TPM was appointed and he did, in fact, administer the
AFN’s funds between December 5, 2011 and April 19, 2012. The legality of his
actions on behalf of the AFN during this period may be affected by this Court’s
decision.
[46]
Further,
the
proper interpretation of the CFA, and particularly the default and remedy
provisions which the Applicant has put directly in issue, remains a live
controversy given the fact that the parties to this application continue to be
parties to the CFA and will administer their respective rights and obligations
under that agreement.
[47]
It
is also of note that other funding agreements between the Government and First
Nations
contain
similar or identical provisions to those at issue here, thus magnifying the
importance of resolving the interpretation issues. As the Applicant put it,
“the resolution of these issues will condition the legal relationships for many
First Nations and for Canada, and may well have a significant impact on the
language of future agreements as well as the interpretation of existing ones”.
However, the Court cautions that its conclusions are limited to this CFA in the
context of the specific facts of the case.
[48]
For
the foregoing reasons, the proceeding is not moot simply because the TPM has
been withdrawn and the Court dismisses the Respondent’s Motion. Even if this
proceeding were technically moot, for the above reasons, the Court exercises
its discretion to determine this judicial review.
IV. ISSUES
[49]
The
issues raised in this application are as follows:
1. Is
judicial review available?
2. If
so, what is the standard of review?
3. Did the
Minister err in his interpretation of the CFA?
4. Did
the Minister err in appointing a TPM?
V. LEGAL ANALYSIS
A. Is judicial review
available?
[50]
The
Respondent argues that judicial review is not available in the circumstances of
this case because the dispute is fundamentally contractual in nature, despite
the fact that a public authority is involved. As such, the law of contract is
applicable. They further argue that the power of the Minister to find the AFN
in default and to appoint a TPM derives entirely from the CFA itself and that
if the AFN seeks to have determined that Canada’s appointment of a TPM
constitutes a breach of the CFA, it must do so under s 17 of the Federal
Courts Act, which provides for relief against the Crown, by way of an
action, rather than by way of a judicial review. They say that given the
exercise of the contractual right to appoint a TPM is not an exercise of
delegated statutory authority, there is no legitimate public law purpose to
justify the substantive review of the reasonableness of the decision. However,
for the following reasons, the Respondent takes too narrow a view of the
relationship of the parties, the nature of the CFA and the unique circumstances
of the Crown in relation to natives – the sui generis nature of Crown-native
dealings.
[51]
In
Irving Shipbuilding Inc v Canada (Attorney General), 2009 FCA 116,
[2010] 2 FCR 488 [Irving Shipbuilding], relied upon by the Respondent,
the issue was whether
a subcontractor, Irving et al, of an unsuccessful bidder for a
government procurement contract may apply for judicial review to challenge the
fairness of the process for awarding the contract when the unsuccessful bidder
decides not to litigate.
At the Federal Court, Harrington J. dismissed the application for
judicial review rejecting the argument put forward by Irving et al that the
award of the contract to another bidder was vitiated by procedural unfairness.
[52]
In the course of dismissing the appeal, the Federal Court of
Appeal agreed with the parties that the award of a public
contract, in this case a contract for the maintenance and servicing of Canadian
Navy submarines, can be the subject of an application for judicial review.
However, the circumstances in which the Court should grant relief requires a
consideration of other factors. The Court explained as follows:
21 The
fact that the power of the Minister, a public official, to award the contract
is statutory, and that this large contract for the maintenance and servicing of
the Canadian Navy's submarines is a matter of public interest, indicate that it
can be the subject of an application for judicial review under section 18.1, a
public law proceeding to challenge the exercise of public power. However, the
fact that the Minister's broad statutory power is a delegation of the
contractual capacity of the Crown as a corporation sole, and that its exercise
by the Minister involves considerable discretion and is governed in large part
by the private law of contract, may limit the circumstances in which the Court
should grant relief on an application for judicial review challenging the
legality of the award of a contract.
[53]
On
the issue of whether the appellants in that case had a right to procedural
fairness arising from the common law in respect of administrative action, the
Court of Appeal explained:
46 The
context of the present dispute is essentially commercial, despite the fact that
the Government is the purchaser. PWGSC has made the contract pursuant to a
statutory power and the goods and services purchased are related to national
defence. In my view, it will normally be inappropriate to import into a
predominantly commercial relationship, governed by contract, a public law duty
developed in the context of the performance of governmental functions pursuant
to powers derived solely from statute.
[54]
In finding
against the appellants, the Court further explained “ . . . when the Crown
enters into a contract, its rights and duties, and the available remedies, are
generally to be determined by the law of contract” (at para 60).
[55]
More
recently, in Air Canada v Toronto Port Authority, 2011 FCA 347, 426 NR
131[Air Canada], the Federal Court of Appeal addressed the issue of
determining whether a matter is public or private for the purposes of judicial
review. Beginning at paragraph 60, the Court explained as follows:
60 In determining the public-private
issue, all of the circumstances must be weighed: Cairns v. Farm Credit Corp.,
[1992] 2 F.C. 115
(T.D.); Jackson v. Canada (Attorney General) (1997), 141 F.T.R. 1
(T.D.). There are a number of relevant factors relevant to the determination
whether a matter is coloured with a public element, flavour or character
sufficient to bring it within the purview of public law. Whether or not any one
factor or a combination of particular factors tips the balance and makes a
matter "public" depends on the facts of the case and the overall
impression registered upon the Court. Some of the relevant factors disclosed by
the cases are as follows:
- The
character of the matter for which review is sought. Is it a
private, commercial matter, or is it of broader import to members of the
public? See DRL v. Halifax Port Authority, supra; Peace Hills
Trust Co. v. Moccasin, 2005 FC 1364 at
paragraph 61, 281 F.T.R. 201
(T.D.) ("[a]dministrative law principles should not be applied to the
resolution of what is, essentially, a matter of private commercial
law...").
- The
nature of the decision-maker and its responsibilities. Is the
decision-maker public in nature, such as a Crown agent or a statutorily-recognized
administrative body, and charged with public responsibilities? Is the matter
under review closely related to those responsibilities?
- The
extent to which a decision is founded in and shaped by law as opposed to
private discretion. If the particular decision is authorized by or emanates
directly from a public source of law such as statute, regulation or order, a
court will be more willing to find that the matter is public: Mavi, supra;
Scheerer v. Waldbillig (2006), 208 O.A.C. 29,
265 D.L.R. (4th) 749
(Div. Ct.); Aeric, Inc. v. Canada Post Corp., [1985] 1 F.C. 127
(T.D.). This is all the more the case if that public source of law supplies the
criteria upon which the decision is made: Scheerer v. Waldbillig, supra
at paragraph 19; R. v. Hampshire Farmer's Markets Ltd., [2004] 1 W.L.R.
233 at page 240 (C.A.), cited with approval in MacDonald v. Anishinabek
Police Service (2006), 83 O.R. (3d) 132
(Div. Ct.). Matters based on a power to act that is founded upon something
other than legislation, such as general contract law or business
considerations, are more likely to be viewed as outside of the ambit of
judicial review: Irving Shipbuilding Inc, supra; Devil's Gap Cottager
(1982) Ltd. v. Rat Portage Band No. 38B, 2008 FC 812 at
paragraphs 45-46, [2009] 2 F.C.R. 267.
- The
body's relationship to other statutory schemes or other parts of government. If the body
is woven into the network of government and is exercising a power as part of
that network, its actions are more likely to be seen as a public matter: Onuschuk
v. Canadian Society of Immigration, 2009 FC 1135 at
paragraph 23, 357 F.T.R. 22; Certified
General Accountants Association of Canada v. Canadian Public Accountability
Board (2008), 233 O.A.C. 129
(Div. Ct.); R. v. Panel on Take-overs and Mergers; Ex Parte Datafin plc.,
[1987] Q.B. 815 (C.A.); Volker Stevin N.W.T. ('92) Ltd. v. Northwest
Territories (Commissioner), [1994] N.W.T.R. 97, 22 Admin. L.R. (2d) 251
(C.A.); R. v. Disciplinary Committee of the Jockey Club, ex parte Aga Khan,
[1993] 2 All E.R. 853 at page 874 (C.A.); R. v. Hampshire Farmer's Markets
Ltd., supra at page 240 (C.A.). Mere mention in a statute, without
more, may not be enough: Ripley v. Pommier (1990), 99 N.S.R. (2d) 338,
[1990] N.S.J. No. 295
(S.C.).
- The extent
to which a decision-maker is an agent of government or is directed, controlled
or significantly influenced by a public entity. For example,
private persons retained by government to conduct an investigation into whether
a public official misconducted himself may be regarded as exercising an
authority that is public in nature: Masters v. Ontario (1993), 16 O.R. (3d) 439,
[1993] O.J. No. 3091
(Div. Ct.). A requirement that policies, by-laws or other matters be approved
or reviewed by government may be relevant: Aeric, supra; Canadian
Centre for Ethics in Sport v. Russell, [2007] O.J. No. 2234
(S.C.J.).
- The
suitability of public law remedies. If the nature of the matter is such that public law
remedies would be useful, courts are more inclined to regard it as public in
nature: Dunsmuir, supra; Irving Shipbuilding, supra
at paragraphs 51-54.
- The
existence of compulsory power. The existence of compulsory power over the public at large
or over a defined group, such as a profession, may be an indicator that the
decision is public in nature. This is to be contrasted with situations where
parties consensually submit to jurisdiction. See Chyz v. Appraisal Institute
of Canada (1984), 36 Sask. R. 266
(Q.B.); Volker Stevin, supra; Datafin, supra.
- An
"exceptional" category of cases where the conduct has attained a
serious public dimension. Where a matter has a very serious, exceptional effect on
the rights or interests of a broad segment of the public, it may be reviewable:
Aga Khan, supra at pages 867 and 873; see also Paul Craig,
"Public Law and Control Over Private Power" in Michael Taggart, ed., The
Province of Administrative Law (Oxford: Hart Publishing, 1997) 196. This
may include cases where the existence of fraud, bribery, corruption or a human
rights violation transforms the matter from one of private significance to one
of great public moment: Irving Shipbuilding, supra at paragraphs
61-62.
[56]
Despite
the Respondent’s reliance on the above cases, the context of the present
dispute cannot be said to be “essentially commercial” or to be a private matter
in all of the circumstances. Indeed, taking into consideration what is being
acquired by the government through the CFA as well as the nature of the
relationship between the parties, it is clear that the present dispute is far
from private for the purposes of judicial review.
[57]
Here,
the CFA was an agreement for the provision of funding for essential services,
such as housing, to members of a First Nation living in the isolated and
hostile environment of the north. These members live on reserves created by
treaty where such services are the life blood of the community. This is clearly
distinct from a contract for the maintenance and servicing of submarines as in Irving
Shipbuilding, above, or the buying of pencils or computers for government
operations.
[58]
Further,
the relationship between the Government and a First Nation is unique and cannot
be analogized to the relationship between the Government and a company bidding
on a government contract. Indeed, given the current situation of many First
Nations members, it is questionable whether they could return to their
traditional lifestyle for survival if the government did not assist in
supplying some essential services like housing. While treaty rights are not directly
at issue, treaty and Crown relationship plays an underlying role. This
situation is one that engages the honour of the Crown. As such, the dispute is
imbued with public law elements.
[59]
Further,
the AFN relies on funding from the government through the CFA to provide
essential services to its members and as a result, the CFA is essentially an
adhesion contract imposed on the AFN as a condition of receiving funding
despite the fact that the AFN consents to the CFA. There is no evidence of real
negotiation. The power imbalance between government and this band dependent for
its sustenance on the CFA confirms the public nature and adhesion quality of
the CFA.
[60]
This
Court has, in several cases, issued decisions on judicial review of issues
similar to those in this case. In Elders Council of Mitchikanibokok Inik v Canada (Minister of Indian Affairs and Northern Development, 2009 FC 374, 343 FTR 298,
the Court dealt with management and financial issues. In Kehewin Cree Nation
v Canada, 2011 FC 364 (available on QL), the Court, in judicial review
proceedings, dealt with a band’s failure to provide financial and other reports
to government as part of funding arrangements.
[61]
Applying
the principles or factors in Air Canada, above, the Court concludes:
·
the
character of the matter in issue is broader than simply commercial. The matter
impacts the AFN’s ability to operate and manage its affairs as a “people”.
·
the
nature of the decision-maker is as the delegate of the Minister carrying out
responsibilities of a public nature owed to a group of First Nations people.
·
the
decision at issue is founded by a provision that speaks directly to the
“health, safety or welfare” of these people. It is a provision of public
welfare not commercial enterprise.
·
the
Minister’s relationship to the AFN is intertwined with constitutional and
statutory schemes. It is a relationship of one government to another.
·
there
is no issue that the decision-maker is an agent of the federal government
directed by statute, regulation and governmental policy.
·
public
law remedies such as declaration, injunction and certiorari would
adequately address the challenge to the decision to appoint a TPM.
·
the
AFN are in a compulsory relationship with the Crown by virtue of the
constitution and legislation. This is not a consensual submission to
jurisdiction.
·
there
is no doubt that given the public, media and political profile of the housing
crisis, the issues in this matter had a serious public dimension.
[62]
Ultimately,
the Court concludes that judicial review is available in the circumstances of
this case.
B. Standard of Review
[63]
On
the first issue regarding the Minister’s interpretation of the CFA, and
specifically whether the risk of compromise to the health, safety or welfare of
AFN members must be caused by the Council before the Council can be found in
default of the CFA (and the Minister can seek a remedy of appointing a TPM),
the applicable standard of review is correctness.
[64]
The
Minister, in interpreting the CFA, and his powers under the CFA, does not enjoy
the deference that an adjudicative tribunal interpreting its statute enjoys for
the reasons given by the Federal Court of Appeal in Canada (Fisheries and
Oceans) v David Suzuki Foundation, 2012 FCA 40, (sub nom Georgia
Strait Alliance v Canada (Minister of Fisheries and Oceans)), 427 NR 110 [David
Suzuki].
[65]
In
David Suzuki, above, the Minister of Fisheries and Oceans appealed a
judgment of the Federal Court that declared that ministerial discretion does
not “legally protect” critical habit under section 58 of the Species at Risk
Act [SARA] and that it was unlawful for the Minister to have cited
discretionary provisions of the Fisheries Act in a protection statement.
In his first ground of appeal concerning the standard of review, the Minister
argued that Parliament made him responsible for the administration of the
regulatory schemes of the SARA and of the Fisheries Act; hence, his
interpretation of their provisions is entitled to deference. In rejecting this
position, the Federal Court of Appeal referred to recent Supreme Court of
Canada jurisprudence beginning with Dunsmuir v New
Brunswick,
2008 SCC 9, [2008] 1 S.C.R. 190 [Dunsmuir],
that established that, unless the situation is exceptional, the interpretation
by an adjudicative tribunal of its enabling statute or of statutes closely
related to its functions should be presumed to be a question of statutory
interpretation subject to deference on judicial review. The Court then
explained as follows:
96 …
By empowering an administrative tribunal to adjudicate a matter between
parties, Parliament is presumed to have restricted judicial review of that
tribunal's interpretation of its enabling statute and of statutes closely
connected to its adjudicative functions. That presumption may however be
rebutted if it can be found that Parliament's intent is inconsistent with the
presumption.
97 The
Minister is inviting this Court to expand the above-described Dunsmuir analytical framework and presumption to all
administrative decision makers who are responsible for the administration of a
federal statute. I do not believe that Dunsmuir and
the decisions of the Supreme Court of Canada which followed Dunsmuir stand for this proposition.
98 What
the Minister is basically arguing is that the interpretation of the SARA and of
the Fisheries Act favoured by his Department and by
the government's central agencies, such as the Department of Justice, should
prevail. The Minister thus seeks to establish a new constitutional paradigm
under which the Executive's interpretation of Parliament's laws would prevail
insofar as such interpretation is not unreasonable. This harks back to the time
before the Bill of Rights of 1689 where the Crown
reserved the right to interpret and apply Parliament's laws to suit its own
policy objectives. It would take a very explicit grant of authority from
Parliament in order for this Court to reach such a far-reaching conclusion.
99 The
issues in this appeal concern the interpretation of a statute by a minister who
is not acting as an adjudicator and who thus has no implicit power to decide
questions of law. Of course, the Minister must take a view on what the statute
means in order to act. But this is not the same as having a power delegated by
Parliament to decide questions of law. The presumption of deference resulting
from Dunsmuir, which was reiterated in Alberta Teachers' Association at paras. 34 and 41, does
not extend to these circumstances. The standard of review analysis set out at
paragraphs 63 and 64 of Dunsmuir must thus be
carried out in the circumstances of this case in order to ascertain
Parliament's intent.
[66]
After
conducting a standard of review analysis, the Court of Appeal ultimately
determined that the issues of statutory interpretation raised by the appeal
should be reviewed on a standard of correctness.
[67]
In
this case, it is similarly the Minister’s interpretation, albeit of an
agreement and not a statute, that is at issue, not that of an adjudicative
tribunal. As noted in David Suzuki, above, while the Minister must “take
a view” on what particular provisions of the CFA mean in order to act, this is
not the same as having a power delegated by Parliament to decide questions of
law. In light of the fact that the question at issue is a question of law, that
the Minister acts in an administrative capacity, and not as an adjudicator, and
that the Minister does not have expertise in the interpretation of contracts,
the standard of correctness is applicable.
[68]
On
the second issue - of the choice of remedy, the parties agree and I would
concur that the applicable standard of review is reasonableness (see, for
example, Tobique
Indian Band v Canada,
2010 FC 67, 361 FTR 202; Ermineskin Tribe v Canada (Indian Affairs and
Northern Affairs), 2008 FC 741, 334 FTR 126).
C. Did the Minister err in
his interpretation of the CFA?
[69]
The
Applicant alleges that the correct interpretation of s 9.1(d) of the CFA
requires that the risk of compromise to the health, safety or welfare of AFN
members be caused by some action, or failure to act, attributable to the
Council before the Council can be found to be in default and the Minister can
invoke the remedy of appointing a TPM. They say that the Minister erred as he
did not turn his mind to the causes of the housing crisis and the specific
question of whether the Council was at fault. The Court disagrees.
[70]
Section
9.1(d) reads as follows:
The Council will
be in default of this Agreement in the event:
. . .
(d)
in the opinion of the Minister of Indian Affairs and Northern Development
or any other Minister that represents Her Majesty the Queen in Right of Canada
in this Agreement, the health, safety or welfare of Members or Recipients is at
risk of being compromised.
[71]
A
plain reading of s 9.1(d) of the CFA does not support the Applicant’s argument.
Rather, the provision is clear that once the Minister is reasonably of the
opinion that the health, safety or welfare of members of the AFN is at risk of
being compromised, the Council can be found to be in default of the CFA. The
Court agrees with the Respondent that s 9.1(d) functions as a deeming
provision.
[72]
The
Applicant equates “default” with “fault” where the two words are not
synonymous. This is particularly the case where the events of “default” are of
a type where fault may not necessarily be attributable to a party. One can
easily contemplate a threat to health or safety (for example) that arises from
entirely external forces but which require remedial action.
[73]
The
Applicant expresses concern that this community and many other native
communities constantly live in a situation where health, safety and welfare are
at risk of being compromised. This may well be true and is a sad
reflection of that life but the ability of the Minister to “swoop in” and take
control of native governments under CFAs is limited by the requirement of
“reasonableness”.
[74]
However,
even if the Minister could reasonably conclude that the health, safety or
welfare of AFN members were at risk of being compromised, the real issue at
stake is whether his choice of remedy was reasonable.
D. Did the Minister
err in appointing a TPM?
[75]
The
Respondent argues that the appointment of a TPM as a remedy to the housing
crisis was reasonable. They say that due to the AFN’s demonstrated and admitted
inability to deal with the housing crisis, the TPM was appointed in good faith
and temporarily to support the goal of addressing the urgent health and safety
needs of the families living in tents and sheds. They allege that the
reasonableness of the decision is evidenced by its consistency with AANDC
policies on default management.
[76]
The
Courts must not interfere with the choice of remedy invoked by the Minister
where that choice is reasonable in falling within a reasonable set of outcomes
given the facts. The Minister is entitled to a degree of deference in the choice
of remedies.
[77]
The
reasonableness of the choice of remedies is conditioned by a reasonable and
accurate appreciation of the facts and a consideration of the reasonable
alternatives available.
[78]
At
the core, the difficulty for the Respondent is that the ADM misunderstood the
nature of the problem, choosing a financial tool in the form of a TPM to
address what was really an operational problem. While the AFN were having
trouble addressing the housing crisis, what they lacked was not the ability to
manage their finances, in which case a TPM may have been an appropriate and
reasonable remedy, but the material means to do so.
[79]
Indeed,
when AANDC officials visited the AFN reserve on November 28, 2011, Chief Spence
explained that the Band had not invoked its Emergency Plan because it lacked
the necessary equipment, for example, cots, blankets and other supplies and
they requested assistance to work on their plan and obtain the necessary
equipment.
[80]
The
AFN had also been able to identify nine homes which could be renovated, with
five earmarked for those families living in tent frames. At the time that AANDC
officials visited the reserve, the AFN were awaiting final quotes and planned
to be able to start working on the houses before Christmas with move-in by the
middle of January. The AFN was also in the process of developing their second
funding proposal for the remaining homes.
[81]
Throughout
this process and the period leading up to the appointment of the TPM, AANDC did
not express any concern with the AFN’s financial management. Indeed, there was
little in the way of any contemporaneous notes in the record showing how the
ADM arrived at his decision to appoint a TPM at all. However, rather than
provide material assistance to help the AFN remedy any alleged default, the ADM
instead opted to appoint a TPM, whose expertise is financial in nature.
[82]
The
Court has already referred to the ADM’s concentration on the level of
intervention rising from co-management to TPM rather than focusing on the range
of remedies available. The concentration on internal policies detracted from
the attention to be paid to the remedies under the CFA.
[83]
One
of the factors relied upon by the ADM in appointing a TPM was the supposed
“failure of the First Nation to accurately identify how many and which members
were in need of assistance, as demonstrated by the late identification of 17
families in need of assistance” (paragraph 54 of ADM’s Affidavit).
[84]
The
ADM failed to appreciate that there was no failure in this respect but rather,
that Chief and Council had simply assigned as a “priority” for attention those
five families living in tents. What the ADM took to be a failure was not a
failure at all but merely a reasonable assignment of action priority.
[85]
There
was no attempt to clarify what the ADM saw as a dichotomy between the five
families living in tents and 17 families in sheds despite the Mushkegowuk First
Nation’s statement of emergency which referred to both situations.
[86]
The
ADM had been advised by his officials that the problems faced by the AFN in
addressing the housing crisis were not financial management in nature but due
to lack of resources and equipment. (Applicant’s Record, Vol 4, p 92-93)
[87]
Despite
choosing what was essentially a financial management remedy in the form of a
TPM and the mandate given, the ADM admitted that at the time of the crisis,
financial management was not the problem. In fact, the AFN was making progress
on the implementation of a 2011 remedial management plan.
[88]
The
evidence shows that the ADM never looked at any remedy other than the
appointment of a TPM despite the indications of problems with resources and
equipment.
[89]
Ultimately,
while the ADM concluded that the appointment of a TPM was a reasonable and
necessary remedy in light of the AFN’s lack of capacity to address the housing
crisis, the remedy he chose failed to deal with the problem at hand, which was
not financial in nature. Although courts must show deference to the Minister’s
choice of remedy and specifically, his decision to appoint a TPM, where the remedy
chosen does not respond to the problem, it is not reasonable.
[90]
Therefore,
the Court must conclude that the Respondent’s decision to appoint a TPM was
unreasonable in all the circumstances of this case.
[91]
The
Applicant is entitled to a declaration to that effect. There is no appointment
to be quashed nor actions to be enjoined. The Applicant is entitled to costs on
the usual scale.
JUDGMENT
THIS
COURT ADJUDGES AND DECLARES that the appointment of the Third Party
Manager on November 30, 2011 was contrary to law. The judicial review is
granted with costs.
“Michael L. Phelan”
Email this Content