Date: 20060519
Docket: A-498-04
Citation: 2006 FCA 190
CORAM: SEXTON
EVANS J.A.
MALONE J.A.
BETWEEN:
PETER G. WHITE MANAGEMENT LTD.
Appellant
and
HER MAJESTY THE QUEEN IN RIGHT OF CANADA AS
REPRESENTED BY THE MINISTER OF CANADIAN HERITAGE
FOR CANADA SHEILA COPPS, AND THE SAID MINISTER OF
CANADIAN HERITAGE FOR CANADA, THE PARKS CANADA
AGENCY AS REPRESENTED BY ITS CHIEF EXECUTIVE OFFICER
TOM LEE, AND THE SAID TOM LEE, THE FIELD UNIT SUPERINTENDENT
OF BANFF NATIONAL PARK, WILLIAM FISHER, CHARLES ZINKAN
AND THE ATTORNEY GENERAL OF CANADA
Respondents
REASONS FOR JUDGMENT
EVANS J.A.
A. INTRODUCTION
[1] Peter G. White Management Ltd. ("the appellant") has appealed from an order of a Judge of the Federal Court dismissing an appeal from a Prothonotary, who had struck all the defendants named by the appellant in its action, except for Her Majesty the Queen in Right of Canada and the Parks Canada Agency. The Crown has cross-appealed from that part of the Judge's order reversing the Prothonotary's decision to dismiss the entirety of the appellant's action.
[2] The Prothonotary's decision is reported as Peter G. White Management Ltd. v. Canada(Minister of Canadian Heritage), 2004 FC 346. The decision of the Federal Court which is the subject of this appeal is reported as Peter G. White Management Ltd. v. Canada (Minister of Canadian Heritage), 2004 FC 1246.
[3] In the first motion before the Prothonotary, the Crown moved to strike the individual defendants - a Minister and three federal public servants - on the ground that a determination of their liability was not within the jurisdiction of the Federal Court. The Crown argued that the appellant's claims against the individual defendants ultimately depend on an alleged breach of a covenant in the appellant's lease from the Crown of land in a national park. Since the right under the lease is not statutory, the Crown submitted that the appellant's action against the individual defendants is not based on a "law of Canada", and is thus outside the constitutionally permitted scope of federal jurisdiction.
[4] In granting this motion, the appellant says, the Prothonotary erred, and the Motions Judge should have allowed the appeal, since federal legislation governs the grant of Crown leases in national parks. Moreover, the appellant's claims depend on an allegation that the individual defendants caused loss to the appellant by conduct which was in excess of the powers conferred on them by federal legislation. Accordingly, the connection between the causes of action brought against the individual defendants and federal law is sufficient to engage the jurisdiction of the Federal Court.
[5] The question to be decided on the appeal, therefore, is whether the appellant has established that its claim against the individual defendants is based on a law of Canada for the purpose of bringing it within the constitutionally permitted scope of federal jurisdiction.
[6] In its second motion, which the Prothonotary allowed, the Crown moved to dismiss the appellant's action in its entirety as an abuse of process on the ground of res judicata. The Motions Judge reversed. In its cross-appeal, the Crown says that the Judge erred, since the legal and factual bases of the statement of claim were decided by Campbell J. in 1997 when dismissing an application for judicial review by the appellant to quash a refusal to grant it a licence in 1996 to operate a gondola on the leased lands. Campbell J.'s decision is reported as Peter G. White Management Ltd. v. Canada(Minister of Canadian Heritage) (1997), 132 F.T.R. 89.
[7] The question to be decided on the cross-appeal is whether the publication of a park Management Plan, after the 1996 refusal of a licence, raises a material legal issue that was not, and could not have been, decided by Campbell J.
B. BACKGROUND
[8] The appellant leases Crown land at Mt. Norquayin Banff National Park, where it operates a ski hill. It acquired the lease in 1995 as a result of an assignment from the original lessee, Banff Norquay Ski Corporation ("Norquay Ski"). The uses permitted in the lease include the operation of a gondola lift in the summer. However, the appellant has never been able to operate the lift outside the winter season because it has been refused a licence.
[9] The motions underlying this appeal and cross-appeal arise from actions which the appellant commenced in the Federal Court in February 2001, pursuant to subsection 17(1) (relief against the Crown) and paragraph 17(5)(b) (relief against servants of the Crown) of the Federal Courts Act, R.S.C. 1985, c. F-7. The appellant seeks $17.5 million in damages, alleging that the defendants are variously liable for breach of a covenant in the lease, and for the torts of inducing breach of contract, "regulatory expropriation", interfering with business relations, and abuse of public office.
[10] This statement of claim is the latest round of a long-standing dispute between the appellant and park authorities over the summer use of the gondola. The starting point is an agreement made between Norquay Ski and the Crown in 1988. At that time, Norquay Ski held a licence permitting it to conduct a business in the Mt. Norquay ski area of the Park, not a lease.
[11] Under the 1988 agreement, the area in which Norquay Ski could conduct its business in the winter was expanded and, in return, it gave up its right to operate the gondola lift in the summer. The agreement was embodied in the Long Range Plan for Mt. Norquay ("LRP"). The LRP is a non-statutory document, issued in 1989 after public consultation, which sets out the policy of the Canadian Parks Service on future development in Banff National Park. Clause 4.3.1 of the LRP states:
The commercial summer use of the gondola and Cliff House will be discontinued by the operator by December 31, 1990.
[12] However, the lease granted by the Crown to Norquay Ski in 1993 did not reflect this agreement. Thus, article 1(b) of the lease provides:
The Lessee acknowledges, agrees and it is a condition upon which this lease is granted that the land will be used only for the purpose of the following activities:
...
(b) Summer: operating a sight-seeing conveyance, retail stores, restaurant and coffee shop;
It is common ground that the appellant's gondola lift is a "sight-seeing conveyance" for the purpose of this provision.
[13] Article 12 provides that the lease is subject to the National Parks Act and regulations, and related statutes:
The Lessee will:
(a) obtain all licences required by the Regulations made pursuant to the National Parks Action; and
(b) comply with the provisions of the National Parks Act and of all other statutes that relate hereto, and with the Regulations made pursuant to such statutes, as they may be amended, revised or substituted from time to time;
[14] When the appellant took an assignment of the lease from Norquay Ski in 1995, it was aware of: the agreement between park authorities and its assignor respecting the summer use of the gondola; the provision in the LRP respecting the summer operation of the gondola; and the fact that Norquay Ski had not operated the gondola in the summer after 1990, even though the annual twelve-month licences issued to Norquay Ski for the years 1992-1995 did not restrict the operation of the gondola to the winter months.
[15] Nonetheless, the appellant went ahead with the purchase, on the strength of a legal opinion that its rights under the lease were not affected by the agreement. The advice was that the agreement was not binding on the appellant, because it was neither statutory in nature nor a covenant that ran with the lease, but was merely a contract to which the appellant was not a party.
[16] In 1996, the appellant made its first application for a licence to operate its gondola in the summer under the National Parks Business Regulations, C.R.C. 1978, c. 1115, which were replaced by the National Parks Business Regulations, 1998, SOR/98-455. In a letter of decision, dated July 2, 1996, the Field Unit Superintendent of Banff National Park at the time, Charles Zinkan, refused the application. The letter set out the factors that he had taken into account in exercising his discretion, including likely environmental impacts of the gondola use, and the LRP.
[17] In its application for judicial review of this decision in 1996, the appellant argued that it had an unfettered right under the lease to operate a gondola in the summer and that the Superintendent had no legal authority to, in effect, expropriate that right by refusing to grant it a licence under the regulations.
[18] Dismissing the application for judicial review in a decision rendered May 28, 1997, Campbell J. held that the appellant did not have the extensive right under article 1(b) of the lease that it claimed. Like other rights in the lease, the right to operate the gondola was subject to any applicable legislation and to the exercise of the Superintendent's broad statutory discretion under the regulations respecting the issue of any necessary licences. Campbell J. concluded (at para. 22) that the lease only gave the appellant "a very restricted contingent right to operate a business on the lands leased", and that the Superintendent had lawfully exercised his discretion to refuse to issue a licence to operate the gondola in the summer by reference to the relevant considerations, including the LRP, to which he had given appropriate weight. The appellant appealed from this decision, but abandoned the appeal on February 6, 2001, before it was heard.
[19] Mr Zinkan rendered his decision on July 2, 1996, and the application for judicial review was argued on May 5, 1997. Between these dates, the Minister of Canadian Heritage, the Honourable Sheila Copps, tabled in the House of Commons, on April 17, 1997, a Management Plan for Banff National Park ("MP"), pursuant to subsection 5(1.1) of the National Parks Act, R.S.C. 1985, c. N-14.
| 5(1.1) The Minister shall, within five years after the proclamation of a park under any Act of Parliament, cause to be laid before each House of Parliament a management plan for that park in respect of resource protection, zoning, visitor use and any other matter that the Minister considers appropriate.
|
5(1.1) Dans les cinq ans suivant la proclamation portant création d'un parc sous le régime d'une loi fédérale, le ministre fait déposer devant chaque chambre du Parlement un plan de gestion du parc en ce qui touche la protection des ressources, le zonage, les modalités d'utilisation par les visiteurs et toute autre question qu'il juge indiquée.
|
[20] This enactment was subsequently repealed and replaced by the Canada National Parks Act, S.C. 2000, c. 32, subsection 11(1), which is to the same effect.
[21] The MP was published in April 1997, with the approval of defendants, Tom Lee, then Assistant Deputy Minister, Parks Canada, with the Department of Canadian Heritage, and subsequently head of Parks Canada Agency, and Mr Zinkan, then Field Unit Superintendent of Banff National Park, and subsequently Executive Director of Mountain Parks. The only provision of this lengthy document relevant to the present litigation is found in the following few words in chapter 5.8, "Ski Areas", under the heading "Key Actions", "Norquay: Prohibit summer use of the lifts; this use is inconsistent with the long-range plan".
[22] In August 2000, the appellant again applied for a licence to operate the gondola outside the winter season, and was again refused. In a letter dated September 6, 2000, the Field Unit Superintendent of the Park, now William Fisher, wrote:
Thank you for your letter dated August 31, 2000 requesting approval to operate the North American chairlift beginning September 8, 2000. As you know, a similar request was made by Banff Mount Norquay in 1996 and that request was denied because this type of operation was not in compliance with the Long Range Plan for the Mount Norquay Ski Area. Since then the Banff National Park Management Plan, 1997 (page 48) provides clear direction on summer use at Norquay "Prohibit summer use of the lifts; this use is inconsistent with the long-range plan." Further, in 1997 Justice Campbell ruled against Banff Mount Norquay and its request for operation of the chairlift. I understand this decision has been appealed.
Based on the above, I am not prepared to issue Banff Mount Norquay a licence pursuant to the National Park Business Regulations or issue a Restricted Activity Permit under the National Park General Regulations to operate the North American chairlift for the five week period commencing September 8, 2000.
[23] The appellant did not make an application for judicial review to challenge this decision. Instead, in February 2001, it commenced the action from which the present motions arise. I note here that the defendants have not relied on the principle in Grenier v. Canada, 2005 FCA 348, to argue that the action is an abuse of process because the appellant should first have proceeded by way of an application for a judicial review of the Superintendent's decision. Since this issue has not been raised by counsel, I do not take any position on it in these reasons.
[24] In summary, the appellant's pleadings allege that the provision in the MP quoted above removed, or purported to remove, the Superintendent's discretion under the regulations to grant a licence after considering all the relevant factors, and was so regarded by Mr Fisher. The argument is that the gondola provision in the MP breached the appellant's right under the lease, thereby effectively expropriating a proprietary right and causing it financial loss.
[25] The appellant says that subsection 5(1.1) of the National Parks Act, under which the MP was developed and tabled, cannot be interpreted as authorizing this kind of interference with its legal rights without compensation. Consequently, the appellant alleges, the individual defendants were acting without statutory authority. Thus, in issuing and approving the disputed provision in the MP, the named defendants - Copps, Lee and Zinkan - are variously liable for "regulatory expropriation", inducing breach of contract, and abuse of public office. The tortious liability of the defendant Fisher is based on his allegedly unlawful rejection of the appellant's application for a licence in 2000.
[26] Since the appellant's appeal will be moot if the Crown's cross-appeal is successful, I shall deal first with the cross-appeal.
C. ISSUES AND ANLYSIS
Issue 1: Did the Motions Judge err in allowing the appeal and denying the defendants' motion to dismiss the action for abuse of process as being res judicata?
[27] The Motions Judge reversed the Prothonotary's decision to dismiss the appellant's action as res judicata, on the ground that the Prothonotary had misapprehended the facts: Merck & Co. Apotex Inc., [2004] 2 F.C.R. 459 (C.A.) at para. 19. In particular, he found that the statement of claim put in issue the lawfulness of a provision in the MP, which was issued after the Superintendent's refusal of the gondola operating licence in 1996, the subject of the application for judicial review decided by Campbell J. in 1997.
[28] Counsel for the Crown, however, argues that the appellant's statement of claim is no more than a new view of the facts, and that there is no material difference between the LRP and the MP with respect to the summer use of the gondola. The MP merely says that this use is prohibited as inconsistent with the LRP, which remains in effect.
[29] I disagree. In my view, the promulgation of the MP is material to the appellant's claim. First, the Mt. Norquay gondola provision in the MP is categorical in its terms: "prohibit the summer use of the lifts". The LRP, on the other hand, appears less mandatory, stating merely that the summer use of the gondola "will be discontinued by the operator by December 31, 1999". This difference in wording may explain why Mr Fisher rejected the appellant's 2000 licence application without canvassing in his letter the range of factors that he considered in his 1996 decision.
[30] Second, unlike the LRP, the MP was issued pursuant to statutory authority, another reason for the Superintendent to regard it as binding upon him, and as removing any discretion to grant the appellant's application for an operating licence in 2000. Moreover, the appellant argues, the gondola prohibition in the MP is legally binding on the Superintendent by virtue of the Parks Canada Agency Act, S.C. 1998, c. 31, sections 3, 4 and 5. Whether or not any of this proves to be correct, it would appear from the Superintendent's letter of decision that he may well have thought that the MP's prohibition of the summer use of the gondola was a binding direction or, at least, enabled him to refuse the licence on the basis of the MP and the LRP, without considering other factors.
[31] Unlike the 1997 application for judicial review, the appellant's present action against the defendants does not depend on a claim that it has the right to a licence under the lease. Rather, the allegation is that the MP unlawfully prevented, or purported to prevent, the Superintendent from considering the application for a licence on its merits, and from ever granting a licence to operate the gondola outside the winter season. As a result, the appellant claims that it has been deprived of its right under the lease to operate the gondola in the summer.
[32] For these reasons, the Motions Judge, in my view, was warranted in interfering with the Prothonotary's order, and made no reversible error in allowing the appeal and dismissing the Crown's motion to strike the appellant's action as res judicata.
Issue 2: Did the Motions Judge err in dismissing the motion to remove defendants from the action?
(i) standard of review
[33] The Motions Judge was of the view (at para. 10) that the removal of the individual defendants was not vital to the final issue of the case because, even if they were struck, the appellant was still left with its action against the Crown. The Crown is being sued for its breach of a covenant in the lease for the same amount of damages as the other defendants are being sued for in tort. In addition, the Crown may be vicariously liable for any torts which the other defendants may be found to have committed. Having concluded that the Prothonotary had not clearly erred, by exercising his discretion on some wrong principle or by misapprehending the facts, the Motions Judge upheld the Prothonotary's order and dismissed the appeal.
[34] In my respectful view, the Motions Judge was wrong for the following two reasons to find that the Crown's motion to dismiss the non-Crown defendants was not vital to the final issue in the case.
[35] First, even though arising from essentially the same facts, the causes of action pleaded against the various defendants by the appellant are separate and distinct. Removing defendants thus puts an end to the appellant's causes of action against them in the Federal Court. Second, if the individual defendants acted unlawfully in the manner alleged by the appellant, they might not be found to have been acting in the course of their employment when they promulgated or approved the provision in the MP concerning summer use of the gondola. In these circumstances, the Crown would not be vicariously liable for any harm that they may wrongfully have inflicted on the appellant.
[36] Consequently, I am of the view that the Motions Judge ought to have determined de novo, whether the individual defendants should be struck. I consider now whether the Prothonotary was correct in striking the non-Crown defendants from the appellant's action.
(ii) Naming Ministers and other servants of the Crown as defendants
[37] In the reasons for his order, the Prothonotary struck the Attorney General of Canada and the Minister of Canadian Heritage from the list of defendants named by the appellant, on the ground that their inclusion was duplicative and unnecessary. He said (at para. 13) that, when Her Majesty the Queen is named as defendant in an action, nothing useful is gained by adding Ministers in their representative capacity.
[38] The Prothonotary also concluded that, while the style of cause suggested that Ms Copps was being sued in her personal capacity, the acts alleged against her were all performed in connection with her official responsibilities respecting the MP. Consequently, it was not proper to name her as a defendant with respect to things done in her personal capacity.
[39] Thus, the Prothonotary said (at para. 10):
The basic proposition is that a Minister of the Crown may not be sued in his or her representative capacity, nor may he or she be sued personally, unless the actions are done in a personal capacity. This is clearly set out in Cairns v. Farm Credit Corp. (1991), 49 F.T.R. 308 (F.C.T.D.) at 310:
The plaintiffs have named the Honourable William McKnight as a defendant in this action. A Minister of the Crown cannot be sued in his representative capacity, nor can he be sued in his personal capacity unless the allegations against him relate to acts done in his personal capacity (Re Air India (1987), 62 O.R. (2d) 130; 44 D.L.R. (4th) 317 (Ont. H.C.)). As the plaintiffs have made no claims against the Minister relating to actions done in his personal capacity, the Honourable William McKnight must be struck as a party to the action.
Despite the dual capacities, representative and personal, set out in the style of cause, suggesting claims against the Minister of Canadian Heritage and that Minister, Sheila Copps, and for that matter against Superintendent Fisher, Field Superintendent Zinkan, and the Parks Canada Agency Chief Executive Officer, Tom Lee, there are no allegations in the statement of claim of any acts done in their personal capacity: rather those officials are said to have induced breach of contract and acted in a tortuous manner and abused their public office, not personally but in an official role, in the promulgation of the Banff National Park Management Plan of 1997.
(a)Attorney General and Minister of Canadian Heritage
[40] In its notice of appeal, the appellant appeals against striking from the action all the "individual defendants", other than Her Majesty in Right of Canada and the Parks Canada Agency. However, no submissions, either written or oral, were made on the appellant's behalf with respect to the removal of either the Minister of Canadian Heritage or the Attorney General of Canada. I infer from this silence that the appellant has abandoned its appeal against that part of the Prothontoary's order. Consequently, I would strike them from the action, and amend the style of cause accordingly.
(b) Messrs Lee, Zinkan and Fisher
[41] The appellant submits that defendants Lee, Zinkan and Fisher are liable for acts done in their personal capacity. Despite the misgivings apparent in the last paragraph quoted above from his reasons, the Prothonotary accepted (at para. 15) that the appellant's pleadings allege that Lee, Zinkan and Fisher committed wrongs in their personal capacities. Counsel for the defendants did not challenge this conclusion of the Prothonotary. Accordingly, I would not strike them from the action on the ground that they are named unnecessarily.
(c) Ms Copps
[42] The Prothonotary relied on the passage quoted above from Cairns as authority for the proposition that Ms Copps could not be sued in her personal capacity for acts done while acting as Minister, namely, promulgating the MP. Counsel for the appellant submits, however, that, since the pleadings allege that the inclusion of the gondola prohibition in the MP unlawfully violated the appellant's rights under the lease and caused it financial loss, this provision was not inserted in the MP in the discharge of a statutory duty. Accordingly, he says, Ms Copps is properly named as a defendant to the action in her personal capacity.
[43] I agree with this conclusion. It is a fundamental principle of the common law that servants of the Crown, including Ministers, are liable for breaches of private law duties on the same basis as other individuals: Peter W. Hogg and Patrick J. Monahan, Liability of the Crown, 3rd edn. (Toronto: Carswell, 2000) at chap. 1.2. It is not a defence to an action against a Crown servant that the tort was committed while the individual was performing official duties, absent, of course, statutory authorization of the act allegedly giving rise to liability.
[44] Indeed, paragraph 17(5)(b) of the Federal Courts Act, R.S.C. 1985, c. F-7, under which the appellant brings its action against the individual defendants, expressly contemplates that Crown servants may be sued for anything done or omitted in the performance of their duties. I see no basis for impliedly exempting Ministers from the categories of servants or officers of the Crown who may be sued for things done or not done while performing their duties.
[45] Thus, in Decock v. Alberta (2000), 186 D.L.R. (4th) 265, 2000 ABCA 122, the Court held that the defendants Klein (the Premier of Alberta) and McLellan (Alberta's Minister of Health) should not be struck as defendants from an action on the ground that the claim against them was based on their conduct while performing public duties. Russell J. A. stated (at para. 22):
It is a well-established principle of tort law that liability is, firstly, personal. .... Thus, in determining the liability of a Crown servant or officer, no distinction should be drawn between the individual's "official" versus "unofficial" actions. No matter the role of the tortfeasor, liability will always fall "first and foremost" personally upon that individual.
[46] See also George v. Harris (1999), 95 O.T.C. 13 (Ont. Ct.of Justice (Gen. Div.)) at paras. 33-34, aff'd. (1999), 89 A.C.W.S. (3d) 40 (Ont. Div. Ct.), where the defendants included Harris and Harnick, Ontario's Premier and Attorney General, respectively. Finally, in M. v. Home Office, [1994] 1 A.C. 377 (Eng. H.L.) at 415, Lord Woolf said: "... the reasoning of Upjohn J. was incorrect, if and in so far as ... he was seeking to suggest that a minister when acting in his official capacity could not be sued personally and an injunction granted."
[47] Accordingly, the Prothonotary ought not to have struck Ms Copps as a defendant on the ground that she committed the allegedly tortious acts in the course of her performance of her duties as a servant or officer of the Crown.
(iii) Are the appellant's claims against the individual defendants based on federal law?
[48] The primary focus of the written and oral submissions concerning the propriety of naming Copps, Lee, Zinkan and Fisher as defendants was whether the Court had jurisdiction over the claims against them. Paragraph 17(5)(b) of the Federal Courts Act expressly confers concurrent jurisdiction on the Federal Court for wrongs committed by servants and officers of the Crown in the performance of their official duties:
| (5) The Federal Court has concurrent original jurisdiction
...
(b) in proceedings in which relief is sought against any person for anything done or omitted to be done in the performance of the duties of that person as an officer, servant or agent of the Crown.
|
(5) Elle a compétence concurrente, en première instance, dans les actions en réparation intentées :
[...]
b) contre un fonctionnaire, préposé ou mandataire de la Couronne pour des faits - actes ou omissions - survenus dans le cadre de ses fonctions.
|
[49] However, a statutory conferral of jurisdiction on the Federal Court over a matter is not sufficient as a matter of constitutional law to engage federal jurisdiction. There must also be "an existing body of federal law which is essential to the disposition of the case and which nourishes the statutory grant of jurisdiction", and the law on which the case is based must also be "a law of Canada" within the meaning of section 101 of the Constitution Act 1867: ITO-International Terminal Operators Ltd. v. Miida Electronics Inc., [1986] 1 S.C.R. 752 at 766.
[50] In Stoney Band v. Canada(Minister of Indian Affairs and Northern Development),[2006] 1 F.C.R. 570, 2005 FCA 220, this Court adopted (at para. 24) Wilson J.'s explanation in Roberts v. Canada, [1989] 1 S.C.R. 322, of the apparent redundancies in the above tests. She said (at 330-3):
... the second element requires a general body of federal law covering the area of the dispute ... and the third element requires that the specific law which will be resolutive of the dispute be a "law of Canada" within the meaning of s. 101 of the Constitution Act, 1867.
[51] In my opinion, the National Parks Act, the regulations enacted under it, and the Parks Canada Agency Act, constitute "a general body of federal law" essential to the disposition of the dispute in the present case, and nourish the grant of jurisdiction conferred by paragraph 17(5)(b) with respect to the appellant's claims against the non-Crown defendants. Legislation governs the grant of leases in national parks, and confers powers to promulgate a MP and to refuse a business licence. The case concerns the intersection of those powers and the terms of the lease.
[52] More difficult, however, is whether the appellant's claims against the individual defendants are also sufficiently based on federal law to establish federal jurisdiction, given that the causes of action are for common law torts, and that whatever right the appellant has to operate the gondola arises under a clause in a lease which is not itself statutory.
[53] In contrast, in Canada v. Crosson (1999), 169 F.T.R. 218 (F.C.T.D.),aff'd. (2000), 265 N.R. 112, the Crown's claim for unpaid rent with respect to lands leased in a national park was based on rents fixed by the Minister pursuant to an express statutory power to determine a fair market rent. In In Crosson, the defendant-lessees argued that the Minister had erred in the exercise of the statutory power to determine a fair market rent and that, accordingly, the sum claimed by the Crown was not owing.
[54] The case law dealing with the nexus required between parties' legal rights and duties, and federal law is not easy to reconcile. Deciding on which side of a blurry line a particular case falls often depends more on an assessment of the particular facts in a given legal context than on general legal principle. Nonetheless, certain legal propositions can be derived from the case law on this aspect of the law of federal jurisdiction.
[55] First, in this case, only federal legislation qualifies as "a law of Canada" or as "an existing body of federal law which is essential to the disposition of the case", since the issue concerns the jurisdiction of the Federal Court over actions in tort against servants of the Crown.
[56] Second, a claim not otherwise based on federal law is not brought within the jurisdiction of the Federal Court merely because it arises from essentially the same facts as a related claim which is within federal jurisdiction, and is affected by that latter claim: [1980] 1 S.C.R. 695">Canada v. Thomas Fuller Construction Co. (1958), [1980] 1 S.C.R. 695; Roberts at 333-34; Stoney Band at paras. 51-52.
[57] Thus, in the present case, the appellant's claims against the individual, non-Crown defendants depend to a degree on establishing that the Crown is liable for breaching the clause in the lease respecting the summer use of the gondola. This connection is not in itself sufficient to establish federal jurisdiction over the claims against the Crown servants, even though the liability of the federal Crown is always founded on a law of Canada: [1977] 2 S.C.R. 1054">Quebec North Shore Paper Co. v. Canadian Pacific Ltd., [1977] 2 S.C.R. 1054 at 1063.
[58] Third, the Federal Court has jurisdiction over a case which is "in pith and substance" based on federal law and, in such a case, may apply provincial law incidentally in the course of resolving the litigation: ITO-International Terminal Operators at 781-82. Conversely, if a case is in "pith and substance" based on provincial common law, it is not within federal jurisdiction, even if it incidentally requires the determination of a question of federal law: Stoney Band at para. 57.
[59] Fourth, the fact that a plaintiff's cause of action is in tort or contract does not necessarily preclude the matter from federal jurisdiction. Contract and tort, Laskin C.J. said in [1980] 2 S.C.R. 442">Rhine v. R.; Prytula v. R., [1980] 2 S.C.R. 442 at 447 "cannot be invariably ... deemed to be, as common law, solely matters of provincial law."
[60] Fifth, when parties' rights arise under and are extensively governed by "a detailed statutory framework", disputes may be adjudicated in the Federal Court: [1980] 2 S.C.R. 442">Rhine and Prytula. The difficulty with applying this principle is to know how comprehensive the federal legislation must be in order to constitute a "detailed" framework.
[61] In [1980] 2 S.C.R. 442">Rhine and Prytula, which involved claims by the federal Crown to recover loans, Laskin C.J. said that the loans in question were made under and were authorized "as part of an overall scheme for the marketing of grain", and that federal legislation had an impact on the contract "at every turn": [1980] 2 S.C.R. 442">Rhine at 447. In Prytula, where the contract in question was a student loan, he said (at 449) that federal regulations "govern every aspect" of the parties' relationships and that "[r]esort must necessarily be had to the statute and regulations to support any legal claim".
[62] The words quoted in the previous paragraph appear to say that, in order to be a "detailed statutory framework" for this purpose, federal legislation must create and define every incident of the parties' legal relationship. However, as Mahoney J.A. perceptively pointed out in Kigowa v. Canada, [1990] 1 F.C. 804 (C.A.) at 816, Laskin C.J. cannot have meant that literally every aspect of the rights of the parties to a transaction must be based on federal law in order to bring the matter within federal jurisdiction.
Perhaps where, as in [1980] 2 S.C.R. 442">Rhine and Prytula, the third element is supplied by a comprehensive statutory framework, that in itself can be taken as the existing federal law which nourishes the statutory grant to such an extent as to demand little, if anything, in the way of discrete federal law essential to the disposition of the case. In other words, the relationship between the parties being entirely a creature of federal law, the law to be applied in the resolution of disputes arising out of that relationship is also taken to be federal law even though it is neither expressed nor expressly incorporated by federal statute. That would appear to have been the case in Rhineand Prytula where it is nowhere suggested that the law by which the debtors' liability to the Crown would actually be determined was anything other than that by which liability for an ordinary commercial obligation would routinely be determined. [Emphasis added]
[63] This question was recently examined by this Court in the Stoney Band case, where by a majority, the Court concluded that the legislation did not provide the "detailed statutory framework" required by Prytula and, accordingly, the Federal Court had no jurisdiction over the Crown's third party claims against alleged concurrent tortfeasors. In that case, the majority concluded that federal law was, at best, incidental to claims based essentially on common law.
[64] I turn now to apply these principles to the present case. The first question is whether the appellant's claims against the individual defendants are "in pith and substance" based on federal law. The second is whether the federal legislation respecting national parks, particularly that governing leases and the operation of businesses, comprises a "detailed statutory framework" which provides the necessary nexus between the legal rights and obligations in dispute, and federal law.
[65] The appellant's claims against the individual defendants all involve allegations that they acted in excess of their statutory powers and thereby caused damage to the appellant's business. First, Mr Fisher's refusal of the appellant's licence application is alleged to have been in excess of his legal authority under the Business Licence Regulations, 1998, in so far as he relied on, or regarded himself bound by, the prohibition in the MP of the use of the gondola in the summer. Second, because of the covenant in the appellant's lease respecting the summer use of the gondola, the impugned provision in the MP is itself said to be in excess of the Minister's legal authority under the National Parks Act to issue MPs, and her power to issue directives under the Parks Canada Act.
[66] There are two non-federal law aspects of the present case. First, the causes of action pleaded by the appellant against the non-Crown defendants are common law torts. However, this is not determinative if the parties' rights and obligations are sufficiently based on federal law.
[67] Second, an element in each cause of action is the right of the appellant under the lease to operate the gondola in the summer. This right is not created by federal law, but derives from a consensual covenant in the lease.
[68] However, the appellant's rights under the lease were created in a legal environment that is heavily regulated by federal legislation. Federal legislation provides parameters within which leases in national parks may be granted. Thus, for example, the National Parks Act, paragraph 7(1)(h) confers broad powers on the Governor in Council to make regulations respecting the grant of leases for specified purposes. The National Parks of Canada Lease and Licence of Occupation Regulations, SOR/92-25, were made pursuant to this power and deal with aspects of leases in national parks.
[69] For example, subsection 3(1) of these Regulations empowers the Minister to grant leases for no longer than 42 years; paragraph 3(1)(e) specifies the purposes for which land outside the towns of Banff and Jasper may be leased; subsection 3(3) deals with the renewal of leases; subsection 3(7) governs the amendment and surrender of leases; and subsection 6(1) contains provisions for the rental rates of leased land, some of which are made terms of the lease.
[70] More important, the appellant's rights under the lease, including article 1(b) permitting the summer use of the gondola, are expressly made subject to applicable federal legislation and to the need to obtain any necessary licence. The National Parks Business Regulations, 1998, deal extensively with the licensing of business operations in national parks. Hence, the appellant's contractual right to operate the gondola in the summer is contingent upon the discretionary grant of a licence by the Superintendent, Mr Fisher. In addition, the exercise of the Superintendent's discretion may be affected by provisions in the MP, issued pursuant to the National Parks Act, subsection 5(1.1), and reviewable by the Minister every five years by virtue of the Parks Canada Agency Act, subsections 32(1) and (2). In addition, the Superintendent may be bound by any relevant general or specific directives given by the Minister: Parks Canada Agency Act, sections 3, 4 and 5.
[71] In my opinion, the pith and substance of the claims against the individual defendants is that their conduct was not authorized by the federal legislation under which they purported to act. The appellant's right under article 1(b) of the lease is incidental, in the sense that its scope is defined by the reach of the statutory regime to which it is subject, including the exercise of the discretionary powers delegated by Parliament.
[72] In these circumstances, I would also conclude, if it were necessary, that federal legislation provides a sufficiently detailed framework to nourish and support the grant of federal jurisdiction in this case. Federal legislation will typically play a much larger role than the common law in establishing and defining the legal relationship between the Crown and lessees of land in national parks. If the legislation can be characterised as a "detailed" framework, then it matters not that, in a given case, the aspects of the parties' rights that are in contention may be determined by common law.
[73] Counsel for the defendants argued that the decision of this Court in Stephens Estate v. Canada (1982), 40 N.R. 620 (F.C.A.), precludes a finding that the appellant's claims against the Crown servants are within federal jurisdiction. In Stephens, the plaintiff brought an action for damages against the Crown for the seizure of his property in satisfaction of a tax debt. The plaintiff alleged that the tax assessment against him was invalid and that he did not owe any tax. Accordingly, the seizure of his property in satisfaction was unlawful, and he sought to join as co-defendants with Her Majesty the Queen, the Crown servants who had accompanied the constable when the goods were seized.
[74] Although the liability of the individual defendants in Stephens depended on a determination of whether their conduct was authorized by the relevant provisions of the Income Tax Act, Le Dain J. held that they could not be joined in the Federal Court as co-defendants in the plaintiff's action against the Crown. After reviewing the reasons in [1980] 2 S.C.R. 442">Rhine and Prytula, he said (at 629-30) that, on the facts before him, the plaintiff's rights were a creation of provincial law and were not sufficiently "provided for and governed by the applicable federal statutes" to bring the claim within federal jurisdiction.
[75] In my view, the case before us is distinguishable on its facts from Stephens. While the appellant's right to use the gondola is not the creation of federal law, it came into existence in a legal environment, namely the lease of land in national parks, which is regulated by federal legislation, to which the lease expressly made it subject. In contrast, the right of the plaintiff in Stephens to the quiet possession of his property is a purely non-statutory, common law right; like all other rights, of course, it is subject to such specific limitations as legislation may expressly impose.
[76] Stephens is often contrasted with Oag v. Canada, [1987] 2 F.C. 511 and Kigowa v. Canada, [1990] 1 F.C. 804, where this Court found that federal jurisdiction extended to the plaintiffs' actions against officials for wrongful imprisonment. In Oag, an inmate in a federal penitentiary alleged that the Chair of the National Parole Board had unlawfully revoked his parole, with the result that he was re-confined. In Kigowa, the basis of the plaintiff's action was that he was unlawfully arrested and detained by an immigration officer after jumping ship at Nanaimo, British Columbia. In both cases, the Court emphasised that the right of the plaintiffs to be at liberty was the creation of federal legislation.
[77] The present case is different from Oag and Kigowa, because the appellant's right under the lease to operate the gondola was not the creation of federal law. Nonetheless, as already noted, leases in national parks are granted pursuant and subject to federal legislation, and the lessee's rights thereby created are defined in the lease by reference to the requirements of the applicable federal legislation, and to the exercise of discretion under federal regulations.
[78] I would only add this. In too many cases it remains unnecessarily difficult to determine whether there is a sufficiently close connection between federal law, and the rights and obligations of the parties to litigation, so as to bring a matter within federal jurisdiction. The 1993 amendments to the Federal Courts Act making the Federal Court's jurisdiction over actions against the federal Crown concurrent have not solved the problems caused by Thomas Fuller, if a plaintiff wishes for good and sufficient reason to proceed in the Federal Court against the Crown and to join servants or officers of the Crown as co-defendants, or if the Crown wishes to claim over against third parties.
[79] The fragmentation of litigation involving separate claims against multiple parties arising from a common factual matrix is apt to be wasteful of public and private resources, and to work injustice. Moreover, to force a litigant to pursue claims such as those against the individual defendants in this case in a provincial court may also undermine the Federal Court's exclusive jurisdiction in federal administrative law: compare Grenier at paras. 22-26.
[80] Wilson J. acknowledged in Roberts (at 333-34) that ancillary and pendent jurisdiction is an attractive idea, which has proved useful for resolving analogous problems of federal jurisdiction in the United States. As Richard C.J. hinted in Stoney Band (at para. 53), it may be time for the Supreme Court to revisit this problematic area of the law.
D. CONCLUSIONS
[81] For these reasons, I would:
(i) allow the appellant's appeal from the Motions Judge's decision that the Federal Court has no jurisdiction over the appellant's claims against individual defendants Copps, Lee, Zinkan, and Fisher, and reverse his order striking them as defendants;
(i) dismiss the Crown's cross-appeal from the decision of the Motions Judge that the appellant's action be dismissed as an abuse of process;
(iii) amend the style of cause by striking the Minister of Canadian Heritage and the Attorney General of Canada as respondents; and
(iv) award costs in the cause throughout to the appellant.
"John M. Evans"
"I agree.
J. Edgar Sexton J.A."
"I agree.
B. Malone J.A."
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