Newell v. Canada, 2002 FCT 373

Date: 20020405

Docket: T-1299-01

Neutral citation: 2002 FCT 373

BETWEEN:

WILLIAM H. NEWELL, as representative of all members

of a class of individuals who have been subject to the

defendant's Administrative Sanctions Program, as described,

since 1994 in the Province of Newfoundland

                                                                                                                                                          Plaintiff

AND:

HER MAJESTY THE QUEEN

                                                                                                                                                      Defendant

                                                            REASONS FOR ORDER

MacKAY J.

[1]                 This is a motion brought by the defendant (the "Crown"), seeking an order to strike out the plaintiff's Statement of Claim without leave to amend on the ground that it discloses no reasonable cause of action.

Facts

[2]                 The plaintiff is a fish harvester and resident of Newfoundland. He held a licence to fish crab in the fishing seasons of 1999 and 2000. On February 18, 2000, the plaintiff was informed in writing by a representative of the federal Department of Fisheries and Oceans (the "DFO"), that he had exceeded his individual quota(s) for 1999 crab landings. The letter asked the plaintiff to review his records and identify any discrepancy to the DFO by March 3, 2000. The letter went on to state:

... If we do not hear from you by that date, the 1999 crab fishery administrative guidelines will apply and any crab allocation for which you may be eligible in 2000 will be reduced, by area, by the ... amounts [then specified].

[3]                 Apparently the plaintiff did not report any discrepancies to the DFO. His allocations for his 2000 snow crab fishing season licence was then reduced by 5268 pounds, as compared with his 1999 quotas, slightly more than the reduction proposed in the letter of February 18.

[4]                 By Statement of Claim filed July 16, 2001, the plaintiff commenced this action and by Amended Statement of Claim dated August 17, 2001, the plaintiff seeks damages for himself, representing the value of lost catch as a result of the Defendant's "tortious interference with his economic interests". He also seeks damages for a class of other fish harvesters who were subject to DFO's Administrative Sanctions Program in the Province of Newfoundland.

[5]                 The plaintiff's original Statement of Claim was based on the ground that the reduction in his quota was not authorized under the Fisheries Act, R.S.C. 1985, c.F-14 (the "Act"), and further that it was punitive in nature. The plaintiff also pleaded that the penalties imposed by administrative sanctions denied defences that were available to the plaintiff if he had been prosecuted under the Act for contravention of the Act or the regulations, including a violation of licence conditions (s. 78.4). The plaintiff's Amended Statement of Claim claims damages for the Crown's intentional tortious interference with his economic interests which caused him to suffer economic loss. That loss, his damages, the plaintiff claims is $13,170.00, the value of his lost catch of 5,268 pounds of snow crab in 2000. In addition to damages claimed on his behalf, he also claims damages, on behalf of the class of individuals, resulting from "lost catch" incurred as a result of the application of the Administrative Sanctions Program.

Issues

[6]                 The Crown submits that the Amended Statement of Claim should be struck out on the ground that it discloses no reasonable cause of action (Federal Court Rules, 1998, Rule 221(a); Hunt v. Carey Can. Inc., [1990] 2 S.C.R. 959). In the first place, it is said the plaintiff cannot seek a civil remedy because, as a matter of law, he has no right to a fishing licence issued by the Minister under s. 7 of the Act. Further, it is urged that no action can be commenced until the Court, in exercise of its judicial review jurisdiction, has determined that the impugned decision is invalid or unlawful or should be quashed or set aside or is otherwise improper.

Analysis

[7]                 In considering whether the Statement of Claim discloses a reasonable cause of action, the Court assumes that all facts therein set out can be established at trial. If those facts do not provide the basis for a cause of action, the Court will strike the Statement of Claim.

[8]                 The basis of the plaintiff's claim is set out in the Amended Statement of Claim, as follows:

                       6(a)         The Plaintiff states that the Defendant had no lawful authority to impose and implement the aforementioned administrative sanction against him as the Defendant was not authorized under Section 7 of the Fisheries Act, R.S.C, 1985, C.F.-14; to impose these alternate penal administrative sanctions for violations of the conditions of his fishing licence. In the alternative the Plaintiff further states that the Defendant's actions were an interference with his economic rights. In the further alternative the Plaintiff states that the administrative sanctions program had as its purpose the imposition of penalties on him for violations of his licence conditions, which purpose is outside the scope of the Defendant's authority under Section 7 of the Fisheries Act. The Plaintiff further states that the administrative sanctions program denied the Plaintiff of procedural safeguards associated with the judicial process, including the pleading of statutory defences, such as due diligence, which are available under the Fisheries Act.

                                6(b)        The Plaintiff states, in the further alternative, that Parliament has provided a process for dealing with alleged violations under Sections 78 to 79.7 of the Fisheries Act, Supra, and has not authorized the making of regulations, or the implementation of a program, that would permit the imposition of penalties by processes other than those set out in the Fisheries Act, thus the Defendant's actions are ultra vires the legislation.

                                  7(a)         The Plaintiff states that as the result of the Defendant's tortious interference with his economic interests he has suffered damages resulting from his lost catch of 5268 pounds of snow crab in 2000 and claims recovery of the sum of $13,170.00; representing the value of his lost catch; from the Defendant.

                                7(b)        The Plaintiff repeats the foregoing and further claims on behalf of the class of individuals, noted in paragraph 1 herein, damages resultant from all lost catch incurred by the Administrative Sanctions Program, and the Defendant's tortious interference with their economic interests in amounts to be determined, since the Program came into being.       

[9]                 In paragraph 6(a) of his claim, the plaintiff pleads that the administrative sanctions imposed against him are alternate penal sanctions imposed for the purpose of applying penalties against him for violations of his fishing licence. That description of the nature and purpose of the administrative reductions of the plaintiff's crab quotas is not otherwise supported by the facts alleged in the Statement of Claim. In the letter sent to the plaintiff in February 2000, quoted in that Statement, he was advised that if he did not identify to DFO any discrepancy by March 3, 2000, "the 1999 crab fishery administrative guidelines will apply and any crab allocation for which you may be eligible in 2000 will be reduced..." The guidelines are not set out in the statement of claim. There is no reference in the quoted correspondence to the reductions as penalties. The purpose of the reductions is not identified in the statement of claim, except by the plaintiff's description of that purpose and of the reductions, as penal. That description, in my opinion, is not a matter of fact. Rather it is an issue to be determined on evidence and arguments to be adduced, if the action is to continue.

[10]            The facts of this case are distinguishable from those in Mathews v. Canada (Attorney General), (1996), 118 F.T.R. 81 (T.D.), affirmed (1999), 167 F.T.R. 167, 24 N.R. 1 (F.C.A.), leave to appeal to S.C.C. refused (2000), 255 N.R. 298. In that application for judicial review, I set aside a decision on behalf of the Minister to reduce the fishing season and the quota assigned for crab catches by the licence granted to Mr. Matthews, because the nature and purposes of the reductions, as penalties for over fishing the previous year, were specifically set out in the notice of reduction of the quotas. That purpose I found to be beyond the authority of the Minister under s. 7 of the Act. Similar facts underlie the decisions in Thibeault v. Canada (Ministre des Pêches et Oceans), (1996) 123 F.T.R. (T.D.) affirmed (1999) 246 N.R. 366 (F.C.A.) and in Kelly v. Canada (Attorney General), (1997), 136 F.T.R. 186 (T.D.).

[11]            The authority of the Minister to issue or to authorize the issuance of fishing licences under s.7 of the Act is extensive, as described by Mr. Justice Major in Comeau's Sea Foods Ltd. v. Canada (Minister of Fishing and Oceans), [1997] 1 S.C.R. 12 at 25:

It is my opinion that the Minister's discretion under s. 7 to authorize the issuance of licences, like the Minister's discretion to issue licences, is restricted only by the requirement of natural justice, no regulations currently being applicable. The Minister is bound to base his or her decision on relevant considerations, avoid arbitrariness and act in good faith. The result is an administrative scheme based primarily on the discretion of the Minister ...

[12]            As a matter of law, the plaintiff has no right to a fishing licence, the breach of which, by a reduction of the fish quota, could give rise to a claim for compensation. In Radil Brothers Fishing Co. Ltd. v. The Queen et al., [2000] F.C.J. No. 1885 (T.D.), the plaintiff sought damages as a result of the Minister's failure to issue him a particular fishing licence with quota anticipated on the basis of preliminary negotiations with the licencing officer. In allowing the defendant's motion to strike the Statement of Claim, Mr. Justice McKeown commented, at para. 36:

In my view a fishing licence is merely a privilege to participate in a fishery for the duration of the licence. A grant of a fishing licence vests no interest or property in the grantee. There is no automatic right of renewal of a fishing licence. Cases such as Joys v. Minister of National Revenue (1995), 128 D.L.R. (4^th) 385 (F.C.A.) at 394 and 399 and Re Bennett and Bennett (1988), 24 B.C.L.R. (2d) 346 (S.C.) at 350-351 confirm this view.

And further, at para. 40:

...The absolutely discretionary decision by the Minister to authorize or issue a fishing licence, which fishing licence remains the property of the Crown, does not give rise to a right between the Plaintiff and the Minister. Consequently, a cause of action does not arise by virtue of the fact that such discretionary decision is reviewable through an application for judicial review.

[13]            Since a fishing licence conveys a privilege, not a right, the plaintiff's claim that the Crown tortiously interfered with his economic right to fish does not disclose a reasonable cause of action i.e., a claim recognized by the law.

[14]            I note that in dealing with the application for judicial review in Mathews, I distinguished the case of Everett v. Canada (Minister of Fisheries and Oceans), (1994), 169 N.R. 100 (F.C.A.) where Madame Justice Desjardins expressly stated that a departmental recommendation to the Minister, that a fishing licence not be issued, to one who three seasons earlier had exceeded his quota by 100%, was not a recommendations "penal in character". Further in that case, Mr. Justice MacGuigan commented that the Minister was entitled to take into account, an applicant's record of overfishing, in a subsequent licensing decision. In Matthews, I commented at para. 28:

... It may be that past compliance with terms of a licence by an applicant can be a relevant factor for the Minister's consideration as an aspect of conservation when deciding whether to issue a licence, as it was in Everett, but s. 7 (the general licensing authority) may not be exercised for the primary purpose of penalizing an applicant ...

[15]            The Crown further alleges that no action can be commenced until the Court in exercise of its judicial review jurisdiction has determined that the impugned administrative decision is invalid or should be set aside. By s-ss. 18(1) and (3) of the Federal Court Act, R.S.C. 1985,

c. F-7 as amended, relief against an invalid decision of any federal board, commission or tribunal may be obtained only on an application for judicial review pursuant to s.18.1. Although the general rule of public law is that when a decision is set aside on appeal or review, there is no additional liability in damages of the public authority concerned, there are exceptions to this rule. For example, damages may arise if failure to act in good faith can be established, as Stone J.A. suggested in Comeau's Sea Foods Ltd. v. Canada, [1995] 2 F.C. 467 (C.A.), at 486). No such circumstance was found in that case, and there the Court of Appeal upheld the authority of the Minister under s. 7 of the Act to revoke an authorization for a fishing licence, in the absence of any evidence of bad faith on the part of the Minister.

[16]            In LaPointe et al. v. Canada (Minister of Fisheries and Oceans) et al. (1992), 51 F.T.R. 161, the defendant Minister suspended and cancelled various fishing licences held by the plaintiffs, despite internal memoranda, provided to the Minister before his decision, advising that there was no legal authority to do so. Lapointe was a case in which after the Minister's decision was quashed, the plaintiff commenced an action for general and punitive damages. Mr. Justice Collier of this Court awarded the plaintiffs damages for loss of revenue and also punitive

damages, commenting, at para. 66, that:

...(T)he actions of the defendants in the present case were not only unlawful ...but were also excessive and high-handed. Neither can the indifferent attitude of the defendants be overlooked....

In that action, Collier J. found on the evidence that the Minister was guided by improper motives and by so doing acted in bath faith.

[17]            In Zarzour v. Canada (2000) 268 N.R. 235 (F.C.A.), Létourneau J.A., writing for the Federal Court of Appeal, quoted with approval, at para. 49, the following extract from Shaw v. Canada (1997), 134 F.T.R. 128 at para. 23:

...I do not see that a plaintiff must, in all circumstances, first bring an application for judicial review and only then, if successful, bring an action for damages. All the more so when a declaration would serve no current purpose....

After quoting this passage, Létourneau J.A. commented:

Unfortunately, there is no magic formula applicable to all situations to which there is more than one remedy. Each case is sui generis, and must be assessed on its merits in order to determine the appropriate procedure.

The Court of Appeal in that case reversed the trial judge's finding of damages claimed as a result of unlawful release of personal information concerning the plaintiff. The Court found no damages where no malice was established on the part of the Crown officer concerned. The case had proceeded as an action for damages without first establishing unlawfulness of the decision to release the information in question.

[18]            While it may be that in particular circumstances there is no necessity to first seek judicial review before initiating a claim for damages against a federal public authority for loss claimed to arise from its unlawful decision, I need not determine whether this is such a case. I note that in Radil Brothers Fishing Co. Ltd., supra, Mr. Justice McKeown suggests that no cause of action arises even if a licensing decision be set aside on judicial review.

[19]            In this case, there is no allegation in the Statement of Claim of bad faith on the part of the Minister in the granting of the licence for the 2000 season to the plaintiff. The allegation of tortious interference with the plaintiff's economic rights is not an allegation of bad faith. Moreover, since the plaintiff had no right to a licence or to a particular quota, reduction of the quota assigned to him, from that under his licence the previous year, did not interfere with any rights established in law.

[20]            The plaintiff urges that the decision in Mathews, "has already judicially reviewed the Defendant's powers under the Fisheries Act to impose penalties for violations of licence conditions". I agree that Mathews appears to settle the law but as I have indicated there are no facts alleged in the Statement of Claim in this case that the administrative measures here were imposed for penal purposes. While one might infer that, this Court in considering the Statement of Claim is bound to consider the facts there set out and it may not infer facts which are not expressly alleged.

[21]            For these reasons, I distinguish Mathews. I also have found no basis in the statement of claim of an allegation of bad faith on the part of the Crown which would be required to sustain a claim in damages.

[22]            For the record, I note that no argument was directed to the issue of including as possible claimants, a class of individuals described in the Amended Statement of Claim. I note that at this date, while proposals are under consideration to amend the Court's Rules to facilitate such a claim, the rules do not, at this stage, expressly provide for such a claim.

Conclusion

[23]            The Crown's motion to strike the plaintiff's amended Statement of Claim on the ground that it discloses no reasonable cause of action is allowed, by separate order. Costs were not requested by the defendant, and none are awarded to either party.

[24]            A separate order goes, striking out the amended statement of claim.

W. Andrew MacKay _____________________________

                                                                                                                                                           JUDGE

OTTAWA, Ontario

April 5 2002.