Ernst v. Alberta Energy Regulator, 2017 SCC 1 (Constitutional law — Charter of Rights — Enforcement)
On appeal from a judgment of the Alberta Court of Appeal (2014 ABCA 285), affirming a decision of Wittmann C.J. (2013 ABQB 537).
The Alberta Energy Regulator (the “Board”) is a statutory, independent, quasi‑judicial body responsible for regulating Alberta’s energy resource and utility sectors. E claims that the Board breached her right to freedom of expression under s. 2(b) of the Canadian Charter of Rights and Freedoms by punishing her for publicly criticizing the Board and by preventing her, for a period of 16 months, from speaking to key offices within it. E brought a claim against the Board for damages as an “appropriate and just” remedy under s. 24(1) of the Charter for that alleged breach. The Board applied to strike this claim on the basis, among others, that it is protected by an immunity clause — i.e., s. 43 of the Energy Resources Conservation Act — which precludes all claims in relation to the Board’s actions purportedly done pursuant to the legislation which the Board administers. Both the Alberta Court of Queen’s Bench and the Court of Appeal found that the immunity clause on its face bars E’s claim for Charter damages and concluded therefore that it should be struck out. On appeal to this Court, E reformulated her claim to add a challenge to the constitutional validity of s. 43.
Held (5-4): (McLachlin C.J. and Moldaver, Côté and Brown JJ. dissenting): The appeal should be dismissed.
Per Cromwell J. (with Karakatsanis, Wagner and Gascon JJ.):
The claim for Charter damages should be struck out and the appeal should be dismissed. It is plain and obvious that s. 43 on its face bars E’s claim for Charter damages. However, because Charter damages could never be an appropriate and just remedy for Charter breaches by the Board, s. 43 does not limit the availability of such a remedy under the Charter and the provision cannot be unconstitutional.
Per Abella J.:
E’s claim for Charter damages should be struck and the appeal dismissed. E did not seek to challenge the constitutionality of s. 43 in the prior proceedings. In the absence of proper notice and a full evidentiary record, this Court should not entertain the constitutional argument. This leaves the constitutionality of s. 43 intact. It is therefore plain and obvious that s. 43, an unqualified immunity clause, bars E’s claim. While it is likely that Charter damages would not be an appropriate and just remedy against this Board, a prior determination of the constitutionality of the immunity clause is required.
Per McLachlin C.J. and Moldaver and Brown JJ. (with Côté J.):
The application to strike E’s claim must fail and the appeal must be allowed. It is not plain and obvious that Charter damages could not be an appropriate and just remedy in the circumstances of E’s claim against the Board. Nor is it plain and obvious that, on its face, s. 43 bars E’s claim for Charter damages. As a result, it is not necessary to consider s. 43’s constitutionality at this stage of the proceedings.
Per Cromwell, Karakatsanis, Wagner and Gascon JJ.:
It is plain and obvious that s. 43 of the Energy Resources Conservation Act on its face bars E’s claim for Charter damages. This conclusion is common ground between the parties. The only issue for decision then is whether E successfully challenged the constitutionality of s. 43. In this case, having had more than ample opportunity to do so, E has failed to discharge her burden of showing that the law is unconstitutional. It follows that the immunity clause must be applied, and E’s claim for Charter damages struck out.
Charter damages may vindicate Charter rights, provide compensation and deter future violations. But awarding damages may also inhibit effective government, and remedies other than damages may provide substantial redress without having a broader adverse impact. Section 24(1) of the Charter confers on the courts a broad remedial authority. But this does not mean that Charter breaches should always, or even routinely, be remedied by damages. The leading case about when Charter damages are an appropriate and just remedy is Vancouver (City) v. Ward, 2010 SCC 27,  2 S.C.R. 28. If damages would further one or more of the objectives of compensation, vindication and deterrence, it is open to the state to raise countervailing factors to establish that damages are not an appropriate and just remedy. In the present case, when such countervailing factors are considered collectively, they negate the appropriateness of an otherwise functionally justified award of Charter damages against the Board.
First, there is an alternative and more effective remedy for Charter breaches by the Board. Judicial review of the Board’s decisions has the potential to provide prompt vindication of E’s Charter rights, to provide effective relief in relation to the Board’s conduct in the future, to reduce the extent of any damage flowing from the breach, and to provide legal clarity to help prevent any future breach of a similar nature. Further, the statutory immunity clause here cannot bar access to judicial review.
Second, good governance concerns are also engaged, as granting damages would undermine the effectiveness of the Board and inhibit effective governance. Private law thresholds and defences may offer guidance about when Charter damages may be an appropriate remedy. The policy reasons considered capable of negating a prima facie duty of care under the private law of negligence have included (i) excessive demands on resources, (ii) the potential chilling effect on the behaviour of the state actor, and (iii) protection of quasi‑judicial decision making. The same policy considerations weigh heavily here. The Board has the public duty of balancing several potentially competing rights, interests and objectives, and balancing public and private interests in the execution of its quasi‑judicial duties. The jurisprudence cautions against attempting to segment the functions of a quasi‑judicial regulatory board such as this one into adjudicative and regulatory activity for the purposes of considering whether its actions should give rise to liability. And the policy reasons that have led legislatures across Canada to enact many statutory immunity clauses, like the one in this case, may also inform the analysis of countervailing considerations relating to good governance. Overall, opening the Board to damages claims could deplete the Board’s resources, distract it from its statutory duties, potentially have a chilling effect on its decision making, compromise its impartiality, and open up new and undesirable modes of collateral attack on its decisions.
Finally, to determine the appropriateness of Charter damages against this type of board on a case‑by‑case basis in a highly factual and contextual manner would largely undermine the purposes served by an immunity. Not every bare allegation claiming Charter damages must proceed to an individualized, case‑by‑case consideration on its particular merits. Immunity is easily frustrated where the mere pleading of an allegation of bad faith or punitive conduct in a statement of claim can call into question a decision‑maker’s conduct. Even qualified immunity undermines the decision‑maker’s ability to act impartially and independently, as the mere threat of litigation, achieved by artful pleadings, will require the decision‑maker to engage with claims brought against him or her.
In view of these countervailing factors, Charter damages could never be an appropriate and just remedy for Charter breaches by the Board. Therefore, s. 43 of the Energy Resources Conservation Act does not limit the availability of such a remedy under the Charter and the provision cannot be unconstitutional.
Per Abella J.:
E is asking this Court to pronounce on the constitutional applicability and operability of s. 43, an immunity clause in the Energy Resources Conservation Act. This is in essence a challenge to the constitutionality of s. 43. At no stage did E give the required formal notice of a constitutional challenge to s. 43. Until she came to this Court, E denied that she was even challenging the constitutionality of s. 43. E’s approach represents an improper collateral attack on s. 43’s constitutionality.
All the provinces have statutes that require notice to be given to the Attorney General of that province, and most require that notice be given to the Attorney General of Canada as well, in any proceeding where the constitutionality of a statute is in issue. Notice requirements serve a vital purpose. They ensure that courts have a full evidentiary record before invalidating legislation and that governments are given the fullest opportunity to support the validity of legislation. A new constitutional question ought not be answered unless the state of the record, the fairness to all parties, the importance of having the issue resolved, the question’s suitability for decision, and the broader interests of the administration of justice demand it. The test for whether new issues should be considered is a stringent one, and the discretion to hear new issues should only be exercised exceptionally and never unless there is no prejudice to the parties.
The threshold for the exceptional exercise of this discretion is nowhere in sight in this case. First, the public interest requires that the fullest and best evidence possible be put before the Court when it is asked to decide the constitutionality of a law. This requires the participation and input of the appropriate Attorneys General, especially from the jurisdiction of the legislation in question. In this case, there is no such evidentiary record.
The notion of “fairness to the parties” also weighs against this Court exercising its discretion to decide the constitutionality of s. 43. The Board asked this Court not to hear the constitutional question because it was not properly raised in the courts below, leaving it, rather than the Attorney General, unfairly as the sole defender of a provision in its enabling statute. At the Court of Appeal, the Attorney General of Alberta, for his part, also expressly raised concerns about the lack of notice and his inability to adduce evidence at the trial court and the appellate court. The failure to provide notice about the intention to challenge the constitutionality of s. 43 has resulted in no record and in the Attorney General of Alberta being unable to properly meet the case against it. This makes acceding to the request to determine the constitutionality of the statutory immunity clause inappropriate.
Immunity clauses protecting judicial and quasi‑judicial bodies are found in a number of Canadian statutes. Judicial and quasi‑judicial decision‑makers are also protected by common law immunities. Immunizing these adjudicators from personal damage claims is grounded in attempts to protect their independence, impartiality and to facilitate the proper and efficient administration of justice.
The immunity clause here is absolute and unqualified. The legislature clearly chose not to qualify the immunity in any way. Any argument that it should not apply to conduct alleged to be punitive, or that it applies to adjudicative but not to other kinds of Board decisions, is nowhere evident in the statutory language. Caution should be exercised before undermining the immunity clause in this case. There are profound and obvious implications for all judges and tribunals from such a decision, and it should not be undertaken without a full and tested evidentiary record. It may or may not be the case that governments will be able to justify immunity from Charter damages, but until the s. 1 justificatory evidence is explored, this Court should not replace the necessary evidence with its own inferences.
While an analysis pursuant to Vancouver (City) v. Ward,  2 S.C.R. 28, likely leads to the conclusion that Charter damages are not an appropriate and just remedy in the circumstances, the question of whether such damages are appropriate requires a prior determination of the constitutionality of the immunity clause. If the clause is constitutional, there is no need to embark on a Ward analysis. If it is found to be unconstitutional, only then does a Ward analysis become relevant. Here, since E did not seek to challenge the constitutionality of s. 43 in the prior proceedings, there is no record either to justify or impugn the provision. This means that, for the time being, the provision’s constitutionality is intact. It is therefore plain and obvious that E’s claim is barred. E’s Charter claim should therefore be dismissed.
Judicial review was the appropriate means of addressing E’s concerns. The conventional challenge to an administrative tribunal’s decision is judicial review, not an action against the administrative tribunal. When the Board made the decision to stop communicating with E, in essence finding her to be a vexatious litigant, it was exercising its discretionary authority under its enabling legislation. Issues about the legality, reasonableness, or fairness of this discretionary decision are issues for judicial review. E had the opportunity to seek timely judicial review of the Board’s decision. She chose not to. Instead, she attempted to frame her grievance as a claim for Charter damages. That is precisely why s. 43 exists — to prevent an end‑run by litigants around the required process, resulting in undue expense and delay for the Board and for the public.
Per McLachlin C.J. and Moldaver, Côté and Brown JJ. (dissenting):
In deciding whether a claim for Charter damages should be struck out on the basis of a statutory immunity clause, the court must first determine whether it is plain and obvious that Charter damages could not be an appropriate and just remedy in the circumstances of the plaintiff’s claim. If it is not plain and obvious that Charter damages could not be appropriate and just, then the court must determine whether it is plain and obvious that the immunity clause, on its face, applies to the plaintiff’s claim. If it is plain and obvious that the immunity clause applies, then the court must give effect to the immunity clause and strike the plaintiff’s claim, unless the plaintiff successfully challenges the clause’s constitutionality.
The framework set out in Vancouver (City) v. Ward, 2010 SCC 27,  2 S.C.R. 28, for assessing whether damages are an appropriate and just remedy in the circumstances can be applied at the application to strike stage. To survive an application to strike, the claimant must first plead facts which, if true, could prove a Charter breach; E has met this threshold here. E’s pleadings establish the elements of an admittedly novel but arguable s. 2(b) claim. It cannot be said that it is plain and obvious that E cannot establish a breach of s. 2(b) of the Charter. The second step requires the claimant to demonstrate that damages could fulfill one or more of the functions of compensation, vindication, or deterrence. E has met this threshold, as well. Her allegations are sufficient to establish that the functions of vindication and deterrence could be supported by an award of Charter damages.
At the third step, the state may show that countervailing considerations make it plain and obvious that Charter damages could not be appropriate and just. Such considerations include the availability of alternative remedies that will meet the same objectives as an award of Charter damages, and good governance concerns — i.e., policy factors that will justify restricting the state’s exposure to civil liability. Here, the Board has not shown that it is plain and obvious that judicial review will meet the same objectives as an award of Charter damages, namely, vindicating E’s Charter right and deterring future breaches. With respect to good governance, two interrelated principles must be kept in mind. First, Charter compliance is itself a foundational principle of good governance. Second, good governance concerns must be considered in a manner that remains protective of Charter rights, since the “appropriate and just” analysis under s. 24(1) is designed to redress the Charter breach. While the common law recognizes absolute immunity from personal liability for judges and other state actors in the exercise of their adjudicative function, there is nothing in the record which indicates that the Board was acting in an adjudicative capacity in this case. Nor is there a compelling policy reason for which to immunize state actors in all cases, including where, as here, the impugned conduct is said to have been punitive in nature. Further, considerations supporting private law immunity from liability for negligent conduct do not automatically support absolute immunity from Charter damages claims for more serious misconduct, including conduct amounting to bad faith or an abuse of power.
Thus, whether the countervailing factors are examined individually or collectively, the record at this juncture does not support recognizing a broad, sweeping immunity for the Board in this case, let alone in every case. In the final analysis, it is not plain and obvious that Charter damages could not be an appropriate and just remedy in the circumstances of E’s claim against the Board.
It is also not plain and obvious that E’s claim is barred by the statutory immunity clause. E seeks Charter damages as a remedy for actions by the Board that E says were intended to punish her. It is arguable that such punitive acts fall outside the scope of the immunity that s. 43 of the Energy Resources Conservation Act confers. While E did not argue that the wording of s. 43 does not apply to her claim, this omission should not impede the just determination of a novel legal issue which has such broad ramifications for the public. E’s assumption that s. 43 bars all actions or proceedings against the Board, regardless of the nature of the claim, is not binding on the Court. Her assumption may ultimately prove correct, but it is not plainly and obviously so at this stage. Since it is not plain and obvious that s. 43 bars E’s claim, it is not necessary to consider s. 43’s constitutionality at this stage of the proceedings. If it is subsequently determined that s. 43 does, indeed, bar E’s claim for Charter damages, then she may challenge its constitutionality at that juncture.
Therefore, the appeal must be allowed. The test for striking out E’s claim at the outset has not been satisfied, and the matter should be returned to the Alberta courts to decide the important issues of free speech and Charter remedies that her case raises.
Reasons for judgment by Cromwell J. (Karakatsanis, Wagner and Gascon JJ. concurring)
Reasons concurring in the result by Abella J.
Joint dissenting reasons by McLachlin C.J. and Moldaver and Brown JJ. (Côté J. concurring)
Neutral Citation: 2017 SCC 1
Docket Number: 36167