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Pro - The SCC finally has a full bench
The Supreme Court rightly exists above partisan politics and Canadians of all political persuasions will benefit from its return to a full complement of judges,” said Harper in his statement.

One would expect Chief Justice McLachlin is anxious to ensure the court has its full complement of judges before its winter session begins on January 12. Without a full bench since Justice Bastarache’s retirement in April, the Chief Justice would potentially have to remove a Justice to prevent tied judgments. Furthermore, current Justices would have an increased workload until the nomination is made.
David Asper echoed these sentiments in the National Post:

Given the state of affairs in Parliament, the process would have been such that the court would have been missing a member for the term of hearings that is about to begin. What’s worse? Make the appointment now so that the Supreme Court can function properly — or wait for the interview process to play out, and miss having the court make use of Justice Cromwell’s skills?
The PM called on the leader of the opposition, solicited his views and then made the appointment. He determined it was worse to delay the appointment, and he was correct.

A recent Globe and Mail editorialquestioned Asper’s logic. After two weeks of appeals beginning January 12 the SCC is scheduled to break for two weeks of judgment writing before hearing appeals for two weeks beginning February 10. The editorial points out it would have been possible to hold hearings before February 10 with only two to four weeks with a less than full strength SCC. If the government were to fall, the delay could be longer. But the Globe questioned why Harper waited until September to make Justice Cromwell’s nomination after Justice Bastarache’s retirement in April.

Con - We look more like a dictatorship
Prime Minister Harper has made two significant decisions since the Governor General agreed to his request to prorogue parliament on December 4. The first was the appointment of 18 Senators, contrary to Harper’s previous pledges to reform the Senate. The second was the Justice Cromwell nomination.

The appointment of both Senators and SCC Justices is within the Prime Minister’s constitutional powers. However, both of these actions take place under unique political circumstances with the government on the brink of a vote of non-confidence and prorogation granted at the start, rather than the end, of a parliamentary session. It is arguable that under circumstances where the government may have lost the confidence of the house, parliamentary review of the Prime Minister’s decisions is even more important. A review of this nature is impossible while parliament is prorogued.

Pro - The Leader of the official Opposition was consulted
In perhaps a new spirit of collaboration, Liberal Leader Michael Ignatieff confirmed Harper consulted him prior to the confirmation of Cromwell’s nomination. According to reports Ignatieff consulted with his current and former justice critics concluding Cromwell is an outstanding appointment and that “certain things that should be made highly political but this is not one of them.” It appears other parties were not consulted about the appointment.

Con – Bad precedent for future appointments
What is left of the parliamentary review process created by the Conservative government in 2006? The Prime Minister’s official statement said:

Citing the urgency of filling the eight-month vacancy on the Supreme Court as the source of this exception, the Prime Minister restated his commitment to returning to a formal mechanism through which Parliament can scrutinize future Supreme Court nominees.

For aforementioned reasons, despite his lack of parliamentary review Justice Cromwell will likely have a distinguished tenure on our top court. But there is little to stop Harper, or any future Prime Minister from using Justice Cromwell as a precedent for bypassing parliamentary review. This could be problematic if a future SCC nominee is either unqualified or inspired by his or her ideology rather than abilities.

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Facts

The Red Chris project is an open pit gold and copper mining operation proposed for north-western British Columbia. In 2003, the proponents of the project submitted a project description to the BC Environmental Assessment Office (BCEAO), which the BCEAO decided would require an environmental assessment certificate before proceeding. Since the scope of the project also included the construction of starter dams related to tailings impoundment and stream crossings, the project also required federal environmental approval from the Department of Fisheries and Oceans (DFO).

On May 21, 2004, the DFO posted a “Notice of Commencement of an environmental assessment” on its “Registry” (an internet site used for the purpose of allowing public access to environmental assessment records; more info here). On the notice, it indicated that a review level of a comprehensive study would be required. Additionally, on May 31, 2004, the DFO asked other federal departments if the project was of any relevance to them. In the letter, the DFO again indicated that it would require a comprehensive study.

The DFO then changed the scope of its intended assessment on December 9, 2004. In doing so, it indicated that a screening report as specified in s. 18 would be sufficient. The change was motivated by further review of the project, new fisheries information, and the decision of the Federal court in Prairie Acid Rain Coalition v. Canada (Minister of Fisheries and Oceans) 2004 FC 1625 [TrueNorth].

On July 22, 2005, the BCEAO issued its assessment report after an extensive assessment which included input from certain federal departments. The conclusion of the report was that the project is not likely to cause significant adverse environmental effects. Accordingly, on August 24, 2005, the provincial assessment certificate was issued.

The federal environmental assessment came to a similar conclusion. After a specific invitation to the Tahltan Band Council and Iskut First Nation to comment on a draft, the screening report was produced on or around April 16, 2006. The federal authorities subsequently issued a Course of Action decision which allowed the proponents to proceed to apply for the appropriate federal licenses.

Procedural History

On June 9, 2006 a notice of application for judicial review of the Course of Action Decision was filed by MiningWatch, a non-profit society interested in the environmental, social, economic, health and cultural effects of mining and in particular its effects on indigenous people.

On September 25, 2007, the applications judge allowed the judicial review. The judge reasoned that the DFO’s initial determination that a comprehensive study level review was required, which was based on the fact that proposed ore production of up to 50 000 tonnes / day exceeded the prescribed threshold of 600 tonnes / day, was correct. As such, the applications judge concluded that the duty of public consultation for comprehensive studies as laid out in s. 21 applied.

Analysis of the Federal Court of Appeal

The FCA had to determine the impact of a 2003 amendment to s. 21 of the CEAA. S. 21(1) reads,

21. (1) Where a project is described in the comprehensive study list, the responsible authority shall ensure public consultation with respect to the proposed scope of the project for the purposes of the environmental assessment, the factors proposed to be considered in its assessment, the proposed scope of those factors and the ability of the comprehensive study to address issues relating to the project.

The difficulty came in determining whether the scoping of the project preceded the determination of whether the project needed a screening or a comprehensive study. That is, whether the term “project” above means “project as scoped”.

At para. 53-54, the court concludes,

I therefore read subsection 21(1) as indicating that where the project “as scoped” is described in the Comprehensive Study List Regulations, [SOR/94-638] subsection 21(1) as amended applies and a public consultation is required.
…
In the case at bar, the RAs [responsible authorities] first determined in May 2004 that the project required public consultation. Following receipt of further information and the release of the decision of the Federal Court in the TrueNorth case, the project was “rescoped”. As a result, it was determined that the project “as rescoped” fell under the purview of the screening process. The RAs in doing so exercised their discretionary power to “scope” and “rescope”. They made no error in doing so.

Public Perceptions and Looking Forward

Different perspectives on the case are being voiced on the internet. MiningWatch on their website hails the granting of the leave to appeal as marking the significance of environmental issues across the nation. They observe that a “simple” screening level assessment without public consultation is inadequate for gauging potential detrimental environmental effects. In contrast, Imperial Metals Corporation issued a press release focusing in on the fact that the provincial assessment was very extensive and also, that the FCA decision indicated that federal legislation had been complied with.

It’ll be interesting to see how the SCC decides this case. With environmental concerns increasingly growing in the public’s eye, and at the same time, natural resources contributing a large part to Canada’s economy, many interested onlookers will be watching to see the dictates that come from the SCC.

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Facts
When assessing the merits of three takeover offers the BCE board of director’s found the Purchaser’s offer to be in the best interest of BCE and BCE shareholders. All offers before the board involved a substantial increase in debt liability for Bell Canada, a subsidiary of BCE. The deal was huge. A premium of 40 per cent over market value was paid per share, with a total value of $52 billion. The deal also involved Bell Canada guaranteeing $30 billion of BCE’s debt. This arrangement was approved by 97.93 percent of BCE shareholders.

This arrangement was opposed, however, by a group holding debentures (”debentureholders”) issued by Bell Canada. The debentureholders were concerned that the trading value and investment grade status of their debentures would decline by approximately 20 percent if the the offer from the Purchaser was approved by the court.

The debentureholders sought relief under s. 241 of the Canada Business Corporations Act (R.S., 1985, c. C-44) (CBCA), commonly known as the oppression remedy, which states:

241. (1) A complainant may apply to a court for an order under this section.
(2) If, on an application under subsection (1), the court is satisfied that in respect of a corporation or any of its affiliates
(c) the powers of the directors of the corporation or any of its affiliates are or have been exercised in a manner that is oppressive or unfairly prejudicial to or that unfairly disregards the interests of any security holder, creditor, director or officer, the court may make an order to rectify the matters complained of.

The debentureholders also claimed the arrangement was not “fair and reasonable” opposing court approval under s. 192 of the CBCA:

192. (4) In connection with an application under this section, the court may make any interim or final order it thinks fit including, without limiting the generality of the foregoing,
(e) an order approving an arrangement as proposed by the corporation or as amended in any manner the court may direct.

Lower Courts
The oppression claim by the debentureholders was dismissed by the Quebec Superior Court, which also approved BCE’s arrangement. This finding was overturned by the Court of Appeal which found that the requirements of s. 192 of the CBCA were not met. The Court of Appeal held BCE directors had a duty to consider whether debentureholders’ contractual rights were respected and also how the adverse impacts on debentureholders’ economic interests could be alleviated. Since the Court of Appeal found s. 192 was not satisfied, it was unnecessary to consider the oppression claim.

Following the decision of the Court of Appeal, BCE and Bell Canada appealed and the debentureholders cross-appealed the dismissal of their oppression claim.

SCC Finding for Section 241 Oppression Remedy
The SCC answered two questions in assessing the debentureholders’ claim of oppression: (1) Does the evidence support the reasonable expectation asserted by the claimant? and (2) Does the evidence establish that the reasonable expectation was violated by conduct falling within the terms “oppression”, “unfair prejudice” or “unfair disregard” of a relevant interest?

With regard to the first question, the SCC held that the debentureholders had not established the reasonable expectation that BCE would protect their economic interests by maintaining their investment grade. The SCC found no error in principle or fact finding in the following determinations made by the trial judge: (1) that BCE was essentially the target of a bidding war and the debentureholders could have negotiated contractual terms to protect their economic interests; (2) that BCE directors’ fiduciary duty to act in the best interests of the corporation would benefit some groups while hurting others, and that all three offers involved increased debt; and (3) that the business judgment rules require deference to be accorded to the decisions of directors acting in good faith for their elected duties. Thus the debentureholders failed to establish a reasonable expectation which would form the basis for a successful oppression claim.

The SCC summarized its approach to oppression cases as follows:

Where conflicting interests arise, it falls to the directors of the corporation to resolve them in accordance with their fiduciary duty to act in the best interests of the corporation. The cases on oppression, taken as a whole, confirm that this duty comprehends a duty to treat individual stakeholders affected by corporate actions equitably and fairly. There are no absolute rules and no principle that one set of interests should prevail over another. In each case, the question is whether, in all the circumstances, the directors acted in the best interests of the corporation, having regard to all relevant considerations, including — but not confined to — the need to treat affected stakeholders in a fair manner, commensurate with the corporation’s duties as a responsible corporate citizen. Where it is impossible to please all stakeholders, it will be irrelevant that the directors rejected alternative transactions that were no more beneficial than the chosen one.

SCC Finding for Section 192 Approval Process
Approval under s. 192 of the CBCA hinges on whether a proposed agreement is fair and reasonable when viewed objectively. To gain court approval a corporation must establish statutory rules have been met, the application is in good faith and that the arrangement is “fair and reasonable.” In assessing the “fair and reasonable” requirement courts look to whether the arrangement has a valid business purpose and if objections regarding legal rights are resolved in fair and balanced way.

The debentureholders argued their objections were not dealt with in a fair and balanced way. The SCC found the debentureholders did not constitute an affected class under s. 192 and only their economic, and not their legal rights were affected by the proposed transaction. The SCC agreed with the trial judge’s conclusion that debenture holders should not be permitted to veto almost 98 percent of the shareholders because the trading value of their securities would be affected. The debentureholders were free to contract against fluctuations in debt load as a contingency, which they did not. Furthermore, there was no better agreement put forward and BCE was advised by both legal and financial experts throughout the process. In summary, the arrangement addressed the debentureholders’ interests in a fair and balanced manner for the purposes of s. 192.

Conclusion and Initial Commentary
The SCC allowed the appeals by BCE and Bell Canada and dismissed the debentureholders’ cross-appeal. Some immediate reaction found “the ruling shifts Canadian law further away from the so-called Revlon rule in the United States which compels directors to maximize only shareholder interests when a company is in play.” This commentary suggested that in certain circumstances a company’s board of directors could accept a lower bid if it offered more value to a wider group of stakeholders. Anita Anand, a University of Toronto Faculty of Law professor, said “this decision is positive for corporate directors as it provides them with latitude and discretion to make decisions that they believe are in the best interests of the corporation.”

Surely, more commentary will follow in the weeks and months ahead regarding both the BCE decision and fate of the BCE acquisition.

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Writing for a unanimous Court, Justice Lebel rejected the appellants’ claim that Parliament’s unemployment insurance power, as provided by section 91(2A) of the Constitution, is limited to compensating wages during periods of unemployment. In his reasons, Justice Lebel makes it clear that Parliament’s s. 91(2A) power must be given a generous and purposive interpretation. He states that the objectives behind the s. 91(2A) power are to alleviate the negative effects of unemployment and to ensure that unemployed persons maintain ties to the labour market such that they can eventually re-enter the workforce. Any federal initiative that is directed towards one of these two objectives is a valid use of the section 91(2A) power. He writes:

Regulating unemployment insurance does not mean simply taking passive responsibility for paying benefits to Canadian workers during periods when they are not working. It also means taking on a more active role designed to maintain or restore ties between persons who may become or are unemployed and the labour market. [official English translation]

The employment benefits programs created by the Employment Insurance Act – which include such measures as supplementing a worker’s income if they accept a lower-paying job, providing grants for continuing education, and paying wage subsidies to employers who are willing to create more jobs – have “a close enough connection with the system’s basic objectives” and are therefore constitutionally valid extensions of the employment insurance system.

A Tax By Any Other Name…

The appellants challenged the constitutional validity of the Employment Insurance Act’s premium-setting mechanism, which authorized the government to adjust the EI premium rates each year. Section 66 of the Act authorized the Employment Insurance Commission to set the premium rates such that two objectives were satisfied:

(a) ensure that there will be enough revenue over a business cycle to pay the amounts authorized to be charged to the Employment Insurance Account; and
(b) maintain relatively stable rate levels throughout the business cycle.

Parliament later amended the Act to include section 66.1 (affecting the premium for years 2002 and 2003) and section 66.3 (affecting the premium for 2005). These provisions overrode section 66 and allowed the Governor in Council to change the premium rates directly, on the recommendation of the Cabinet. However, unlike s. 66, the new provisions did not enumerate any objectives that would guide how the premium rates should be set. The provisions’ failure to provide such guidelines, wrote the Court, effectively turned employment insurance payments into a general “payroll tax.”

Employment insurance has traditionally been viewed as a regulatory charge rather than a tax because premiums are levied to fund a specific regulatory scheme. The Court explored similar territory earlier this year in 620 Connaught Ltd. v. Canada 2008 SCC 7 (for which the case brief from TheCourt.ca can be read here). Referencing that case as well as Westbank First Nation v. British Columbia Hydro and Power Authority 1999 3 S.C.R. 134, Justice Lebel states that for there to be a regulatory charge, there must exist a regulatory scheme, the collection of a levy must be connected to that scheme, and the collected amounts must be used to fund the particular regulated activity.

Justice Lebel found that the second requirement of a regulatory charge – namely, the existence a relationship between the levy and the regulatory scheme – was not met by the premium-setting provisions of the Act. While section 66 sets out how the needs of the employment insurance system should guide the setting of the annual EI premium rate, the overriding sections 66.1 and 66.3 do not explain how EI revenues and EI expenditures are related. The new provisions allow the EI premium to be a tax for general purposes, managed by the Governor General in Council.

While section 53 of the Constitution allows Parliament to impose a tax, the creation of a tax must be explicit and “any taxing authority must be delegated expressly and unambiguously.” In this case, sections 66.1 and 66.3 of the Employment Insurance Act fail to state that the premium collection represents a tax and that taxing authority is delegated to the Governor General in Council. Therefore, the two impugned provisions (which affected EI premiums in 2002, 2003 and 2005) are unconstitutional.

Looking Forward: Consequences and Uncertainties

The Court’s broad reading of section 91(2A) of the Constitution may allow the federal government to breathe a sigh of relief as it now tries to deal with a $50 billion reserve. Since the reserve can only be used for employment insurance purposes, the Court’s open interpretation of the EI regime allows the government greater flexibility in how the money can be spent. Parliament may be tempted to use the funds for economic development initiatives that have only an indirect link to alleviating unemployment, as essentially any Parliamentary action that tethers unemployed persons to the labour market constitutes a valid EI expenditure.

The stickier issue concerns what will happen to the funds that were collected in 2002, 2003 and 2005. Since the premium-setting mechanism used at that time has been declared constitutionally invalid, the collection of funds during those years was unlawful. Justice Lebel’s reasons are silent on the subject of remedies, but he suspends the declaration of invalidity for twelve months, most likely to allow Parliament to come up with a solution. Given that the premium-setting mechanism was invalidated strictly because of inadequate language in ss. 66.1 and 66.3 of the Employment Insurance Act, I expect that Parliament will retroactively amend those provisions to adequately characterize the EI levy as a regulatory charge rather than a tax.

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The Criminal Lawyers’ Association appealed this decision to the Ontario Court of Appeal, claiming that under section 2(b) of the Charter, freedom of thought, belief, opinion and expression, including freedom of the press and other media of communication, or in accordance with the constitutional principle of democracy, the public should have a “right of access to government information”. The Ontario Court of Appeal allowed their appeal, finding that the section 23 failure to allow the public interest override to apply to the section 14 and 19 exemptions infringed section 2(b) of the Charter, which was not justified by section 1. For a more in-depth analysis of the case, please see Eric Baum’s September 26th post, “Do Canadians Have a Right to Information under the Charter?”.

While the Criminal Lawyers’ Association’s position is understandable, as it only seems fair that, in accordance with the principle of democracy and the right to free expression, any provincial or federal information document with a “compelling public interest” should be disclosed to the public, the points raised by the Ministry of Public Safety and Security in opposition present an alternative way of viewing the potential implications of including such a right under the Charter right to freedom of expression. From the police perspective, investigators may be more reluctant to make notes on cases or lay charges and the public may feel uncomfortable making statements to the police regarding criminal matters under the concern that their documents could potentially become public. Similarly, this may disrupt the administration of justice if the private documents of judges made during the course of a case are made public. Mahmud Jamal, a lawyer for the Canadian Bar Association, also pointed out in an article by Kirk Makin in the Globe and Mail, “Access to Information Not a Right, Top Court Told”, that the free flow of legal advice between government figures who consult lawyers regarding policy issues may be chilled explaining, “We want governments, in assessing whether waterboarding is torture, to have the assistance of counsel.”

While there are legitimate concerns raised in this appeal to the Supreme Court of Canada, it is also important to consider that in deciding whether the Charter’s freedom of expression guarantee places an onus on governments to disclose information with “compelling public interest”, we must consider that the Charter is a “living tree” doctrine, that is meant to be interpreted in a progressive approach in order to allow it to adapt to the modern-day reality and concerns. As David Stratas, the lawyer for the Criminal Lawyers’ Association, explained, the Charter guarantee of freedom of expression is about “protecting and promoting the free and vibrant circulation of communications that is necessary to sustain and enhance democracy.” With such important issues at play in this case, it is certainly one to keep an eye on as we wait for the final word from the SCC.

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Leading up to Harper’s meeting with Jean on December 4, many speculated about the ways in which the coalition’s threat could be defused. Jean was faced with three potential solutions: dissolution, prorogation, or asking for Harper’s resignation. On the subject of prorogation, constitutional scholar Ned Franks of Queen’s University suggested that Jean could agree to prorogue Parliament with conditions. The government could manage day-to-day affairs until it was reconvened, much like the way that governments operate during an election campaign. This type of prorogued Parliament would necessitate that the Governor General not approve orders-in-council requiring cabinet decisions; as such, the government would not be able to appoint judges or ambassadors, negotiate treaties, or undertake any major policy initiatives, because they would all require Jean’s approval.

In a Globe and Mail article, written mere days before Jean’s decision, Canadian constitutional historian Bob Beal expressed concern about the legitimacy of a prorogation request under the circumstances. He stated that if Harper were to ask for, and receive, a prorogation, questions would be raised “that have never been raised before.” This is because, as Beal noted, prorogations are usually fairly routine. While a Governor General has never refused a Prime Minister’s request for prorogation or put conditions on it, the Governor General has never had to: no Prime Minister has ever requested prorogation when he faced an imminent confidence vote. Prior to Harper’s, the most troublesome prorogation request was made in 1873. In that year, John A. Macdonald asked the Governor General Lord Dufferin to prorogue parliament in order to stop the work of a committee investigating Macdonald’s involvement in the Pacific Scandal, involving allegations that Macdonald’s Conservative government was taking bribes. Lord Dufferin approved of Macdonald’s prorogation request, but the prorogue was limited to a period of ten weeks. When Parliament returned, Macdonald was censured and promptly resigned.

But Macdonald’s request was not made in the shadow of an impending non-confidence motion. Beal opined that a request like Harper’s “could be seen as asking the Governor General to interfere to the extent of cancelling or delaying the exercise of the most basic right members of the House have, to express confidence or non-confidence in a government.” In fact, the day after Beal’s article was published, the leader of the Liberal Party, Stephane Dion, asked the Governor General to refuse to grant prorogation for this very reason. In Dion’s view, it would be an abuse of power to deny the right of the legislature to give or withhold its confidence in the government.

After a closed-door meeting at Rideau Hall on December 4, it was announced that Jean had granted Harper’s request for a prorogation until January 26, 2009. There was no indication that the prorogation came with any limitations on Harper’s prime ministerial abilities. Given that prorogations can legally last up to one year, this prorogation is set to be relatively short. Former Governor General and NDP politician Edward Schreyer has stated that a short prorogation might be reasonable as long as it wasn’t used “as a means of evading, avoiding, and thwarting the expression of the parliamentary will” by avoiding a confidence vote. However, given the formation of the Liberal-NDP coalition and the non-confidence motion looming within a week of Harper’s request, it overwhelmingly appears that Harper sought prorogation specifically for this purpose.

Legitimate concerns have been expressed over what Harper has asked of the Governor General. The most compelling, in my view, is that Jean’s approval of the prorogation request sets a dangerous precedent in which a Prime Minister may seek prorogation or dissolution when confronting a political vote of non-confidence. In addition to the constitutional uniqueness of this crisis, Harper’s political opponents have spoken out against the perceived misuse of his prime ministerial position. These circumstances set the stage for the disgruntled Cabinet to potentially refer a question to the Supreme Court of Canada. The federal government has such referral power, and if the referred question is of national importance, the SCC will give its opinion on the matter. While many Supreme Court references specifically consider the constitutionality of legislation (for example, in the 1976 Anti-Inflation Reference), 2 S.C.R. 373 the court has more recently been asked broader questions, such as the legality of unilateral secession of Quebec from Canada in the Reference re Secession of Quebec, [1998] 2 SCR 217. Though federal references are not common, neither is a constitutional crisis of this magnitude. In the near future, the Supreme Court may be asked to clarify the limits on the Prime Minister’s prorogation power.

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At first, I complained to the Canadian Human Rights Commission about discrimination in the provision of a public service on the ground of disability. The complaint was transferred to the Agency because it deals with disability in travel situations under the accessible transportation provisions of its legislation, the Canadian Transportation Act, S.C. 1996, c. 10 (“CTA”).

In order to provide a corrective measure under Part V subsection 172(3) of the CTA, it must be satisfied that:

1. there is a person with a disability;

2. this person has encountered an obstacle; and

3. this obstacle is undue.

The Agency decided that it needed information about whether obesity was a disability and assigned an inquiry officer in 1998, who produced a report in 1999, which concluded that obesity could be a disability. The Agency determined that the Interim Report was inconclusive as to whether obesity should be considered a disability and, accordingly, the Agency decided that it would not adopt the recommendations and conclusions contained in the Interim Report.

The Agency next decided to hold hearings into the preliminary jurisdictional issue of whether obesity constitutes a disability for the purposes of Part V of the CTA. Two weeks of hearings were conducted in Calgary during 2001 at which many experts provided evidence as to whether obesity was a disability. During these proceedings, the Agency received expert evidence on models of disability, including the World Health Organization’s International Classification of Functioning, Disability and Health (the “ICF model”), which identifies three elements for determining whether a person has a disability: impairment, activity limitations, and participation restrictions. In a two to one majority, the three member Panel of the Agency concluded that obesity per se was not a disability for the purposes of the CTA. See: Decision No. 646-AT-A-2001 (McKay-Panos v. Air Canada).

I decided to appeal the decision and was fortunate to receive Court Challenges funding, based on the implications of the issue on interpretation of disability under the Canadian Charter of Rights and Freedoms s. 15(1). Court Challenges was a not-profit organization set up by the federal government in 1994 to provide financial assistance for important court cases that advance language and equality rights under Canada’s Constitution. The federal government discontinued the program in 2006.

We argued that the CTA was legally incorrect in not taking the context of the discrimination into account, and context is critical in human rights cases. That is, each case must be based on its own circumstances. Obesity might not be a disability for me in my workplace, but it would be one when trying to fit into an airplane seat. Thus, we believed the blanket finding that obesity per se is not a disability did not result from a correct legal analysis of the issue.

With the assistance of two lawyers, Ritu Khullar and Jo-Ann Kolmes, I applied for leave to appeal and then appealed the Agency’s ruling to the Federal Court of Appeal. See: McKay-Panos v. Air Canada, 2006 FCA 8

The Council of Canadians with Disabilities intervened in the Federal Court of Appeal case. This was because they were involved in the Joanne Neubauer and Eric Norman case, arguing for “one person one fare” for disabled passengers, and wanted to submit a brief on disability. The Federal Court of Appeal ruled that I was disabled by obesity and that “[I]n light of the concession [of Air Canada] that the applicant suffers from an impairment, and the fact that she has encountered an activity limitation on account of this impairment, the only conclusion open to the Agency was that the applicant is a person with a disability under the CTA” (para 42). In 2006, the matter was remitted back to the Agency to decide my case once again.

In the meantime, the Neubauer and Norman case was being heard by the Agency. The Agency decided to add the issue of obesity to the consideration of whether paying additional flight fares to accommodate disability was an undue obstacle under the CTA. We intervened in the matter to represent the specific issue of undue obstacle in the case of obesity. In this regard, the Agency found that the fare policies of Air Canada, Air Canada Jazz and WestJet related to domestic air services:

constitute undue obstacles to persons who require additional seating to accommodate their disabilities to travel by air insofar as these policies require these persons with disabilities to pay additional fares and charges for transportation services that are over and above what other passengers pay for the same transportation services to have their disability-related needs accommodated. (para. 21)

The Agency ordered that:

[25]….The carrier respondents shall not charge a fare for additional seats provided to the following persons with disabilities:

- those persons who are required, under the terms of the carriers’ tariff, to be accompanied by an Attendant;

- those persons who are disabled as a result of obesity; and

- those other persons who require additional seating for themselves to accommodate their disability to travel by air.

[26] With respect to the implementation of corrective measures, in recognition of the need for the respondents to, in the case of the carrier respondents, develop new or modify existing eligibility screening mechanisms so that they can properly apply the new policies, and, in the case of the Gander Airport Authority, establish a procedure to determine how to identify those persons with disabilities who are required by air carrier domestic tariffs to travel with an Attendant, the Agency determined that a twelve-month period is reasonable for the finalization and implementation of the corrective measures ordered.

See: Decision No. 6-AT-A-2008 (Estate of Eric Norman, Joanne Neubauer and the Council of Canadians with Disabilities v. Air Canada et al).

The airline was denied leave to appeal this decision to the Federal Court of Appeal (Federal Court of Appeal, Number 08-A-11, May 5, 2008) and the Supreme Court of Canada further denied leave to appeal that decision (see: Air Canada, Jazz Air LP, as represented by its general partner, Jazz Air Holdings GP Inc., carrying on business as Air Canada Jazz and West Jet v. Canadian Transportation Agency, Estate of Eric Norman, Joanne Neubauer and Council of Canadians with Disabilities).

In the meantime, the Agency released a favourable decision on my particular case on October 18, 2008: Decision No. 519-AT-A-2008 (McKay-Panos v. Air Canada).

This time the Agency found that the manner in which Air Canada personnel treated me constituted an undue obstacle to my mobility under the CTA and ordered that Air Canada modify its policies regarding, inter alia, persons who are disabled by obesity. At para 50, the Agency stated:

The Agency directs Air Canada to ensure, if it has not already done so, that its training program a related materials include information on providing services to, and interacting with, customers who are disabled due to obesity. It should be clear in that information that obesity can be a disability and that it may require accommodation in the same sense that passengers with other disabilities may require accommodation to meet their particular needs. Finally, training information must cover such aspects of sensitivity and awareness as the importance of treating with dignity those passengers who are disabled as a result of their obesity.

I am looking forward to the day the policies are implemented and people with disabilities can then fly with dignity.

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Courts Below

Recognizing SLC’s efforts to comply with the relevant legislative standards, the trial judge found that SLC had committed no fault. However, she held that art. 976 of the Civil Code of Québec (C.C.Q.) established a scheme of no-fault liability such that SLC could be held civilly liable on the basis that the cement plant’s emissions of dust, odours and noise had caused annoyances to the representatives and the members of the class that were abnormal and excessive.

SLC appealed to the Québec Court of Appeal who rejected the trial judge’s theory of no-fault liability and instead found SLC liable based on proven fault. According to the Court of Appeal, SLC had an obligation to ensure that its equipment functioned optimally; as soon as a breakdown occurred, the plant must cease operating until the equipment properly repaired. SLC had failed to do so on numerous occasions during the period covered by the claim. The Court of Appeal therefore found that SLC had committed a fault and was, as a result, civilly liable. Based on this analysis of civil liability, the trial judge’s damages awards were reduced to exclude annoyances that had not resulting from SLC’s fault.

SLC appealed with regard to the Court of Appeal’s conclusion that it was liable on the basis of fault. The representatives cross-appealed, seeking recognition of a no-fault liability scheme in respect of neighbourhood annoyances that are excessive and to restore the trial judge’s conclusions on the quantum of damages.

Issue

While SLC raised several defences to avoid or limit its civil liablility for damages, the main issue before the Court was whether there is, under art. 976 C.C.Q., a liability scheme based on the extent of the annoyances suffered by the victim rather than on the conduct of the party who allegedly caused them. A no-fault liability regime would expand the scope of the existing rules regarding civil liability in Québec.

Decision

A unanimous Court dismissed the appeal by SLC and allowed the cross-appeal, restoring the decision of the trial judge with respect to no-fault liability and the damages to be awarded to the plaintiffs. The Court expressly rejected the theory of real liability adopted by the Court of Appeal, which unduly limited the scope of art. 976 and the possibility of instituting a class action.

Article 976 of the C.C.Q. states that:

976. Neighbours shall suffer the normal neighbourhood annoyances that are not beyond the limit of tolerance they owe each other, according to the nature or location of their land or local custom.

In the process of determining that art. 976 permitted scheme of no-fault liability, the Court examined three cases from the Supreme Court of Canada and the Quebec Court of Appeal dating as far back as 1896, in which no-fault liability was imposed in Québec upon a finding of excessive neighbourhood annoyances. These cases confirmed that where there is excessive interference with one’s enjoyment of their property, he or she should have the right to recover damages even where there is absence of fault; the fact that the defendant had shown care and caution did not exempt him from liability.

There was also evidence that the Québec legislature rejected prior drafts of art. 976 that imposed a positive obligation on owners to not cause excessive inconveniences to neighbours. Instead, it adopted a version that was silent on the question of liability resulting from neighbourhood annoyances.

The Court also reviewed academic commentaries that favoured the recognition of a scheme of civil liability based on the simple existence of abnormal neighbourhood disturbances without the requirement of proving fault, as it would be consistent with the approach taken in Canadian common law.

At common law, the tort of nuisance – defined as unreasonable interference with the use of land – is focused on the harm suffered by the victim rather than on wrongful conduct by the defending party. The interference must be intolerable to an ordinary person, which must be assessed by considering factors such as the nature, severity and duration of the interference, the character of the neighbourhood, the sensitivity of the plaintiff’s use and the utility of the activity.

The principle of the relativity of rights states that one party’s right to exercise his or her right of ownership of property must necessarily limited by the other party’s right to enjoy his or her property. The Court concluded that a no-fault liability regime in respect of nieghbourhood disturbances struck a fair balance between the rights of owners or occupants of neighbouring lands.

Conclusion

It was almost disappointing to find that the SCC decision with the best opening paragraph of the year turned out to be so unexciting; even the facts of the case and the injuries suffered by the class were mundane. Without disrespect to the plaintiffs, the annoyances complained of consisted of clinker dust or cement dust that demanded many residents to wash their cars, windows and garden furniture frequently; there was sulphur, smoke and cement odours as well as noise from the cement plant’s operation which “caused annoyances that were beyond the limit of tolerance” in different parts of the community. (para. 95)

As this case dealt specifically with art. 976 C.C.Q., it would have little application to other provinces beyond Quebec. However, the Court’s disposition of this case was not at all surprising. It seems only proper to interpret the Québec civil law in a manner that will be consistent with the English common law that applies to the rest of the country, by applying principles from the tort of nuisance in addressing the provision regarding neighbourhood disturbances in the Civil Code of Québec.

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