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Following are our summaries of the civil decisions of the Court of Appeal for Ontario for the week of March 4, 2024. There were only two civil decisions this week.
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In Halton (Regional Municipality) v. Canadian National Railway Company, the Regional Municipality of Halton was unsuccessful in blocking the construction of a large intermodal hub by CN for the carriage of goods by rail that was approved by the federal government. The Region and residents of Milton are strongly against the project for traffic, noise and environmental reasons. The application judge dismissed Halton’s application to stop the project until its land use planning bylaws and a myriad of other provincial laws were complied with. The Court dismissed the appeal. The Constitution gives jurisdiction over interprovincial railways to the federal government and the constitutional law doctrines of interjurisdictional immunity and paramountcy mean that the federal law prevails over provincial and local laws.
In La Française IC 2 v Wires, a foreign arbitral award was enforced.
Wishing everyone a nice weekend.
John Polyzogopoulos
Blaney McMurtry LLP
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Table of Contents
Civil Decisions
Halton (Regional Municipality) v. Canadian National Railway Company, 2024 ONCA 174
Keywords: Constitutional Law, Federal Undertakings, Interprovincial Railways, Division of Powers, Interjurisdictional Immunity, Paramountcy, Municipal Law, Land Use Planning, Civil Procedure, Issue Estoppel, Abuse of Process, Pesticides Act, RSO 1990, c. P.11 Courts of Justice Act, RSO 1990, c. C.43, Constitution Act 1867, CN Commercialization Act, S.C. 1995, c. 24, Quebec Environment Quality Act, C.Q.L.R. c. Q-2, Halton v CNR, 2018 ONSC 6095, Halton (Regional Municipality) v Canada (Environment), 2024 FC 348, Carmichael v GlaxoSmithKline Inc, 2020 ONCA 447, Kelly v Palazzo, 2008 ONCA 82, Chippewas of Mnjikaning First Nation v Chiefs of Ontario, 2010 ONCA 47, Canadian Western Bank v Alberta, 2007 SCC 22, Rogers Communications Inc v Châteauguay (City), 2016 SCC 23, Bank of Montréal v Marcotte, 2014 SCC 55, Québec (Attorney General) v Canadian Owners and Pilots Association, 2010 SCC 39, Marine Services International Ltd v Ryan Estate, 2013 SCC 44, Desgagnés Transport Inc v Wärtsilä, 2019 SCC 58, Canada (Attorney General) v PHS Community Services Society, 2011 SCC 44, British Columbia (Attorney General) v Lafarge Canada Inc, 2007 SCC 23, Ontario (Attorney General) et al v Winner et al, [1954] 4 DLR 657 (PC), Greater Toronto Airports Authority v. Mississauga (City) (2000), 50 OR (3d) 641 (CA), Toronto Corporation v Bell Telephone Co of Canada, [1905] AC 52 (PC), Canadian Pacific Railway Company v Corporation of the Parish of Notre Dame de Bonsecours, [1899] AC 367 (PC), Clark v Canadian National Railway Co, [1988] 2 SCR 680, R v TNT Canada Inc (1986), 58 OR (2d) 410 (CA), Ontario v Canada Pacific Ltd (1993), 13 OR (3d) 389 (CA), Johannesson v Rural Municipality of West St Paul, [1952] 1 SCR 292, Attorney General of Quebec v IMTT-Québec Inc, 2019 QCCA 1598, Commission de Transport de la Communauté Urbaine de Québec v Canada (National Battlefields Commission), [1990] 2 SCR 838, Toronto (City) v CUPE, Local 79, 2003 SCC 63, Catalyst Group Inc v VimpelCom Ltd, 2019 ONCA 354, Heynen v Frito Lay Canada Ltd (1999), 45 O.R. (3d) 776 (CA), Dosen v Meloche Monnex Financial Services Inc (Security National Insurance Company), 2021 ONCA 141, Strickland v Canada (Attorney General), 2015 SCC 37, Operation Dismantle v The Queen, [1985] 1 SCR 441, Hofer v Hofer et al, 2022 MBCA 99, SA v Metro Vancouver Housing Corp, 2019 SCC 4, Daniels v Canada (Indian Affairs and Northern Development), 2016 SCC 12, Solosky v The Queen, [1980] 1 SCR 821, Gook Country Estates Ltd v Quesnel (City of), 2008 BCCA 407, Bunker v Veall, 2023 ONCA 501, Bryton v Capital Corp GP Ltd v CIM Bayview Creek Inc, 2023 ONCA 363, William v British Columbia, 2012 BCCA 285, Tsilhqot’in Nation v British Columbia 2014 SCC 44, Doria v Warner Bros Entertainment Canada Inc, 2023 ONCA 321, Feinstein v Freedman, 2014 ONCA 205, Hamilton v Open Window Bakery Ltd, 2004 SCC 9, Association des parents de l’école Rose-des-vents v British Columbia (Education), 2015 SCC 21
La Française IC 2 v. Wires, 2024 ONCA 171
Keywords: Contracts, Arbitration Agreements, Civil Procedure, Arbitration Awards, Enforcement, Behn v Moulton Contracting Ltd, 2013 SCC 26, Canam Enterprises Inc v Coles (2000), 51 O.R. (3d) 481 (CA), R v Scott, [1990] 3 SCR 979, Law Society of Saskatchewan v Abrametz, 2022 SCC 29
CIVIL DECISIONS
Halton (Regional Municipality) v. Canadian National Railway Company, 2024 ONCA 174
[Simmons, Paciocco and Thorburn JJ.A.]
Counsel:
K. E. Thomson, S. G. Frankel, C. Li, R. Northey and H. Machum, for the appellants
S. Block, A. Bernstein, Y. Bienenstock, J. Silver and C. Koopman, for the respondent
J. Cheng, A. Law and M. Cormack, for the intervener, Attorney General of Canada
P. Ryan and A. Ralph, for the intervener, Attorney General of Ontario
Keywords: Constitutional Law, Federal Undertakings, Interprovincial Railways, Division of Powers, Interjurisdictional Immunity, Paramountcy, Municipal Law, Land Use Planning, Civil Procedure, Issue Estoppel, Abuse of Process, Pesticides Act, RSO 1990, c. P.11 Courts of Justice Act, RSO 1990, c. C.43, Constitution Act 1867, CN Commercialization Act, S.C. 1995, c. 24, Quebec Environment Quality Act, C.Q.L.R. c. Q-2, Halton v CNR, 2018 ONSC 6095, Halton (Regional Municipality) v Canada (Environment), 2024 FC 348, Carmichael v GlaxoSmithKline Inc, 2020 ONCA 447, Kelly v Palazzo, 2008 ONCA 82, Chippewas of Mnjikaning First Nation v Chiefs of Ontario, 2010 ONCA 47, Canadian Western Bank v Alberta, 2007 SCC 22, Rogers Communications Inc v Châteauguay (City), 2016 SCC 23, Bank of Montréal v Marcotte, 2014 SCC 55, Québec (Attorney General) v Canadian Owners and Pilots Association, 2010 SCC 39, Marine Services International Ltd v Ryan Estate, 2013 SCC 44, Desgagnés Transport Inc v Wärtsilä, 2019 SCC 58, Canada (Attorney General) v PHS Community Services Society, 2011 SCC 44, British Columbia (Attorney General) v Lafarge Canada Inc, 2007 SCC 23, Ontario (Attorney General) et al v Winner et al, [1954] 4 DLR 657 (PC), Greater Toronto Airports Authority v. Mississauga (City) (2000), 50 OR (3d) 641 (CA), Toronto Corporation v Bell Telephone Co of Canada, [1905] AC 52 (PC), Canadian Pacific Railway Company v Corporation of the Parish of Notre Dame de Bonsecours, [1899] AC 367 (PC), Clark v Canadian National Railway Co, [1988] 2 SCR 680, R v TNT Canada Inc (1986), 58 OR (2d) 410 (CA), Ontario v Canada Pacific Ltd (1993), 13 OR (3d) 389 (CA), Johannesson v Rural Municipality of West St Paul, [1952] 1 SCR 292, Attorney General of Quebec v IMTT-Québec Inc, 2019 QCCA 1598, Commission de Transport de la Communauté Urbaine de Québec v Canada (National Battlefields Commission), [1990] 2 SCR 838, Toronto (City) v CUPE, Local 79, 2003 SCC 63, Catalyst Group Inc v VimpelCom Ltd, 2019 ONCA 354, Heynen v Frito Lay Canada Ltd (1999), 45 O.R. (3d) 776 (CA), Dosen v Meloche Monnex Financial Services Inc (Security National Insurance Company), 2021 ONCA 141, Strickland v Canada (Attorney General), 2015 SCC 37, Operation Dismantle v The Queen, [1985] 1 SCR 441, Hofer v Hofer et al, 2022 MBCA 99, SA v Metro Vancouver Housing Corp, 2019 SCC 4, Daniels v Canada (Indian Affairs and Northern Development), 2016 SCC 12, Solosky v The Queen, [1980] 1 SCR 821, Gook Country Estates Ltd v Quesnel (City of), 2008 BCCA 407, Bunker v Veall, 2023 ONCA 501, Bryton v Capital Corp GP Ltd v CIM Bayview Creek Inc, 2023 ONCA 363, William v British Columbia, 2012 BCCA 285, Tsilhqot’in Nation v British Columbia 2014 SCC 44, Doria v Warner Bros Entertainment Canada Inc, 2023 ONCA 321, Feinstein v Freedman, 2014 ONCA 205, Hamilton v Open Window Bakery Ltd, 2004 SCC 9, Association des parents de l’école Rose-des-vents v British Columbia (Education), 2015 SCC 21
facts:
The respondent, Canadian National Railway Company (“CN”) was in the process of constructing an “intermodal hub” on a 485-hectare parcel of land in the town of Milton. The intermodal hub project had affected many local residents adversely, including through the disruption caused by ongoing construction, the noise and heavy truck traffic it will generate, its environmental impact, and the demands it will impose on local infrastructure. The project generated fierce local opposition.
While federal approval was under consideration, Halton applied for declarative relief on issues relating to the applicability of provincial and local laws to the intermodal hub. Halton identified fewer than 20 specific local laws that it said applied, and sought, among other relief, a declaration that “[v]alid provincial and municipal by-laws of general application apply to the [intermodal train hub] unless they (a) impair a vital or essential aspect of a federal railway, or (b) conflict with a federal statute, regulation or approval.” CN secured a temporary stay of the initial application pending disposal of the federal approval process.
In 2021, federal approval for the construction of the intermodal hub on CN’s property in the Halton Region was granted by the Governor in Council, CTA and the Minister. The temporary stay of Halton’s initial application for declaratory relief issued by the stay motion judge ended with the federal approval.
In 2022, Halton amended that application, for the second time, expanding the reach of the relief it was seeking. This second amended application was the one that was before the application judge and that was the subject of the current appeal. Halton was seeking declarations that CN “is obligated to seek and obtain all requisite approvals under each of the [listed] provincial laws … prior to constructing and operating the [intermodal hub].”
issues:
- Did the application judge misapprehend the evidence relating to CN’s claim to absolute immunity?
- Did the application judge misapprehend the evidence in finding that Halton wished to block the intermodal hub, or make and base his decision on unfair and unjustified findings concerning the conduct of elected officials?
- Did the application judge err in law by misapplying the law of interjurisdictional immunity to the three bylaws?
- Did the application judge err by failing to apply the stay motion judge’s finding that Halton’s applications were not hypothetical or premature?
- Did the application judge err in law or in fact by declining to address the constitutional applicability and operability of the overwhelming majority of the listed local laws?
- Should leave to appeal the costs award be granted and the appeal from the costs decision be allowed?
holding:
Appeal dismissed.
reasoning:
- No.
The application judge did not find that CN never denied that local laws apply to the project. His comment in his Reasons for Judgment that the federal approval of the project “does not mean that CN was immune to any or all local or provincial laws” showed that he attended to the evidence before him on this point. It was clear from the context that he was simply describing the position that CN took before him. Whatever Halton may think of the sincerity of the position CN took before the application judge, the application judge was entitled to accept it, and the Court saw no basis for interfering with his decision to do so.
- No.
Halton argued that during the application hearing, it “made clear that their purpose in pursuing the Application is not to block the intermodal hub from proceeding, but rather to ensure that CN complies with local enactments…”. It argued that the application judge misapprehended its position by finding that the Regional Municipality of Halton and the other applicants “wish to prevent CN from constructing the intermodal hub until it complies with municipal planning processes”.
The Court did not agree with this submission. The application judge based his conclusion about Halton’s position not only on the historical opposition of Halton to the intermodal hub, but also on his observation that most of the materials that Halton filed dealt with complaints about the federal approval, and on the implications of the requests for relief that were before him. Halton was seeking an injunction that would have prevented further construction until application processes relating to curb cutting and regional roads that required official plan amendments were completed. The application judge had an evidentiary basis before him for the conclusions reached. His factual findings were entitled to deference.
- No.
Cooperative federalism holds that statutes enacted by both levels of government should be permitted to operate, where possible. The doctrine of “interjurisdictional immunity” serves to qualify the operation of cooperative federalism by preventing concurrent jurisdiction in limited circumstances. Interjurisdictional immunity prevents laws validly enacted by one order of government from impairing the “unassailable core” content of a head of power or a vital or essential aspect of an undertaking that is specified as exclusive under the Constitution Act, 1867.
Limits are imposed on interjurisdictional immunity in two ways. First, the doctrine is to be used with restraint. Second, to prevent interjurisdictional immunity from being given broad sweep the doctrine is applied strictly. To be rendered ineffective under this doctrine a law must: (1) impair, (2) a “core” or “vital and essential” element of the exclusive power.
There are two steps in an interjurisdictional immunity inquiry. The first step is to determine whether the impugned law trenches on the protected core of the other level of government’s legislative jurisdiction. If interjurisdictional immunity could apply based on this inquiry because the impugned law will intrude upon the protected undertaking, the second step is launched, which is to resolve whether the impugned law’s intrusion on the exercise of the protected undertaking is sufficiently serious to invoke the doctrine.
- Did the application judge err in deciding that the three bylaws intruded upon a “core” federal undertaking?
The parties agreed that the federal government had jurisdiction over interprovincial railways. However, Halton argued that the three bylaws do not intrude upon the core of the railway undertaking that is protected by interjurisdictional immunity and submitted that the application judge erred in finding otherwise.
First, the Court was not persuaded that the application judge erred in treating the intermodal hub as a vital part of a railway undertaking. There was ample evidence before the application judge establishing that the function of the intermodal hub was to enable the transport of goods in and out of the Greater Toronto Area by rail. The involvement of the trucks did not alter the function of the intermodal hub as an essential part of the railway undertaking. The intermodal hub served the railway in the same way a more conventional railway station does, as a location to embark and disembark cargo.
Second, Halton argued that the application judge erred by finding there was “ample precedent for interjurisdictional immunity in relation to the location and operation of interprovincial railway undertakings and undertakings declared to be of national import”. Its position was that absent precedents establishing that the construction and operation of an intermodal hub lies at the “core” of federal railway jurisdiction, the rigorous precedential limitation on the application of interjurisdictional immunity cannot be met. The Court held that Halton’s position was unduly rigid. The fact that there may not be precedents was not enough on its own to oust interjurisdictional immunity, even leaving aside that in some cases interjurisdictional immunity claims could be recognized without precedent. Even if there had not been precedents directly on point, the application judge would not have erred by considering analogous precedents. The analogous precedents the application judge considered supported his decision.
Third, Halton argued that the application judge erred by applying interjurisdictional immunity where there was a “double aspect” that arose from the concurrent jurisdiction that CN had over railroads, on the one hand, and municipalities had, on the other hand, over local environmental matters. Not only can interjurisdictional immunity apply in double aspect cases, but a finding of interjurisdictional immunity could obviate the need to resolve double aspect issues. The Court therefore rejected this submission.
Fourth, Halton relied on the recital in the Minister Decision Statement that Ministry approval did “not relieve [CN] from any obligation to comply with other legislative or other legal requirements of the federal, provincial, or local governments” as supporting its position that interjurisdictional immunity should not be applied. The Court found this statement irrelevant. The Minister did not purport to describe what provincial or local laws qualified as legal requirements relating to this project. The Minister was expressing the caveat that Ministry approval did not absolve CN from complying with any other legal requirements that apply.
- Did the application judge err in determining that the three bylaws “impair” the core of the federal undertaking?
The application judge based his decision on his conclusion that in order to comply with those bylaws “prior to building the intermodal hub CN was required to apply for exemptions from curb cut and grading bylaws by applying for and obtaining official plan amendments.” The Court saw two strains of reasoning in this explanation. First, the official plan approval that he found to be required under each of the three bylaws confers broad discretion on municipal officials that effectively authorizes them to prohibit the construction of the intermodal hub. The power to prevent the project was impairing. Second, he found that the official plan approval would require years of proceedings. Although he did not articulate it, it was clear from his reasoning that he found this delay would itself constitute an impairment of the core federal power.
Not all local or provincial legislation requiring permits will impair the exercise of the federal power or a vital or essential part of an undertaking. If a provincial law purports to claim the authority to impair a federal undertaking, the doctrine is available, especially in the context of a case such as this where Halton had asked a court to grant prophylactic declarations and injunctions on the strength of its assertion of authority to regulate. The Court therefore rejected Halton’s position that a finding of impairment was premature.
In the Court’s view there could be no realistic issue taken with the breadth of discretion that operates when an official plan amendment is being considered. Official plans, by their very nature, reflect planning objectives and priorities that local governments choose, an inherently discretionary determination. The application judge could not be faulted for not stating the obvious in his decision.
The Court saw no error in the application judge’s interpretation of bylaw 32-17 as requiring official plan compliance. The Court was not persuaded that the application judge erred in finding that the relief Halton sought under all three bylaws impaired the core of exclusive federal jurisdiction, which includes CN’s constructing and operating the intermodal hub in a location approved by the federal government. Even in the absence of a broad discretion to refuse permit approval, imposing an overlong approval delay pending official plan amendments is sufficiently serious to constitute an impairment.
- No.
The application judge did not err by “ignoring” the stay motion judge’s conclusion that Halton’s application was not “premature” or “too hypothetical or lacking a concrete factual foundation”. The underlying principles of res judicata, issue estoppel and abuse of process that Halton was invoking did not apply. The application judge’s task was to determine if, on the factual record before him, the much broader declarations sought in the second revised application were premature or too hypothetical to adjudicate after the hearing, where CN was not claiming absolute immunity as a federal undertaking from all provincial legislation.
The Court had recognized that even where the requirements of issue estoppel are not met, it may be appropriate to bar re-litigation using the abuse of process doctrine. However, given the starkly different issue the application judge was facing, there can be no principled basis for holding, based on the principles of abuse of process, that the application judge erred in failing to prevent re-litigation as an abuse of process.
- No.
Halton argued that the application judge erred by denying its requests for declaratory relief without addressing the applicability and operability of most of the listed local laws it had identified. The Court found that the application judge’s conclusions that Halton’s application for declaratory relief lacked the factual underpinnings to demonstrate a live controversy warranting such relief, and also lacked the specific information required to resolve whether interjurisdictional immunity applied to these remaining laws, leading him to decline to consider the “premature” and “hypothetical questions” that Halton had posed. The Court found that the application judge applied the correct legal tests, placing the burden on Halton to establish the evidentiary foundation for the declarations it sought. His conclusion that the necessary factual underpinnings were lacking was supported by the record and provided an appropriate basis for his decision to deny the relief requested.
- No.
The Court did not grant Halton leave to appeal the $2.3 million costs award, despite the imposing amount of that award. Costs decisions are highly discretionary and afforded significant deference. The Court found that the decision by the application judge was entirely understandable given his findings that Halton’s application was overreaching, and that Halton was using the litigation to shut down the construction of the intermodal hub. CN’s claim to absolute immunity was not litigated, as it conceded during the litigation that it did not have absolute immunity and ultimately prevailed on all of the issues that were in dispute. Halton’s assertion that the costs award was clearly excessive and inflated lacked a factual basis, especially considering Halton’s tactical decision to raise more than 65 laws for consideration and to seek sweeping relief relating to a project of obvious importance.
La Française IC 2 v. Wires, 2024 ONCA 171
[van Rensburg, Roberts and Gomery JJ.A.]
Counsel:
P. Michell, for the appellant
M. Seers, for the respondent
Keywords: Contracts, Arbitration Agreements, Civil Procedure, Arbitration Awards, Enforcement, Behn v Moulton Contracting Ltd, 2013 SCC 26, Canam Enterprises Inc v Coles (2000), 51 O.R. (3d) 481 (CA), R v Scott, [1990] 3 SCR 979, Law Society of Saskatchewan v Abrametz, 2022 SCC 29
facts:
The appellant appealed from a judgment that recognized and enforced an Arbitration Award dated April 7, 2021, where the arbitrator had dismissed the appellant’s claims and ordered them to pay various fees, including the arbitrator’s fee of EUR 44,541.25, the Stockholm Chamber of Commerce (“SCC”) Administrative fee of EUR 14,412.50, and the respondent’s costs of GBP 112,107.38. The dispute originated from a Bespoke Funding Agreement between the appellant and Profile Investment on behalf of IC2 Fund, SICAV-FIS, leading to an arbitration in London against the respondent to recover damages. Throughout the arbitration, the appellant faced a series of setbacks including being ordered to pay security for costs, failing to pay, challenging the arbitrator’s appointment unsuccessfully, and attempting to discontinue the arbitration. Eventually, the arbitrator ruled in favor of the respondent, dismissing the arbitration and awarding costs. The appellant contested the enforcement of the award, arguing that it should be set aside and reconsidered due to alleged judicial errors.
issues:
- Did the application judge err in failing to address the appellant’s argument that the arbitral tribunal was improperly constituted as a result of an alleged lack of independence and impartiality and also erred in finding that it was an abuse of process for the appellant to relitigate this issue.
- Did the application judge err in finding that the respondent had standing to bring the application and correcting the misnaming of the respondent in the Award?
- Did the application judge err in upholding the arbitrator’s award of costs to the respondent that included costs settled by the parties?
holding:
Appeal dismissed.
reasoning:
- No.
The Court found that the appellant was not entitled to re-raise issues about the arbitral tribunal’s propriety because they had not pursued further appeals in England against the SCC’s decision. The court supported the application judge’s view that allowing such a challenge would constitute an abuse of process, considering the doctrine’s role in preserving the fairness and integrity of judicial proceedings. The court noted that the appellant’s objections appeared to stem more from dissatisfaction with the arbitrator’s decisions rather than genuine concerns about impartiality or independence. The issues had been discoverable at the time of appointment, and the SCC had already dismissed the appellant’s late allegations as unfounded. The Court agreed that revisiting these challenges would be an abuse of process, especially given the earlier opportunity to rectify any valid issues through an appeal, which the appellant neglected to pursue.
- No.
The Court affirmed the application judge’s decision that correctly identified the respondent as the party to the arbitration and the judgment. The judge’s determination was based on evidence, including the appellant’s own arbitration request, which consistently named the respondent. An isolated mis-reference to a different corporation number was deemed a minor error without impact. Consequently, the respondent was rightfully recognized as a party entitled to enforce the Award, and the judge had the authority to confirm the parties to the Award and to mandate its recognition and enforcement.
- No.
The Court found that the application judge made no error in recognizing and enforcing the costs in the Award. The arbitrator distinguished between the settled costs of the respondent’s counterclaim and the costs of the arbitration. He applied a discount to the costs of the arbitration to account for the distinction. There was no double-counting or overcompensation.
The information contained in our summaries of the decisions is not intended to provide legal advice and does not necessarily cover every matter raised in a decision. For complete information or for specific advice, please read the decision or contact us.