Federal Court of Appeal Decisions

Date: 20070112

Docket: A-430-05

Citation: 2007 FCA 20

 

CORAM:       LINDEN J.A.

                        NADON J.A.             

                        PELLETIER J.A.

 

BETWEEN:

THE ATTORNEY GENERAL OF CANADA

Appellant

and

JOSE PEREIRA E. HIJOS, S.A.

and ENRIQUE DAVILA GONZALEZ

 

Respondents

 

 

 

 

 

Heard at Ottawa, Ontario, on October 24, 2006.

Judgment delivered at Ottawa, Ontario, on January 12, 2007.

 

REASONS FOR JUDGMENT BY:                                                                             NADON J.A.

CONCURRED IN BY:                                                                                                LINDEN J.A.

                                                                                                                              PELLETIER J.A.

 

 

Date: 20070112

Docket: A-430-05

Citation: 2007 FCA 20

 

CORAM:       LINDEN J.A.

                        NADON J.A.             

                        PELLETIER J.A.

 

BETWEEN:

THE ATTORNEY GENERAL OF CANADA

Appellant

and

JOSE PEREIRA E. HIJOS, S.A.

and ENRIQUE DAVILA GONZALEZ

 

Respondents

 

REASONS FOR JUDGMENT

 

NADON J.A.

 

[1]        On March 9, 1995, acting under the authority of the Coastal Fisheries Protection Regulations (the “Regulations”) enacted by the Governor in Council pursuant to section 6 of the Coastal Fisheries Protection Act, R.S.C. 1985, c. C-21 (as amended by S.C. 1994, c.14), Canadian fisheries officers and members of the Royal Canadian Mounted Police (the “RCMP”) arrested the Spanish fishing vessel, the ESTAI (the “ship” or the “vessel”), on the high seas and forced it to proceed to Saint John’s, Newfoundland, where charges were laid against the ship and her master for breaches of section 5.2 of the Act. More particularly, the ship and her master were charged with fishing a “straddling stock”, i.e. Greenland halibut, in the “Regulatory Area” of the Northwest Atlantic Fisheries Organization (“NAFO”) situated in the Northwest Atlantic Ocean beyond Canada’s 200-mile economic zone.

 

[2]        Although these charges were withdrawn on April 18, 1995, the respondents, pursuant to the provisions of the Crown Liability and Proceedings Act, R.S.C. 1985, c. C-50, commenced legal proceedings against the Federal Crown by Statement of Claim filed on July 28, 1995, as amended on April 30, 2003, seeking damages by reason of, inter alia, the illegal arrest of the ship in international waters and the unlawful trespass by servants and agents of the Federal Crown in pursuing, boarding, arresting and forcibly escorting the ship to Saint John’s. In making their claim, the respondents asserted that the Regulations pursuant to which the Federal Crown’s servants and agents purported to act were ultra vires the regulation-making authority conferred on the Governor in Council by section 6 of the Act.

 

[3]        The respondents also advanced a claim on behalf of the master of the ship, Captain Davila, under section 15 of the Canadian Charter of Rights and Freedoms (the “Charter”) by reason of discrimination on the basis of his race and of his national and ethnic origins.

 

[4]        On July 26, 2005, after a six-week trial in Saint John’s, Mr. Justice Gibson of the Federal Court rendered judgment. Notwithstanding the fact that he rejected all of the respondents’ allegations with regard to the Federal Crown’s tortious liability and that he upheld the validity of the Regulations, the Judge allowed the respondents’ action, in part, and awarded them the sum of $137,052.57 with interest.

 

[5]        Before us are an appeal by the Attorney General of Canada (the “appellant”) and a cross-appeal by the respondents. The appeal is directed at that part of the judgment which grants damages to the respondents. The appellant says that in the absence of a finding of liability against the Federal Crown, the Judge could not award damages. By their cross-appeal, the respondents attack the Judge’s dismissal of their allegations that the conduct of the Federal Crown’s servants and agents in arresting, detaining and forcibly escorting the ship to Saint John’s was unlawful. In making this challenge, the respondents say that the Judge erred in upholding the validity of the Regulations.

 

THE RELEVANT LEGISLATION

[6]        As the Act and the Regulations are at the heart of the appeal and the cross-appeal, I immediately reproduce the relevant sections thereof:

 

[7]        Before turning to the facts of the case, it is important at this stage to point out that Greenland halibut is a stock of fish which is set out in both Tables I and II of paragraph 21(2) of the Regulations. In other words, for the purposes of section 5.2 of the Act, Greenland halibut is a “straddling stock”, i.e. a prescribed stock of fish.

 

[8]        A review of the facts will be helpful to a proper understanding of the issues raised by the appeal and the cross-appeal. More particularly, a review of the Northwest Atlantic Fisheries Organization and the legislative scheme in place as of March 3, 1995 will provide the necessary background to the events of March 9, 1995.

 

THE FACTS

            A.   The Northwest Atlantic Fisheries Organization:

[9]        The Convention on Future Multilateral Cooperation in the Northwest Atlantic Fisheries (the “Convention”), which Canada ratified on November 30, 1978, came into force on January 1, 1979. Pursuant thereto, the contracting parties established an international organization known as the Northwest Atlantic Fisheries Organization (“NAFO”), whose headquarters are in Dartmouth, Nova Scotia. The primary objective of the Convention is to encourage international cooperation and consultation with respect to the conservation and optimum utilization of the fisheries resources of the Northwest Atlantic area.

 

[10]    The Convention provides for the establishment of a scientific council, whose raison d’être is to provide consultation among contracting parties and to provide scientific advice to, inter alia, the Fisheries Commission (the “Commission”), a body established by the Convention responsible within NAFO for the management and conservation of the fishery resources of the “Regulatory Area”. For present purposes, suffice it to say that the “Regulatory Area” is that part of the “Convention Area” which lies beyond the 200 nautical miles in which coastal states exercise fisheries jurisdiction. The “Convention Area” is divided into seven fisheries Subareas, each divided into a further number of Subareas. The events which have given rise to the appeal and the cross-appeal occurred in Subarea 3L, which is partly within Canadian fisheries waters and partly outside those waters, and in Subarea 3M, which is entirely outside Canadian fisheries waters.

 

[11]    In carrying out its functions, the Commission may establish quotas that limit the annual catch of various species of fish by contracting parties and the allocation of the established annual catches to contracting parties. Until the end of 1994, the Commission had not set a quota with respect to the annual catch of Greenland halibut and, hence, there were no limits imposed on the contracting parties. However, at the Commission’s annual meeting held in September 1994, a proposal was made by one of its members, Norway, that the total allowable catch (the “TAC”) for Greenland halibut in NAFO Subareas 2 and 3 be fixed at 27,000 tonnes for the year 1995. This proposal was adopted by the Commission and, as a result, submitted to the contracting parties.

 

[12]    I should point out that Canada supported Norway’s proposal that the TAC for Greenland halibut in NAFO Subareas 2 and 3 for 1995 be limited to 27,000 tonnes. However, the European Union (the “E.U.”), a contracting party to the Convention whose 12 member states included Portugal and Spain, abstained with respect to the 27,000 TAC proposal, after its representative had proposed a TAC of 40,000 tonnes.

 

[13]    As required by article XI (6) of the Convention, Norway’s proposal with respect to the 27,000 tonne TAC was sent by NAFO’s Executive Secretary to all contracting parties. Pursuant to article XI(7) of the Convention, such a proposal becomes a measure binding on all contracting parties to enter into force on a date determined by the Commission, failing the presentation by a contracting party of an objection thereto within the time prescribed by the provision. In the event, none of the contracting parties objected to the proposal that the Greenland halibut TAC for the year 1995 be fixed at 27,000 tonnes.

 

[14]    Following the adoption by NAFO of Norway’s proposal, there remained the allocation of the TAC to contracting parties. The Commission met in Brussels on January 30 and February 1, 1995, the principal item on its agenda being the allocation to contracting parties of 1995 quotas for Greenland halibut in NAFO Subareas 2 and 3.

 

[15]    During the meeting, the representative for Cuba put forward the following proposal: Canada – 16,300 tonnes, or 60.37%; the E.U. – 3,400 tonnes, or 12.59%; Russia – 3,200 tonnes, or 11.85%; Japan – 2,600 tonnes, or 9.63%; others – 1,500 tonnes, or 5.6%. Cuba’s proposal was adopted, with 6 parties in favour (Canada, Cuba, Iceland, Japan, Norway, Russia), 2 parties abstaining (Denmark, on behalf of the Faroe Islands, and the Republic of Korea), and 5 parties opposing (Estonia, the E.U., Latvia, Lithuania, Poland).

 

[16]    On February 6, 1995, Canada’s Minister of Fisheries and Oceans wrote to the E.U. Commissioner for Fisheries, indicating that Canada was willing to transfer part of its Greenland halibut allocation for 1995 to the E.U., “… on the understanding that the E.U. will not invoke the objection procedure”. Canada’s offer was not accepted by the E.U.

 

[17]    On March 3, 1995, the E.U., acting in accordance with article XII(1) of the Convention, objected to the proposal made by Cuba, and adopted by the Commission, for individual quotas for 1995 of Greenland halibut in NAFO Subareas 2 and 3. Not only did the E.U. object to the proposed allocation, but it unilaterally fixed its own quota for Greenland halibut in the NAFO Regulatory Area at a level (i.e. 18,630 tonnes) far in excess of the quota which had been allocated to it by the Commission at its January 30 and February 1, 1995 meeting in Brussels.

 

[18]    There can be no doubt whatsoever that the foregoing events led to the March 3, 1995 amendments to the Regulations. I now turn to a brief review of the legislative history of the Act and the Regulations.

 

B.   Legislative History:

[19]    Prior to May 25, 1994, the Act regulated the activities of foreign fishing vessels in Canadian fisheries waters, which included all coastal waters of Canada out to the two hundred mile limit of Canada’s economic zone. On May 25, 1994, amendments to the Act came into force. The major change brought about by the amendments was that Canada would now regulate straddling stocks of fish not only within Canadian waters, but outside the 200-mile limit.

 

[20]    The expressions “NAFO Regulatory Area” and “straddling stock” were added to the definitions of section 2 of the Act. Further, sections 5.1 and 5.2 were added to the Act. By section 5.1, Parliament declared that the purpose of section 5.2 was to enable it to take those actions that were necessary to prevent the destruction of straddling stocks on the Grand Banks of Newfoundland and “… to permit their rebuilding, while continuing to seek effective international solutions to the situation referred to in paragraph (d)”, i.e. that foreign fishing vessels were fishing straddling stocks in the NAFO Regulatory Area in a way which undermined the effectiveness of sound conservation and management measures. By section 5.2, Parliament prohibited the fishing of such straddling stocks in the NAFO Regulatory Area by “foreign fishing vessels of a prescribed class”.

 

[21]    Further, paragraphs b.1 to b.5 were added to the regulation-making authority of the Governor in Council found in section 6 of the Act, so as to enable the Governor in Council, inter alia, to prescribe as straddling stocks, for the purposes of section 5.2 of the Act, stocks of fish occurring both within Canadian fishing waters and in areas beyond those waters, to prescribe classes of foreign fishing vessels, for the purposes of section 5.2., and to prescribe measures for the conservation and management of straddling stocks to be complied with by persons aboard foreign fishing vessels of a prescribed class.

 

[22]    Pursuant to the authority of the amended legislation, the Regulations were amended on May 25, 1994 (PC 1994-836, 25 May 1994, registered as SOR/94-362). The Regulations extended the authority of “protection officers” outside Canadian fisheries waters to “vessels without nationality”, a defined term, and to foreign fishing vessels flying the flags of Belize, Cayman Islands, Honduras, Panama, Saint Vincent and the Grenadines, and Sierra Leone, with respect to “straddling stocks”, defined to include Greenland halibut in NAFO Subareas 3L, 3M, 3N and 3O. Further, the Regulations declared that a prohibition against fishing for straddling stocks, preparing to fish for straddling stocks or catching and retaining straddling stocks constituted a prescribed conservation and management measure for the purposes of section 5.2 of the Act.

 

[23]    On March 3, 1995, the Regulations were again amended (P.C. 1995-372, registered as SOR/95-136). In addition to maintaining the restrictions on foreign fishing vessels without nationality and foreign fishing vessels flying flags of convenience, the Regulations now provided, for the purposes of section 5.2 of the Act, that the vessels of Spain and Portugal fell in a prescribed class and that, as a result, these vessels could not fish, catch or retain Greenland halibut in the NAFO Subareas 3L, 3N and 3O.

 

[24]    Although these amending Regulations were not published in the Canada Gazette until March 22, 1995, notice of the enactment of the amendments was given to the E.U. As a result, Spain withdrew its fishing vessels from the fisheries Subareas over which the amending Regulations sought to extend Canada’s jurisdiction to regulate fisheries. In due course, prior to March 9, 1995, Spain’s fishing vessels returned to fishing within the fisheries Subareas subject to the amending Regulations. Among those vessels was the ESTAI.

 

[25]    I now turn to the events of March 9, 1995.

 

C.   The Arrest, Detention and Voyage of the ESTAI to Saint John’s:

[26]    In his reasons, the Trial Judge carefully reviewed these events and, hence, I can do no better than reproduce paragraphs 1 to 16 of his reasons:

[1]                On the 9th of March, 1995, at or about 18:15 (6:15 p.m.), armed boarding parties from three (3) or four (4) Canadian vessels boarded the Spanish deep-sea freezer-trawler ESTAI (the "ESTAI") within the Northwest Atlantic Fisheries Organization ("NAFO") Regulatory Area, which is to say outside Canadian fishery waters or, put another way, on the high seas. The boarding parties, which may have included members of a Royal Canadian Mounted Police ("RCMP") emergency response team, arrested the ESTAI. They requested that the Master of the ESTAI cooperate and take his vessel to St. John's, Newfoundland. They advised him that if he did not cooperate, they would take his vessel to St. John's in any event. Enrique Davila Gonzalez ("Captain Davila"), a co-plaintiff and Master of the ESTAI, agreed to cooperate. The ESTAI, accompanied by a number of Canadian vessels, proceeded toward St. John's at full speed. The events of the 9th of March, 1995 leading up to the arrest of the ESTAI are of interest. Based on the testimony of the Master of one of the Canadian vessels taking part in the boarding and arrest, they will briefly be recited here.

 

[2]                Very early on the morning of the 9th of March, 1995, the two hundred and five (205) foot Canadian fisheries patrol vessel Cape Roger, was steaming east in Canadian fishery waters in the NAFO Convention Area, close to the demarcation line between Canada's two hundred (200) mile fishery zone and waters outside that zone. For ease of reference, an outline map is attached to these reasons as Annex I. The map depicts the east coast of Canada, and the Northern United States, the west coast of Greenland and the NAFO Convention Area of the adjacent seas, divided into fishery subareas. The map also indicates the outside limit of Canada's fishery zone. The Cape Roger was accompanied by the Leonard J. Cowley, another Canadian fisheries patrol vessel, the Sir Wilfrid Grenfell, a Canadian coastguard vessel, the Chebucto, a Canadian Department of Fisheries and Oceans vessel out of the Department's Maritime Region in Nova Scotia and the Terra Nova, a naval vessel, all apparently with the support of a Canadian reconnaissance aircraft.

 

[3]                At or about 02:30 hours, the Cape Roger exited from NAFO's fishery subarea 3L inside Canadian fishery waters to the same fishery subarea outside Canada's fishery waters.

 

[4]                By a rather circuitous route, the Cape Roger and accompanying vessels reached their target, then identified as the ESTAI, by about 13:52 hours. At that point in time, both the Canadian vessels and the ESTAI were in NAFO fishery subarea 3L and on the deep waters of Flemish Pass between Flemish Cap to the east and Canadian fishery waters to the west. The ESTAI was engaged in deep-water fishing for Greenland halibut with its net extending behind it secured to the ESTAI by two (2) long lengths of heavy cable.

 

[5]                More than an hour earlier, the Cape Roger had removed from its gun locker two (2) 50 calibre guns and two hundred (200) rounds of ammunition. The guns were mounted on the deck of the Cape Roger.

 

[6]                By 13:58 hours, the Cape Roger was alongside, but at a safe distance from, the ESTAI. Its boarding craft, a "fast rescue craft" with a rigid hull, inflated collar and a one hundred and fifty (150) horsepower diesel engine, was in the water close alongside the Cape Roger. Not more than two (2) minutes later, the boarding craft, with an armed boarding team, was clear of the Cape Roger and on its way to the ESTAI.    It arrived at the ESTAI within three (3) minutes and mounted its boarding ladder on the side of the ESTAI. There was no clear evidence before the Court that any prior warning of the proposed boarding had been given to the ESTAI.

 

[7]                Boarding team members, of which there were either six (6) or eight (8), the evidence is unclear, wore floatation suits and Kevlar soft body armour. They were equipped with MP5 submachine guns or machine pistols, semi-automatic in operation and utilizing 9 millimetre ammunition.

 

[8]                The boarding was resisted. Crew members of the ESTAI threw the boarding team's ladder back into the water, cut the warps (that is to say, the cables attaching the ESTAI's fishing net to the ship) and the ESTAI began to run.

 

[9]                The Leonard J. Cowley was the first of the Canadian vessels to take off in hot pursuit of the ESTAI. At least the Sir Wilfrid Grenfell and the Cape Roger followed. The RCMP emergency response team on board the Sir Wilfrid Grenfell was requested to "take over" in the event of another attempted boarding. The course of the ESTAI and of the pursuing Canadian vessels was slightly south of east, that is to say, further out to sea.

 

[10]            Sometime in the afternoon, the Cape Roger received a message from the ESTAI indicating that it, that is to say, the Cape Roger, was too close to the ESTAI and was putting the ESTAI and its crew in danger.

 

[11]            By 16:00 hours, the chase was going on in dense fog. Other Spanish vessels were apparently attempting to obstruct the boarding and arrest of the ESTAI. By 17:00 hours, the ESTAI and pursuing vessels crossed into fishery subarea 3M. By 17:17 hours, the Leonard J. Cowley was "moving in" on the ESTAI. At 17:40 hours, the Sir Wilfrid Grenfell had activated its water cannon and directed its stream at the ESTAI. In later testimony, the Chief Engineer aboard the ESTAI testified that he feared that the effect would be to flood the engine room and frozen fish holds of the ESTAI. Perhaps at some risk to himself, to minimize the risk of flooding, the Chief Engineer secured hatches on deck that had been open.

 

[12]            By 17:45 hours, the Cape Roger received authority to fire warning shots. It raised its "Lima" signal flag indicating an intention to board. Canadian vessels were manoeuvring at very close quarters. The Master of the Cape Roger, in his testimony, expressed retrospective concern about the risks that were being taken.

 

[13]            At or about 17:50 hours, the ESTAI apparently advised the Canadian vessels that it was not going to stop. There may have been communication with the ESTAI from one of the Canadian vessels that had a Spanish interpreter on board. The ESTAI appealed to another vessel in the same general area that had a NAFO inspector on board. The NAFO inspector contacted one of the Canadian vessels to inquire what was going on. The Canadian vessel responded but provided no relevant information.

 

[14]            At or about 17:57 hours, warning shots were fired from at least one of the Cape Roger's guns "across the bow", that is to say, in front of, not over, the bow of the ESTAI. When the guns and the remaining ammunition were returned to the Cape Roger's gun locker, it was determined that twenty-three (23) rounds had been fired.

 

[15]            Following the warning shots, by approximately 18:00 hours, the ESTAI had stopped. Boarding craft and armed boarding teams were immediately mobilized on board and along side three (3) or four (4) of the Canadian ships. Armed boarding teams, perhaps including members of the RCMP emergency response team, were prepared and proceeded to the ESTAI, under the illumination of flares. They boarded without incident. As earlier indicated, the Captain of the ESTAI cooperated in turning his ship towards St. John's. Apparently the voyage to St. John's took place without animosity between the Spanish officers and crew members and the Canadian boarding team members that remained on board. Indeed, at the request of Captain Davila, shortly after the boarding, the Canadians put their guns away.

 

[16]            The ESTAI and the Cape Roger, after sailing at a very slow pace through ice conditions, and in the company of at least some of the other Canadian vessels, arrived in St. John's on the afternoon of Sunday the 12th of March, 1995. More will be said about the short stay of the ESTAI, its Master and crew in St. John's and of discoveries and events following the return of the ESTAI to its home port of Vigo, Spain, later in these reasons.

 

 

 

[27]    I now turn to the respondents’ Statement of Claim as amended on April 30, 2003.

 

RESPONDENTS’ AMENDED STATEMENT OF CLAIM

[28]    As I indicated earlier, as a result of the pursuit, boarding, arrest and forcible return of the ESTAI to Saint John’s, the respondents commenced an action in damages against the Federal Crown. These proceedings were brought pursuant to the Crown Liability and Proceedings Act and the Attorney General of Canada was named as defendant. Sections 3(b)(i), 8, 10 and 23 of that Act are relevant and they provide as follows:

 

[29]    For reasons which will appear evident very shortly, the allegations made by the respondents in their pleadings are crucial to the outcome of their cross-appeal.

 

[30]    In essence, the respondents allege in their pleadings that the actions of the Federal Crown, its employees, servants and agents in pursuing, boarding, arresting and forcing the ship to proceed to Saint John’s, were unlawful and constituted unlawful trespass. The respondents also allege that the laying of charges against the vessel and its master by the Federal Crown was unlawful.

 

[31]    In making these allegations, the respondents assert that Regulation P.C. 1995-372 of March 3, 1995 was invalid in a number of respects, namely:

1.                       The Regulations were not enacted for the purposes of sound conservation and management or for any other purpose authorized by the Act and, hence, were ultra vires the authority conferred on the Governor in Council by the Act.

2.                       The regulatory amendments had not been gazetted by the time the Federal Crown’s servants and agents opened fire and boarded the ship in international waters and, as a result, the Regulations were of no force or effect.

3.                       In prescribing that the vessels flying the flags of Spain or Portugal constituted a class of foreign fishing vessels for the purposes of section 5.2 of the Act, the Regulations were ultra vires section 6 of the Act in that the words “class of foreign fishing vessel” cannot encompass, in respect to foreign fishing vessels, the idea of flag or national origin.

4.                       The Regulations are discriminatory and in violation of section 15(1) of the Charter in that they purport to bring two nations and no others within the ambit of the Regulations in an area of the sea beyond the 200-mile limit. The respondents also say that the Regulations discriminate against Spanish vessels on the basis of race, national  and ethnic origin and, as a result, violate section 15(1) of the Charter and are therefore of no force or effect.

5.                       The Regulations, which set out in Table V of PC 1995-372 a list of seven prescribed conservation and management measures applicable by virtue of paragraph 21(2)(b) thereof to Table IV vessels, i.e. Spanish and Portuguese vessels, violate section 15 of the Charter and are of no force or effect.

6.                       The Regulations, in making Spanish and Portuguese vessels subject to Canadian law on the high seas beyond the 200-mile limit, are ultra vires the regulation-making authority conferred on the Governor in Council by section 6 of the Act.

 

[32]    The respondents also take the position in their pleadings that the actions of the Federal Crown’s employees, servants and agents, in attempting to board the vessel without notice on the high seas and in using water canons and guns against the vessel and in boarding the vessel under force of automatic weapons on the high seas, “were high-handed, and oppressive…”.

 

[33]    Those are the grounds upon which the respondents sought damages against the Federal Crown. I point out that the respondents’ Statement of Claim does not disclose any allegation of malice or bad faith on the part of those servants and agents of the Federal Crown involved in the pursuit, boarding, arrest and forced return of the vessel to Saint John’s, nor does it disclose any allegation that in enacting the Regulations at issue, the Governor in Council acted either with malice or in bad faith, or that it knew or ought to have known that the Regulations were not authorized by section 6 of the Act.

 

[34]    To make matters crystal clear, I wish to add that the respondents do not allege that by reason of the Governor in Council’s fault, negligence or bad faith in enacting the Regulations, they are entitled to damages. Rather, as I understand the respondents’ amended Statement of Claim, they submit that because the Regulations pursuant to which the Federal Crown’s servants and agents arrested their vessel are invalid, they are entitled to damages.

 

[35]    I now turn to the decision of the Court and the manner in which the learned Trial Judge disposed of the respondents’ allegations.

 

THE DECISION OF THE FEDERAL COURT

[36]    The first matter dealt with by Gibson J. was the question of the validity of the March 3, 1995 amendments to the Regulations. First of all, the learned Judge indicated that he was satisfied that in enacting the amendments to the Regulations on March 3, 1995, the Governor in Council’s intentions were to preserve Greenland halibut stocks and to strengthen the international regulatory regime. Hence, in his view, the Regulations were valid and, consequently, the servants and agents of the Federal Crown had the legal right to arrest the ship and its master on the high seas on March 9, 1995.

 

[37]    The learned Judge then held that there was no basis for him to conclude that the vessels of Spain and Portugal could not constitute a “prescribed class” for the purpose of section 5.2 of the Act.

 

[38]    He then went on to consider the respondents’ Charter arguments. In his view, those arguments were unfounded. At paragraph 217 of his reasons, the Judge disposes of this issue in the following terms:

[217]       Similarly, the Court can find no basis on which to conclude that the prescription of vessels flying the flags of Spain and Portugal as a "class" of vessels for the purposes of section 5.2, contravenes section 15 of the Charter. First, and most obviously, section 15 of the Charter simply does not speak to protection of "vessels" but rather to the protection of the equality of individuals against discrimination on grounds that certainly include race and national or ethnic origin. The Court simply cannot conclude that the distinctions here at issue were directed against Spanish persons based upon stereotyping and prejudice against them. Even if the evidence before the Court was clear that only Spanish persons may serve aboard fishing vessels flying the flag of Spain, and it was not, the evidence certainly did not go so far as to demonstrate that Spanish persons do not and cannot serve aboard vessels flying the flags of other states.

 

 

[39]    With respect to the respondents’ submissions to the effect that P.C. 1995-372 had not appeared in the Canada Gazette by March 9, 1995, the Judge concluded on the basis of subsection 11(2) of the Statutory Instruments Act, R.S. 1985, c. S-22, that these submissions were without merit. In particular, he noted that the March 3, 1995 amendments provided that they were to apply “… according to their terms before they are published in the Canada Gazette” and that, in any event, the owners of the ESTAI and their master were aware of the intent of the Governor in Council in enacting the amendments prior to March 9, 1995.

 

[40]    The Judge then considered the respondents’ allegations concerning the reckless conduct of the Federal Crown’s servants and agents in the pursuit of the vessel and in the use of excessive force. Relying on the provisions of sections 8, 8.1, 9 of the Act and section 19.5 of the Regulations, the Judge concluded that the respondents’ allegations, i.e. that the actions of the Federal Crown’s servants and agents in using gunboats against the vessel and in harassing and terrorizing its master and crew on the high seas were unlawful and tortious, were not made out. More particularly, the Judge was of the view that in the circumstances of the case, the use of a water canon and the firing of warning shots could not be considered as excessive or unreasonable.

 

[41]    Lastly, the Judge turned his attention to the damages claimed by the respondents. As I indicated earlier, notwithstanding the dismissal of all of the respondents’ allegations of fault and of unlawful trespass, he granted the respondents the sum of $137,058.57 with interest.

 

[42]    In the course of his discussion of the damages claimed by the respondents, the Judge considered their claim that the vessel had suffered hull damage caused by ice encountered during her voyage from the point of arrest to Saint John’s and that regardless of whether the arrest was lawful, the damage was attributable to the negligence of the Crown’s servants and agents. After canvassing the evidence on the point, the Judge concluded that the respondents had failed to meet their burden of establishing, on a balance of probabilities, that damage to the hull of the ship “… was attributable, in whole or in part, to the voyage of the ESTAI from the point of arrest to Saint John’s, Newfoundland. I reach this conclusion in large part by drawing an adverse inference from the failure of Captain Davila to testify” (paragraph 233 of the Judges’ reasons).

 

 

 

 

ANALYSIS

[43]    As I am of the view that the appeal must necessarily be allowed unless the cross-appeal is successful, I will deal firstly with the cross-appeal. I begin my discussion thereof by examining the grounds upon which the respondents seek to overturn the decision of the Federal Court.

 

[44]    The respondents say firstly that the Judge erred in law and made a palpable and overriding error in concluding that the amending Regulations were enacted for conservation and management purposes and that the objective thereof was to strengthen the international regulatory regime.

 

[45]    The respondents further say that the Judge erred in law in that his decision is inconsistent with the Government of Canada’s obligations under the Convention. They also say that the Judge erred in failing to award them damages for the ice damage caused to the vessel during the voyage from the point of arrest to Saint John’s.

 

[46]    Lastly, the respondents refer to grounds (vi) to (x) of their Notice of Cross-Appeal. For ease of reference, I reproduce in their totality the grounds of appeal put forward by the respondents in their Notice of Cross-Appeal:

                                                            (i)            that the learned trial judge erred in law in holding that the amending regulations of 3^rd March 1995 were enacted for conservation and management purposes rather than to promote the economic interests of Canada, and there was palpable and overriding error in so holding;

                                                          (ii)            that the learned trial judge erred in law in holding that the Defendant (Appellant) had the legal right to arrest the ESTAI and its master in international waters on the 9^th of March 1995;

                                                         (iii)            that the learned trial judge erred in law and made palpable and overriding error in holding the Defendant’s (Appellant’s) objective was the achievement in international for a of significant strengthening of the international regulatory regime and when strengthening of the international regulatory regime was not a lawful goal of the amending regulations;

                                                        (iv)            that the learned trial judge erred in law in reaching a decision inconsistent with the Defendant’s (Appellant’s) treaty obligations under the Convention on Future Multilateral Cooperation in the Northwest Atlantic Fisheries done at Ottawa in 1978;

                                                          (v)            that the learned trial judge erred in law and failed to apply the proper burden of proof in refusing to award damages to the Respondents for ice damage to the ESTAI and the decision constituted palpable and overriding error;

                                                        (vi)            that the learned trial judge erred in law in failing to give adequate reasons for his decisions;

                                                       (vii)            that the learned trial judge erred in law in allowing hearsay evidence of alleged foreign historical fishing practices while refusing to allow questioning concerning destructive Canadian fishing practices;

                                                     (viii)            that the learned trial judge erred in law in failing to recuse himself as trial judge in an action involving allegations of misconduct and abuse of authority by the Defendant given the trial judge’s 28 years of service as an employee and servant of the Defendant;

                                                        (ix)            that the decision complained of is erroneous in law and in fact;

                                                          (x)            such further grounds as counsel may advise and this honourable court may permit.

 

 

 

[47]    As appears from these grounds of appeal, the respondents do not challenge the Judge’s conclusion with respect to the Charter issue, nor do they challenge his findings concerning the conduct of those on board the Canadian vessels who arrested, detained and forced the ESTAI to proceed to the port of Saint John’s.

 

[48]    I begin with ground (viii). The respondents say that the Judge erred in law in failing to recuse himself in regard to an action against the Federal Crown for misconduct and abuse of authority when the Judge had served as a federal employee for 28 years. In my view, there is simply no basis to support this ground of appeal. In any event, that issue was raised by the respondents by way of an interlocutory motion prior to the commencement of the trial and the motion was dismissed by Gibson J. in an order dated December 14, 2004. No appeal was taken from that order.

 

[49]    In grounds (ix) and (x) of its Notice of Cross-Appeal, as the appellant points out, the respondents have made a general, bald assertion to the effect that Gibson J.’s decision is erroneous in law and in fact and claim to reserve the right to raise additional grounds in challenging the Judge’s decision. For obvious reasons, these grounds cannot succeed.

 

[50]    Ground (vii) is to the effect that Gibson J. erred in allowing hearsay evidence of alleged foreign historical fishing practices while refusing to allow questioning concerning destructive Canadian fishing practices. That ground was not pursued by the respondents in their written submissions and nothing was said in that regard before us at the hearing. Consequently, I need not say anything further.

 

[51]    In ground (vi), the respondents submit that the Judge’s reasons do not constitute adequate reasons for judgment. Again, the respondents did not pursue this point in their written or oral submissions. In any event, there can be no doubt whatsoever that the Judge’s reasons were adequate reasons for judgment.

 

[52]    I now turn to grounds (i) to (v), which are directed at the Judge’s conclusion that the amending Regulations were valid. The respondents’ main argument is that the Regulations were ultra vires the enabling legislation because the Governor in Council was motivated by economic rather than conservation purposes. On the premise that the Regulations are invalid, the respondents argue that the arrest of their vessel was unlawful and that, as a result, they are entitled to damages.

 

[53]    The appellant’s reply to these arguments is that the Regulations were valid in that they were motivated by an urgent need to deal with a crisis in the conservation of Greenland halibut stocks in the NAFO Regulatory Area beyond Canada’s 200-mile economic zone. Further, the appellant says that even if the Regulations are found to be invalid, the arrest of the vessel does not give rise to liability, as the arresting officers were entitled to rely upon the presumption of validity of legislation and the de facto authority to arrest and detain the ESTAI given to them by the legislation.

 

[54]    For the reasons that follow, I conclude that the cross-appeal cannot succeed.

 

[55]    Before addressing the respondents’ submissions regarding the validity of the Regulations, a brief review of the jurisprudence pertaining to the legal consequences of a declaration of invalidity of legislation is necessary. In other words, does a declaration of invalidity of legislation render unlawful actions of the Federal Crown’s servants and agents who, at all relevant times, were acting under the authority of legislation subsequently declared invalid? Further, does the Government become liable in damages by reason only of a declaration of invalidity of legislation?

 

[56]    I begin with Guimond v. Quebec (Attorney General), [1996] 3 S.C.R. 347, which stands for the proposition that a claim in damages against the Crown arising from the invalidity of legislation will only succeed where it can be demonstrated that the conduct of the Crown’s agents and servants was either “clearly wrong”, in bad faith or that it constitutes an abuse of power.

 

[57]    In Guimond, supra, the respondent was sentenced to imprisonment upon default of payment of fines for infractions to the Quebec Highway Safety Code. He spent 49 days in prison and, while on conditional release, he sought judicial authorization under article 1003 of the Quebec Code of Civil Procedure, R.S.Q. c. 25, to initiate a class action for damages against the government for breach of his constitutional rights and those of others in a similar position, namely, persons who had been sentenced to imprisonment upon default of payment of fines under statutory sentencing provisions alleged to infringe the Charter and the Quebec Charter of Human Rights and Freedoms, R.S.Q. c-12. The respondent sought damages under sub-section 24(1) of the Charter on a bare allegation of the unconstitutionality of the legislation under which he had been sentenced.

 

[58]    In concluding that the respondent’s case did not meet the threshold required by article 1003(b), i.e. “the facts alleged seem to justify the conclusions sought”, the Court drew upon the principles arising from the civil law that neither Parliament nor a legislature were liable in damages for enacting legislation subsequently found to be invalid. At paragraphs 13 to 17 of his Reasons in Guimond, supra, Gonthier J., writing for a unanimous Court, carefully reviews the authorities with respect to the liability of the Crown for damages arising from the enactment of laws subsequently found to be unconstitutional:

13     … The general principle, that an action in tort for civil damages will not lie [by reason of the enactment of laws subsequently found to be unconstitutional], was enunciated clearly in this Court’s decision in Welbridge Holdings Ltd. v. Greater Winnipeg, [1971] S.C.R. 957. In that case, the plaintiff company commenced work on certain lands on the basis of a municipal zoning by-law passed by the defendant municipality.  The by-law was subsequently declared ultra vires, and the company sought damages against the municipality.  This Court rejected the action in negligence.  As Laskin J. (as he then was) reasoned for the Court, at p. 969:

In exercising [a discretionary legislative] authority, a municipality (no less than a provincial Legislature or the Parliament of Canada) may act beyond its powers in the ultimate view of a Court, albeit it acted on the advice of counsel.  It would be incredible to say in such circumstances that it owed a duty of care giving rise to liability in damages for its breach.  "Invalidity is not the test of fault and it should not be the test of liability":  see Davis, 3 Administrative Law Treatise, 1958, at p. 487.

 

The principle was reiterated by this Court in Central Canada Potash Co. v. Government of Saskatchewan, [1979] 1 S.C.R. 42.  As Delisle J.A. observed in his dissenting reasons in the court below, at p. 253 D.L.R.:

[TRANSLATION] In terms of the civil law, there is no doubt that the Crown is not negligent when it enacts a law that is subsequently declared invalid, any more than the public official who attends to its implementation.  In Central Canada Potash Co. v. Government of Saskatchewan (1978), 88 D.L.R. (3d) 609, [1979] 1 S.C.R. 42, 6 C.C. L.T. 265, Martland J., on behalf of the court, said the following about a government official’s enforcement of legislation that is subsequently held to be ultra vires (at p. [90 S.C.R.]):

In my opinion it would be unfortunate, in a federal state such as  Canada, if it were to be held that a government official, charged with the enforcement of legislation, could be held to be guilty of intimidation because of his enforcement of the statute whenever a statute whose provisions he is under a duty to enforce is subsequently held to be ultra vires.

 

14     Professor Cooper-Stephenson, in his text Charter Damages Claims (1990), at pp. 330-32, has interpreted these cases as establishing a “claim of right” defence to civil damages claims arising from legislation which had been declared constitutionally invalid.  He submits that these cases endorse a qualified immunity from tort claims where governmental actors have committed a good faith and reasonable error in enforcing legislation which is subsequently found to violate the Constitution.  Dussault and Borgeat extend this argument to its logical conclusion stating, in their treatise, Administrative  Law (2nd ed. 1990), vol. 5, that Parliament itself enjoys the immunity (at p. 177):

 

In our parliamentary system of government, Parliament or a legislature of a province cannot be held liable for anything it does in exercising its legislative powers.  The law is the source of duty, as much for citizens as for the Administration, and while a wrong and damaging failure to respect the law may for anyone raise a liability, it is hard to imagine that either Parliament or a legislature can as the lawmaker be held accountable for harm caused to an individual following the enactment of legislation.  [Footnotes omitted.]

 

15     Of course, with the enactment of the Charter, a plaintiff is not limited to an action for damages under the general law of civil liability but could, in theory, seek compensatory and punitive damages as an “appropriate and just” remedy under s. 24(1).  Academic commentators have generally been of the view that the “claim of right” doctrine applies with equal force under s. 24(1).  As M. L. Pilkington argued in her article on "Monetary Redress for Charter Infringement", in R. J. Sharpe, ed., Charter Litigation (1987), 307, at pp. 319-20:

 

In assessing whether a remedy is appropriate and just, a court must consider not only the need to implement the guarantees of the Charter, but also the need to do so without unduly interfering with the effective operation of government.

 

…

 

A qualified immunity for government officials is a means of balancing the protection of constitutional rights against the needs of effective government, or, in other words, determining whether a remedy is appropriate and just in the circumstances.  A government official is obliged to exercise power in good faith and to comply with "settled, indisputable" law defining constitutional rights.  However, if the official acts reasonably in the light of the current state of the law and it is only subsequently determined that the action was unconstitutional, there will be no liability.  To hold the official liable in this latter situation might "deter his willingness to execute his office with the decisiveness and judgment required by the public good".  [Emphasis added.]

 

Professor Garant concludes in Droit administratif (3rd ed. 1991), vol. 2, at p. 487:

 

[translation]  It seems that there is no right to obtain a compensatory remedy from the government where the Charter violation results from a statute that is declared unconstitutional.

 

16     The jurisprudence under the Charter also supports this view.  In the Reference re Manitoba Language Rights, [1985] 1 S.C.R. 721, this Court relied in part on the “de facto doctrine” to maintain “rights, obligations and other effects” arising under unilingual legislation ruled unconstitutional.  As the Court defined the doctrine, at pp. 756 and 757:

 

 “The rule of law is that acts of a person assuming to exercise the functions of an office to which he has no legal title are, as regards third persons, . . . legal and binding.” 

 

…

 

Thus the de facto doctrine will save those rights, obligations and other effects which have arisen out of actions performed pursuant to invalid Acts of the Manitoba Legislature by public private bodies corporate, courts, judges, and persons exercising statutory powers and public officials.  Such rights, obligations and other effects are, and will always be, enforceable and unassailable.

 

17     The Divisional Court of Ontario in Crown Trust Co. v. The Queen in right of Ontario (1986), 26 D.L.R. (4th) 41, at pp. 48-49, applied the de facto doctrine to deny an action for Charter damages arising from an unconstitutional statute. As Henry J. explained:

 

 [W]e consider the law to be clear that no cause of action exists for the conduct of the appellants as agents and representatives of the registrar when acting within the authority of the legislation in the absence of any allegation of wrongful conduct, bad faith, negligence or collateral purpose.  The statutes are to be given full force and effect until set aside.

 

[Emphasis added]

 

 

 

[59]    More recently, in Mackin v. New Brunswick (Minister of Finance), [2002] 1 S.C.R. 405, the Supreme Court reiterated the principles enunciated in Guimond, supra. The facts in Mackin, supra, were that the New Brunswick Act to Amend the Provincial Court Act, S.N.B.1995, c. 6, which came into force on April 1, 1995, abolished the system of supernumerary judges in that province and replaced it with a panel of retired judges paid on a per diem basis. The amendments were made in the interest of efficiency and flexibility, and for economic and financial reasons. The respondents challenged the constitutionality of the amending legislation and argued that it unjustifiably affected the tenure and financial security of judges that formed part of judicial independence.

 

[60]    Although the Supreme Court ultimately concluded that the amending legislation was unconstitutional, it dismissed the respondents’ claim in damages. At paragraph 82, Gonthier J., writing for a majority of the Court, made the following remarks:

82.     Applying these principles to the situation before us, it is clear that the respondents are not entitled to damages merely because the enactment of Bill 7 [the Act to amend the Provincial Court Act] was unconstitutional.  On the other hand, I do not find any evidence that might suggest that the government of New Brunswick acted negligently, in bad faith or by abusing its powers.  Its knowledge of the unconstitutionality of eliminating the office of supernumerary judge has never been established.  On the contrary, Bill 7 came into force on April 1, 1995, more than two years before this Court expressed its opinion in the Provincial Court Judges Reference, supra, which, it must be recognized, substantially altered the situation in terms of the institutional independence of the judiciary.  Consequently, it may not reasonably be suggested that the government of New Brunswick displayed negligence, bad faith or wilful blindness with respect to its constitutional obligations at that time.

 

[Emphasis added]

 

 

[61]    Thus, there can be no doubt that the Federal Crown will not be liable for the conduct of its servants and agents in the course of implementing and enforcing legislation subsequently found to be invalid, unless it can be shown that their conduct was wrongful, in bad faith or negligent. Nor will the Government be liable for merely enacting regulations later found to be invalid, unless there is proof that in enacting such legislation, the Government was acting either in bad faith, was negligent or was reckless. In other words, liability will arise where the Government knew or ought to have known that its legislation was not authorized by the enabling statute, i.e., that its legislation was invalid.

 

[62]    I now return to the facts of the case and to the respondents’ submissions with regard to the invalidity of the Regulations.

 

[63]    The Judge held, and his findings are not challenged in this appeal, that those on board the Canadian vessels who arrested the ESTAI and escorted it to Saint John’s, did not act recklessly, that they did not use excessive force, nor did they fail to comply with sections 19.3 to 19.5 of the Regulations. Consequently, even if the Regulations were held to be invalid, no liability can arise by reason of the actions taken by the Crown’s servants and agents. In effect, it is undeniable that on March 9, 1995, the vessel was fishing contrary to section 5.2 of the Act, that she was a vessel of a prescribed class (Spanish), that she was fishing in the NAFO Regulatory Area for a prescribed stock (Greenland halibut), contrary to a prescribed conservation and management measure (prohibition of fishing).

 

[64]    Hence, it is my view that the arrest of the ESTAI on March 9, 1995 was lawful by reason of the fact that the arresting officers were acting under valid authority at the time and that, in any event, even if the Regulations were declared invalid, the arresting officers had the de facto authority to act as they did.

 

[65]    This disposes of ground (ii) of the cross-appeal and, therefore, only grounds (i), (iii), (iv) and (v) remain for determination. I will now deal with grounds (i), (iii) and (iv).

 

[66]    The respondents’ submissions in regard to these grounds are the following. Firstly, the respondents say that the Governor in Council was not authorized by the enabling legislation to prescribe, as a conservation and management measure, an outright prohibition of fishing by Spanish and Portuguese ships.

 

[67]    Secondly, the respondents say that sections 5.1 and 5.2 of the Act did not authorize the Governor in Council to coerce contracting parties to the Convention to conclude international agreements favourable to Canada.

 

[68]    Thirdly, the respondents say that there was no evidence that deep-water Greenland halibut, at a habitat of 4,000-5,000 feet, ever moved back and forth to the much shallower (2,000-3,000 feet approximately) waters of the Grand Banks, nor was there any evidence that there had ever been any Greenland halibut fishery on the Grand Banks. Thus, according to the respondents, Table V, Item 1 of the Regulations, which prescribes as a conservation and management measure a prohibition against fishing in Divisions 3L, 3M, 3N and 3O of the Regulatory Area, is invalid to the extent that these areas are beyond the Grand Banks of Newfoundland, since Parliament was concerned only with straddling stocks on the Grand Banks.

 

[69]    Fourthly, the respondents say that the Regulations are invalid because they were enacted for the purpose of giving commercial advantage to Canadian fishing vessels and were not enacted as bona fide conservation and management measures.

 

[70]    In addressing the respondents’ submissions, it is important to keep in mind the allegations made by the respondents in their amended Statement of Claim. As I indicated earlier, there are no allegations to the effect that in enacting the Regulations, the Government was either acting in bad faith, out of malice, or was abusing its powers. In other words, the respondents did not allege that the Government knew or ought to have known that in enacting the Regulations, they were not authorized by the enabling legislation. The only allegation which could possibly be of some help to the respondents is the one found at paragraph 34 of the amended Statement of Claim and which reads as follows:

34. The plaintiffs state further that the Regulation (PC 1995-372) was not enacted for the purposes of sound conservation and management, or for any other purpose authorized by the Coastal Fisheries Protection Act, and was ultra vires the authority conferred by the Coastal Fisheries Protection Act.

 

 

[71]    Regretfully for the respondents, I cannot read that allegation as an allegation that the Governor in Council acted recklessly in enacting the Regulations or that it acted in bad faith or that it knew or ought to have known that the Regulations were not authorized by the enabling legislation. Consequently, even if we were to conclude that the Regulations are invalid, I am satisfied, on the basis of Guimond, supra and Mackin, supra, that the Government cannot be found liable and, as a result, the respondents cannot be entitled to damages. In any event, even if allegations of bad faith had been made, I do not see any evidence in the record which could support such allegations.

 

[72]    I would add that at no time during his oral presentation did counsel for the respondents argue that the Government was either “at fault”, negligent or reckless in enacting the Regulations pursuant to which the vessel was arrested. Rather, his position was consistent with the allegations found in the respondents’ pleadings, i.e. that the arrest of the vessel was unlawful because the Regulations pursuant to which the vessel had been arrested were invalid.

 

[73]    Even though these conclusions are sufficient to dispose of grounds (i), (ii) and (iii) of the cross-appeal, I will nonetheless briefly address the respondents’ submissions that the Regulations were invalid.

 

[74]    Firstly, with respect to the submission that the Governor in Council was not authorized to coerce contracting parties to the Convention or that it acted contrary to Canada’s international obligations, I would simply say that in enacting sections 5.1 and 5.2 of the Act, Parliament clearly intended for Canada to take action in the NAFO Regulatory Area regardless of whether or not an agreement had been reached by the contracting parties on the measures which Canada believed were necessary in order to conserve and manage straddling stocks on the Grand Banks of Newfoundland.

 

[75]    As Canada’s obligations under the Convention were never incorporated into Canadian legislation, they must give way, in the event of inconsistency, to properly enacted domestic legislation. Thus, to the extent that the Act and the Regulations are valid legislation, that is the end of the matter as far as this Court is concerned.

 

[76]    Secondly, failing an allegation of bad faith or recklessness on the part of the Government, Canada’s motivation in enacting the Regulations is, in my view, an irrelevant consideration. In Thorne’s Hardware Ltd. v. Canada, [1983] 1 S.C.R. 106, the appellants argued that in enacting Order in Council PC 1977-2115 of July 27, 1977, which expanded the harbour limits of the port of Saint-John, New Brunswick, the Governor in Council had acted “in bad faith”, i.e. for improper motives in that the true purpose for the Order in Council was the collection of harbour dues from one of the appellants without offering any service in return.

 

[77]    In upholding this Court’s decision which dismissed the appellants’ challenge of the Order in Council, the Supreme Court of Canada made it clear that courts were not authorized to make inquiries into the motives which had led the Government to enact the regulations in question. At pages 112 and 113, Dickson J. (as he then was), writing for a unanimous Court, made the following remarks:

Counsel for the appellants was critical of the failure of the Federal Court of Appeal to examine and weigh the evidence for the purpose of determining whether the Governor in Council had been motivated by improper motives in passing the impugned Order in Council. We were invited to undertake such an examination but I think that with all due respect, we must decline. It is neither our duty nor our right to investigate the motives which impelled the federal Cabinet to pass the Order in Council, …

 

I agree with the Federal Court of Appeal that the Government’s reasons for expanding the harbour are, in the end, unknown. Governments do not publish reasons for their decisions; governments may be moved by a number of political, economic, social or partisan considerations.…

 

[Emphasis Added]

 

 

[78]    The nature of the inquiry which a court must conduct with regard to the validity of regulations is therefore not a determination of the Government’s motivation, but rather a determination of whether the regulations are authorized by the enabling legislation. In determining whether the Governor in Council was authorized by the enabling legislation to make the Regulations at issue, regard must be had to section 6 of the Act which authorizes the Governor in Council to make regulations, inter alia, “generally for carrying out the purposes and provisions of this Act” (paragraph 6(e) of the Act). More particularly, paragraphs 6(b)(i), (ii) and (iii) authorize the Governor in Council to make regulations prescribing, as straddling stocks, stocks of fish that occur both within Canadian fisheries waters and in areas beyond and adjacent to Canadian fisheries waters, prescribing, as a class, foreign ships for the purposes of section 5.2, and prescribing any measure for the conservation and management of straddling stocks to be complied with by persons aboard foreign fishing vessels of a prescribed class.

 

[79]    The regulation-making power given to the Governor in Council must be examined in the light of sections 5.1 and 5.2 of the Act, wherein Parliament made it clear that it was of the view that it was imperative for foreign fishing vessels to comply with sound conservation and management measures for straddling stocks on the Grand Banks of Newfoundland, as these stocks were “a major renewable world food source, having provided a livelihood for centuries to fishers, …”, and that no persons aboard foreign fishing vessels of a prescribed class were to fish straddling stocks in the NAFO Regulatory Area in contravention of any prescribed conservation and management measures.

 

[80]    It is clear from sections 5.1, 5.2 and 6 of the Act that Parliament was not, in any way, limiting the conservation and management measures to be prescribed by the Governor in Council to measures agreed upon by the contracting parties to the Convention or to those which these parties supported through NAFO. I therefore see no merit to the respondents’ submission that the Governor in Council was not authorized to prescribe as a class the fishing vessels of Spain and Portugal. In the light of sections 5.1 and 5.2, I simply see no basis to this argument. I agree entirely with the Judge when he says at paragraph 216 of his Reasons:

216.     … Indeed, all of the evidence that was before the Court pointed to the reality that the continuing threat to endangered species of straddling stocks in the NAFO Regulatory Area was posed by fishing vessels without nationality, foreign fishing vessels flying "flags of convenience" and, on the particular facts of this matter, foreign fishing vessels flying flags of Spain and Portugal.

 

 

[81]    In assessing whether the Regulations were authorized by the enabling legislation, it is important to also have regard to the 1994 Report by the Fisheries Resource Conservation Council (the “Council”) to the Minister of Fisheries and Oceans. In its Report, the Council advised the Minister that Greenland halibut was a straddling stock in respect of which conservation measures were necessary. At pages 2 and following of its Report, the Council states:

The following is a descriptive overview of Greenland halibut in Subareas 0, 1, 2 and 3:

 

1.             The species occurs with no break in continuity from Davis Straight in the north (Subareas 0 and 1) to the Flemish Pass and the southern Grand Banks in the south (Subarea 3). It is generally considered to be one stock.

 

2.             The stock is transboundary in nature, occurring in the north both in Canadian waters (Subarea ) – Baffin Island) and in the adjacent Greenland waters (Subarea 1 – west Greenland); and in the south (Subarea 3) both in Canadian waters inside the 200-mile limit and in the adjacent NAFO Regulatory Area outside.

 

…

 

4.             Excessive fishing on any component of the stock would have a detrimental effect on the resource as a whole.

 

5.             In Subareas 0 and 1, the stock has been relatively widely distributed with concentrations on the steep slopes of the continental shelf and in the deep fjords of west Greenland and Baffin Island.

 

Up to the early 1980s, the stock was also distributed widely in Subareas 2 and 3. However, since the mid-1980s, a profound change in distribution has taken place to the extent that now very few Greenland halibut are found on the traditional banks or in the deep bays of Labrador and eastern Newfoundland. Rather, the remaining fish are concentrated in a relatively narrow band on the steep slopes the continental shelf and in the Flemish Cap.

 

It is generally believed that these concentrations in the southern reaches of Subarea 3 (outside 200 miles) are fish that migrated from Subarea 2 and the northern part of Subarea 3.

 

6.             Available scientific indices show a significant decline in stock abundance.

 

…

 

9.                    The traditional Canadian fishery was prosecuted in the mid-shore banks and in deep-water holes off eastern Newfoundland and Labrador (Subareas 2 and 3) at levels in the order of 25,000t annually as late as the early 1980s. This fishery has essentially disappeared.

 

10.                 At the same time, significant increases in effort have been developed in non-traditional areas, in particular:

-- the unregulated foreign vessel otter trawl fishery in the NAFO Regulatory Area outside 200 miles in Subarea 3; …

 

 

[82]    After setting out its reasons for concern regarding the status of Greenland halibut, i.e. that certain members of NAFO were fishing without restrictions and in an indiscriminate way, that fishing of the stock outside the 200-mile limit in Subareas 2 and 3 was expanding at an alarming rate, and that the maximum catch for both inside and outside the 200-mile limit should be set at around 25,000 tonnes, the Council impressed upon the Minister the need for additional conservation measures. It concluded its Report by making, inter alia, the following recommendations:

1.              Find a permanent solution to regulate Greenland halibut and to significantly reduce fishing effort and catches by foreign vessels in the NAFO Regulatory Area outside the Canadian 200-mile limit in Subarea 3.

 

2.              Strive to limit, to the extent practical, total catches in Subareas 2 and 3 to the 25,000t maximum annual level previously recommended by the FRCC, until scientific evidence is available to advise differently.

 

 

[83]    In the course of his testimony at trial, Mr. Bob Applebaum, the Director General of the International Directorate in the Department of Fisheries and Oceans, informed the Court that the information given to the Minister by the Council in its 1994 Report was consistent with the information gathered by his Department.

 

[84]    It will be recalled that the NAFO contracting parties agreed to a TAC of 27,000 tonnes for Greenland halibut for the year 1995, a figure which is in line with the Council’s recommendation to the Minister. Because the NAFO contracting parties had come to an agreement with regard to the TAC, the respondents submit that the purpose for which the March 3, 1995 Regulations were enacted cannot possibly have been conservation and management. In their view, the agreement concerning the TAC settled the conservation issue and, as a result, Canada’s attempt to obtain a significant share of the individual quotas through NAFO and its enactment OF the March 3, 1995 Regulations can only be viewed as an attempt to exploit a greater share of the Greenland halibut stock to the detriment of the E.U., i.e. Spain and Portugal.

 

[85]    In my view, the respondents’ submission is flawed. Firstly, the Council’s 1994 Report to the Minister clearly shows that Greenland halibut was a “straddling stock” in respect of which conservation measures were necessary. Secondly, the fact that the NAFO contracting parties had agreed to a TAC of 27,000 tonnes did not end their discussion with regard to the conservation of the stock. The parties then attempted to conclude a second agreement, this time, with regard to individual quotas, but to no avail.

 

[86]    As a result, the E.U. unilaterally set for itself a quota of approximately 18,630 tonnes for Greenland halibut in the NAFO Regulatory Area, a level far in excess of the 3,400-tonne quota which the Commission had allocated to it at its January 30 and February 1, 1995 meeting. This no doubt led to the enactment of the March 3, 1995 Regulations, pursuant to which Canada prohibited the fishing of Greenland halibut by Spanish and Portuguese fishing vessels in the NAFO Regulatory Area outside the 200-mile limit. The effect of these Regulations, in my view, was to ensure that failing an agreement on individual quotas, the 27,000-tonne limit for 1995 would not be exceeded, thus protecting the stock.

 

[87]    It appears undeniable that if both the NAFO TAC of 27,000 tonnes and the additional 15,230 tonnes of quota which the E.U. allocated to itself (18,630, less 3,400) had been fished, the TAC of 27,000 tonnes would have been greatly exceeded for 1995. This could have posed a serious conservation risk for the stock and would have undermined Parliament’s objectives as set out in section 5.1 of the Act.

 

[88]    Linked to this is the fact that there was evidence that Spanish vessels had been overfishing Greenland halibut outside the 200-mile limit and that that constituted a possible cause of the sudden drastic decline of the stock inside the 200-mile line, including the stock traditionally found on the Grand Banks.

 

[89]    I am therefore satisfied that in prohibiting Spanish and Portuguese ships from fishing Greenland halibut in the NAFO Regulatory Area, the Governor in Council enacted a measure of conservation which fell within the authority conferred upon it by the enabling legislation.

 

[90]    This leaves only ground (v) of the cross-appeal, i.e. that the Judge erred in law and failed to apply the proper burden of proof in refusing to award damages to the respondents for ice damage to the vessel and that in so concluding, the Judge made a palpable and overriding error. It will be recalled that at paragraph 233 of his Reasons, the Judge concluded that the respondents had not met their burden of showing that ice had damaged the ship’s hull during the voyage from the point of arrest to Saint John’s.

 

[91]    Two issues were before the Judge. The first one, which he disposed of, was whether ice had caused damage to the vessel during her voyage to Saint John’s. The second issue, which he does not appear to have dealt with, presumably because of his finding on the first issue, was whether or not such damage was attributable to negligence on the part of the Crown’s servants and agents who were on board the ships which escorted the ESTAI to Saint John’s.

 

[92]    Since the appellant cannot be liable for damage caused to the ship, including the alleged damage caused by ice, unless the Crown’s servants and agents were negligent, I will deal first with the second issue. In that regard, although the respondents have, in a general way, raised that issue in ground (v) of the cross-appeal, their Memorandum of Fact and Law discloses no submissions or arguments with respect to the acts or omissions of the Crown’s servants which would render the Crown liable for ice damage. I am therefore of the view that that the respondents have abandoned this point.

 

[93]     As a result, we need not decide whether Gibson J. erred in concluding that the respondents had not satisfied him that ice had caused damage to the ESTAI.

 

 

THE APPEAL

[94]    As I have already indicated, the Judge awarded damages to the respondents even though he, in effect, dismissed their action. It is not obvious from the Judge’s Reasons exactly why he granted damages to the respondents. In that regard, it suffices to reproduce paragraphs 228, 236 and 237 of the Judge’s Reasons:

[228]       In light of the Court's conclusions to this point, consideration of issues relating to the damages claimed in this action on behalf of the Plaintiffs may be seen to be unnecessary. The Court concludes otherwise. The diversion of the ESTAI and her master and crew to St. John's, the laying of charges and the detention of the ESTAI in port combined with the eventual disposition of the charges against the ESTAI and her master, give rise to special considerations. Further, given the amount of time that has elapsed since the events in question and the possibility of an appeal of the judgment herein, the Court will turn, relatively briefly, to those issues.

 

…

 

[236]      Counsel for the Defendant urged that legal fees and disbursements, including bonding expenses, when associated with a prosecution, whether successful or otherwise and whether or not fully prosecuted, are not recoverable unless the Defendant's case was "remarkable" or there was "oppressive or improper conduct" alleged against the Crown.

 

[237]      The circumstances of the arrest of the ESTAI and its master, the charges laid against them and the eventual stay of all of those charges are sufficient, the Court is satisfied, to make of those charges a "remarkable" case for the accused, here the Plaintiffs. While the Court is not satisfied that there is any evidence that the conduct of the Crown in the arrests and preliminary pursuit of the charges involved any oppressive or improper conduct, the Court is nonetheless satisfied that the Plaintiffs should be entitled to cover their out-of-pocket legal expenses and ship's agency fees to the time of the departure of the ESTAI from St. John's. These disbursements, when converted from pesetas where appropriate at the agreed rate, total $74,787.82.

 

[Emphasis added]

 

[95]    The only indication of the Judge’s rationale appears from footnote 83 to his paragraph 236, where he cites the Supreme Court of Canada’s decision in R. v. M. (C.A.), [1996] 1 S.C.R. 500, at paragraph 97, page 569. Although the learned Judge does not quote what the Supreme Court said at paragraph 97 in R. v. M., it will be helpful, for the present discussion, to reproduce that paragraph where Chief Justice Lamer, writing for a unanimous Court, makes the following remarks regarding the attribution of costs in criminal proceedings:

97.     Finally, the respondent has filed a request for costs on a solicitor-client basis under this Court's discretionary authority under s. 47 of the Supreme Court Act, R.S.C., 1985, c. S-26.  We have previously acknowledged that this discretionary power extends to making an order for costs in a criminal case, including both summary conviction matters (R. v. Trask, [1987] 2 S.C.R. 304 (costs denied)) and indictable matters (Olan v. The Queen, No. 14000, October 11, 1977 (costs allowed)).  But the prevailing convention of criminal practice is that whether the criminal defendant is successful or unsuccessful on the merits of the case, he or she is generally not entitled to costs.  See Berry v. British Transport Commission, [1962] 1 Q.B. 306 (C.A.), at p. 326, per Devlin L.C.J.  The Criminal Code codifies this convention as a matter of appellate practice before provincial courts of appeal in cases involving indictable offences.  See s. 683(3) of the Code, but see. s. 839(3) regarding summary conviction cases.  Consistent with this established convention, in Trask, we denied costs under s. 47 to a criminal defendant following a successful appeal of a summary conviction matter, as there was nothing "remarkable" about the defendant's case, nor was there any "oppressive or improper conduct" alleged against the Crown (at pp. 307-8).

 

[Emphasis Added]

 

 

[96]    In brief, Lamer C.J. explains that the general rule in criminal proceedings is that whether a criminal defendant succeeds or not on his defence, he or she will not be entitled to costs unless there was something “remarkable” about the case or the Crown’s conduct was “oppressive or improper”.

 

[97]    The above-quoted passage from R. v. M., supra, is helpful in understanding what the Judge says at paragraph 237 of his Reasons, i.e., that the circumstances surrounding the arrest of the vessel and of its master, the charges brought against them and the subsequent stay of those charges are such as to make of those charges a “remarkable” case for the accused, i.e. the respondents. In making these remarks, the Judge made it clear that he was satisfied that there was nothing oppressive or improper in the Crown’s conduct with regard to the arrest and the bringing of the charges against the vessel and its master.

[98]    Before proceeding, I must point out that nowhere in his Reasons does the Judge say why he is of the view that the case is a “remarkable” case within the meaning of R. v. M., supra. In my view, in concluding that the case fell within the exception to the general rule that a criminal defendant is not entitled to costs on a successful defence, the Judge fell into error.

 

[99]    Firstly, it is important to emphasize that in R. v. M., supra, the Supreme Court of Canada was addressing the power of a provincial superior court to award costs to an accused in the context of a criminal case where the charges were either dismissed or stayed.

 

[100]       Secondly, the charges against the vessel and its master were brought before the Newfoundland Supreme Court and there is no evidence that the respondents, following the stay of the charges against them, applied to that Court for costs.

 

[101]       Thirdly, there is nothing in the evidence which, in my view, could have allowed the Newfoundland Supreme Court to make an award of costs in favour of the respondents, the persons accused of violating section 5.2 of the Act. As R. v. M., supra, clearly shows, an award of costs to an accused in criminal proceedings is highly exceptional. It is only in special circumstances that such an award will be made: where there has been “oppressive or improper conduct” by the Crown (see: R. v. Trask, [1987] 2 S.C.R. 304 at paragraph 7, and R. v. M., supra, at paragraph 97); where the court allows costs as a remedy under section 24(1) of the Charter for breach of an accused’s Charter rights (see: R. v. Pawlowski, [1993] 79 C.C.C. (3d) 353 (Ont. C.A.; leave to appeal to the Supreme Court, denied [1993] S.C.C. No. 187); where the Crown pursues a matter as a test case and, as a result, the accused is put through substantial expense (see: R. v. Trask, supra); and where “systemic problems” beyond the control of the accused result in loss and delay (see: R. v. Curragh, [1997] 1 S.C.R. 537 at 546, paragraph 13). These are obviously only examples of situations where courts have concluded that it would be appropriate to grant costs to an accused in a criminal case. Whether or not in any given situation such an order is appropriate, is a matter to be decided by the court having jurisdiction in respect of the charges brought against the accused defendants.

 

[102]       Fourthly, the Judge did not make an Order for costs on the authority of R. v. M., supra. It is clear from his Reasons and, in particular, from paragraph 228, that what he made was an award in damages. The issue of costs was dealt with separately at paragraphs 262 to 266 of his Reasons. It is worth pointing out that the Judge refused to make an award of costs on a solicitor and client basis, as had been requested by the respondents, because he was of the view that there had been no reprehensible, scandalous or outrageous conduct on the part of the Crown.

 

[103]       Lastly, a few words concerning the submissions made by the respondents on the appeal. The first submission is, in effect, that they are entitled to damages because the arrest of the vessel and its forced return to Saint John’s was unlawful by reason of the invalidity of the Regulations and by reason of the Crown’s shameful conduct in the whole episode.

 

[104]       I understand the respondents’ argument to be that their allegations regarding the Crown’s liability ought to have been allowed and, thus, that damages were in order. Whether or not the Judge was right in concluding as he did with respect to the Crown’s liability is the subject of the cross-appeal, but cannot be a valid argument on the Crown’s appeal.

 

[105]       The respondents’ second submission is that the Federal Court is a court of equity under section 3 of the Federal Courts Act and, thus, Gibson J. had the jurisdiction to make the award in damages which he made. With respect, I see absolutely no basis to this argument.

 

[106]       I therefore conclude that having, for all intents and purposes, dismissed the respondents’ action, there was no basis whatsoever for the Judge to award damages to the respondents.

CONCLUSION

[107]       For these reasons, I would allow the Attorney General’s appeal, dismiss the respondents’ cross-appeal, set aside the decision of the Federal Court and I would dismiss the respondents’ action with costs. Finally, I would grant the appellant its costs, both in the appeal and in the cross-appeal.

“M. Nadon”

“I agree.

            A.M. Linden J.A.”

 

I agree.

            J.D. Denis Pelletier J.A.”

 

FEDERAL COURT OF APPEAL

 

NAMES OF COUNSEL AND SOLICITORS OF RECORD

 

 

DOCKET:                                                                              A-430-05

 

Appeal and cross-appeal from a Judgment of the Honourable Justice Gibson dated July 26, 2005 in file T-1602-95.

 

STYLE OF CAUSE:                                                               A.G.C. v.

                                                                                                 JOSE PEREIRA E. HIJOS S.A. and

                                                                                                 ENRIQUE DAVILA GONZALEZ     

 

PLACE OF HEARING:                                                        Ottawa

 

DATE OF HEARING:                                                          October 24 and 25, 2006

 

REASONS FOR JUDGMENT:                                           NADON J.A.

 

CONCURRED IN BY:                                                         LINDEN J.A.

                                                                                                PELLETIER J.A.

 

DATED:                                                                                 January 12, 2007

 

APPEARANCES:

 

Mr. Michael Donovan Ms. Kathleen McManus	FOR THE APPELLANT
Mr. John Sinnott Mr. Andrew Fitzgerald	FOR THE RESPONDENTS

 

 

SOLICITORS OF RECORD:

 

Mr. John H. Sims, Q.C. Deputy Attorney General of Canada	FOR THE APPELLANT
Lewis, Sinnott, Shortall, Hurley St. John’s, Newfoundland	FOR THE RESPONDENTS