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Dockets LA10003 and LA10004
Order LA11-04

IN THE MATTER of a request for review of Order LA10-08, issued by the Commission on August 27, 2010.

BEFORE THE COMMISSION

on Friday, the 18th day of March, 2011.

Maurice Rodgerson, Chair
Allan Rankin, Vice-Chair

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Order

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Contents

Appearances & Witnesses

Reasons for Order

1.    Introduction

2.    Discussion

3.    Findings

4.    Disposition

Order

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Appearances & Witnesses

1.    For the Appellants Ian Cray and Paul Christensen

Counsel:
Jonathan M. Coady

2.    For the Respondent Minister of Finance and Municipal Affairs

Counsel:
Mark E. Campbell

3.    For the Developer Myles Hickey / Hickey Farms Limited

Myles Hickey

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Reasons for Order

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1.  Introduction

[1]   In Order LA10-08, issued by the Commission on August 27, 2010, the Commission allowed the appeal in part of the Appellants Ian Cray and Paul Christensen (the Appellants), amended the February 3, 2010 decision of the Respondent Minister of Finance and Municipal Affairs (the Minister) granting preliminary subdivision approval for parcel numbers 872473 and 795732, by requiring said decision to be brought into full compliance with the Planning Act Subdivision and Development Regulations (the Regulations).

[2]  By letter dated September 24, 2010, Don Walters, then Manager, Inspection Services Section, Department of Environment, Energy and Forestry [said Department acting on behalf of the Minister] requested a review of Order LA10-08. 

[3]  By letter dated September 28, 2010, Commission staff invited the Appellants, the Minister and the Developer Myles Hickey (Mr. Hickey) to file written submissions on the request for review, with a deadline of October 19, 2010.  Christopher Callbeck, a non-lawyer representative for the Appellants, filed a written submission on their behalf. In order to further explore the legal issues involved, this deadline was extended and written submissions were filed by both the Appellants' legal counsel and the Minister's legal counsel on December 10, 2010.  Mr. Hickey filed a written rebuttal on December 15, 2010.

2.  Discussion

The Appellant's Position

[4]  The submission filed by Counsel for the Appellants follows in summary form.

• The onus rests on the party seeking reconsideration to show that the Commission made an error or that evidence has emerged that was not known or available at the time of the original hearing.  Such errors or circumstances must also be material.  Matters not going to the very basis of the findings made by the Commission are not open to reconsideration.

• Departmental policies do not have the force of law and, where such policies are inconsistent with an enactment, the enactment prevails.  The function of lawmaking is conferred on the legislature, which may, in certain circumstances, decide to delegate such authority to subordinate bodies.  In this case, that authority was conferred upon cabinet.

• Every word in an enactment is intended to have meaning and to serve a function.  The words contained in section 17(2) of the Regulations are clear and unambiguous.  The triggering date is the day on which the lots are "approved", not the day on which the application is made.  A deliberate choice was made by those drafting the Regulations and that expression of legislative intention must be respected.

• An enactment is intended to have immediate effect and to apply prospectively.  There was nothing in the Regulations that delayed the coming into force of section 17(2) of the Regulations.  There was also no exception made for applications under review or consideration upon the Regulations coming into force.  Cabinet was crystal clear that the amended Regulations came into force on March 21, 2009.  It was open to legislators to delay the commencement of the Regulations.  They chose not to do so.  It was also open to legislators to except existing applications from the Regulations.  Again, they chose not to do so.  Those deliberate choices must be respected.

• Legislators in this jurisdiction have previously taken specific steps to exempt matters from the general presumption that an enactment is intended to be given immediate effect and to apply prospectively.  For example, in fixing the minimum lot sizes under the Regulations, legislators carefully and expressly noted that the new standards "[did] not apply to lots approved prior to June 12, 1993."  However, no such steps were taken when fixing the new requirements for public roads.

• The mere filing of an application does not entitle an applicant to insist that the law in force at the time of filing be applied when the application is finally determined by the Minister.  As the Supreme Court of Canada observed in Gustavson Drilling (1964) Ltd. v. Minister of National Revenue, [1977] 1 S.C.R. 271 (Gustavson Drilling) "no one has a vested right to continuance of the law as it stood in the past."  If the decision in Boyd Builders was construed to the contrary, the Minister would be required to ignore provisions of a valid enactment that are in force on the date that the application is approved.  This is an absurd result. Not only does the Minister derive his decision-making authority from that same enactment, but the requirements at issue would have been passed by cabinet – the superior entity that delegates the Minister his authority to make the decision in the first place.  Such a construction would also have the practical consequence of prompting a flood of applications in advance of any proposed legislative amendments, thereby frustrating the intent of the Minister.

• For the purpose of deciding whether or not to approve an application, the relevant law is that in force on the date that the decision is made.  The relevant law in this case was that in place when the application was determined by the Minister.  It was not open to the Minister to ignore the legal requirements that had been proclaimed in force before the application by Hickey was approved.  Compliance with the Regulations, as amended, was mandatory.

• Insisting on compliance with the Regulations in this case cannot be said to offend the legal presumption against retroactivity.  Applying a new requirement in the Regulations to an application in progress does not mean that it is retroactive.  Rather, it would give immediate effect to the amended Regulations – a result that is presumed in statutory construction.

• Immediate application is objectionable only if it interferes with vested rights.  A right cannot be said to be vested until the holder is actually able to exercise it or to compel its exercise.  As of March 21, 2009, Mr. Hickey met some of the requirements for subdivision approval, but did not meet all of them.  By way of example, on April 22, 2009, the Environmental Assessment Officer raised three concerns regarding the application, see page 109 of the Minister's record.  On May 19, 2009, the Manager of Traffic Data Collection and Analysis noted a number of requirements to be satisfied in relation to the application by Mr. Hickey, see page 96 of the record.  On July 6, 2009, the Environment Officer noted that all of the lots had to be classified as Category II for the purpose of sewage disposal systems, see page 53 of the record.  According to subsection 26(1) of the Regulations, preliminary approval could not have been granted until the lots in question had been classified.  That classification did not occur until July 6, 2009.  For these reasons, Mr. Hickey could not compel approval by the Minister on or before March 21, 2009 and, when the Regulations came into force, Hickey had no vested right with which the Regulations interfered.  The most that can be said is that, on March 21, 2009, the application by Mr. Hickey was under review by the Minister.  This position is consistent with that taken by the Commission in Triple K. Construction Inc. v. Department of Community and Cultural Affairs, February 18, 1992.

• Even if it was open to the Commission to accept the proposition that the mere submission of an application gives rise to a vested right on the part of an applicant, it remains clear, at least in this case, that the intention of subsection 17(2) of the Regulations was to interfere with that right and require all applications subsequently "approved" for 21 or more lots to be served by public roads.  In other words, there is an express intention to affect the rights of those persons who had applied to subdivide land, but whose applications had not yet been approved.

[5]  The Appellants request that the Commission dismiss the request for reconsideration.

The Minister's Position

[6]  The submission filed by Counsel for the Minister is reproduced below in its entirety. 

Mr. Hickey's Position

[7]  In his letter of December 15, 2010, Mr. Hickey expressed frustration with the timeframe associated with the appeal process.  Mr. Hickey also offered the following information:

On March 11, 2009, I spoke with John White to obtain information relative to seeking subdivision approval.  An appointment was then made for March 13, 2009.

March 13, 2009, I met with Mr. White at his office in Summerside where subdivision approval guidelines were discussed.  At that time a formal application was made for subdivision approval.

In mid April, I met with Mr. White at his office to view the preliminary lot plan and discuss some concerns regarding lot placement and configuration as laid out by Locus Surveys Ltd.. At that time, I asked Mr. White if the March 21 ruling would apply to this subdivision.

Mr. White informed me that it would not apply due to the fact that formal application was made on March 13, 2009, well before the March 21 subsection 17(2) came into effect.

3.  Findings

[8]  After a careful review of the submissions of the parties and the applicable law, it is the decision of the Commission to deny the request for reconsideration filed by the Minister.  Accordingly, the Commission confirms the decision contained in Order LA10-08.

[9]  Section 12 of the Island Regulatory and Appeals Commission Act (the IRAC Act) reads as follows:

12.  The Commission may, in its absolute discretion, review, rescind or vary any order or decision made by it, or rehear any application before deciding it. 1991,c.18,s.12.

[10]  In Order LA97-11, In the Matter of a Request for Review of Commission Order LA97-08 by Keir Clark and Marion Clark (Order LA97-11 Clark), the Commission set out in some detail the test to be met on an application for a review or reconsideration of Commission decision:

The Commission and its predecessor, the Prince Edward Island Public Utilities Commission, have considered in the past the minimum criteria an Applicant must meet before the Commission will exercise its absolute discretion in the matter of reviewing its decisions under s.12 of the Island Regulatory and Appeals Commission Act, and the identical predecessor to s.12, s.16 of the Public Utilities Commission Act. This test has been interpreted consistently by the Commission in its past decisions.

As noted in previous decisions, the onus rests upon the Applicant to show that a prima facie case exists which will entitle the Applicant to the review. A prima facie case will be shown only where the function of review should be exercised to correct an error of the Commission or to meet changed circumstances.

Changed circumstances may encompass either a situation which has developed after the decision or where new evidence emerges which was not known or not available at the time the original evidence was adduced. Changed circumstances will dictate a review only if they are material.

Finally, the power to review is discretionary and will be exercised sparingly.

[11]  In Triple K. Construction Inc. v. Department of Community and Cultural Affairs, February 18, 1992, the Commission expressed the following:

Decision

Having considered the evidence presented during the hearing the Island Regulatory and Appeals Commission denied the appeal of Triple K. Construction Inc. The reasons for not allowing the appeal are:

(a) The application for the building permit was received by the Department of Community and Cultural Affairs on or about November 12, 1991. The amendment to the Planning Act Regulations was made on October 17, 1991. The Commission concludes that if the building permit application was indeed new as the Department concluded, Section 15.1 would prohibit intensifying the use of the access and the application would have to be denied.

(b) It is clear from the evidence that the appellant had made a special effort to determine if the use of the property for rental cottages was suitable. From the Department's response it seemed the only issue for the appellant to overcome was the size of the parcel. However, before the formal application was made, changes were made to the Planning Act Regulations that effectively prohibited the proposed development. In the opinion of the Commission, if Triple K. Construction Inc. had a vested or accrued right to a building permit prior to the change in the Regulations, it would most likely be entitled to the permit, notwithstanding any other changes in the law not considered in this appeal.

So the question is whether the appellant had an accrued or vested right to a permit prior to the change in the Regulations. The Commission has studied this question and has concluded that an accrued or vested right to a building permit crystallizes upon the filing of an application together with all other required documentation such that the application complied in all respects with the Regulations in effect at the time of the application. In other words, if nothing further need be done with respect to the application under the former regulations, the applicant would have been entitled to a permit even if the rule changed. The Commission finds based on the evidence presented that Triple K. Construction Inc. had not obtained a vested right to a permit prior to the regulation. The application for a building permit was not filed until after the regulation was amended. The Commission therefore concludes that the appeal must be denied.

Emphasis added.

[12]  In Epiciers Unis Metro-Richelieu Inc. v. Collin, [2004] S.C.J. No. 55 at paragraph 46, Justice LeBel wrote:

46  The principles of retroactivity, immediate application and retrospectivity of new legislation must not be confused with each other.  New legislation does not operate retroactively when it is applied to a series of events that occurred before and after it came into force or with respect to legal effects straddling the date it came into force (Cote, supra, at p. 175).  If events are under way when it comes into force, the new legislation will apply in accordance with the principle of immediate application, that is, it governs the future development of the legal situation (Cote, supra, at pp.152 et seq.).  If the legal effects of the situation are already occurring when the new legislation comes into force, the principle of retrospective effect applies.  According to this principle, the new legislation governs the future consequences of events that happened before it came into force but does not modify effects that occurred before that date (Cote, supra, at pp.133 et seq. and pp. 194 et seq.).

[13]  In the present appeal, many of the submissions presented by both legal counsel would be only of academic interest if the evidence were to support a finding that, effective March 21, 2009, Mr. Hickey had a vested right to the proposed subdivision.

[14]  In Order LA10-08, it was noted that Mr. Hickey's application was received on March 25, 2009.  The Minister, in Mr. Walters' letter of September 24, 2010 acknowledges that the date stamp on Mr. Hickey's application for subdivision was "inaccurate and resulted in an error in the facts presented at the hearing".  Rather than merely assert that the application was submitted on March 13, 2009, Mr. Walters had the foresight to file an affidavit from Mr. White to provide a solid legal foundation to set the record straight.  The Commission can, and will, rely on this affidavit and finds that Mr. Hickey's application was filed with the Minister on March 13, 2009.

[15]  However, the Commission's decision in Triple K. Construction makes it clear that the mere filing of an application is not enough.  In addition to the application, all other required documentation must be filed before the vested right crystallizes.

[16]  Subsection 26(1) of the Regulations read as follows:

26. (1) A subdivision application that includes lots intended to accommodate septic sewage disposal systems shall not be granted preliminary approval until the lots have been categorized in accordance with subsection 23(1).

[17]  The record before the Commission supports a finding that the lots in Mr. Hickey's proposed subdivision were not categorized in accordance with subsection 23(1) of the Regulations until the consultant Stantec filed its June 26, 2009 report.  On this basis, the Commission finds that Mr. Hickey's March 13, 2009 application, as of March 21, 2009, did in fact require other documentation to be filed in order for the application to comply with the Regulations. In the words of the April 22, 2009 memo from Jay Carr, Environmental Assessment Officer to John White, Senior Subdivision Officer:

Before our Department can complete the review of the subdivision proposal the Developer will be required to contract the services of a qualified soil's consultant (at their expense) to undertake an assessment of the land proposed for subdivision.

[18]  The Commission finds that, while Mr. Hickey's application was filed prior to the subsection 17(2) amendment to the Regulations, it was missing other required documentation which was not provided until months after the effective date of said amendment and thus no vested right existed prior to March 21, 2009. 

[19]  As an alternative to the vested right argument, Counsel for the Minister contends on page 2 of his submission that:

… it was also clear that Cabinet's intent was not to apply these Regulations to applications which had been received prior to March 21, 2009.  Staff at the Department of Finance and Municipal Affairs (formerly Communities, Cultural Affairs and Labour) who attended the Cabinet meeting wherein the Regulations were approved have advised that they indicated to Cabinet that the new Regulations would not apply to applications which had been received.  Approval for the amendments was granted by Cabinet on that basis.  As such, it is clear that Government had no intent to apply the new Rules to existing applications.

Staff at the Department have further advised that in a memo to Cabinet on the proposed regulations amendments, it was made clear that none of the proposed amendments would be retroactive, but were only intended to apply to new applications received after the proclamation date of the amendments.

Cabinet approved the new regulations on the understanding that they would not apply to subdivisions for which an application had been filed prior to the regulations coming into force.

[20]  The Commission wrestled at considerable length in Order LA10-08 to determine the intent of subsection 17(2).  Counsel for the Minister makes a series of assertions, very much like a closing argument to the Court or this Commission, of some facts that happened. Unfortunately, the assertions were made, but no proof, no evidence of the assertions, was offered.  Counsel repeatedly says that it is "clear", but it is not clear to the Commission.  A copy of the memo from the Minister's staff to the Lieutenant Governor in Council would have been helpful.

[21]  What is clear to the Commission is that there is no "notwithstanding" clause or "for greater certainty" clause accompanying subsection 17(2) of the Regulations.  Rather, subsection 17(2) simply and clearly reads:

17(2) All roads serving 21 or more lots approved after March 21, 2009, shall be public roads.

Emphasis added.

[22]  The Commission is of the view that ministerial or departmental policies, especially when open and well known, play a valuable role in the structuring of discretionary authority.  In Discretionary Justice: A Preliminary Inquiry (Baton Rouge: Lousiana State University Press, 1969), K.C. Davis writes:

The seven instruments that are most useful in the structuring of discretionary power are open plans, open policy statements, open rules, open findings, open reasons, open precedents, and fair informal procedure.  The reason for repeating the word "open" is a powerful one: Openness is the natural enemy of arbitrariness and a natural ally in the fight against injustice. We should enlist it much more than we do.  When plans and policies and rules are kept secret, as through confidential instruction to staffs, private parties are prevented from checking arbitrary or unintended departures from them.  Findings are a better protection against arbitrariness if affected parties can point to needed corrections.  Reasoned opinions pull toward evenhanded justice but the pull is stronger if the opinions are out in the open.

…

Policy statements are usually looser than rules and are not necessarily binding on the agency, as legislative rules may be.  Policy statements may still be very helpful.  Such a statement may be appropriate when the agency feels that its not quite prepared to issue rules; the agency may say, in effect: We are feeling our way in this direction, and this is where we want to go if we can get there.  A policy statement may be essentially an announcement of a plan for an area of the agency's activities and therefore may be very helpful in structuring discretion.

[23]  That said, the wording of subsection 17(2) does not invite discretion.  It uses the imperative or mandatory word "shall". 

[24]  In Sara Blake, Administrative Law in Canada, 4th edition, (Markham, Ont.: LexisNexis, 2006) it is noted at page 145:

Types of subordinate legislation are varied.  Typical forms of legally binding subordinate legislation include regulations, rules, by-laws and orders.  These are distinguishable from directives, policy statements and guidelines, which are not legally enforceable.  A regulation is a "law" which must be complied with, while a directive is not.

[25]  The Commission wishes to remind the parties and the public of the state of the law in Canada: ministerial or departmental policy not enshrined in an Act or Regulation does not bind a Court or tribunal possessing the necessary jurisdiction.  In the present appeal, the Commission is not bound by the Minister's policy.  In Campbell v. Canada (Attorney General), 2006 FC 510, Justice Tremblay-Lamer wrote at paragraph 18:

18  From the outset, it is important to stress that ministerial policies, including fishing quota policies, are not binding.  They are not law.  Therefore, even if the Minister did deviate from an adopted policy, such deviation, in and of itself, would not warrant judicial review.  In Skycharter Ltd. v. Canada (Minister of Transport), [1997] F.C.J. No. 128 (T.D.) at paragraphs 11-12, Justice Wetston held that policy statements and directives are not binding on an authority (i.e. the Minister) and are not enforceable by members of the public. 

[26]  The fact that Mr. Hickey had been advised by the Minister's staff that the Regulations in effect prior to March 21, 2009 would apply to the subdivision application is not relevant.  Policy contrary to law cannot change the law.  

[27]  While it is certainly possible that it was not the intent of the Lieutenant Governor in Council to apply the requirement set forth in subsection 17(2) to a subdivision applied for prior to March 21, 2009, the Minister only offered an assertion, unsupported by evidence.  Given the plain wording of subsection 17(2), and in the absence of a legal instrument such as an Order-in-Council (OIC) qualifying the intended effect of the regulatory change, this assertion of intent is not good enough.

[28]  In the aftermath of this Order, if the assertion of the Minister was, in fact, the true intent of the Lieutenant Governor in Council, the remedy may be to amend the wording of the Regulations, or if necessary, the Planning Act itself.

[29]  Accordingly, the Commission finds that there is no evidence of an error of the Commission or changed circumstances under the test set out in Order LA97-11 Clark.  Accordingly, there is no basis upon which to vary Order LA10-08.

4.  Disposition

[30]   An Order denying the request for reconsideration and confirming the decision set out in Order LA10-08 will be issued.

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