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Declarations - Test for a Declaration. Halton (Regional Municipality) v. Canadian National Railway Company
In Halton (Regional Municipality) v. Canadian National Railway Company (Ont CA, 2024) the Court of Appeal considered (and dismissed) appeals of denials of injunction and declaration applications by several local municipalities against CN, this with respect to the construction of a huge rail intermodal hub near Milton. The primary issue was the extent to which this federal project required provincial and municipal authorizations in the face of the doctrine of 'interjurisdictional immunity'.
Here the court usefully sets out the requirements of declarations, and the court's discretion in that respect:(1) The Applicable Legal Principles
[89] In Ontario, declarations are issued pursuant to s. 97 of the Courts of Justice Act, R.S.O. 1990, c. C.43, which states that the Court of Appeal for Ontario and the Superior Court of Justice “may make binding declarations of right”. The decision to grant a declaration is therefore discretionary. Indeed, the law allows for “the broadest judicial discretion” in deciding whether to provide declaratory relief: Strickland v. Canada (Attorney General), 2015 SCC 37, [2015] 2 S.C.R. 713, at para. 37. The discretion is so broad that a court “may refuse [to make a declaration], even if the case for it has been made out”: Operation Dismantle v. The Queen, 1985 CanLII 74 (SCC), [1985] 1 S.C.R. 441, at p. 482; see also Lazar Sarna, The Law of Declaratory Judgments, 4th ed. (Toronto: Carswell, 2016) at p. 21. Once made, decisions on whether to grant declaratory relief are entitled to “significant deference” on appeal: Hofer v. Hofer et al., 2022 MBCA 99, at para. 25.
[90] Although declarations “declare” rights, “no ‘injury’ or ‘wrong’ need have been actually committed or threatened in order to enable the plaintiff to invoke the judicial process; he need merely show that some legal interest or right of his has been placed in jeopardy or grave uncertainty”: Operation Dismantle, at p. 457, citing Edwin Borchard, Declaratory Judgments, 2nd ed. (Cleveland: Banks-Baldwin Law Publishing Co., 1941) at p. 27. Declarations may therefore serve a “preventative function”.
[91] In S.A. v. Metro Vancouver Housing Corp, 2019 SCC 4, [2019] 1 S.C.R. 99, at para. 60, the Supreme Court of Canada described the elements that should be present before a judge exercises discretion to grant a declaration:Declaratory relief … may be appropriate where (a) the court has jurisdiction to hear the issue, (b) the dispute is real and not theoretical, (c) the party raising the issue has a genuine interest in its resolution, and (d) the responding party has an interest in opposing the declaration being sought. (citations omitted). [92] Only prerequisite (b) – the requirement that the dispute is real and not theoretical – is in issue. In Daniels v. Canada (Indian Affairs and Northern Development), 2016 SCC 12, [2016] 1 S.C.R. 99, at para. 11, the Supreme Court elaborated upon this prerequisite by directing that “[a] declaration can only be granted if it will have practical utility, that is, if it will settle a ‘live controversy.’” This passage appears to assert that a declaration can never be granted unless the dispute is real and not theoretical but the language used in Solosky v. The Queen, 1979 CanLII 9 (SCC), [1980] 1 S.C.R. 821, at p. 832 is more permissive in stating that a declaration will “not normally be granted when the dispute is over and has become academic, or where the dispute has yet to arise and may not arise”. I need not address whether proof that a dispute is real and not theoretical is a necessary condition to obtaining declaratory relief or simply a typical expectation. That uncertainty does not matter for the purpose of this appeal since even the permissive formulation would, as a matter of law, allow an application judge to deny a declaration after finding that it would not settle a live controversy.
[93] It should also be said that there is no inconsistency between the call for a “real” or “live controversy” as opposed to theoretical or hypothetical dispute, and the preventative function that declarations may be serve. In Operation Dismantle, at p. 457, Dickson J., as he was then, made clear that “the preventative function of the declaratory judgment must be based on more than mere hypothetical consequences; there must be a cognizable threat to a legal interest before the courts will entertain the use of its process as a preventive measure.”
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[123] ... It has been recognized by the Court of Appeal for British Columbia in obiter dictum that “the inadequacy of the arguments presented” is an appropriate basis for exercising discretion to deny a declaration: Gook Country Estates Ltd. v. Quesnel (City of), 2008 BCCA 407, 50 M.P.L.R. (4th) 161, at para. 10. This passage has been quoted with approval on two recent occasions by this Court, in Bunker v. Veall, 2023 ONCA 501, at para. 22, and Bryton v. Capital Corp GP Ltd. v. CIM Bayview Creek Inc., 2023 ONCA 363, at para. 64. In my view, when the arguments presented leave an application judge in a position where they must dig randomly through mounds of filed material with little or no guidance, in order to eliminate or confirm the speculative possibility that the material required to resolve complex constitutional issues could be buried inside, a discretionary decision by the application judge to deny the application is not only reasonable, but it should be expected. A litigant who brings a complex application on a large record such as this without providing the application judge with a roadmap does so at their peril.
[124] I will make one final point. I recognize that an application judge faced with an application for a declaration has discretion to provide a declaration that is less sweeping than the one sought: William v. British Columbia, 2012 BCCA 285, 33 B.C.L.R. (5th) 260, at paras. 114 - 117, reversed on other grounds in Tsilhqot’in Nation v. British Columbia 2014 SCC 44, [2014] 2 S.C.R. 257; Lazar Sarna, The Law of Declaratory Judgements, 4th ed. (Toronto: Carswell, 2016) at p. 114. The application judge would not have erred by taking a piecemeal approach and examining for each of the listed local laws, whether a declaration should be issued. However, this, too, is a discretionary determination. Given the state of the record and how this case was argued, I can find no fault in the application judge’s decision not to do so. . Bryton Capital Corp. GP Ltd. v. CIM Bayview Creek Inc.
In Bryton Capital Corp. GP Ltd. v. CIM Bayview Creek Inc. (Ont CA, 2023) the Court of Appeal considers basics of declaratory relief, and dismisses the appeal (in part) since the declaration request was colourable in light of what the appellant truly sought:1. Positions of the Parties
[56] Bryton contends that the application judge erred in refusing to grant a declaration in its favour to preclude or to dismiss the Creditor Claims and the ss. 95 and 96 BIA claims. Specifically, it asserts that the application judge erred in failing to assess the full test for declaratory relief set out in Solosky v. The Queen, 1979 CanLII 9 (SCC), [1980] 1 S.C.R. 821, at p. 831, which requires: (a) that the question be real and not theoretical; (b) that the person raising it has a real interest in raising it; and (c) that there is an opposing party. ...
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[62] A declaratory judgment is “a formal statement by a court pronouncing upon the existence or non-existence of a legal state of affairs”: Harry Woolf & Jeremy Woolf, Zamir & Woolf: The Declaratory Judgment, 3rd ed. (London: Sweet & Maxwell, 2002), at p. 1. Declaratory relief, being restricted to a declaration of the parties’ rights, “is mainly sought in commercial matters to help parties define their rights” and contains no provision ordering any party to do anything or any form of sanction: Harrison v. Antonopoulos (2002), 2002 CanLII 28725 (ON SC), 62 O.R. (3d) 463 (S.C.), at paras. 27-28.
[63] The Supreme Court recently described the criteria for declaratory relief in S.A. v. Metro Vancouver Housing Corp., 2019 SCC 4, [2019] 1 S.C.R. 99, at para. 60:Declaratory relief is granted by the courts on a discretionary basis, and may be appropriate where (a) the court has jurisdiction to hear the issue, (b) the dispute is real and not theoretical, (c) the party raising the issue has a genuine interest in its resolution, and (d) the responding party has an interest in opposing the declaration being sought. [Citations omitted.] This summary largely re-iterates the relevant criteria for declaratory relief outlined in Solosky.
[64] As indicated in S.A., declaratory relief is discretionary. A non-exhaustive list of reasons why a court may deny declaratory relief includes “standing, delay, mootness, the availability of more appropriate procedures, the absence of affected parties, the theoretical or hypothetical nature of the issue, the inadequacy of the arguments presented, or the fact that the declaration sought is of merely academic importance and has no utility”: Gook Country Estates Ltd. v. Quesnel (City of), 2008 BCCA 407, 73 R.P.R. (4th) 241, at para. 10. Delineating whether a specific procedure is amenable to declaratory relief is important, as the burden of proof, determination of urgency, and limitation of actions may differ in favour of the litigant who chooses the declaration over other routes to relief: Lazar Sarna, The Law of Declaratory Judgments, 4th ed. (Toronto: Thomson Reuters, 2016), at pp. 52-53. There is a real risk that, “to permit the issuance of a declaration where another suitable remedy exists is to effectively erode the divisions between recourses and subsume all relevant writs and motions under the umbrella of the declaratory proceeding”: Sarna, at p. 53.
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[67] I see no merit to this ground of appeal. Bryton’s attempt to obtain declaratory relief dismissing and barring the Creditor Claims and the ss. 95 and 96 BIA claims through the vehicle of an application was defective on two bases: (1) it was not a proper use of the application procedure, and (2) it went beyond the proper scope of declaratory relief. Further, and in any event, the application judge did not consider an irrelevant factor and his exercise of discretion in refusing declaratory relief is entitled to deference.
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[69] Second, Bryton’s requested declaration went beyond the normal scope of declaratory relief. It is obvious from the scope of relief sought by Bryton that it was seeking relief that extended far beyond a declaration of its rights: it sought to dismiss proceedings that were already underway and to bar any further proceedings to challenge the Option. In essence, it sought to use its application as a vehicle to require the respondents’ claims to be brought forward for determination. As noted in Woolf & Woolf, at p. 196: “The usual justification for granting negative declarations, namely, the removal of uncertainty from legal relations, cannot apply to a case where the other party has already instituted proceedings for the determination of the matter in dispute, or to a case where such proceedings are imminent”.
[70] Finally, and contrary to Bryton’s submissions, the application judge did not consider an irrelevant factor when he referred to the existence of other proceedings to challenge the Option. The preconditions for granting declaratory relief set out in Solosky are necessary, but not sufficient. As previously indicated, declaratory relief is discretionary and can be refused based on a variety of considerations, including whether other available recourse is appropriate. Declaratory relief should not be entertained if it results in “an abuse of process, an unwarranted side-stepping of delays and costs attached to other recourses, or a procedural or evidentiary prejudice against the other parties to the action”: Sarna, at p. 52.
[71] Bryton points to T1T2 Limited Partnership v. Canada (1995), 1995 CanLII 7042 (ON SC), 23 O.R. (3d) 81 (Gen. Div.), aff’d (1995), 1995 CanLII 8961 (ON CA), 24 O.R. (3d) 546 (C.A.), as authority that it may not always be appropriate to consider if there is an “alternative, more appropriate process or remedy” available. In that case, a judge granted declaratory relief to determine a liability issue and to expedite the determination of the case.
[72] Bryton’s reliance on T1T2 is misplaced. First, significant factual and procedural differences exist between this case and T1T2. T1T2 involved an action for breach of contract, where the plaintiffs sought declaratory relief and a reference to arbitration to determine damages. The plaintiffs brought a motion for summary judgment for a declaration that the defendant was in breach of contract. The motion judge accepted that, where the defendant had put forward no evidence in response, there was no genuine issue for trial with respect to this claim. In granting the declaration, the motion judge rejected the defendant’s argument that such relief should be denied because a “more appropriate” process or remedy was available – the commencement of a common law action for breach of contract and damages. Counsel had agreed that a reference to arbitration was not appropriate. Accordingly, the court declared that the defendant was in breach, with an order that the issue of damages proceed to trial.
[73] In the present case, as the application judge observed, there was already a proceeding underway that had been commenced by a Third Mortgagee on behalf of CIM Bayview’s creditors to challenge the Option under the FCA, the ACA, and the CBCA oppression remedy. And, motions under s. 38 of the BIA to obtain an assignment of the trustee’s rights to assert claims under ss. 95 and 96 had been initiated. The application judge properly concluded that it was not appropriate for Bryton to bring these matters forward for determination on their merits prematurely and by way of an application for declaratory relief. Indeed, Bryton itself had successfully challenged the timing and propriety of the NOI Trustee’s attempt to bring challenges to the Option under ss. 95 and 96 of the BIA before the court in December 2020, when the Bryton Option Motion was heard.
[74] Additionally, T1T2 did not hold that the availability of an alternative, more appropriate process or remedy was an irrelevant factor when considering whether to grant declaratory relief. The motion judge simply concluded that, in the circumstances of that case, the plaintiff’s summary judgment motion and a declaration that the defendant was in breach of contract were the appropriate process and remedy. . Taylor v. Hanley Hospitality Inc.
In Taylor v. Hanley Hospitality Inc. (Ont CA, 2022) the Court of Appeal considered mootness where a party sought a not-yet-necessary declaration:[45] The parties are now essentially seeking a standalone declaration of the meaning of s. 50.1 of the ESA and O. Reg. 228/20. Divorced from any factual foundation, the issue is academic at this stage of these proceedings because it would not resolve the fact-driven dispute between the parties: Borowski v. Canada (Attorney General), 1989 CanLII 123 (SCC), [1989] 1 S.C.R. 342, at para. 15. As a result, it is at this court’s discretion whether the issue should be entertained and determined at this stage: Borowski, at para. 16. I would refrain from interpreting the provision and regulations. Not only was this remedy not sought in the parties’ respective pleadings, but for the reasons stated above, this panel has neither the record nor the submissions that would permit us to carry out a proper analysis of s. 50.1 of the ESA and O. Reg. 228/20. . Spencer v. Canada (Attorney General)
In Spencer v. Canada (Attorney General) (Fed CA, 2023) the Federal Court of Appeal held a declaration application against COVID quarantine provisions to be moot after they were no longer in effect:[5] As the impugned provisions are no longer in effect, we are of the view that these appeals are now moot (Borowski v. Canada (Attorney General), 1989 CanLII 123 (SCC), [1989] 1 S.C.R. 342, 57 D.L.R. (4th) 231). Where declarations are sought as in this case, relief will be granted only if the relief will settle a "“live controversy”" between the parties (Daniels v. Canada (Indian Affairs and Northern Development), 2016 SCC 12, [2016] 1 S.C.R. 99 at para. 11). Although the appellants have a genuine interest in the outcome of the appeals, there is no longer a live controversy between the parties. Therefore, the appeals have become moot. . Alberta (Attorney General) v. British Columbia (Attorney General)
In Alberta (Attorney General) v. British Columbia (Attorney General) (Fed CA, 2021) the Federal Court of Appeal considered a rare intergovernmental (province-to-province) dispute, where BC sued Alberta over some Alberta legislation and there were suggestions that it was retaliatory to BC. One issue was whether the case was suited for a declaratory remedy:[174] In Ewert v. Canada, 2018 SCC 30, [2018] 2 S.C.R. 165 [Ewert], the Supreme Court set out a four-part test on when a court can grant declaratory relief. This test requires that (i) the court have jurisdiction over the subject matter; (ii) the dispute be real and not theoretical; (iii) the party raising the issue have a genuine interest in its resolution; and (iv) the responding party have an interest in opposing the declaration sought (Ewert at para. 81).
[175] This test reaffirms, in essence, the test for declaratory relief set out in Solosky v. The Queen, 1979 CanLII 9 (SCC), [1980] 1 S.C.R. 821, 105 D.L.R. (3d) 745 [Solosky cited to S.C.R.], Canada (Prime Minister) v. Khadr, 2010 SCC 3, [2010] 1 S.C.R. 44, and Daniels v. Canada (Indian Affairs and Northern Development), 2016 SCC 12, [2016] 1 S.C.R. 99 [Daniels], all of which were considered in Ewert. In Solosky, the Supreme Court clarified the requirement that the dispute must be real and not hypothetical. On this point, it contrasted real disputes with situations "“when the dispute is over and has become academic, or where the dispute has yet to arise and may not arise”" (Solosky at 832). In a subsequent case, Operation Dismantle v. the Queen, 1985 CanLII 74 (SCC), [1985] 1 S.C.R. 441, 18 D.L.R. (4th) 481, the Court referred to Solosky in support of the proposition that there has to be a "“cognizable threat to a legal interest”" before a court can consider declaratory relief (at 457 S.C.R.). More recently, in Daniels, the Court specified that a declaration can "“only be granted if it will have practical utility, that is, if it will settle a ‘live controversy’ between the parties”" (Daniels at para. 11).
[176] In responding to Alberta’s prematurity objection, the Judge relied on the Daniels test (Judge’s reasons at para. 84, citing Daniels at para. 11). He opined that while the requirement of a "“live controversy”" implies the need for a factual matrix, this is more often the case when the Charter is at play. In disputes involving division of powers issues, a factual matrix is less relevant given that the "“pith and substance of legislation does not change according to the manner in which the law is applied”" (Judge’s reasons at para. 86). The Judge therefore held that in determining whether BC’s action gives rise to a "“live controversy”" of the kind contemplated by Daniels, evidence as to the application of the Act is of little relevance. As such, the Judge took the view that declaratory relief is available to BC in the present matter even though there are no regulations in place to operationalize the Act and the Minister has yet to use the powers conferred upon him by that legislation:[86] A factual background, however, is less necessary where the Charter is not in play, particularly in division-of-powers cases. The pith and substance of legislation does not change according to the manner in which the law is applied. Indeed, in R v Morgentaler, 1993 CanLII 74 (SCC), [1993] 3 SCR 463 at 485–488 [Morgentaler], the Supreme Court of Canada noted that evidence of a statute’s practical effects is of little relevance in ascertaining the statute’s pith and substance. Courts have often dealt with the merits of actions or motions for declaratory judgments regarding the compliance of legislation with the division of powers or other constitutional limits to legislative power: Attorney General of Quebec v Blaikie, 1979 CanLII 21 (SCC), [1979] 2 SCR 1016; Potter v Québec (Procureur général), 2001 CanLII 20663 (QC CA), [2001] RJQ 2823 (CA); British Columbia v Imperial Tobacco Canada Ltd, 2005 SCC 49, [2005] 2 SCR 474; British Columbia (Attorney General) v Christie, 2007 SCC 21, [2007] 1 SCR 873; Canadian Western Bank v Alberta, 2007 SCC 22, [2007] 2 SCR 3 [Canadian Western Bank]. While the procedural background of those cases varies, it appears that the Court in each case dealt with the constitutional issue without inquiring about the precise manner in which the legislation would be implemented.
[87] Applying those principles, I am unable to give effect to Alberta’s prematurity objection. The most basic reason is that British Columbia’s action does not challenge any measure taken pursuant to the Act. It challenges the Act itself. It is what the Americans would call a “facial challenge.” The Act is now in force. The main question will be to determine the Act’s pith and substance and, according to Morgentaler, this does not require evidence regarding the application of the Act. Evidentiary difficulties are not an obstacle in this case.
[88] Moreover, there is a “live controversy,” as required by Daniels. In the course of the debates regarding the Act, members of the Alberta legislature have described it as targeting British Columbia. British Columbia, in turn, asserts that the Act is unconstitutional. This is certainly a live controversy. The practical utility of a declaration is beyond question.
[89] The fact that the Lieutenant Governor in Council must make certain regulations and the Minister must make certain orders before the Act produces concrete effects is immaterial. In the particular circumstances of this case, the mere adoption of the act is a threat that is sufficient to give rise to a “live controversy” of the kind contemplated by Daniels. ....
[181] In light of the above, I believe the Judge erred in holding that "“the mere adoption of the act is a threat that is sufficient to give rise to a ‘live controversy’”" (Judge’s reasons at para. 89). In a section 121 analysis, a court must first establish that the impugned law in essence restricts the movement of goods across a provincial border before it can proceed to an inquiry into the law’s purpose (see Comeau at para. 111). Put differently, consideration must first be given to the actual cost imposed on the movement of goods. An indeterminate threat (e.g. to "“turn off the taps”" or "“inflict economic pain”") that has not materialized into an actual charge is insufficient to establish a violation of section 121. As no charge or restriction has yet been imposed by Alberta on the export of crude oil to British Columbia, it is impossible for a court to say anything about the Act’s effects, if any, on a province’s rights or obligations under section 121. Simply put, a section 121 dispute "“has yet to arise and may not arise.”"
[182] It is therefore plain and obvious that, as matters currently stand with regards to the section 121 component of BC’s claim, the legal test for declaratory relief has not been met. In this respect, I find BC’s claim against Alberta to be premature. . Daniels v. Canada (Indian Affairs and Northern Development)
In Daniels v. Canada (Indian Affairs and Northern Development) (SCC, 2016) the Supreme Court of Canada stated the basic criteria for issuing a declaration:[11] This Court most recently restated the applicable test for when a declaration should be granted in Canada (Prime Minister) v. Khadr, 2010 SCC 3 (CanLII), [2010] 1 S.C.R. 44. The party seeking relief must establish that the court has jurisdiction to hear the issue, that the question is real and not theoretical, and that the party raising the issue has a genuine interest in its resolution. A declaration can only be granted if it will have practical utility, that is, if it will settle a “live controversy” between the parties: see also Solosky v. The Queen, 1979 CanLII 9 (SCC), [1980] 1 S.C.R. 821; Borowski v. Canada (Attorney General), 1989 CanLII 123 (SCC), [1989] 1 S.C.R. 342.
[12] The first disputed issue in this case is whether the declarations would have practical utility. There can be no doubt, in my respectful view, that granting the first declaration meets this threshold. Delineating and assigning constitutional authority between the federal and provincial governments will have enormous practical utility for these two groups who have, until now, found themselves having to rely more on noblesse oblige than on what is obliged by the Constitution.
[13] Both federal and provincial governments have, alternately, denied having legislative authority over non-status Indians and Métis. As the trial judge found, when Métis and non-status Indians have asked the federal government to assume legislative authority over them, it tended to respond that it was precluded from doing so by s. 91(24). And when Métis and non-status Indians turned to provincial governments, they were often refused on the basis that the issue was a federal one. . S.A. v. Metro Vancouver Housing Corp.
In S.A. v. Metro Vancouver Housing Corp. (SCC, 2019) the court confirmed the criteria for granting a declaration:(1) Declaratory Relief
[60] S.A. requests, among other things, that this Court issue a declaration that the assets in the Trust are not hers for the purpose of the Assistance Application. Declaratory relief is granted by the courts on a discretionary basis, and may be appropriate where (a) the court has jurisdiction to hear the issue, (b) the dispute is real and not theoretical, (c) the party raising the issue has a genuine interest in its resolution, and (d) the responding party has an interest in opposing the declaration being sought (Ewert v. Canada, 2018 SCC 30 (CanLII), at para. 81; see also Daniels v. Canada (Indian Affairs and Northern Development), 2016 SCC 12 (CanLII), [2016] 1 S.C.R. 99, at para. 11; Canada (Prime Minister) v. Khadr, 2010 SCC 3 (CanLII), [2010] 1 S.C.R. 44, at para. 46).
[61] In my view, all of these criteria are met in this case. As I explained above (in Part A of the analysis), the interpretation of the word “asset” as it is used in the Assistance Application is a justiciable issue that falls within the jurisdiction of this Court. Moreover, that issue is real, and is one in which both parties clearly have a genuine interest. I am therefore unable to accept MVHC’s submission that no legal purpose would be served by the declaratory relief sought by S.A. In these circumstances, a declaration that the assets in the Trust cannot be treated as S.A.’s assets for the purpose of the Rental Assistance Program would clearly have practical utility, as it would settle a “live controversy” between the parties (see: Operation Dismantle Inc. v. The Queen, 1985 CanLII 74 (SCC), [1985] 1 S.C.R. 441, at p. 457; Daniels, at paras. 11-12; and Solosky v. The Queen, 1979 CanLII 9 (SCC), [1980] 1 S.C.R. 821, at p. 833). Accordingly, I would declare that S.A. has a right to have her application for a rent subsidy considered by MVHC in accordance with the terms of the Assistance Application, and that her interest in the Trust is not an “asset” for the purpose of such a determination.
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