Gratton-Masuy Environmental Technologies Inc. et al. v. Building Materials Evaluation Commission (Ont.) et al., (2010) 269 O.A.C. 279 (CA)

• Judge: Cronk, MacFarland and Karakatsanis, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: May 13, 2010
• Jurisdiction: Ontario
• Citations: (2010), 269 O.A.C. 279 (CA);2010 ONCA 501

Gratton-Masuy Env. Tech. v. BMEC (2010), 269 O.A.C. 279 (CA)

MLB headnote and full text

Temp. Cite: [2010] O.A.C. TBEd. JL.027

Gratton-Masuy Environmental Technologies Inc. (c.o.b. as Ecoflo Ontario) and Waterloo Biofilter Systems Inc. (plaintiffs/appellants) v. Her Majesty the Queen in Right of Ontario, Building Materials Evaluation Commission, Judith Beauchamp, Corneliu E. Chisu, Antonio Chow, Craig Cunningham, Gerard A. L. Egberts, Gregory Ford, Matthew Graham, Barry Haywood, Elizabeth Hilfrich, Douglas Joy, Edward J. Link, Donald J. Morton, Rashmi Nathwani, Matthew Roberts, Eugene Stodolak, Susan Reed Tanaka, James Wilkinson, Brian Willison and Frank Wright (defendants/respondents)

(C51395; 2010 ONCA 501)

Indexed As: Gratton-Masuy Environmental Technologies Inc. et al. v. Building Materials Evaluation Commission (Ont.) et al.

Ontario Court of Appeal

Cronk, MacFarland and Karakatsanis, JJ.A.

July 12, 2010.

Summary:

The plaintiffs sold on-site wastewater treatment systems. Their product was an innovative technology. The Building Materials Evaluation Commission issued Authorizations approving the plaintiffs' systems. The Commission subsequently amended the Authorizations by way of two resolutions. The plaintiffs applied for judicial review.

The Ontario Divisional Court, in a decision reported 161 O.A.C. 208, allowed the application. The court held that while the Commission had the legislative authority to reconsider the Authorizations, it had failed to provide the plaintiffs with adequate notice and a meaningful opportunity to be heard in respect of the amendments to the Authorizations. The court quashed the Commission's resolutions and remitted the matter to the Commission for rehearing on proper notice and disclosure to the plaintiffs. The Commission then commenced a second review of the Authorizations. It set up a subcommittee to meet with the plaintiffs to discuss technical issues relating to the Authorizations and to prepare a report for the full Commission. The subcommittee submitted its report. The Commission informed the plaintiffs that it was considering amendments to the Authorizations. Before any amendments were made, the plaintiffs brought an action against the Commission, 19 Commission members, including the subcommittee members, and the Ontario Crown. The plaintiffs claimed the following: (1) declaratory relief quashing certain Commission resolutions; (2) injunctive relief prohibiting the Commission from acting on the subcommittee's report or "proceed[ing] against the Authorizations" pending the final disposition of the action"; and (3) as against the individual defendants and the Crown, general, special and punitive damages for alleged misfeasance in public office. The defendants moved under rule 21.01(3) of the Rules of Civil Procedure (Ont.) for an order dismissing the action or, in the alternative, for an order under rule 21.01(1)(b) striking the statement of claim in its entirety. They argued that (1) the Commission lacked the legal capacity to be sued; (2) the court had no jurisdiction over the subject matter of the plaintiffs' action; (3) the matters complained of were subject to the doctrine of res judicata or otherwise constituted an abuse of process; and (4) the plaintiffs' pleading disclosed no reasonable cause of action.

The Ontario Superior Court allowed the motion in part. The court struck the plaintiffs' claims as against the individual defendants except for the subcommittee members and dismissed the motion in all other respects. The defendants who were still subject to the plaintiffs' action appealed.

The Ontario Divisional Court, in a decision not reported in this series of reports, allowed the appeal. The court dismissed the plaintiffs' action against the Commission, and struck the statement of claim as against the subcommittee members and the Crown. The plaintiffs appealed, with leave.

The Ontario Court of Appeal dismissed the appeal.

Administrative Law - Topic 1423

Finality - Privative clauses - Circumstances when privative clauses may be disregarded - [See Practice - Topic 1462 ].

Administrative Law - Topic 2084

Natural justice - Constitution of board or tribunal (considerations incl. bias) - Conflict of interest - [See second Torts - Topic 9162 ].

Administrative Law - Topic 6541

Judicial review - Prohibition - Procedure - General - The plaintiffs brought an action against the Building Materials Evaluation Commission (Ont.), a non-corporate statutory entity - The relief claimed included a "prohibitory injunction", which was "similar in effect to the writ of prohibition" - The Ontario Court of Appeal affirmed that relief in the nature of prohibition had to be sought against the Commission by way of judicial review, rather than by way of action - See paragraphs 54 to 57.

Courts - Topic 7409

Provincial courts - Ontario - Superior Court - Jurisdiction - Declaratory relief - The Ontario Court of Appeal held that the fact that declaratory relief was available against the Ontario Crown under the Proceedings against the Crown Act (Ont.), and the fact that the Ontario Superior Court had jurisdiction to make "binding declarations of right" pursuant to ss. 11(2) and 97 of the Courts of Justice Act (Ont.), did not mean that the Superior Court's jurisdiction to grant declaratory relief could be invoked in an action against a defendant that did not have the legal capacity to be sued in its own right - See paragraphs 58 to 62.

Practice - Topic 235

Persons who can sue and be sued - Agencies of government - Statutory bodies - The Ontario Court of Appeal held that the Building Materials Evaluation Commission (Ont.), a non-corporate statutory entity existing by virtue of s. 28(1) of the Building Code Act (Ont.), was not a suable entity for the purpose of obtaining declaratory and injunctive relief - Under the Westlake test, the Commission fell within that category of non-corporate statutory entities that were subject to proceedings brought against them by way of the extraordinary remedies, but that could not be sued in an action - See paragraphs 42 to 81.

Practice - Topic 235

Persons who can sue and be sued - Agencies of government - Statutory bodies - The Ontario Court of Appeal discussed the test for the suability of statutory bodies - See paragraphs 36 to 41.

Practice - Topic 1462

Pleadings - Statement of claim - General - Requirement of stating basis for claim - The plaintiffs brought an action for misfeasance in public office against the members of a subcommittee set up by the Building Materials Evaluation Commission (Ont.) - The core of the plaintiffs' pleadings against the subcommittee members consisted of allegations of bad faith, actual malice and bias - Section 31(1) of the Building Code Act (Ont.) precluded any action against the subcommittee members "for any act done in good faith in the execution or intended execution of any power or duty under [the] Act ... or for any alleged neglect or default in the execution in good faith of that power or duty" - The Ontario Court of Appeal held that to avoid the protective ambit of s. 31(1), sufficient facts had to be pleaded to support allegations of bad faith or malice against the subcommittee members - The court then affirmed the striking of the plaintiffs' statement of claim where the pleas against the subcommittee members lacked sufficient particulars of material facts and reflected broadly cast allegations of bad faith, malice and bias based merely on assumptions and speculation about the motivations underlying the conduct of the subcommittee members - See paragraphs 86 to 110.

Practice - Topic 2230

Pleadings - Striking out pleadings - Grounds - Failure to disclose a cause of action or defence - The Ontario Court of Appeal stated that a finding of fairness and good faith was inappropriate on a motion under rule 21.01(b) of the Rules of Civil Procedure (Ont.) to strike, for failure to disclose a cause of action, a statement of claim seeking damages for misfeasance in public office, a tort for which an "essential ingredient" was bad faith or dishonesty - See paragraphs 111 and 112.

Practice - Topic 2230

Pleadings - Striking out pleadings - Grounds - Failure to disclose a cause of action or defence - The Ontario Court of Appeal stated that it was true that relief under rule 21.01(1)(b) of the Rules of Civil Procedure (Ont.), i.e., striking a statement of claim for failure to disclose a cause of action, could not be granted without scrutiny of the statement of claim as a whole - See paragraphs 93 to 97.

Practice - Topic 2230

Pleadings - Striking out pleadings - Grounds - Failure to disclose a cause of action or defence - [See Practice - Topic 1462 ].

Practice - Topic 5378

Dismissal of action - Grounds - General and want of prosecution - Where defendant lacks capacity to be sued - Rule 21.01(3)(b) of the Rules of Civil Procedure (Ont.) permitted a defendant to move before a judge to have an action stayed or dismissed summarily on the ground that the defendant did not have the legal capacity to be sued - The Ontario Court of Appeal ruled that rule 21.01(3)(b) "thus envisages that an action cannot be brought against a non-suable entity regardless of the claims advanced and the relief sought" - See paragraph 73.

Torts - Topic 9162

Duty of care - Particular relationships - Claims against public officials, authorities or boards - Misfeasance in or abuse of public office - The Ontario Court of Appeal stated that bad faith or dishonesty was an "essential ingredient of the tort of misfeasance in public office" - See paragraphs 83 to 86.

Torts - Topic 9162

Duty of care - Particular relationships - Claims against public officials, authorities or boards - Misfeasance in or abuse of public office - The plaintiffs brought an action for misfeasance in public office against the members of a subcommittee set up by the Building Materials Evaluation Commission (Ont.) - The core of the plaintiffs' pleadings against the subcommittee members consisted of allegations of bad faith, actual malice and bias - In respect of two members, the plaintiffs complained that they were in the same business as them - The Ontario Court of Appeal rejected the complaint - Mere participation on the Commission of persons who were in the same industry as those who appeared before the Commission, without more, could not anchor a plea of bad faith, malice or bias - See paragraphs 107 and 108.

Cases Noticed:

Westlake v. Ontario, [1971] 3 O.R. 533 (H.C.), affd. [1972] 2 O.R. 605 (C.A.), affd. (1973), 33 D.L.R.(3d) 256 (S.C.C.), consd. [para. 37].

Hollinger Bus Lines Ltd. v. Labour Relations Board (Ont.), [1952] 3 D.L.R. 162 (Ont. C.A.), consd. [para. 40].

Smith v. Human Rights Commission (N.B.) et al. (1997), 185 N.B.R.(2d) 301; 472 A.P.R. 301; 143 D.L.R.(4th) 251 (C.A.), leave to appeal refused (1997), 223 N.R. 71; 192 N.B.R.(2d) 198; 489 A.P.R. 198 (S.C.C.), consd. [para. 49].

New Brunswick (Board of Management) v. Dunsmuir (2008), 372 N.R. 1; 329 N.B.R.(2d) 1; 844 A.P.R. 1; 2008 SCC 9, refd to. [para. 49, footnote 3].

Campbell Soup Co. v. Farm Products Marketing Board (Ont.) (1975), 10 O.R.(2d) 405 (S.C.), affd. (1977), 16 O.R.(2d) 256 (C.A.), refd to. [para. 63].

Bingo Enterprises Ltd. et al. v. Lotteries and Gaming Licensing Board (Man.) (1983), 23 Man.R.(2d) 33 (C.A.), dist. [para. 66].

Seaway Trust Co. et al. v. Ontario et al. (1983), 41 O.R.(2d) 501 (Div. Ct.), revd. (1983), 41 O.R.(2d) 532 (C.A.), leave to appeal refused (1983), 52 N.R. 235; 1 O.A.C. 159 (S.C.C.), dist. [para. 66].

Bemis v. Belleville (City) (1990), 38 O.A.C. 310 (Div. Ct.), refd to. [para. 72, footnote 6].

First Real Properties Ltd. et al. v. Hamilton (City), [2002] O.A.C. Uned. 129; 59 O.R.(3d) 477 (Div. Ct.), refd to. [para. 72, footnote 6].

Atikokan Forest Products Ltd. et al. v. Ontario, [2000] O.T.C. Uned. 501; 2000 CarswellOnt 2363 (Sup. Ct.), refd to. [para. 72, footnote 6].

South-West Oxford (Township) v. Ontario (Attorney General) (1983), 44 O.R.(2d) 376 (H.C.), refd to. [para. 72, footnote 6].

TeleZone Inc. v. Canada (Attorney General) (2008), 245 O.A.C. 91; 303 D.L.R.(4th) 626 (C.A.), leave to appeal granted (2009), 399 N.R. 396; 262 O.A.C. 397 (S.C.C.), refd to. [para. 74].

Dyson v. Attorney General, [1911] 1 K.B. 410 (C.A.), refd to. [para. 78].

Odhavji Estate et al. v. Woodhouse et al., [2003] 3 S.C.R. 263; 312 N.R. 305; 180 O.A.C. 201; 2003 SCC 69, consd. [para. 83].

Pispidikis v. Scroggie et al., [2002] O.T.C. 1033; 62 O.R.(3d) 596 (Sup. Ct.), affd. (2003), 180 O.A.C. 45; 68 O.R.(3d) 655 (C.A.), consd. [para. 89].

Hunt v. Carey Canada Inc. - see Hunt v. T & N plc et al.

Hunt v. T & N plc et al., [1990] 2 S.C.R. 959; 117 N.R. 321, refd to. [para. 90].

Operation Dismantle Inc. et al. v. Canada et al., [1985] 1 S.C.R. 441; 59 N.R. 1, refd to. [para. 90].

Region Plaza Inc. v. Hamilton-Wentworth (Regional Muncipality) (1990), 12 O.R.(3d) 750 (H.C.), consd. [para. 99].

Energy Probe v. Atomic Energy Control Board and Ontario Hydro, [1985] 1 F.C. 563; 56 N.R. 135; 15 D.L.R.(4th) 48 (F.C.A.), leave to appeal refused (1985), 58 N.R. 316 (S.C.C.), refd to. [para. 106].

Pearlman v. Manitoba Law Society Judicial Committee, [1991] 2 S.C.R. 869; 130 N.R. 121; 75 Man.R.(2d) 81; 6 W.A.C. 81, refd to. [para. 108].

Miguna v. Ontario (Attorney General) et al. (2005), 205 O.A.C. 257; 262 D.L.R.(4th) 222 (C.A.), refd to. [para. 110].

Miguna v. Toronto Police Services Board et al. (2008), 243 O.A.C. 62; 2008 ONCA 799, refd to. [para. 112].

Statutes Noticed:

Building Code Act, S.O. 1992, c. 23, sect. 28(1) [para. 3]; sect. 28(4) [para. 4]; sect. 31(1) [para. 31].

Civil Procedure Rules (Ont.) - see Rules of Civil Procedure (Ont.).

Courts of Justice Act, R.S.O. 1990, c. C-43, sect. 11(2), sect. 97 [para. 61].

Judicial Review Procedure Act, R.S.O. 1990, c. J-1, sect. 2(1) [para. 54].

Proceedings against the Crown Act, R.S.O. 1990, c. P-27, sect. 5(1)(a) [Appendix A].

Rules of Civil Procedure (Ont.), rule 21.01(1)(b) [para. 93]; rule 21.01(3)(b) [para. 73].

Authors and Works Noticed:

Brown, Donald J.M., and Evans, John M., Judicial Review of Administrative Action in Canada (1998) (Looseleaf Ed.), pp. 1:8200, fn. 470 [para. 65]; 4:2400 [para. 65].

Jones, David Phillip, and de Villars, Anne S., Principles of Administrative Law (5th Ed. 2009), pp. 640 [para. 57]; 755, 756, 757 [para. 58]; 758, 759 [para. 49, footnote 3].

Counsel:

Y. Monica Song, for the appellants;

Leslie M. McIntosh, for the respondents.

This appeal was heard on May 13, 2010, by Cronk, MacFarland and Karakatsanis, JJ.A., of the Ontario Court of Appeal. The following decision of the Court of Appeal was delivered by Cronk, J.A., and released on July 12, 2010.