Wells v. Newfoundland and Board of Commissioners of Public Utilities (Nfld.), (1999) 180 Nfld. & P.E.I.R. 269 (SCC)

• Judge: Lamer, C.J.C., L'Heureux-Dubé, Gonthier, Cory, McLachlin, Iacobucci, Major, Bastarache and Binnie, JJ.
• Court: Supreme Court of Canada
• Case Date: May 17, 1999
• Jurisdiction: Canada (Federal)
• Citations: (1999), 180 Nfld. & P.E.I.R. 269 (SCC);[1999] SCJ No 50 (QL);JE 99-1909;[1999] ACS no 50;180 Nfld & PEIR 269;177 DLR (4th) 73;548 APR 269;90 ACWS (3d) 894;1999 CanLII 657 (SCC);15 Admin LR (3d) 274;[1999] 3 SCR 199;46 CCEL (2d) 165;245 NR 275

Wells v. Nfld. (1999), 180 Nfld. & P.E.I.R. 269 (SCC);

    548 A.P.R. 269

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [1999] Nfld. & P.E.I.R. TBEd. SE.024

Her Majesty the Queen in Right of Newfoundland and Board of Commissioners of Public Utilities (appellants) v. Andrew Wells (respondent)

(26362)

Indexed As: Wells v. Newfoundland and Board of Commissioners of Public Utilities (Nfld.)

Supreme Court of Canada

Lamer, C.J.C., L'Heureux-Dubé, Gonthier, Cory, McLachlin, Iacobucci, Major, Bastarache and Binnie, JJ.

September 15, 1999.

Summary:

Wells' position on the Public Utilities Board was terminated under the new Public Utilities Act. Wells claimed that he was entitled to compensation.

The Newfoundland Supreme Court, Trial Division, in a decision reported in 126 Nfld. & P.E.I.R. 295; 393 A.P.R. 295, dismissed Wells' claim. Wells appealed.

The Newfoundland Court of Appeal, O'Neil, J.A., dissenting, in a decision re­ported 156 Nfld. & P.E.I.R. 271; 483 A.P.R. 271 allowed the appeal, set aside the trial judge's decision, and awarded Wells two and one-half years of salary plus pension benefits for that period. The Crown and the Board of Commissioners of Public Utilities appealed.

The Supreme Court of Canada dismissed the appeal.

Administrative Law - Topic 2006

Natural justice - General principles - Cir­cumstances when rules applicable - [See Crown - Topic 1084 ].

Administrative Law - Topic 2270

Natural justice - The duty of fairness - Circumstances or powers to which duty does not apply - Wells was appointed Commissioner of the Public Utilities Board - Under the Public Utilities Act he was entitled to hold office during good behav­iour until the age of 70 years - The Act was repealed, a new Act created a new Board, and Wells was removed from office - Wells claimed compensation - He argued, inter alia, that the decision was made in bad faith - The Supreme Court of Canada rejected the argument - The decision to restructure the Board was a bona fide decision and was deliberated and enacted by Newfoundland's elected legislature -Legislative decision making was not sub­ject to any known duty of fairness - The decision did not constitute a direct and intentional attack upon his interests - Wells had no claim to participation in the deci­sions leading to the elimination of his position through comprehensive reforms - Also he had no basis to challenge the decision not to re-appoint him - See para­graphs 57 to 62.

Contracts - Topic 3826

Performance or breach - Frustration or impossibility - Application of doctrine - Wells was appointed Commissioner of the Public Utilities Board - Under the Public Utilities Act he was entitled to hold office during good behav­iour until the age of 70 years - The Act was repealed, a new Act created a new Board, and Wells was removed from office - Wells claimed compensation - The Crown argued that Wells' employment contract was frustrated by the passage of the new Act, which made Wells' further employment in his previous position impossible - Further­more, the separation of powers between the legislative and executive branches meant that a legislative act which barred the executive from performing contractual obligations did not constitute self-induced frustration, as the branches were indepen­dent entities - The Supreme Court of Canada rejected the arguments - The sepa­ration of powers was not a rigid and abso­lute structure - Except in certain rare cases, the executive frequently and de facto con­trolled the legislature - See paragraphs 50 to 54.

Contracts - Topic 3831

Performance or breach - Frustration or impossibility - Governmental interference or regulation - [See Contracts - Topic 3826 ].

Crown - Topic 1002

Contracts with Crown - General principles - Crown bound by its contracts - [See second Crown - Topic 5129 ].

Crown - Topic 1003

Contracts with Crown - General principles - Rules governing public servants - [See both Crown - Topic 5121 ].

Crown - Topic 1081

Contracts with Crown - Employment con­tracts - General - [See both Crown - Topic 5121 , Crown - Topic 5126 and second Crown - Topic 5129 ].

Crown - Topic 1084

Contracts with Crown - Employment con­tracts - Duty of Crown - Wells was appointed Commissioner of the Public Utilities Board - Under the Public Utilities Act he was entitled to hold office during good behav­iour until the age of 70 years - The Act was repealed, a new Act created a new Board, and Wells was removed from office - Wells claimed compensation - He argued, inter alia, that since he lost his job as a result of governmental action, he had a right to fairness in the making of that decision - The Supreme Court of Canada stated, inter alia, that "Crown employees, even those who have no specific statutory or negotiated terms protecting them from dismissal, have the right not to be dis­missed except in accordance with the principles of natural justice." - See para­graphs 56 and 57.

Crown - Topic 1087

Contracts with Crown - Employment con­tracts - Power to dismiss - General - [See Crown - Topic 1084 ].

Crown - Topic 5121

Officials and employees - Appointment and employment - General - Wells was appointed Commissioner of the Public Utilities Board - Under the Public Utilities Act he was entitled to hold office during good behav­iour until the age of 70 years - The Act was repealed, a new Act created a new Board, and Wells was removed from office - Wells claimed compensation - The Supreme Court of Canada stated that "[a]s the Crown is bound to act according to the rule of law, it must normally respect the principles of natural justice in exercising its legal rights in relation to contracts of employment." - See paragraph 24.

Crown - Topic 5121

Officials and employees - Appointment and employment - General - Wells was appointed Commissioner of the Public Utilities Board - Under the Public Utilities Act he was entitled to hold office during good behav­iour until the age of 70 years - The Act was repealed, a new Act created a new Board, and Wells was removed from office - Wells claimed compensation - The Supreme Court of Canada confirmed that "the law regarding senior civil servants accords with the contemporary understand­ing of the state's role and obligations in its dealings with employees. Employment in the civil service is not feudal servitude ... the common law views mutually agreed employment relationships through the lens of contract. This undeniably is the way virtually everyone dealing with the Crown sees it. While the terms and conditions of the contract may be dictated, in whole or in part, by statute, the employment rela­tionship remains a contract in substance and the general law of contract will apply unless specifically superseded by explicit terms in the statute or the agreement." - See paragraphs 29 and 30.

Crown - Topic 5126

Officials and employees - Appointment and employment - Appointment at pleasure - What constitutes - Wells was appointed Commissioner of the Public Utilities Board - Under the Public Utilities Act he was entitled to hold office during good behav­iour until the age of 70 years - The Legis­lature created a new Board - Wells was removed from office - He claimed com­pensation - The trial judge held, inter alia, that Wells' position was really an at pleas­ure appointment which was secure only if cabinet did not alter it (s. 5(5)) - The Supreme Court of Canada stated, inter alia, that the "only contemplated termination was by bad behaviour or age. It was ex­plicitly a tenured job. That tenure has to mean something. The most plausible inter­pretation of the respondent's terms of employment is that while his position, and the authority flowing from it, could be eliminated, he could not be deprived of the benefits of the job except by virtue of age or bad behaviour. The Crown breached its ongoing obligations to the respondent when it cut off his remuneration." - See paragraphs 33 to 36.

Crown - Topic 5128

Officials and employees - Appointment and employment - Termination of em­ploy­ment - General - [See Administrative Law - Topic 2270 and Crown - Topic 5126 ].

Crown - Topic 5129

Officials and employees - Appointment and employment - Termination of em­ploy­ment - Compensation - Wells was appointed Commissioner of the Public Utilities Board - Under the Public Utilities Act he was entitled to hold office during good behav­iour until the age of 70 years - The Act was repealed, a new Act created a new Board, and Wells was removed from office - Wells claimed compensation - The Supreme Court of Canada stated that "[b]oth the terms of the statute governing his appointment, and his specific negoti­ations with the government's representa­tives established that the fundamental terms of his appointment were that he would serve until the age of 70, subject to good behaviour. This agreement plainly meant that the Crown could not terminate the respondent's employment unless he did something which rendered him unfit to continue serving as a Public Utilities Com­missioner. No misbehaviour was alleged against the respondent, but his position was eliminated. In the private sector, this would clearly constitute a breach of the respon­dent's contract of employment, and he would be entitled to damages. His status as an employee of the Crown, in the circum­stances, should not be different." - See paragraphs 16 and 17.

Crown - Topic 5129

Officials and employees - Appointment and employment - Termination of em­ploy­ment - Compensation - Wells was ap­pointed Commissioner of the Public Utili­ties Board - Under the Public Utilities Act he was entitled to hold office during good behav­iour until the age of 70 years - The Act was repealed, a new Act created a new Board, and Wells was removed from office - Wells claimed compensation - The Crown argued, inter alia, that the legisla­ture retained the power to eliminate Wells' posi­tion - Since Wells' position legiti­mate­ly ceased to exist, his rights which flowed from it ceased at the same time - It relied on s. 28(1) of the Interpre­tation Act (Nfld.) which provided that an Act should be con­strued as reserving to the Legislature the power of repealing it and revoking a privi­lege vested or granted to a person by that Act - The Supreme Court of Canada re­jected the argument stating, inter alia, that while the legislature was free to remove the power and responsibility of Wells' office, in doing so it did not strip Wells of the compensation flowing from his position unless it specifically so enacted - See paragraphs 37 to 43.

Crown - Topic 5129

Officials and employees - Appointment and employment - Termination of em­ploy­ment - Compensation - Wells was appointed Commissioner of the Public Utilities Board - The Legislature created a new Board and Wells was removed from office - Wells claimed compensation - The trial judge dismissed the claim - The New­foundland Court of Appeal allowed Wells' appeal and awarded Wells two and one-half years' salary plus pension benefits - The Supreme Court of Canada affirmed the damages award - See paragraphs 63 to 68.

Crown - Topic 5129

Officials and employees - Appointment and employment - Termination of em­ploy­ment - Compensation - [See Crown - Topic 5126 ].

Practice - Topic 9256

Appeals - Judgments by appeal court - Remittal to trial judge - When appropriate - A trial judge dismissed Wells' compensa­tion claim - The New­foundland Court of Appeal allowed Wells' appeal and assessed damages in the first instance (there was no comment on the subject by the trial judge) - It did so in the interests of expedition and to avoid further litigation and the passage of time - The Crown appealed objecting to the Court of Appeal's award­ing of damages - The Supreme Court of Canada affirmed the damages award - The court agreed that ordinarily the assessment of damages should have been referred back to the trial judge - However, Wells was terminated more than nine years ago and any further delays were not in the interests of justice and the case ought to be con­cluded - See paragraphs 66 to 68.

Public Utilities - Topic 4484

Public utility commissions - Members - Revocation or termination of appointment -[See Administrative Law - Topic 2270 , Crown - Topic 1084, second Crown - Topic 5121 , Crown - Topic 5126 and first Crown - Topic 5129 ].

Statutes - Topic 6903

Operation and effect - Repeal - Preserva­tion of rights acquired or accrued under repealed statute - [See second Crown - Topic 5129 ].

Cases Noticed:

CNCP Telecommunications v. Alberta Government Telephones and CRTC, [1989] 2 S.C.R. 225; 98 N.R. 161, refd to. [para. 5].

Alberta Government Telephones v. Cana­dian Radio-television and Telecommuni­cations Commission - see CNCP Tele­communications v. Alberta Government Telephones and CRTC.

Reilly v. R., [1934] A.C. 176 (P.C.), refd to. [para. 10].

Peddle v. Newfoundland (1994), 122 Nfld. & P.E.I.R. 64; 379 A.P.R. 64; 116 D.L.R.(4th) 161 (Nfld. C.A.), refd to. [para. 10].

Petryshyn et al. v. Canada, [1993] 3 F.C. 640; 65 F.T.R. 38 (T.D.), refd to. [para. 13].

Quebec (Attorney General) v. Labrecque et al., [1980] 2 S.C.R. 1057; 38 N.R. 1, refd to. [para. 20].

Wilson and Nova Scotia Government Employees' Association v. Civil Service Commission (N.S.), [1981] 1 S.C.R. 211; 35 N.R. 103; 43 N.S.R.(2d) 631; 81 A.P.R. 631, refd to. [para. 23].

Nicholson v. Haldimand-Norfolk Regional Board of Commissioners of Police and Ontario (Attorney General), [1979] 1 S.C.R. 311; 23 N.R. 410, refd to. [para. 24].

Knight v. Board of Education of Indian Head School Division No. 19, [1990] 1 S.C.R. 653; 106 N.R. 17; 83 Sask.R. 81, refd to. [para. 24].

Lucas v. Lucas, [1943] P. 68, refd to. [para. 26].

Washer v. British Columbia Toll Highways and Bridges Authority (1965), 53 D.L.R.(2d) 620 (B.C.C.A.), refd to. [para. 26].

Cooper v. Canadian Human Rights Com­mission, [1996] 3 S.C.R. 854; 204 N.R. 1, refd to. [para. 31].

Reference Re Remuneration of Judges of the Provincial Court (P.E.I.), [1997] 3 S.C.R. 3; 217 N.R. 1; 206 A.R. 1; 156 W.A.C. 1; 121 Man.R.(2d) 1; 158 W.A.C. 1; 156 Nfld. & P.E.I.R. 1; 483 A.P.R. 1, appld. [para. 32].

R. v. Campbell (J.) and Shirose (S.), [1999] 1 S.C.R. 565; 237 N.R. 86; 119 O.A.C. 201, refd to. [para. 32].

Ridge v. Baldwin, [1964] A.C. 40 (H.L.), refd to. [para. 32].

R. v. Dominion of Canada Postage Stamp Vending Co., [1930] S.C.R. 500, refd to. [para. 37].

Reference Re Canada Assistance Plan Act - see Reference Re Constitutional Ques­tion Act (B.C.).

Reference Re Constitutional Question Act (B.C.), [1991] 2 S.C.R. 525; 127 N.R. 161; 1 B.C.A.C. 241; 1 W.A.C. 241, refd to. [para. 37].

West Lakes Ltd. v. South Australia (State) (1980), 25 S.A.S.R. 389 (S.C. in banco), refd to. [para. 37].

Welch v. New Brunswick (1991), 116 N.B.R.(2d) 262; 293 A.P.R. 262 (T.D.), refd to. [para. 42].

Manitoba Fisheries Ltd. v. Canada, [1979] 1 S.C.R. 101; 23 N.R. 159, refd to. [para. 47].

National Trust Co. v. Wong Aviation Ltd., [1969] S.C.R. 481, refd to. [para. 51].

Operation Dismantle Inc. et al. v. Canada et al., [1985] 1 S.C.R. 441; 59 N.R. 1, refd to. [para. 52].

Fraser v. Public Service Staff Relations Board (Can.), [1985] 2 S.C.R. 455; 63 N.R. 161, refd to. [para. 52].

Blaikie et al. v. Quebec (Attorney General) et al., [1981] 1 S.C.R. 312; 36 N.R. 120, refd to. [para. 53].

Roncarelli v. Duplessis, [1959] S.C.R. 121, refd to. [para. 58].

Martineau v. Matsqui Institution Discipli­nary Board, [1980] 1 S.C.R. 602; 30 N.R. 119, refd to. [para. 59].

Constitutional Amendment References 1981 (Man., Nfld., Que.), [1981] 1 S.C.R. 753; 39 N.R. 1; 11 Man.R.(2d) 1; 34 Nfld. & P.E.I.R. 1; 95 A.P.R. 1, refd to. [para. 60].

Inuit Tapirisat of Canada and National Anti-Poverty Organization v. Canada (Attorney General), [1980] 2 S.C.R. 735; 33 N.R. 304, refd to. [para. 61].

Neilson v. Vancouver Hockey Club (1988), 51 D.L.R.(4th) 40 (B.C.C.A.), refd to. [para. 65].

Gunton v. Richmond-upon-Thames London Borough Council, [1980] 3 All E.R. 577 (C.A.), refd to. [para. 65].

Pilotte v. Bellechasse Hospital Corp., [1979] 2 S.C.R. 454; 11 N.R. 47, refd to. [para. 67].

Reaney v. Co-operative Wholesale Society Ltd., [1932] W.N. 78 (C.A.), refd to. [para. 68].

Statutes Noticed:

Interpretation Act, R.S.N. 1990, c. I-19, sect. 28(1) [para. 40]; sect. 29(1)(c) [para. 41].

Public Utilities Act, S.N. 1989, c. 37, generally [para. 8].

Public Utilities Act, R.S.N. 1970, sect. 5(4), sect. 5(5) [para. 33].

Supreme Court Act, R.S.C. 1985, c. S-26, sect. 46.1 [para. 68].

Authors and Works Noticed:

Blair, L., The Civil Servant - A Status Relationship (1958), 21 Mod. L. Rev. 265, generally [para. 26].

Chitty, J., A Treatise on the Law of Pre­rogatives of the Crown (1820), generally

[para. 26].

Chitty on Contracts (27th Ed. 1994), vol. 1, para. 23-047 [para. 51].

Emden, C.S., The Civil Servant in the Law and The Constitution (1923), p. 18 [para. 25].

Fridman, G.H.L., The Law of Contract in Canada (3rd Ed. 1994), pp. 642, 643 [para. 51].

Hansard (Nfld.) - see Newfoundland, Han­sard, House of Assembly.

Hogg, Peter W., Liability of the Crown (1989), pp. 171, 172 [para. 48].

Newfoundland, Hansard, House of As­sembly, Proceedings of the Resource Legislation Review Committee (Decem­ber 14, 1989), p. L7 [para. 42].

Counsel:

John B. Laskin, Reg Locke and Andrew R. Bernstein, for the appellants;

Gillian D. Butler, Q.C., Stacy L. Feltham and Kenneth S. Purchase, for the respon­dent.

Solicitors of Record:

Department of Justice, St. John's, New­foundland, for the appellants;

White, Ottenheimer & Baker, St. John's, Newfoundland, for the respondent.

This appeal was heard on May 17, 1999, by Lamer, C.J.C., L'Heureux-Dubé, Gon­thier, Cory, McLachlin, Iacobucci, Major, Bastarache and Binnie, JJ., of the Supreme Court of Canada. The following decision of the court was delivered in both official languages on September 15, 1999, by Major, J.