Grassy Mountain Coal Project – Privative Clauses and Vavilov by Michael B. Niven, K.C. and Michael Custer, Dec 14, 2023, Carscallen LLP
The Grassy Mountain Coal Project (the “Project”) was recently back for consideration before the Alberta Courts. The team of Michael B Niven K.C. and Michael Custer of Carscallen LLP helped in achieving a successful outcome for the Municipal District of Ranchland No. 66 on an important administrative law issue.
The decision issued on Monday, December 4th concerned the Project’s controversial proposed open-pit coal mine on Grassy Mountain in the eastern slopes of the Rocky Mountains. The proposed coal mine, located in the MD of Ranchland and north of Crowsnest Pass, Alberta, would have produced metallurgical coal. Northback Holdings Corporation (“Northback”), formerly Benga Mining Limited, an Australian company, had previously sought the required Provincial and Federal regulatory approvals allowing it to develop the Grassy Mountain coal leases and proceed with the Project. The coal from Grassy Mountain would have been shipped overseas to India and China to make steel.
The Project raised significant environmental concerns and generated opposition from locals in the MD of Ranchland and the Crowsnest Pass area, and from environmental groups and individuals all over Alberta. Other groups were in support of the economic and cultural benefits the Project would bring to the area, including the MD of Crowsnest Pass, and the Piikani and Stoney Nakoda First Nations (the “First Nations”).
In 2021, and after 29 hearing days, Northback’s application was denied by the Grassy Mountain Joint Review Panel, which consisted of representatives of the Alberta Energy Regulator (the “AER”) and the Federal Minister of Environment and Climate Change. The application for the Project was rejected because the economic benefits were outweighed by the potential adverse environmental impacts. Northback and the First Nations were undeterred by this decision and proceeded to file a federal judicial review application, a provincial judicial review application and an application for permission to appeal the decision of the Minister, each seeking to overturn the decision of the Joint Review Panel.
In the permission to appeal application, Northback and the First Nations sought to show that the Joint Review Panel had made one or more errors on a question of law or jurisdiction, and therefore that the Joint Review Panel’s decision should be overturned. Those arguments were unsuccessful, and permission to appeal application was refused by the Honourable Madam Justice Ho of the Alberta Court of Appeal in a January 2022 decision. Northback and the First Nations then applied for leave to appeal to the Supreme Court of Canada. Leave to appeal was also refused by the SCC.
Northback and the First Nations were again not to be deterred, and next attempted to get the refusal of the Project overturned by way of a judicial review before the Alberta Court of King’s Bench. Judicial review is one of the ways in which the Courts exercise judicial oversight over the decisions of administrative decision-makers, such as the AER. Northback alleged that notwithstanding the outcome of the permission to appeal application, the Joint Review Panel’s decision was unreasonable. The AER brought an application in September to have Northback’s Provincial judicial review application struck, with the MD of Ranchland supporting the AER’s application as an Intervenor.
The AER and the MD of Ranchland argued that Northback and the Nations were barred from exercising any right of judicial review due to both the application of section 56 of the Responsible Energy Development Act, SA 2012, c. R-17.3 (“REDA“), and because Northback and the First Nations had already exhausted an adequate alternative remedy by way of their previous applications for leave to appeal. Essentially, the matter was res judicata, a collateral attack on the Alberta Court of Appeal decision, and prohibited by the privative clause in REDA. That privative clause says that all decisions of the AER are “…final and shall not be questioned or reviewed in any court by application for judicial review or otherwise…” Northback and the First Nations argued that the privative clause was unenforceable. They cited the Supreme Court of Canada’s decision in Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 (“Vavilov“), arguing that nothing could prevent them from pursuing judicial review of an AER decision on questions of fact or on questions of mixed fact and law.
The Honourable Madam Justice Kuntz of the Alberta Court of King’s Bench decided in favour of the AER and the MD of Ranchland on December 4, 2023, concluding that:
- The Supreme Court in Vavilov did not say that a privative clause has no impact on the availability of judicial review – to the contrary, “Vavilov leaves open the possibility that the judicial review beyond a circumscribed right of appeal may be precluded”. In this case, Northback was afforded a statutory right of appeal of the AER Decision through section 45 of REDA, and that statutory right of appeal provided Northback with sufficient opportunity to have the AER Decision reviewed;
- The legislature can “oust judicial review on certain issues with a private clause” in certain instances, contrary to Northback’s argument that a privative clause has no effect on the availability of judicial review; and
- There was no challenge to the constitutionality of the privative clause, its plain and ordinary meaning should be given effect, and a legislature can, within constitutional limits, insulate an administrative decision from judicial interference.
After an extensive review of the case law dealing with an applicant’s ability to request judicial review on questions of fact or mixed fact and law, notwithstanding existence of a privative clause and a statutory right of appeal, the Court of King’s Bench concluded that:
Vavilov does not stand for the proposition that a privative clause has no impact on the availability of judicial review. It also does not require or allow the Court to ignore a plainly worded privative clause.
As a result, Northback’s application for judicial review was dismissed.
This decision is important in the context of administrative law and the ongoing interpretation of Vavilov. The Regulatory team at Carscallen LLP has experience before a wide variety of regulatory bodies and can assist your organization in navigating the complexities of the applicable legislation and can help you achieve the results you seek.