Couchiching First Nation et al. v. The Attorney General of Canada et al.
[Indexed as: Couchiching First Nation v. Canada (Attorney General)]
103 O.R. (3d) 745
2010 ONSC 4373
Ontario Superior Court of Justice,
Shaw J.
September 14, 2010
Injunctions -- Jurisdiction -- Plaintiffs advising defendant Town that it was not extending lease of parkland -- Town moving for interim order restraining Ontario, Canada and plaintiffs from interfering with Town's exclusive possession of park pending determination of action -- Motion judge granting interim preservation order -- Leave to appeal denied -- No conflicting decision existing and no good reason existing to doubt correctness of order -- Motion judge aware that injunction is not available against Crown but determining that interim preservation order was necessary to maintain status quo to ensure effectiveness of disposition of action -- Remedy of injunction or preservation order can be granted to maintain status quo on interim basis even if court does not have jurisdiction to grant injunctive relief on independent basis -- Jurisdiction to grant interim order preserving status quo founded on court's inherent jurisdiction to ensure effectiveness of its final disposition and not on Rules of Civil Procedure.
In 1907, Ontario passed an Order-in-Council consenting to the surrender to Canada of lands in a reserve for a public park for the defendant Town. In 1910, Canada gave the Town a 99-year lease of the surrendered land. The plaintiffs and the Town agreed to a one-year extension of the lease when it expired in 2009. In 2010, the plaintiffs advised the Town that they did not intend to extend the agreement and asked the Town to remove its property from the park. The Town brought a motion for an interim injunction restraining Ontario, Canada and the plaintiffs from interfering with the Town's exclusive possession of the park or, alternatively, for an interim preservation order, pending final determination of the resulting action. The motion judge granted an interim preservation order. The plaintiffs, Ontario and Canada brought a motion for leave to appeal.
Held, the motion should be dismissed.
There was no conflicting decision on the matter involved in the proposed appeal and no good reason to doubt the correctness of the order in question. The motion judge was fully aware that provincial and federal legislation provides that an injunction is not available against the Crown. However, on the authority of the decision of the Supreme Court of Canada in Canada v. Law Society of British Columbia, he determined that an interim order was necessary to maintain the status quo to ensure the effectiveness of the disposition of the action. There was no good reason to decline to follow the obiter statement to that effect in Law Society. The cases cited by the moving parties did not conflict with the proposition set out in Law Society as they did not deal with the proposition that although a court may not have jurisdiction to grant a preservation order viewed independently, it nevertheless does have the competence to grant a preservation order on an interim basis to preserve the status quo, provided that it has the jurisdiction to undertake the particular lis which it has taken on. The jurisdiction to grant an interim order to preserve the status quo is not founded on the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, but rather on the inherent jurisdiction of the court to ensure the effectiveness of its final disposition. The interim preservation order [page746] did not give the Town the ultimate remedy it sought. There was no good reason to doubt the correctness of the motion judge's conclusion that there was a serious issue to be tried, that changing the nature of an established recreational park of 100 years' standing would create irreparable harm and that the balance of convenience favoured the Town.
MOTION for leave to appeal an interim preservation order.
Cases referred to
Canada (Attorney General) v. Law Society of British Columbia, 1982 29 (SCC), [1982] 2 S.C.R. 307, [1982] S.C.J. No. 70, 137 D.L.R. (3d) 1, 43 N.R. 451, [1982] 5 W.W.R. 289, 37 B.C.L.R. 145, 19 B.L.R. 234, 66 C.P.R. (2d) 1, 15 A.C.W.S. (2d) 304, folld Aroland First Nation v. Ontario (1996), 1996 7961 (ON SC), 27 O.R. (3d) 732, [1996] O.J. No. 557, 45 C.P.C. (3d) 223, 61 A.C.W.S. (3d) 54 (Gen. Div.) Deep v. Ontario, [2004] O.J. No. 2734, [2004] O.T.C. 541, 131 A.C.W.S. (3d) 964 (S.C.J.) Granite Power Corp. v. Ontario, [2002] O.J. No. 2188 (S.C.J.) Loomis v. Ontario (Ministry of Agriculture & Food) (1993), 1993 8625 (ON SC), 16 O.R. (3d) 188, [1993] O.J. No. 2788, 108 D.L.R. (4th) 330, 22 C.P.C. (3d) 396, 44 A.C.W.S. (3d) 148 (Div. Ct.) Smith v. Nova Scotia (Attorney General), [2004] N.S.J. No. 343, 2004 NSCA 106, 244 D.L.R. (4th) 649, 226 N.S.R. (2d) 344, 35 C.C.E.L. (3d) 151, 26 C.C.L.T. (3d) 71, 19 C.P.C. (6th) 40, 133 A.C.W.S. (3d) 867, affg [2003] N.S.J. No. 196, 2003 NSSC 126, 216 N.S.R. (2d) 95, 26 C.C.E.L. (3d) 226, 36 C.P.C. (5th) 123, 123 A.C.W.S. (3d) 926 [Leave to appeal to S.C.C. refused [2004] S.C.C.A. No. 498], consd
Other cases referred to
Aetna Financial Services Ltd. v. Feigelman, 1985 55 (SCC), [1985] 1 S.C.R. 2, [1985] S.C.J. No. 1, 15 D.L.R. (4th) 161, 56 N.R. 241, [1985] 2 W.W.R. 97, 32 Man. R. (2d) 241, 29 B.L.R. 5, 55 C.B.R. (N.S.) 1, 4 C.P.R. (3d) 145, 29 A.C.W.S. (2d) 267, J.E. 85-192, EYB 1985-150475 Amax Potash Ltd. v. Saskatchewan, 1976 15 (SCC), [1977] 2 S.C.R. 576, [1976] S.C.J. No. 86, 71 D.L.R. (3d) 1, 11 N.R. 222, [1976] 6 W.W.R. 61 Anishinabe of the Sacred Circle Inc. v. Ontario (Minister of Health and Long-Term Care), [2002] O.J. No. 4212, [2002] O.T.C. 835, 117 A.C.W.S. (3d) 807 (S.C.J.) Ash v. Lloyd's Corp. (1992), 1992 7652 (ON SC), 8 O.R. (3d) 282, [1992] O.J. No. 894 (Gen. Div.) British Columbia Power Corp. v. British Columbia Electric Co., 1962 43 (SCC), [1962] S.C.R. 642, [1962] S.C.J. No. 48, 34 D.L.R. (2d) 196 at 274, 38 W.W.R. 701 Comtrade Petroleum Inc. v. 490300 Ontario Ltd. (1992), 1992 7405 (ON SC), 7 O.R. (3d) 542, [1992] O.J. No. 652, 55 O.A.C. 316, 6 C.P.C. (3d) 271, 32 A.C.W.S. (3d) 1026 (Div. Ct.) Couchiching First Nation v. Fort Frances (Town), [2010] O.J. No. 2558, 2010 ONSC 2442 Del Frari v. Del Frari, 1985 2879 (SK QB), [1985] S.J. No. 386, 19 D.L.R. (4th) 172, 33 A.C.W.S. (2d) 115 (Q.B.) Fraser v. Beach (2005), 2005 14309 (ON CA), 75 O.R. (3d) 383, [2005] O.J. No. 1722, 252 D.L.R. (4th) 1, 197 O.A.C. 113, 33 R.P.R. (4th) 193, 138 A.C.W.S. (3d) 1163 (C.A.) Hamilton (City) v. Loucks, 2003 64221 (ON SC), [2003] O.J. No. 3669, 232 D.L.R. (4th) 362, [2003] O.T.C. 848, 40 C.P.C. (5th) 368, 42 M.P.L.R. (3d) 70, 125 A.C.W.S. (3d) 701 (S.C.J.) Hydro-Quebec v. Canada (Attorney General), 1991 3656 (QC CA), [1991] J.Q. no 481, [1991] R.J.Q. 922, J.E. 91-671, 37 Q.A.C. 293, [1991] 3 C.N.L.R. 40, 26 A.C.W.S. (3d) 518 (C.A.) Inland Revenue Commissioners v. Rossminster Ltd., [1980] A.C. 952, [1980] 1 All E.R. 80, [1980] 2 W.L.R. 1, [1980] S.T.C. 42, 52 T.C. 160 (H.L.) Jackson v. Saskatchewan (Minister of Finance), 1982 2420 (SK QB), [1982] S.J. No. 916, 21 Sask. R. 221, 4 C.R.R. 271, 17 A.C.W.S. (2d) 304 (Q.B.) Jessome v. Jessome, [1998] O.J. No. 5565, 87 O.T.C. 143, 43 R.F.L. (4th) 196, 85 A.C.W.S. (3d) 13 (Gen. Div.) Lord v. Canada (Attorney General), 2000 9079 (QC CA), [2000] J.Q. no 1354, [2000] 3 C.N.L.R. 69, 98 A.C.W.S. (3d) 801 (C.A.) NB (Electric Power Commission) v. Maritime Electric Co., 1985 5533 (FCA), [1985] F.C.J. No. 93, [1985] 2 F.C. 13, 60 N.R. 203 (C.A.) R. v. Henry, [2005] 3 S.C.R. 609, [2005] S.C.J. No. 76, 2005 SCC 76, 260 D.L.R. (4th) 411, 342 N.R. 259, [2006] 4 W.W.R. 605, J.E. 2006-62, 376 A.R. 1, 219 B.C.A.C. 1, 49 B.C.L.R. (4th) 1, 202 C.C.C. (3d) 449, 33 C.R. (6th) 215, 136 C.R.R. (2d) 121 R. v. Prokofiew (2010), 100 O.R. (3d) 401, [2010] O.J. No. 2498, 2010 ONCA 423, 264 O.A.C. 174, 256 C.C.C. (3d) 355, 2010 G.T.C. 1044; [page747] Saskatchewan Square Ltd. v. Canada Mortgage & Housing Corp., 1995 CarswellSask 76 (Q.B.) Van Mulligen v. Saskatchewan Housing Corp., 1982 2424 (SK QB), [1982] S.J. No. 1043, 23 Sask. R. 66 (Q.B.) Vogel v. International Nesmount Industrial Corp., [1994] B.C.J. No. 1922 (S.C.) Winnipeg Child & Family Services (Southeast Area) v. Canada (Attorney General), 1977 CarswellMan 370 (Q.B.) Wittal v. Saskatchewan Government Insurance, 1988 5072 (SK CA), [1988] S.J. No. 413, 51 D.L.R. (4th) 641, [1988] 5 W.W.R. 616, 67 Sask. R. 14, 11 A.C.W.S. (3d) 125 (C.A.)
Statutes referred to
An Act for the settlement of questions between the Governments of Canada and Ontario respecting Indian Lands, 1891 (Can.), c. 5 and 1891 (Ont.), c. 3 Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 19(1)(b), 66(3) Crown Liability and Proceedings Act, R.S.C. 1985, c. C-50, s. 22 [as am.] Proceedings Against the Crown Act, R.S.O. 1990, c. P.27, s. 14
Rules and regulations referred to
Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 40.03, 45, 45.01, (1), (2), 62.02, (4), (a), (b)
Authorities referred to
"Developments in the Law: Injunctions" (1965), 78 Harv. L. Rev. 994 Hogg, Peter W., Liability of the Crown, 2nd ed. (Toronto: Carswell, 1989) Sharpe, Robert J., Injunctions and Specific Performance, looseleaf (Aurora, Ont.: Canada Law Book, 2009)
Peter H. Griffin, for plaintiffs on leave to appeal motion. Donald Colborne, for plaintiffs. John S. Tyhurst, for Attorney General of Canada. Rebecca Regenstreif, for Her Majesty the Queen in Right of Ontario. Jerome R. Morse and Wesley Derksen, for Corporation of the Town of Fort Frances.
SHAW J.: --
The Proceedings
[1] Her Majesty The Queen in Right of Ontario ("Ontario"), the Attorney General of Canada ("Canada") and the plaintiffs seek leave to appeal to the Divisional Court from the order of McCartney J. dated April 27, 2010 [[2010] O.J. No. 2558, 2010 ONSC 2442].
[2] The order was made in a motion brought by the Corporation of the Town of Fort Frances (the "Town") for, among other relief, an interim injunction to restrain Ontario, Canada and the plaintiffs from interfering with the Town's exclusive possession of Pither's Point Park, located in the Town, where the Rainy River and Rainy Lake meet, or, in the alternative, an interim preservation order, preserving Pither's Point Park as a park to [page748] be operated and maintained by the Town at the Town's expense, pending final determination of the within action.
[3] McCartney J. granted the following order [at para. 26]:
. . . An order is to go for interim preservation of the property in question in this motion, commonly known as Pither's Park, in the Town of Fort Frances, to continue in the possession of the said Town and maintained as in the past as a public park by the Town of Fort Frances, together with all the roads therein, until final determination of this action or further order of the court.
[4] The primary issue on the motion for leave to appeal, advanced by all the moving parties, is that injunctive relief, including a preservation order, is not available against the Crown.
[5] Canada also submits that McCartney J. erred in applying the normal test for injunctive relief, of a "serious issue" to be tried, rather than requiring the Town to establish that it had a "strong prima facie case".
[6] In addition, the plaintiffs submit that (a) there is no serious issue to be tried; (b) there is no risk to real property; (c) there is no irreparable harm; (d) the balance of convenience favours the moving parties; and (e) the order does not preserve a status quo, but rather creates a new one, effectively granting the ultimate relief sought by the Town.
[7] Unlike the positions of Canada and the plaintiffs, Ontario advises that it does not seek leave to appeal from the finding of McCartney J. that the Town's claim to the park raises a serious issue.
Nature of the Action
[8] The factual background giving rise to these proceedings is summarized in the reasons of McCartney J. as follows [at para. 2]: (1) In October 1873, Treaty 3 was entered into which involved the surrender of approximately 55,000 square miles of land of the Saulteaux Tribe to the Federal Government of Canada ("Canada"). (2) Under the terms of Treaty 3, Canada was to set up Reserves for the various Indian Bands out of the surrendered lands. (3) One of those Reserves has become known as the "Agency One Reserve", and was described as follows by Simon Dawson, one of the Land Commissioners in charge of selecting the reserves, in a letter dated December 31, 1874, as follows: [page749]
At the foot of Rainy Lake to be laid off as nearly as may be in the manner indicated on the Plan -- two chains in depth along the shore of Rainy Lake and the bank of Rainy River, to be reserved for roads, right of way to lumbermen, booms, wharfs, and other public purposes.
This Indian Reserve not to be for any particular chief or band but for the Saulteaux tribe generally and for the purpose of maintaining thereon an Indian Agency with the necessary grounds and buildings.
(4) Confusion over which Crown (Ontario or Canada) owns ceded land was later decided by the Courts in favour of Ontario. (5) Since Canada was still responsible to set up the Reserves, it was apparent that the two levels of Crowns had to work together in this regard. (6) In 1891 Canada and Ontario reached an agreement and passed similar legislation to enforce it. Canada's legislation entitled "An Act for the settlement of questions between the Government of Canada and Ontario respecting Indian Lands" reads in part as follows:
That to avoid dissatisfaction or discontent among the Indians, full enquiry will be made by the Government of Ontario as to the reserves heretofore laid out in the territory, with a view of acquiescing in the location and extent thereof unless some good reason presents itself for a different course.
That in case the Government of Ontario after such enquiry is dissatisfied with the reserves or any of them already selected, or in case other reserves in the said territory are to be selected, a joint commission or joint commissions shall be appointed by the Governments of Canada and Ontario to settle and determine any question or all questions relating to such reserves or proposed reserves.
(7) Around 1904, Fort Frances began to request from Canada and Ontario that a park be set aside at a location known as Pither's Point -- which was a part of the Agency One lands. (8) In July 1907, Ontario passed an Order in Council consenting to the surrender to Canada of lands in Agency One Reserve known as Pither's Point for a public park for the Town of Fort Frances. (9) In September of 1908, Ontario passed a second Order in Council which reads in part as follows:
Upon the recommendation of the Honourable Minister of Lands, Forest and Mines the Committee of the Council advise that consent be given to the Government of Canada granting such part of Pither's Point Indian Reserve as may be asked for by the Town of Fort Frances for park purposes.
(10) On October 1, 1908, 114 acres of Agency One Reserve were surrendered to Canada, which surrender was felt necessary for setting up the park and which was approved by Order in Council in November 1908. (11) By a lease dated May 18, 1910, Canada gave a 99 year lease of 70 acres of these surrendered lands to the Town for payment of $1.00 per acre per year. This was later renegotiated, reducing the acreage involved to 35 acres on September 26, 1927. [page750] (12) On April 18, 1915, Ontario, by statute, consented to the Reserves set up by Canada under Treaty 3, which included the Agency One Reserve. (13) The lease expired on April 30, 2009. The Plaintiffs and the Town agreed to an extension for a further year. Curiously, neither Ontario nor Canada were involved in regards to this agreement to extend. (14) By letter from Plaintiffs' counsel, dated February 15, 2010, the Town was advised that the Plaintiffs were not extending the agreement any further, and the Town was to remove its property from the park by April 30, 2010.
Leave to Appeal
[9] Section 19(1)(b) of the Courts of Justice Act, R.S.O. 1990, c. C.43 provides that an appeal lies to the Divisional Court from an interlocutory order of a judge of the Superior Court, with leave.
[10] Rule 62.02(4) [of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194] provides that leave to appeal shall not be granted unless (a) there is a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal and it is, in the opinion of the judge hearing the motion, desirable that leave to appeal be granted; or (b) there appears to the judge hearing the motion good reason to doubt the correctness of the order in question and the proposed appeal involves matters of such importance that, in his or her opinion, leave to appeal should be granted.
[11] As noted in Jessome v. Jessome, [1998] O.J. No. 5565, 43 R.F.L. (4th) 196 (Gen. Div.), at p. 198 R.F.L., rule 62.02(4) consists of two disjunctive branches and, in turn, each branch has two conjunctive requirements.
[12] To succeed under the first branch, namely, rule 62.02(4) (a), it is necessary for the moving party to show that there is a conflicting decision and it is desirable that leave be granted. A "conflicting decision" is one in which a different principle has been chosen by another court. A "conflicting decision" is not one where another court, in following the same principle, has exercised its discretion differently: see Comtrade Petroleum Inc. v. 490300 Ontario Ltd. (1992), 1992 7405 (ON SC), 7 O.R. (3d) 542, [1992] O.J. No. 652 (Div. Ct.).
[13] To succeed on the second branch, namely, rule 62.02(4) (b), the moving party must establish that there is good reason to doubt the correctness of the order and that the proposed appeal involves matters of such importance that leave to appeal should be granted. In determining if there is "good reason to doubt the correctness" of the decision, the question for the motion judge is not whether the decision is wrong or probably wrong, but whether the correctness of the decision is open to very serious [page751] debate: see Ash v. Lloyd's Corp. (1992), 1992 7652 (ON SC), 8 O.R. (3d) 282, [1992] O.J. No. 894 (Gen. Div.), at p. 284 O.R.
Application of Rule 62.02(4)
A. Issue of conflicting decisions
[14] Ontario submits that the decision of McCartney J. conflicts with the jurisprudence regarding the Crown's immunity from injunctive relief. Canada and the plaintiffs adopt the submissions of Ontario on this issue.
[15] Section 14 of the Ontario Proceedings Against the Crown Act, R.S.O. 1990, c. P.27 provides:
14(1) Where in a proceeding against the Crown any relief is sought that might, in a proceeding between persons, be granted by way of injunction or specific performance, the court shall not, as against the Crown, grant an injunction or make an order for specific performance, but in lieu thereof may make an order declaratory of the rights of the parties.
(2) The court shall not in any proceeding grant an injunction or make an order against a servant of the Crown if the effect of granting the injunction or making the order would be to give any relief against the Crown that could not have been obtained in a proceeding against the Crown, but in lieu thereof may make an order declaratory of the rights of the parties.
[16] Section 22 of the federal Crown Liability and Proceedings Act, R.S.C. 1985, c. C-50, as amended by S.C. 1990, has wording similar to that of s. 14 of the Proceedings Against the Crown Act.
[17] Ontario submits that although the Superior Court has broad inherent jurisdiction to grant an injunction, the Ontario Court of Appeal in Fraser v. Beach (2005), 2005 14309 (ON CA), 75 O.R. (3d) 383, [2005] O.J. No. 1722 (C.A.), at paras. 7-8, has confirmed that the court's inherent jurisdiction to grant injunctive relief can be limited by statute.
[18] Ontario refers to Smith v. Nova Scotia (Attorney General), [2004] N.S.J. No. 343, 2004 NSCA 106, at para. 87, leave to appeal dismissed [2004] S.C.C.A. No. 498, in which Cromwell J.A. (as he then was) described the "absolute language" of the statutory provision prohibiting injunctions against the Crown (with reference to Nova Scotia's equivalent provision to s. 14 of Ontario's Proceedings Against the Crown Act) as being "all-encompassing" and as a "blanket prohibition".
[19] Ontario also refers to two Ontario decisions, Deep v. Ontario, [2004] O.J. No. 2734, [2004] O.T.C. 541 (S.C.J.) and Granite Power Corp. v. Ontario, [2002] O.J. No. 2188 (S.C.J.), where the court struck out requests for injunctions against the Crown on the basis of s. 14 of the Proceedings Against the Crown Act. [page752]
[20] Ontario submits that not only is an injunction not available against the Crown, relief analogous to an interim injunction is not available. In support of its submission, Ontario refers to the decision of the Divisional Court in Loomis v. Ontario (Ministry of Agriculture & Food) (1993), 1993 8625 (ON SC), 16 O.R. (3d) 188, [1993] O.J. No. 2788 (Div. Ct.), where, in the context of addressing whether interim declarations can be granted against the Crown, the Divisional Court adopted the words of Lord Scarman of the House of Lords in Inland Revenue Commissioners v. Rossminster Ltd., [1980] A.C. 952, [1980] 1 All E.R. 80 (H.L.), at p. 1027 A.C. In Rossminster, the House of Lords had before it a consideration of whether there was a possibility of making an interim declaration in light of legislation in the United Kingdom similar in wording to s. 14 of Proceedings Against the Crown Act. In particular, Ontario refers to the following comment of Lord Scarman, at pp. 105-106 All E.R.:
The second point on which I desire to comment is as to the possibility of an "interim declaration". Under existing law only a final and conclusive declaration may be granted by a court. This means that, where the Crown is defendant or respondent, relief analogous to an interim injunction is not available. Many commentators, including the Law Commission, recommend that interim relief should be available against the Crown and that an "interim declaration" would be the appropriate way of providing it. I gravely doubt the wisdom of interim relief against the Crown. The state's decisions must be respected unless and until they are shown to be wrong. Judges neither govern nor administer the state: they adjudicate when required to do so. The value of judicial review, which is high, should not be allowed to obscure the fundamental limits of the judicial function. And, if interim relief against the Crown be acceptable, the interlocutory declaration is not the way to provide it. For myself, I find absurd the posture of a court declaring one day in interlocutory proceedings that an applicant has certain rights and upon a later day that he has not. Something less risible must be devised.
[21] In Loomis, the Divisional Court stated, at para. 7:
It is the opinion of this court that there is a general rule, and the general rule is that interlocutory or interim declarations should not be granted against the Crown and there is, in the case law, an exception to the general rule. As we characterize the theme of the cases that stand for this exception, it is that, in those cases there is generally present some evidence of deliberate flouting of established law by the governmental authority. That appears to be the sine qua non of the cases evidencing the exception.
[22] Ontario submits that the interim preservation order granted by McCartney J. is relief analogous to an interim injunction and, as such, is prohibited by s. 14 of the Proceedings Against the Crown Act.
[23] Finally, on the issue of conflicting cases, Ontario refers to the decision of Wright J. in Aroland First Nation v. Ontario, (1996), 1996 7961 (ON SC), 27 O.R. (3d) 732, [1996] O.J. No. 557 (Gen. Div.). Wright J. [page753] held that in certain circumstances a citizen has a right to an interim declaratory order against the Crown, and a superior court has the jurisdiction to make such an order, but the citizen's right to such an order and the exercise of this power by the court is extraordinary and such an order should be granted only where there is evidence of a deliberate flouting of established law by governmental authority.
[24] Ontario notes that McCartney J. found as a fact on the motion that neither Ontario nor Canada intended to flout the established law in this matter and he therefore did not grant an interim declaration. Despite the finding of McCartney J. that there had been no deliberate flouting of the law, Ontario points out that McCartney J. held [at para. 22] that there was a second line of cases, ". . . dealing strictly with situations where it is important to maintain the status quo which make interim injunctive relief available". In coming to this conclusion, McCartney J. relied on Anishinabe of the Sacred Circle Inc. v. Ontario (Minister of Health and Long-Term Care), [2002] O.J. No. 4212, [2002] O.T.C. 835 (S.C.J.) and Canada (Attorney General) v. Law Society of British Columbia, 1982 29 (SCC), [1982] 2 S.C.R. 307, [1982] S.C.J. No. 70.
[25] In Anishinabe, Stach J., at para. 14, stated:
Although there is a sound basis and well entrenched authority in support of the proposition that the court cannot grant an injunction against the Crown, I am persuaded that this court has power to make a declaratory order or interim preservation order so as to maintain the status quo pending the disposition of all claims between the parties. (See Law Society (British Columbia) v. Canada (Attorney General), 1982 29 (SCC), [1982] 2 S.C.R. 307 per Estey J. at 330 as cited by MacInnes J. in Southeast Child and Family Services v. Canada (Attorney General), [1997] M.J. No. 385 at para. 12.
[26] In Canada v. Law Society of British Columbia, at para. 40, Estey J. held as follows:
Courts having a competence to make an order in the first instance have long been found competent to make such additional orders or to impose terms or conditions in order to make the primary order effective. Similarly courts with jurisdiction to undertake a particular lis have had the authority to maintain the status quo in the interim pending disposition of all claims arising even though the preservation order, viewed independently, may be beyond the jurisdiction of the court.
[27] McCartney J. relied upon the passages from both Stach J. and Estey J. in reaching his conclusion that in order to effectively adjudicate on a matter before the courts, the courts must have the ability to maintain the status quo until a final determination can be reached, particularly so where the issue is the preservation of the property which is the very subject matter of the dispute. McCartney J. held that in Ontario the importance of [page754] this power is emphasized in Rule 45 of the Rules of Civil Procedure, which provides:
45.01(1) The court may make an interim order for the custody or preservation of any property in question in a proceeding or relevant to an issue in a proceeding, and for that purpose may authorize entry on or into any property in the possession of a party or a person not a party.
(2) Where the property is of a perishable nature or likely to deteriorate or for any other reason out to be sold, the court may order its sale in such manner and on such terms as are just.
[28] McCartney J. held [at para. 25]:
I have little doubt that if after 100 years the status quo of the park in question should change, and possession should be taken out of the control of the Town, and it loses its ability to operate as a park as it has done for the last century, such an act would surely compromise the fair, final and timely determination of the issues of who does or does not have ownership rights to the park.
[29] Ontario submits that there is a clear conflict between the principle applied by McCartney J. and that applied by both trial-level and appellate-level Ontario courts in Fraser, Deep, Granite Power Corp., Loomis and Aroland. As such, Ontario submits, these decisions are "conflicting decisions" within the meaning of rule 62.02 and leave to appeal the order of McCartney J. should be granted on this basis.
B. Issue of good reason to doubt the correctness of the decision
(a) Ontario submissions
[30] Ontario submits that there are four good reasons to doubt the correctness of the order of McCartney J.
[31] Firstly, Ontario submits that despite the statutory prohibition under s. 14 of the Proceedings Against the Crown Act and the case law regarding the unavailability of injunctive relief against the Crown, McCartney J. ordered an interim injunction against the Crown in the form of a preservation order. McCartney J. cited both Anishinabe and Law Society, supra, in support of the proposition that there are situations where it is important to maintain the status quo which make interim injunctive relief available.
[32] The Crown refers to the text Injunctions and Specific Performance, looseleaf (Aurora, Ont.: Canada Law Book, 2009) at 2.700, by Mr. Justice Robert Sharpe, where orders for interim preservation of property, such as orders made under Rule 45 of the Rules of Civil Procedure, are equated with interim injunctive relief. [page755]
[33] The Crown acknowledges that in Amax Potash Ltd. v. Saskatchewan, 1976 15 (SCC), [1977] 2 S.C.R. 576, [1976] S.C.J. No. 86, Dickson J., writing for the court, at para. 38, held:
Neither the determination of constitutional validity of s. 5(7) of the [Saskatchewan] Proceedings Against the Crown Act nor an order for preservation of assets is in the nature of relief by way of injunction, or specific performance, or an interim declaration of the rights of the parties on the merits in the main action.
[34] However, Ontario submits that in Aetna Financial Services Ltd. v. Feigelman, 1985 55 (SCC), [1985] 1 S.C.R. 2, [1985] S.C.J. No. 1, the Supreme Court of Canada did equate an interim preservation order with an injunction. In Aetna, the Supreme Court of Canada held that an interim injunction could be granted for the preservation of assets which were the very subject matter in dispute, where to allow the litigation to proceed otherwise would result in the destruction of the assets before the resolution of the dispute. This was not to be equated with a Mareva injunction, which could be granted in an action based on a debt where there was a likelihood that the defendant would remove available assets.
[35] Ontario also notes that McCartney J. ordered the Town to enter into an undertaking pursuant to rule 40.03, which provides that on a motion for an interlocutory injunction, the moving party shall, unless the court orders otherwise, undertake to abide by any order concerning damages that the court may make.
[36] Secondly, the Crown submits that McCartney J. relied on rule 45.01(1) for the proposition that the court has the ability to grant preservation orders to maintain the status quo, but that rule 45.01(1) is subordinate legislation to s. 14 of the Proceedings Against the Crown Act which statutorily bars injunctions. Subsection 66(3) of the Courts of Justice Act provides that no rule in the Rules of Civil Procedure may conflict with any Act of the legislature.
[37] Thirdly, Ontario submits that McCartney J. erred in relying on Anishinabe and Law Society as a line of cases that purportedly allows courts to make "interim preservation orders" against the Crown. Ontario submits that the error was that McCartney J. relied on obiter dicta comment from Anishnabe that misapprehended the obiter dicta comment of Estey J. in Law Society.
[38] Ontario submits that in Anishinabe, Stach J. dismissed the First Nations' application for an interlocutory order against the Ontario Crown because the First Nations could not establish irreparable harm. Therefore, Ontario submits, the comments of Stach J., set out at para. 25 of these reasons, are obiter dicta and do not have the force of law. Moreover, Ontario contends that [page756] Stach J. misapprehended the obiter comments of the Supreme Court of Canada in Law Society, set out at para. 26 of these reasons. In Law Society, the Supreme Court of Canada granted a final declaration that the Combines Investigation Act did not apply to the Law Society of British Columbia and also granted a final injunction to enjoin the director under the Combines Investigation Act from further investigating the Law Society.
[39] The Crown submits that the obiter comments of Estey J. are not binding and do not provide authority for an interim preservation order against the Crown. The Crown submits that the Supreme Court of Canada decision of British Columbia Power Corp. v. British Columbia Electric Co., 1962 43 (SCC), [1962] S.C.R. 642, [1962] S.C.J. No. 48, upon which Estey J. relied, is only authority for granting an interim preservation order against the Crown where there is a constitutional challenge to a statute. In British Columbia Power Corp., the provincial Crown's claim to property depended on the constitutional validity of various provincial statutes. In such a case, the Supreme Court of Canada held, at para. 4, that it had the authority to preserve the assets in question:
. . . if there is a reasonable doubt as to whether such legislation is constitutionally valid . . . in such circumstances, the Court has the same jurisdiction to preserve assets whose title is dependent on the validity of the legislation as it has to determine the validity of the legislation itself.
[40] Fourthly, the Crown submits that McCartney J. erred in finding that interim injunctions are available against the Crown to "preserve the status quo", because the phrase "status quo" merely restates the basic premise behind the granting of an interlocutory injunction, namely, that the plaintiff must demonstrate that, unless an injunction is granted, his or her rights will be nullified or impaired by the time of trial. The Crown cites Sharpe, Injunctions and Specific Performance, supra, at para. 2.550.
[41] With respect to the second of the two criteria in rule 62.02(4)(b), Ontario submits that it is both desirable and important that leave be granted because, Ontario contends, the decision of McCartney J. leaves the state of the law respecting the availability of injunctive relief against the Crown, including interim preservation orders, unclear.
(b) Canada's submissions
[42] Canada submits that the "status quo" exception relied upon by McCartney J. is not a proper exception to the general rule that injunctive relief is not available against the Crown because such exception has not been established by jurisprudence. [page757] Canada submits that McCartney J. erroneously relied on Anishinabe because the comments made in Anishinabe with respect to the "status quo" exception were made in obiter by reason of the fact that the injunctive relief sought in that case was denied. Canada also submits it was an error for McCartney J. to rely on the passage of Estey J. in Law Society, quoted above, because it, too, was obiter dicta.
[43] Canada further submits that even if the "status quo" exception is found to be established principle, the exception is not available in this case because the interim preservation order effectively gives the Town the ultimate remedy sought. Interim relief should not be granted if it implies that the Town has, in fact, the right it claims.
[44] Furthermore, Canada submits that the interim preservation order does not maintain the status quo between the parties, but rather replaces the obligation owed under the expired lease, including the requirement to pay rent and to permit camping rights to the Indians, with an undefined legal regime.
[45] Canada submits that McCartney J. erred in concluding that the Town had to meet only the test of a serious issue to be tried, rather than a higher standard of a strong prima facie case. Canada bases its submissions on the following factors: (a) the claims made by the Town against the property raise only an issue of law based on the interpretation of the Order- in-Council; (b) there is no substantial dispute over the facts; (c) the relief sought by the Town is against a public authority; and (d) the Town is asserting purported property rights.
[46] Canada submits that the finding by McCartney J. that the facts are in dispute is wrong.
(c) Plaintiffs' submissions
[47] The plaintiffs adopt the submission of Ontario and Canada on the issue of correctness.
[48] The plaintiffs further assert that McCartney J. erred in that he failed to correctly analyze what was in fact the status quo, and, instead of preserving an existing right, he created a new right. The plaintiffs submit that the Town is not asserting a continuing leasehold interest, but rather a different, ownership interest which is inconsistent with the fact of the lease. The [page758] plaintiffs submit that each element of the harm about which the Town complains flows not from the claim it asserts but from the termination of the lease under which it has no reversionary interest. The plaintiffs contend that it is open to real debate as to whether a preservation order under rule 45.01 is needed.
[49] The plaintiffs further contend that rule 45.01 authorizes orders only for the custody and protection of personal property. There is no issue in this action over personal property.
[50] The plaintiffs also submit that McCartney J. was arguably wrong in making an order for the preservation of the Park in the context of rule 45.01 when the lands are not at risk of destruction or deterioration and there is nothing to preserve pending trial.
[51] Finally, the plaintiffs submit that even if McCartney J. was correct in characterizing this issue in injunctive terms, there is no serious issue to be tried, there is no harm which cannot be rectified by the payment of damages and the balance of convenience favours deference to the terms of the lease. With respect to the balance of convenience, the plaintiffs submit that McCartney J. proceeded on a wrong principle in that (a) the status quo was defined by the expired lease, not the ownership interest claimed by the Town; (b) the lease has terminated and, without a reversionary interest, the Town has no ownership or possessory right over the Park; and (c) by granting the order he did, McCartney J. effectively granted the full effect of the final relief sought in this proceeding by the Town.
Discussion
[52] I have determined that leave to appeal should not be granted. I am not persuaded that there is a conflicting decision on the matter involved in the proposed appeal or that there is good reason to doubt the correctness of the order in question.
(a) Whether there is a conflicting decision
[53] Canada v. Law Society of British Columbia is the foundation for the decision of McCartney J. For ease of reference, I again set out the relevant passage [at para. 23]:
Courts having a competence to make an order in the first instance have long been found competent to make such additional orders or to impose terms or conditions in order to make the primary order effective. Similarly courts with jurisdiction to undertake a particular lis have had the authority to [page759] maintain the status quo in the interim pending disposition of all claims arising even though the preservation order, viewed independently, may be beyond the jurisdiction of the court.
[54] Ontario, Canada and the plaintiffs urge me to find that this passage is non-binding obiter dicta.
[55] Law Society was a unanimous decision of the Supreme Court of Canada, delivered by Estey J. Respectfully, characterization of this passage as obiter dicta does not determine whether those comments are binding on this court. The issue of obiter dicta in a Supreme Court of Canada judgment has very recently been dealt with by the Ontario Court of Appeal in R. v. Prokofiew (2010), 100 O.R. (3d) 401, [2010] O.J. No. 2498, 2010 ONCA 423 (C.A.). Justice Doherty, writing for a unanimous five-judge panel, stated, at paras. 20 and 21:
Obiter dicta will move along a continuum. A legal pronouncement that is integral to the result or the analysis that underlies the determination of the matter in any particular case will be binding. Obiter that is incidental or collateral to that analysis should not be regarded as binding, although it will obviously remain persuasive.
Lower courts should be slow to characterize obiter dicta from the Supreme Court of Canada as non-binding. It is best to begin from the premise that all obiter from the Supreme Court of Canada should be followed, and to move away from that premise only where a reading of the relevant judgment provides a cogent reason for not applying that obiter. The orderly and rational development of the jurisprudence is not served if lower courts are too quick to strike out in legal directions different than those signalled in obiter from the Supreme Court of Canada.
[56] In my view, the passage in question from Law Society has application beyond the particular facts of Law Society. The proposition is made for the guidance of lower courts. It should be accepted as authoritative: see R. v. Henry, 2005 SCC 76, [2005] 3 S.C.R. 609, [2005] S.C.J. No. 76, at para. 57, cited by Doherty J. in Prokofiew [at para. 18].
[57] I am not persuaded from my reading of Law Society that there is a cogent reason to decline to follow the obiter. The moving parties argue that the statement by Estey J. is restricted in its application to cases in which there is a constitutional challenge to a statute. The implication of this argument, as the Town notes in its submissions, is that in all other cases, the comment has no force and that provincial superior courts do not in fact have ". . . the authority to maintain the status quo in the interim . . .". However, I do not read the statement to be confined solely to cases where the issue is the constitutional validity of a statute. It is true that in support of the proposition in question, Estey J. cited B.C. Power Corp. v. B.C. Elec. Co., supra, where it was held that it was not open to the Crown to claim a Crown [page760] immunity based upon an interest in certain property where the Crown's interest in the property was dependent on the validity of the legislation which it had itself passed. However, Estey J. prefaced his citation of B.C. Power by stating that this was "an example" (emphasis added) of the power of a provincial superior court to maintain the status quo pending a final determination of the lis which it has undertaken, even though the court may not have the jurisdiction to grant a preservation order "viewed independently".
[58] McCartney J. was fully aware that provincial and federal legislation provides that an injunction is not available against the Crown. However, on the authority of Law Society, he determined that an interim order was necessary to maintain the status quo to ensure the effectiveness of the disposition of the action.
[59] The cases cited by the moving parties, namely, Smith, Deep, Granite Power, Loomis and Aroland, do not conflict with the proposition set out by Estey J., which was the principle followed by McCartney J. Those cases do not, in fact, deal at all with the proposition that although a court may not have the jurisdiction to grant a preservation order "viewed independently", it nevertheless does have the competence to grant a preservation order on an interim basis to preserve the status quo, provided that it has the jurisdiction to undertake the particular lis which it has taken on.
[60] Smith states that Crown immunity from injunctions is expressed in absolute language and is all-encompassing. Notwithstanding this characterization, the moving parties acknowledge that there are exceptions to the prohibition where the constitutional validity of the legislation authorizing government action is at issue or where the Crown has "flouted the law". There is no dispute in Law Society or in the decision of McCartney J. that the relevant statutes proscribe injunctions against the Crown. However, the Supreme Court of Canada in Law Society held that despite such legislation, the superior court retains jurisdiction to control its process so that its adjudication will be effective. Smith does not deal with the crux of the question before McCartney J., namely, although there is a prohibition, does the court have overriding jurisdiction to maintain the status quo on an interim basis to protect its process.
[61] Deep dealt with a motion to strike a statement of claim in which relief was sought in the nature of a mandatory injunction against the Crown. In view of s. 14 of the Proceedings Against the Crown Act, the claim was struck. This decision is not on point with the issue before McCartney J. [page761]
[62] Granite Power also was a pleadings motion where the portion of the claim seeking injunctive relief against Ontario was struck because the court had no jurisdiction to grant relief against the Crown. Again, it does not deal with the issue in Law Society or the issue facing McCartney J.
[63] In Loomis, the Divisional Court dealt with the issue of whether an interim declaration could be made against the Crown. Students had prima facie entered into contracts with the Crown for their tuition in various courses at a community college. Due to funding constraints imposed by the Ontario cabinet, the courses were cancelled. The students brought an action for a declaration that they had binding contracts of tuition. The motion judge granted an interim declaration that the plaintiffs were entitled to attend and complete the educational programs for which they were accepted, pending trial.
[64] The Divisional Court held that the motion judge lacked the jurisdiction to make the order he did. The court observed that the motion judge purported to make an interim declaration of the contractual rights of the plaintiffs, which, in effect, was a mandatory injunction or an order for specific performance of contracts of tuition.
[65] The thrust of Loomis is that a declaration is, by its nature, final and to use the words of Lord Scarman in Rossminster, it is "absurd" for a court "to declare one day in interlocutory proceedings that an applicant has certain rights and upon a later day that he has not". For this reason, as noted by Professor Peter Hogg in Liability of the Crown, 2nd ed. (Toronto: Carswell, 1989) at pp. 20-22, referred to Loomis, courts have nearly always refused to grant a temporary declaration before there has been a final determination of the applicable law.
[66] However, neither Estey J. in Law Society, nor McCartney J. in the decision at hand, made orders which were declaratory of the rights of the parties. Rather, the orders were in the nature of preservation orders made solely to protect the status quo pending trial, ancillary to the court's inherent power to control its own process.
[67] In Aroland, as in Loomis, the court dealt with a motion for an interim declaration against the Crown. In Aroland, Wright J. held, at para. 27:
Loomis confirms that in Ontario there is a general rule "that interlocutory or interim declarations should not be granted against the Crown and there is, in the case law, an exception to the general rule" [i.e., the deliberate flouting of the law by the governmental authority.]
[68] In Aroland, Wright J. added, at paras. 22-25 and 28: [page762]
With utmost respect to my colleagues the language adopted by them in Loomis was infelicitous. It is difficult to say that the court has no jurisdiction when the court has in fact exercised that jurisdiction and the exercise of that jurisdiction has been confirmed by the Court of Appeal as was in the case of Peralta v. Ontario (Ministry of Natural Resources) (1984), 46 C.P.C. 218 (Ont. H.C.J.).
The Ontario Court of Justice (General Division) is a Superior Court of common law jurisdiction. It is the descendant of and continues the jurisdiction of the Royal Courts of Justice in our Constitution which is "similar in principle to that of the United Kingdom": see the Constitution Act, 1867. The Supreme Court of Canada has very recently confirmed in MacMillan Bloedel Ltd. v. Simpson (1995), 1995 57 (SCC), 33 C.R.R. (2d) 123, 130 D.L.R. (4th) 385 that this court is at the heart of our judicial system and occupies a unique place in our Constitution. It would be a rare day when it could be said that the court has no jurisdiction in a civil matter.
With respect to those who have gone before me I suggest that the correct question is not: "Has the court jurisdiction to make an interim declaration against the Crown", but rather:
"Have these citizens a right to an interim declaration against the Crown?" . . . . .
That the court in Loomis was using the word "jurisdiction" in a very broad sense is obvious from the fact that the court acknowledged that there are extraordinary circumstances when the court may and should make an interim declaration against the Crown. An example of this is found in Peralta v. Ontario where Houlden J.A. refused to stay an interim declaratory order the Crown granted by White J. White J. was a member of the Divisional Court in Loomis. . . . . .
To say that a court has jurisdiction is not to say that the court must exercise that jurisdiction. All branches of government exercise some self-restraint in the interest of comity with the others. In certain circumstances a citizen has a right to an interim declaratory order against the Crown. That being so this court has undoubted jurisdiction to make such an order but the citizen's right to such an order and the exercise of this power by the court is extraordinary and wisdom dictates that such an order be granted only where there is evidence of a deliberate flouting of established law by the governmental authority.
[69] Although Wright J. stated that "wisdom dictates" that an interim declaration should only be ordered where there has been a deliberate flouting of the law by the Crown, it is conceded by the moving parties that such an order may also be made where the constitutional validity of the legislation authorizing government action is in question.
[70] The Town submits that if it is acknowledged that the prohibition does not apply to deliberate flouting of the law by the Crown, or to cases involving constitutional validity, then it should also not apply to a situation where the administration of [page763] justice may be brought into disrepute because the court cannot protect the effectiveness of its disposition of the lis. This submission has force.
[71] I see nothing in Wright J.'s discussion of superior court jurisdiction or of the convention that courts must exercise some self-restraint in comity with other branches of government which contradicts the principle expressed by Estey J. The general proposition that Wright J. puts forward, that it would be a "rare day" when it could be said that a superior court does not have jurisdiction in a civil case, is similar to the principle that a superior court maintains jurisdiction to make an interim order to protect its process, even in the face of legislation which renders a preservation order, viewed independently, beyond the jurisdiction of the court.
[72] In Aroland, the plaintiff sought an interlocutory declaration to restrain the Province of Ontario from issuing any forest resource licences for certain areas of the province. Wright J. held that an interim declaration could not be used as an interim injunction to maintain the status quo pending determination of the parties' rights. Similar to Loomis, an interim declaration in this case would have been declaratory of the rights of the parties, on an interlocutory basis, namely, that the province did not have the right to issue forestry resources licences because the Crown had ignored the plaintiff First Nations in negotiations and had bargained in bad faith. This is not the nature of the order made by McCartney J. which preserved the status quo of the Park, as a park, pending a determination of the parties' rights.
[73] The decision of Law Society was not discussed in Aroland. There was no disagreement in Aroland with the principle expressed by Estey J.
[74] The Town refers to Justice Sharpe's text Injunctions and Specific Performance, supra, at para. (8), s. 2.550. Justice Sharpe states that the use of the phrase "status quo" adds little or nothing to the analysis of the purpose of an interlocutory injunction. "Properly understood, the phrase merely restates the basic premise of granting an interlocutory injunction, namely, that, the plaintiff must demonstrate that, unless an injunction is granted, his or her rights will be nullified or impaired by the time of trial." Justice Sharpe, in a footnote to this comment, refers to the following quotation from "Injunctions", "Developments in the Law: Injunctions" (1965), 78 Harv. L. Rev. 994, at p. 1058:
The concept status quo lacks sufficient stability to provide a satisfactory foundation for judicial reasoning. The better course is to consider directly [page764] how best to preserve or create a state of affairs in which effective relief can be awarded to either party at the conclusion of trial.
[75] The town submits, and I agree, that this is similar to the rationale that underlines the proposition set out by Estey J.
[76] I was not referred by the moving parties to any case that discussed the comments of Estey J. in Law Society and disagreed with those comments.
[77] In this province, Stach J. in Anishinabe, supra, expressly followed Law Society and held that this court has the power to make a declaratory order or interim preservation order to maintain the status quo pending the disposition of the case. The moving parties submit that Stach J.'s comments were obiter and misinterpreted the obiter of Estey J. I disagree. Although Stach J. did not grant an interlocutory injunction to continue funding the services provided by the plaintiffs, he first asked himself whether he had authority to grant the interlocutory relief requested. He then determined on the basis of the comments of Estey J. in Law Society that he did. He next considered the substantive submissions of the parties in reaching his decision to decline the relief that he had found he had the jurisdiction to grant. His analysis of whether he had jurisdiction to grant the relief requested was integral to his decision. In any event, even if the analysis by Stach J. of whether he had jurisdiction could be characterized as obiter, it is obiter that follows Law Society. It does not misinterpret the principle laid down by Estey J.
[78] In Wittal v. Saskatchewan Government Insurance, 1988 5072 (SK CA), [1988] S.J. No. 413, 51 D.L.R. (4th) 641 (C.A.), a split decision of the Saskatchewan Court of Appeal, Bayda C.J.S. dealt directly with the comments of the Supreme Court of Canada in Law Society:
In effect, the court said that paramount consideration is to be given to the purpose or intent of the order not to its effect. In other words, even if the court does not have the competence (i.e. the jurisdiction) to grant injunctive relief "viewed independently", it nevertheless has the competence to grant injunctive relief as a status quo order so long as the court has the jurisdiction to undertake the particular lis (e.g. a declaration) it has undertaken. It does not matter in my view whether the lack of competence (to grant injunctive relief, viewed independently) stems from a statute which vests the competence in some other court or whether it stems from a statute which simply takes the competence away and vests it in no court (as it is said was done here).
[79] In Saskatchewan Square Ltd. v. Canada Mortgage & Housing Corp., 1995 CarswellSask 76 (Q.B.), Rothery J., after citing the passages quoted above from Law Society and from Wittal, concluded that based on the reasoning in those cases, he had authority to grant injunctive relief to maintain the status quo [page765] pending trial between a property owner and Canada Mortgage & Housing Corp.
[80] In Manitoba, in Winnipeg Child & Family Services (Southeast Area) v. Canada (Attorney General), 1977 CarswellMan 370 (Q.B.), MacInness J. referred to the comments of Estey J. and Bayda J.A. and held that he was satisfied that the Manitoba Court of Queen's Bench had the jurisdiction to grant an interim injunction so as to maintain the status quo between the parties pending disposition of the case. This decision was cited with approval by Stach J. in Anishinabe.
[81] I have also reviewed the following cases, not cited by the parties, where the passage from Estey J. has been referred to: Jackson v. Saskatchewan (Minister of Finance), 1982 2420 (SK QB), [1982] S.J. No. 916, 21 Sask. R. 221 (Q.B.); Van Mulligen v. Saskatchewan Housing Corp., 1982 2424 (SK QB), [1982] S.J. No. 1043, 23 Sask. R. 66 (Q.B.); Del Frari v. Del Frari, 1985 2879 (SK QB), [1985] S.J. No. 386, 19 D.L.R. (4th) 172 (Q.B.); NB (Electric Power Commission) v. Maritime Electric Co., 1985 5533 (FCA), [1985] F.C.J. No. 93, [1985] 2 F.C. 13 (C.A.); Hydro- Quebec v. Canada (Attorney Genreal), 1991 3656 (QC CA), [1991] J.Q. no 481, [1991] 3 C.N.L.R. 40 (C.A.); Vogel v. International Nesmont Industrial Corp., [1994] B.C.J. No. 1922 (S.C.); Lord v. Canada (Attorney General), 2000 9079 (QC CA), [2000] J.Q. no 1354, [2000] 3 C.N.L.R. 69 (C.A.); Smith v. Nova Scotia (Attorney General), [2003] N.S.J. No. 196, 2003 NSSC 126, affd 2004 NSCA 106, [2004] N.S.J. No. 343, 244 D.L.R. (4th) 649 (C.A.), leave to appeal to S.C.C. denied [2004] S.C.C.A. No. 498. Although the fact situations in those cases may be distinguished from the present case, in none of them did the courts take issue with the comments of Estey J.
(b) Whether there is good reason to doubt the correctness of the decision
[82] In my view, the submission of the moving parties that there is good reason to doubt the correctness of McCartney J.'s decision is answered by the decision in Law Society. It is a decision of the Supreme Court of Canada and, whether or not the principle was expressed as obiter, it is binding on this court. I do not believe that anything turns on whether the preservation order granted by McCartney J. is characterized as injunctive relief (as in Aetna Financial, supra) or, because it is a preservation order, it is not characterized as injunctive relief (as in Amax Potash, supra). In Law Society, Estey J. holds that the remedy of an injunction can be granted to maintain the status quo in the interim as ancillary to the court's principal determination, even if the court does not have the jurisdiction to grant injunctive relief "viewed independently". This jurisdiction is not founded on [page766] Rules of Civil Procedure, such as Rule 45, but rather on the inherent jurisdiction of the court to ensure the effectiveness of its final disposition.
[83] I disagree with the submission of Canada that a status quo order is not available because the interim preservation order gives the Town the ultimate remedy it seeks. The order is not declaratory of the Town's rights. Rather, it is directed at preserving the Park, as a park, until the competing claims of the parties can be determined at trial. The land has been operated as a park for approximately 100 years. As noted by the Town, it features public beaches, public picnic facilities, a public baseball diamond with night lighting, public camping areas for recreation vehicles and tents, playground equipment, public horseshoe pits, washrooms, change facilities, roads, and water and sewer lines. If McCartney J. had not granted a preservation order, the Park, as a park, would sit idle, unmaintained and subject to damage. None of the moving parties have indicated that they would operate and maintain the park pending trial.
[84] Contrary to Canada's submissions, I believe it to be more accurate to say that loss of the Park, as a park, pending trial would be closer to granting an ultimate remedy than would an order preserving the Park until a final disposition, on all the evidence, is made at trial. Canada wants me to find, at this stage, that the Town has no rights to the land because of the expiry of the lease. But that is the very issue for trial. In balancing where the lesser harm would be occasioned pending trial, surely the least harmful outcome is to allow the Park to continue as it has for 100 years and at the end of the trial decide whether it should remain with the Town or remain with the Crown. Where is the harm to any party in the continuation of the Park, as a park, pending trial? As noted by McCartney J., the lease expired on April 30, 2009. The plaintiffs and the Town agreed to an extension for a further year. Neither Ontario nor Canada were involved in this agreement. All parties were therefore content to maintain the status quo in 2009. The plaintiffs caused a letter, dated February 25, 2009, to be published in a local newspaper stating:
We recognize that the Pither's Point Park affords both the First Nations and residents of Fort Frances the opportunity to partake in many family and recreational activities. The cessation of the lease as a park would serve no practical purpose at this time.
[85] It appears that all parties were content in 2009 to have the Park continue under "an undefined legal regime", to use the words of Canada's submissions. [page767]
[86] Canada submits that McCartney J. should have followed a higher standard of "a strong prima facie case" rather than "a serious issue to be tried" because the claims made by the Town raise only an issue of law and there is no substantial dispute over the facts. McCartney J., who has been the case manager of this action for many years, expressly disagreed with Canada's submission. He held that the meaning and effect of the Order- in-Council of 1908 and the question of who owns or is entitled to the land requires a review of contradictory facts and interpretation of those facts over a period in excess of 100 years. He stated [at para. 9]: "It is not a pure question of law nor are the facts undisputed -- but just the opposite." In light of the extensive material filed on this motion and on the motion before McCartney J., I see no basis to reject McCartney J.'s finding in this regard.
[87] The plaintiffs' submissions focused on whether a preservation order was authorized or needed under Rule 45. I have dealt with this issue in finding that the interim remedy of a preservation order was available to McCartney J. under his inherent jurisdiction as a superior court judge to ensure the effectiveness of the court's final disposition. It is not necessary to find that jurisdiction in the Rules of Civil Procedure.
[88] I do not accept the plaintiffs' submissions that there was no serious issue to be tried, that there is no harm which cannot be rectified by damages and that the balance of convenience favours deference to the terms of the lease.
[89] McCartney J. analyzed each of these submissions. With respect to a serious issue to be tried, he summarized the Town's position as follows [at para. 5]:
The Town argued that by virtue of the Order in Council of September 1908, Ontario, which owned the land once the surrender had been completed, transferred authority to grant it to the Town only for the purpose of a park -- that this was made clear in the Order, and in correspondence surrounding it. In point of fact, Ontario complained to Canada when it found out that it was charging a lease payment, since the property was to be "given" to the Town free of charge. So the Town argues while the Order in Council granting the park to the Town still stands, no one but the Town is entitled to it.
[90] McCartney J. then summarized the competing positions of Ontario, Canada and the plaintiffs. He found [at para. 9] that the Town's position, although complex, could not be said to be "frivolous" or "vexatious". The material filed by the parties on this motion and the motion before McCartney J. supports his finding. I do not see that there is good reason to doubt the correctness that there is a serious issue to be tried.
[91] The plaintiffs submit that there is no evidence of irreparable harm that cannot be compensated in damages. McCartney J. [page768] held that changing the nature of an established recreational municipal park of 100 years' standing would create irreparable harm. He relied on the following passage from Justice Sharpe, Injunctions and Specific Performance, supra, at para. 4.10, quoted with approval in Hamilton (City) v. Loucks, 2003 64221 (ON SC), [2003] O.J. No. 3669, 232 D.L.R. (4th) 362 (S.C.J.), at paras. 26-27:
Where property rights are concerned, it is almost that damages are presumed inadequate and an injunction to refrain continuation of the wrong is the usual remedy.
[92] The plaintiffs submit that what the Town is asserting as irreparable harm flows not from a dispute over an ownership interest, but rather from the expiry of the lease. However, although the lease has expired, and the moving parties may ultimately be successful in their claim that ownership of the land remains with the Crown, the Town claims that the Park lands were granted to it and that Canada obtained the surrender of the lands to be able to give the lands to the Town for use as a park. This issue of who owns or is entitled to the property is the essence of the case. Therefore, property rights are the issue and the usual remedy where property rights are concerned is an injunction because damages are presumed inadequate. I do not see good reason to doubt the correctness of this aspect of McCartney J.'s decision. I note that neither Ontario nor Canada contested the issue of irreparable harm on the motion before McCartney J.
[93] I have previously addressed the issue of balance of convenience. McCartney J. found that there was no evidence that the moving parties would be inconvenienced by the granting of an injunction. Ontario and Canada did not argue this issue before McCartney J. There is no good reason to doubt the correctness of McCartney J.'s finding that the balance of convenience favoured the Town and its interest in maintaining a park pending the final outcome of this action.
Conclusion
[94] For the reasons given, I find that the moving parties have failed to meet the test for granting leave to appeal under rule 62.02(4) and the motion is therefore dismissed.
[95] Costs of this motion may be spoken to by making arrangements with the trial coordinator within the next 20 days.
Motion dismissed.