Ontario First Nations (2008) Limited Partnership v. Her Majesty the Queen in Right of Ontario, as represented by the Minister of Aboriginal Affairs et al.

[Indexed as: Ontario First Nations (2008) Limited Partnership v. Ontario (Minister of Aboriginal Affairs)]

Ontario Reports

Ontario Superior Court of Justice,

Lederer J.

December 13, 2013

118 O.R. (3d) 356 | 2013 ONSC 7141

Case Summary

Arbitration — Appeals — Decision by arbitration panel that Crown prerogative did not prevent it from adjudicating whether province had breached revenue sharing agreement between province and First Nations being final — Decision by panel allowing First Nations to withdraw claim against Ontario Lottery and Gaming Commission also final — Court having jurisdiction to hear appeal from both decisions. [page357]

Arbitration — Jurisdiction — Revenue sharing agreement between province and First Nations providing that First Nations had right to have representative appointed by Crown to board of directors of Ontario Lottery and Gaming Commission — Crown failing to make appointment — First Nations seeking arbitration — Crown prerogative not preventing arbitration panel from adjudicating whether province had breached agreement.

Arbitration — Parties — Revenue sharing agreement between province and First Nations providing that First Nations had right to have representative appointed by Crown to board of directors of Ontario Lottery and Gaming Commission ("OLG") — Crown failing to make appointment — First Nations seeking arbitration — Arbitration panel not erring in permitting First Nations to withdraw claim against OLG — OLG having no say in appointment of representative — OLG's interests not affected by continuation of arbitration without it as party.

The Crown and First Nations, a corporation representing the First Nations of Ontario, entered into a revenue sharing agreement in 2008 in furtherance of a settlement of two actions concerning the distribution of the revenues earned by a casino located on a First Nation's reserve. The agreement specified that the Crown would appoint a representative of the First Nations to the board of directors of the Ontario Lottery and Gaming Commission ("OLG"). More than five years later, no such appointment had been made. First Nations sought arbitration. The Crown and OLG, which was also a party to the agreement, brought a motion to strike the claim, arguing that, as a result of the continuing operation of the Crown prerogative, the Crown was not required to make the appointment. The arbitration panel found that the Crown prerogative did not prevent it from adjudicating whether the province had breached the revenue sharing agreement by failing to appoint a representative of Ontario First Nations to the board of directors of OLG. Prior to the hearing of the jurisdiction motion, the arbitration panel permitted First Nations to withdraw its claim against OLG. The Crown and OLG appealed both decisions.

Held, the appeal should be dismissed.

Both decisions were final, not interlocutory. The order on the jurisdiction motion was final because the Crown would no longer be able to raise the Crown prerogative as a complete defence. The order on the withdrawal motion was final because, once it was made, OLG was not longer able to take part in a proceeding in contravention of what it said was its right. The court had jurisdiction to hear the appeals.

The arbitration panel did not err in finding that it had jurisdiction. The Crown prerogative could not be utilized to avoid a declaration that the revenue sharing agreement has been breached. That was so either because the agreement created a legal relationship that was independent of the Crown prerogative and subject to a declaration that it had been breached, or because the agreement created a legitimate expectation of a process, not a substantive decision. Either way, the claim for a declaration that the agreement had been breached was justiciable.

The arbitration panel did not err in permitting First Nations to withdraw its claim against OLG. OLG had no role to pay in the selection of the members of its board. Its interests would not be affected by the continuation of the arbitration without it as a party. [page358]

Black v. Canada (Prime Minister) (2001), 2001 8537 (ON CA), 54 O.R. (3d) 215, [2001] O.J. No. 1853, 199 D.L.R. (4th) 228, 147 O.A.C. 141, 105 A.C.W.S. (3d) 239 (C.A.); Guergis v. Novak (2013), 116 O.R. (3d) 280, [2013] O.J. No. 2975, 2013 ONCA 449, 364 D.L.R. (4th) 70, 308 O.A.C. 96, 3 C.C.L.T. (4th) 84, 228 A.C.W.S. (3d) 1187, varg (2012), 112 O.R. (3d) 118, [2012] O.J. No. 3943, 2012 ONSC 4579, 94 C.C.L.T. (3d) 328, 353 D.L.R. (4th) 552 (S.C.J.); Pacific National Investments Ltd. v. Victoria (City), [2000] 2 S.C.R. 919, [2000] S.C.J. No. 64, 2000 SCC 64, 193 D.L.R. (4th) 385, 263 N.R. 1, [2001] 3 W.W.R. 1, J.E. 2001-64, 144 B.C.A.C. 203, 83 B.C.L.R. (3d) 207, 15 M.P.L.R. (3d) 1, REJB 2000-21473, 101 A.C.W.S. (3d) 818; R. v. Dominion of Canada Postage Stamp Vending Co., 1930 87 (SCC), [1930] S.C.R. 500, [1930] S.C.J. No. 24, [1930] 4 D.L.R. 241, 1930 CarswellNat 38; Wells v. Newfoundland, 1999 657 (SCC), [1999] 3 S.C.R. 199, [1999] S.C.J. No. 50, 177 D.L.R. (4th) 73, 245 N.R. 275, J.E. 99-1909, 180 Nfld. & P.E.I.R. 269, 15 Admin. L.R. (3d) 274, 46 C.C.E.L. (2d) 165, 99 CLLC Â210-047, 90 A.C.W.S. (3d) 894, consd

Other cases referred to

1579203 Ontario Ltd. v. Ontario, 2007 21966 (ON SC), [2007] O.J. No. 2349, 158 A.C.W.S. (3d) 707 (S.C.J.); 887574 Ontario Inc. v. Pizza Pizza Ltd., 1995 7417 (ON SC), [1995] O.J. No. 936, 23 B.L.R. (2d) 259, 54 A.C.W.S. (3d) 832 (Gen. Div.) [Leave to appeal to C.A. refused [1995] O.J. No. 1645 (C.A.)]; Agricultural Research Institute of Ontario v. Campbell-High (2002), 2002 10432 (ON CA), 58 O.R. (3d) 321, [2002] O.J. No. 996, 157 O.A.C. 116, 48 R.P.R. (3d) 9, 112 A.C.W.S. (3d) 670 (C.A.); AWS Engineers and Planners Corp. v. Deep River (Town), 2005 467 (ON SC), [2005] O.J. No. 68, 249 D.L.R. (4th) 478, [2005] O.T.C. 15, 40 C.L.R. (3d) 223, 136 A.C.W.S. (3d) 269 (S.C.J.); Baker v. Canada (Minister of Citizenship and Immigration), 1999 699 (SCC), [1999] 2 S.C.R. 817, [1999] S.C.J. No. 39, 174 D.L.R. (4th) 193, 243 N.R. 22, J.E. 99-1412, REJB 1999-13279, 14 Admin. L.R. (3d) 173, 1 Imm. L.R. (3d) 1, 89 A.C.W.S. (3d) 777; Ball v. Donais (1993), 1993 8613 (ON CA), 13 O.R. (3d) 322, [1993] O.J. No. 972, 64 O.A.C. 85, 45 M.V.R. (2d) 319, 40 A.C.W.S. (3d) 1031 (C.A.); Bank of Nova Scotia v. Schussler (1980), 1980 1582 (ON SC), 28 O.R. (2d) 161, [1980] O.J. No. 3559, 111 D.L.R. (3d) 509, 2 A.C.W.S. (2d) 414 (H.C.J.); Beckman v. Little Salmon/ Carmacks First Nation, [2010] 3 S.C.R. 103, [2010] S.C.J. No. 53, 2010 SCC 53, [2011] 1 C.N.L.R. 12, J.E. 2010-2043, 295 B.C.A.C. 1, 2010EXP-3771, 408 N.R. 281, EYB 2010-182306, 97 R.P.R. (4th) 1, 10 Admin. L.R. (5th) 163, 326 D.L.R. (4th) 385, 55 C.E.L.R. (3d) 1, 196 A.C.W.S. (3d) 74; Burtch v. Barnes Estate (2006), 2006 12955 (ON CA), 80 O.R. (3d) 365, [2006] O.J. No. 1621, 209 O.A.C. 219, 27 C.P.C. (6th) 199, 20 M.P.L.R. (4th) 160, 147 A.C.W.S. (3d) 581 (C.A.); Capital Regional District v. Saanich (District), 1980 712 (BC SC), [1980] B.C.J. No. 1931, 115 D.L.R. (3d) 596, 24 B.C.L.R. 154, 5 A.C.W.S. (2d) 46 (S.C.); Charlebois v. Enterprises Normand Ravary Ltée (2006), 2006 8873 (ON CA), 79 O.R. (3d) 504, [2006] O.J. No. 1114, 266 D.L.R. (4th) 732, 208 O.A.C. 253, 50 C.L.R. (3d) 182, 146 A.C.W.S. (3d) 755 (C.A.); Council of Civil Service Unions v. Minister for the Civil Service, [1985] 1 A.C. 374, [1984] 3 All E.R. 935, [1984] 3 W.L.R. 1174, [1985] I.C.R. 14, [1985] I.R.L.R. 28 (H.L.); Galt-Canadian Woodworking Machinery Ltd. v. Cambridge (City) (1983), 1983 3103 (ON CA), 41 O.R. (2d) 544, [1983] O.J. No. 2909, 146 D.L.R. (3d) 768, 22 M.P.L.R. 208, 20 A.C.W.S. (2d) 345 (C.A.), affg (1982), 1983 1893 (ON CA), 36 O.R. (2d) 417, [1982] O.J. No. 2562, 135 D.L.R. (3d) 58, 19 M.P.L.R. 14, 14 A.C.W.S. (2d) 97 (Div. Ct.); Haida Nation v. British Columbia (Minister of Forests), [2004] 3 S.C.R. 511, [2004] S.C.J. No. 70, 2004 SCC 73, 245 D.L.R. (4th) 33, 327 N.R. 53, [2005] 3 W.W.R. 419, J.E. 2004-2156, 206 B.C.A.C. 52, 36 B.C.L.R. (4th) 282, 19 Admin. L.R. (4th) 195, 11 C.E.L.R. (3d) 1, [2005] 1 C.N.L.R. 72, 26 R.P.R. (4th) 1, 135 A.C.W.S. (3d) 2; Holland v. Saskatchewan, [2008] 2 S.C.R. 551, [2008] S.C.J. No. 43, 2008 SCC 42, EYB 2008-136658, J.E. 2008-1434, 376 N.R. 316, 294 D.L.R. (4th) 193, [2008] 9 W.W.R. 193, 311 Sask. R. 197, 58 C.C.L.T. (3d) 1, 167 A.C.W.S. (3d) 427; Holland v. Saskatchewan (Agriculture, Food and Rural Revitalization, Minister in Charge), [2009] S.J. No. 551, 2009 SKQB 334, 341 Sask. R. 187, 180 A.C.W.S. (3d) 609; [page359] Holland v. Saskatchewan (Agriculture, Food and Rural Revitalization), [2010] S.J. No. 32, 2010 SKQB 32, 349 Sask. R. 111, [2010] 7 W.W.R. 369, 87 C.P.C. (6th) 145; Inforica Inc. v. CGI Information Systems and Management Consultants Inc. (2009), 97 O.R. (3d) 161, [2009] O.J. No. 3747, 2009 ONCA 642, 80 C.P.C. (6th) 197, 254 O.A.C. 117, 311 D.L.R. (4th) 728, 97 Admin. L.R. (4th) 159 (C.A.), revg 2008 60706 (ON SC), [2008] O.J. No. 4695, 97 Admin. L.R. (4th) 175 (S.C.J.); Liberty Mutual Insurance Co. v. Bank of Nova Scotia, 2008 37060 (ON SC), [2008] O.J. No. 2929, 48 B.L.R. (4th) 239, 64 C.C.L.I. (4th) 299, 171 A.C.W.S. (3d) 433 (S.C.J.); Lombard Canada Ltd. v. Royal & SunAlliance Insurance Co. (2008), 2007 82792 (ON SC), 94 O.R. (3d) 62, [2008] O.J. No. 5239, 70 C.C.L.I. (4th) 190, [2009] I.L.R. I-4779 (S.C.J.); Manitoba Métis Federation Inc. v. Canada (Attorney General), [2013] S.C.J. No. 14, 2013 SCC 14, 291 Man. R. (2d) 1, 441 N.R. 209, 2013EXP-799, J.E. 2013-429, [2013] 2 C.N.L.R. 281, 27 R.P.R. (5th) 1, [2013] 4 W.W.R. 665, 355 D.L.R. (4th) 577, 223 A.C.W.S. (3d) 941; Manos Foods International Inc. v. Coca-Cola Ltd., 1999 3022 (ON CA), [1999] O.J. No. 3623, 180 D.L.R. (4th) 309, 125 O.A.C. 66, 40 C.P.C. (4th) 113, 2 C.P.R. (4th) 283, 91 A.C.W.S. (3d) 398 (C.A.); Mikisew Cree First Nation v. Canada (Minister of Canadian Heritage), [2005] 3 S.C.R. 388, [2005] S.C.J. No. 71, 2005 SCC 69, 259 D.L.R. (4th) 610, 342 N.R. 82, J.E. 2005-2156, 37 Admin. L.R. (4th) 223, [2006] 1 C.N.L.R. 78, 21 C.P.C. (6th) 205, EYB 2005-97906, 143 A.C.W.S. (3d) 957; M.N.R. v. Coopers and Lybrand Ltd., 1978 13 (SCC), [1979] 1 S.C.R. 495, [1978] S.C.J. No. 97, 92 D.L.R. (3d) 1, 24 N.R. 163, [1978] C.T.C. 829, 78 D.T.C. 6528, [1979] 1 A.C.W.S. 1; Ontario First Nations (2008) Limited Partnership v. Ontario (Minister of Aboriginal Affairs), August 22, 2012 and November 16, 2012; Operation Dismantle Inc. v. Canada, 1985 74 (SCC), [1985] 1 S.C.R. 441, [1985] S.C.J. No. 22, 18 D.L.R. (4th) 481, 59 N.R. 1, J.E. 85-495, 12 Admin. L.R. 16, 13 C.R.R. 287, 31 A.C.W.S. (2d) 45; R. v. Badger, 1996 236 (SCC), [1996] 1 S.C.R. 771, [1996] S.C.J. No. 39, 133 D.L.R. (4th) 324, 195 N.R. 1, [1996] 4 W.W.R. 457, J.E. 96-737, 37 Alta. L.R. (3d) 153, 181 A.R. 321, 105 C.C.C. (3d) 289, [1996] 2 C.N.L.R. 77, 30 W.C.B. (2d) 211; Reference re Canada Assistance Plan (British Columbia), 1991 74 (SCC), [1991] 2 S.C.R. 525, [1991] S.C.J. No. 60, 83 D.L.R. (4th) 297, 127 N.R. 161, [1991] 6 W.W.R. 1, J.E. 91-1267, 1 B.C.A.C. 241, 58 B.C.L.R. (2d) 1, 1 Admin. L.R. (2d) 1, 28 A.C.W.S. (3d) 652; Rio Algom Ltd. v. Canada (Attorney General), [2012] O.J. No. 100, 2012 ONSC 550 (S.C.J.); Toronto (City) v. Lakewood Developments Inc., [1980] O.J. No. 1418 (Div. Ct.); Zurich Insurance Co. v. Co-Operators General Insurance Co., 2008 19786 (ON SC), [2008] O.J. No. 1694, 62 C.C.L.I. (4th) 207, 167 A.C.W.S. (3d) 396 (S.C.J.)

Statutes referred to

Arbitration Act, 1991, S.O. 1991, c. 17, ss. 17(1), 43, (2)

Canadian Charter of Rights and Freedoms

Manitoba Act, 1870, S.C. 1870, c. 3, s. 31

Ontario Lottery and Gaming Corporation Act, 1999, S.O. 1999, c. 12, Sch. L, ss. 2(2), 5(1)

Proceedings Against the Crown Act, R.S.O. 1990, c. P.27, s. 14(1)

Rules and regulations referred to

Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 21.01(1) (b), 23.01

Authorities referred to

Cox, Noel, "The Dichotomy of Legal Theory and Political Reality: The Honours Prerogative and Political Unity" (1998-99), 14 Australian Journal of Law and Society 15

Hogg, Peter W., Liability of the Crown, 2nd ed. (Toronto: Carswell, 1989)

Slattery, Brian, "Understanding Aboriginal Rights" (1987), 66 Can. Bar Rev. 727 [page360]

APPEAL from decisions of an arbitration panel.

J.R. Caskey, Q.C., and J.D. Virtue, for claimants/responding party.

Dennis Brown, Q.C., Walter Myrka, Tom Schreiter and Eric Wagner, for Her Majesty in Right of Ontario, as represented by the Minister of Aboriginal Affairs, the Minister of Finance and the Attorney General of Ontario, respondent/moving party.

Awanish Sinha, Byron Shaw, Brandon Kain and Timothy Chapman-Smith, for Ontario Lottery and Gaming Corporation, respondent/moving party.

[1] LEDERER J.: — This is an appeal from two decisions of an arbitration panel.

Introduction

[2] On February 19, 2008, representatives of the First Nations of Ontario and Her Majesty the Queen in Right of Ontario (the "Crown") entered into an agreement. Among other things, it specified that the Crown would appoint a representative of the First Nations to the board of directors of the Ontario Lottery and Gaming Commission ("OLG"). Now, more than five years later, no such appointment has been made. Pursuant to the agreement, Ontario First Nations (2008) Limited Partnership ("Ontario First Nations"), the party to the agreement that represents the First Nations, sought arbitration. The Crown and OLG, also a party to the agreement, brought a motion to strike the claim. They did not, and do not, deny the existence or validity of the contract. Nonetheless, they argue that, as a result of the continuing operation of the Crown (or royal) prerogative, the Crown is not required to make the appointment. To put it differently, the Crown and OLG say that, as a result of the operation of the prerogative, Ontario First Nations can have no recourse to the arbitrators or the court. Any examination of the actions of the Crown, any direction to the Crown by the arbitration panel, or limitation imposed on the ability of the Crown to make appointments to the board of OLG would be a fettering of the prerogative and beyond the jurisdiction of the arbitrators and the court. The arbitration panel did not agree. It found that the Crown prerogative did not prevent it from adjudicating whether the province has breached the revenue sharing agreement by failing to appoint a representative of Ontario First Nations to the board of directors of OLG. This is the first of the two decisions from which the Crown and OLG appeal. [page361]

[3] Prior to the hearing of the motion regarding the jurisdiction of the arbitration panel, Ontario First Nations decided to withdraw its claim as against OLG. Both OLG and the Crown opposed the discontinuance. Ontario First Nations prepared an amended statement. It withdrew all prayers for relief against OLG. The arbitration panel required that Ontario First Nations bring a motion. It did. The motion was heard. OLG submitted that the applicable provision of the Arbitration Act, 1991 did not contemplate the partial termination of a claim.[^1] The arbitration either had to be withdrawn entirely, or left to proceed against both parties. Moreover, its rights and interests could be affected and, on this basis, OLG argued that it had the right "to make full answer and defence".[^2] The arbitration panel allowed the withdrawal. It found that OLG had no involvement in who is appointed to its board. This is the second of the two decisions from which the Crown and OLG appeal.

Background

[4] The agreement was in furtherance of a settlement of two significant actions concerning the distribution of the revenues earned by a casino located on a First Nation's reserve (Casino Rama). The casino was "conducted and managed", through OLG, for the benefit of First Nations in Ontario. There were disputes between representatives of the First Nations, the casino and the Province of Ontario as to how the revenues were to be shared. The two actions were commenced. Settlement talks began in May 2005. Central to the discussions was the establishment of a new, stable, long-term relationship between the Province of Ontario and First Nations, whereby First Nations would share in gaming revenues from all of the activities of OLG. On February 19, 2008, in settlement of one of the two actions, the Gaming Revenue Sharing and Financial Agreement (the "revenue sharing agreement") was entered into. Pursuant to its terms, Ontario First Nations would receive a 1.7 per cent share of the gross revenues generated from gaming and ancillary activities in Ontario. The revenue sharing agreement also provided that Ontario First Nations shall have a right to a representative appointed to the board of directors of OLG. In response to the failure of the government to make the promised appointment, on April 4, 2012, relying on the terms of the revenue sharing [page362] agreement, Ontario First Nations delivered a notice of arbitration seeking the appointment of its preferred candidate.[^3] The initial claim requested, among other things, a mandatory order requiring that the appointment be made immediately or, in the alternative, a declaration that the province of Ontario had a contractual obligation, pursuant to the revenue sharing agreement, to make the appointment.[^4]

[5] On June 14, 2012, Ontario First Nations brought a motion before the arbitration panel for interim injunctive relief requiring that OLG immediately cease any activity that was in furtherance of a strategic plan that was directed to modernizing lottery and gaming in Ontario or, in the alternative, an order that its preferred candidate be appointed to the board of directors of OLG. The motion failed. In reasons, dated August 22, 2012, the arbitration panel concluded that the relief sought against both OLG and the Crown was precluded by common law, the operation of the Proceedings Against the Crown Act, s. 14(1)[^5] and the revenue sharing agreement, s. 7.3 and s. 7.4. These sections of the legislation and the agreement limit the ability of the court to impose certain equitable relief (injunctions and specific performance) on the Crown. The decision of the arbitration panel noted:

There is nothing to suggest that the Arbitration Act or the Agreement have somehow waived or eroded the Crown immunity otherwise spelled out in s. 14 [of the Proceedings Against the Crown Act] and, accordingly, the Panel has no jurisdiction to grant the relief sought.

We conclude that Mr. Finkelstein's submission on Crown immunity, supported as it is by other Respondents' counsel, is a complete answer to the plaintiff's interim claims.[^6]

[6] In light of the decision made by the arbitration panel, both the Crown and OLG moved to strike the statement which began [page363] the arbitration as disclosing no reasonable cause of action (the "jurisdiction motion").

[7] After the motion brought by OLG had been commenced (August 24, 2012), on September 7, 2012, Ontario First Nations served a "notice of discontinuance" in respect of its claim and the relief sought against OLG and, as requested by the arbitration panel, served the motion seeking to "withdraw the . . . Arbitration Claim" against OLG (the "withdrawal motion").

[8] This was followed, on September 25, 2012, by the amended statement. OLG was no longer included as a party to the arbitration. The claims to injunctive relief and specific performance against the Crown, the claims not permitted by the Proceedings Against the Crown Act, were abandoned. The claims for a declaration and damages, which the Proceedings Against the Crown Act allowed, remain.

[9] The arbitration panel heard the jurisdiction motion and the withdrawal motion on October 2, 2012. It released its decisions on both motions on December 11, 2012. They are dated November 16, 2012. They were withheld pending payment to the arbitration panel. In its decision, made with respect to the jurisdiction motion, the arbitration panel concluded that "the principle of Crown prerogative does not prevent us from adjudicating as to whether the Province has breached its agreement to appoint a representative of [Ontario First Nations] to the OLG board".[^7] It dismissed the motion. On the withdrawal motion, the arbitration panel could "not see how OLG's interest can be affected if we continue without it as a party to the arbitration".[^8] The motion seeking withdrawal was granted.

[10] This is the appeal from these two decisions.

Analysis

(a) Preliminary issue

[11] These appeals initially came before the court on July 2, 2013. At that time, I asked whether the court had the jurisdiction to decide the issues raised. In the case of Inforica Inc. v. CGI Information Systems and Management Consultants Inc.,[^9] an arbitrator granted a motion for security for costs. This was set aside by a judge of the Superior Court, who held that the [page364] arbitrator lacked jurisdiction to make the order [2008 60706 (ON SC), [2008] O.J. No. 4695, 97 Admin. L.R. (4th) 175 (S.C.J.)]. There was an appeal. There was a motion to quash the appeal. It was dismissed and the appeal [was] allowed. The Court of Appeal relied on the Arbitration Act. "Section 17(1) defines the parameters of s. 17, allowing an arbitrator to rule on his 'own jurisdiction to conduct the arbitration'."[^10] Section 17(1) says:

17(1) An arbitral tribunal may rule on its own jurisdiction to conduct the arbitration and may in that connection rule on objections with respect to the existence or validity of the arbitration agreement.

(Emphasis added)

[12] The Court of Appeal found that "[t]he words 'jurisdiction to conduct the arbitration' connote jurisdiction over the entire substance or subject matter of the case, not jurisdiction to make interlocutory or procedural orders that do not determine the merits of the dispute and that are made along the way to final resolution of the issues".[^11] It was said that "A significant feature of the modern approach limiting access to the courts to review decisions of arbitrators is that there are no appeals from procedural or interlocutory orders."[^12]

[13] The issue as raised by the court, in this case, was whether either the order made with respect to the jurisdiction motion or the order made with respect to the withdrawal motion was interlocutory and not subject to an appeal to this court. The parties requested an adjournment to consider this issue. Supplementary facta were filed and the court reconvened on September 24, 2013.

[14] An order is "final", as opposed to "interlocutory", where it results in the final disposition of an issue in the dispute. This is so even where the order does not finally dispose of the action.[^13]

[15] The order on the jurisdiction motion was final because the Crown would no longer be able to raise the Crown prerogative as a complete defence. The issue was decided. The arbitration [page365] panel found that it was not prevented from adjudicating whether the province had breached its agreement. The prerogative could not be relied on to prevent an inquiry into the actions of the Crown. Inevitably, such an examination would take place during the course of the arbitration.

[16] The order on the withdrawal motion was final because, once it had been made, OLG was no longer able to take part in a proceeding in contravention of what it says is its right. The withdrawal motion relied on rule 23.01 of the Rules of Civil Procedure.[^14] In Burtch v. Barnes Estate, the Court of Appeal observed that an order determining the validity of a notice of discontinuance is "unquestionably a final order".[^15]

[17] The appeals proceeded. The orders were final and not interlocutory.

(b) Standard of review

[18] The issues raised with respect to the decision in the jurisdiction motion concern the application of the Crown prerogative. Does the claim involve a non-justiciable exercise of the prerogative? Does the revenue sharing agreement, by requiring that a representative of Ontario First Nations be appointed to the board of directors of OLG, impose an invalid fetter on the discretion of the Crown to make the appointment? These are questions of law. The standard of review is correctness.[^16] [page366]

[19] It is worthwhile noting that the arbitration panel considered the jurisdiction motion to be akin to a motion brought pursuant to rule 21.01(1)(b)[^17] and accepted the facts as pleaded in the amended statement.[^18] On such a motion, it must be plain and obvious that the action cannot succeed.

[20] The issues raised by the appeal of the withdrawal motion concern whether OLG is a necessary party or has a right to take part in the arbitration. These are questions of law or, in the alternative, mixed fact and law. The revenue sharing agreement provided a broad right of appeal on "questions of law, or questions of mixed fact and law, including, without limitation, matters of process and procedure".[^19] Courts have concluded that, in providing a right of appeal from the decision of a privately appointed arbitrator, parties intend that there will be a "full and clean appeal on the merits". Accordingly, the standard of review is one of correctness.[^20] [page367]

(c) The jurisdiction order

[21] The appointment of a representative of Ontario First Nations to the board of OLG was provided for in the revenue sharing agreement:

[Ontario First Nations] shall have the right to have a representative of [Ontario First Nations] appointed by the Province as a member of the board of directors of OLG in accordance with and pursuant to the procedures of the Province for making such appointments. Any nominee of [Ontario First Nations] must comply with the criteria established for service as a member of the board of directors of OLG. [Ontario First Nations] shall require any appointee that subsequently ceases to comply with such approved criteria to resign immediately, failing which the Province shall be entitled to terminate such appointee as a member of the board of directors of OLG.[^21]

(Emphasis added)

[22] The revenue sharing agreement goes further. In it, the Crown (the province) warrants that it has the capacity to enter into and carry out the terms of the agreement, acknowledges that the representations the agreement contains are being relied on by Ontario First Nations and that the revenue sharing agreement has been authorized and executed by the Crown (the province). This is found in the opening portion of s. 7.3 of the revenue sharing agreement, which states:

The Province represents and warrants to [Ontario First Nations Limited Partnership and to Ontario First Nations], and acknowledges that [Ontario First Nations Limited Partnership and Ontario First Nations] are relying on such representations and warranties in entering into this Agreement, that the Province has all necessary capacity, power and authority to enter into and to carry out the provisions of this Agreement and this Agreement has been duly authorized, executed and delivered by the Province[.]

[23] The section goes on to confirm that the equitable remedies available against the Crown are limited, as is the enforcement of whatever remedies remain. It says that the revenue sharing agreement

. . . constitutes a legal, valid and binding obligation enforceable against the Province in accordance with the terms of this Agreement, subject to the [page368] Financial Administration Act, the availability of equitable remedies in favour of the Crown, the limited availability of equitable remedies against the Crown, the Proceedings Against the Crown Act (Ontario) and the limitations with respect to the enforcement of remedies against sovereign entities and their agencies, including the qualifications that a court of Ontario may not, against the Province, grant an injunction, make an order for specific performance, make an order for recovery or delivery of real or personal property or issue execution or attachment or process in the nature thereof other than garnishment in limited circumstances.

[24] The limitations referred to are recognized and reflected in the amendment, found in the amended statement, which restrict the relief sought to a declaration and damages. Certainly, a declaration can be obtained against the Crown. I shall have more to say about this and the availability of damages later in these reasons. Despite this, the position taken by the Crown and OLG is that Ontario First Nations is without recourse to the court in the face of the failure of the province to appoint a representative to the board of directors of OLG, even now, more than five years after revenue sharing agreement was entered into. The question of the appointment is said to be non-justiciable and an improper fettering of the discretion of the Crown. I cannot help but observe that this position is more than a little disquieting:

In a nation governed by the rule of law, we assume that the government will honour its obligations unless it explicitly exercises its power not to. In the absence of a clear express intent to abrogate rights and obligations -- rights of the highest importance to the individual -- those rights remain in force. To argue the opposite is to say that the government is bound only by its whim, not its word. In Canada this is unacceptable, and does not accord with the nation's understanding of the relationship between the state and its citizens[.][^22]

and

But although the general principles for assessing damages in breach of contract cases should be applied where the government is one of the contracting parties, that does not mean that courts should ignore how uniquely disconcerting a contract breach is when it is the state that breaks a bargain with one of its citizens. The government occupies a unique -- and uniquely powerful -- role in its relationship with the public. This power imbalance, in turn, creates a duty on the government to act in a way that enhances public confidence in reliable fairness from the government.

Governments owe, and their citizens expect to receive, the benefit of a duty of good faith. When governments breach their agreements with a [page369] member of the public, they do more than violate contractual obligations; they also impair that person's legitimate expectations that the state will respect and comply with its legal obligations.[^23]

[25] In short, if we cannot rely on the province to stand behind a contract it has made, knowing that the other parties are relying on its terms, what confidence can we have that our government will respect other obligations it has taken on.

[26] These concerns should be greater when, as here, the other contracting party represents First Nations. For whatever reasons, with whatever purpose or intention, there have been failings, by the Crown, in its relations with First Nations. The relationship is one that is between nations. It does not arise "from a paternalistic desire to protect the Aboriginal peoples; rather, it was a recognition of their strength":

The sources of the general fiduciary duty do not lie, then, in a paternalistic concern to protect a "weaker" or "primitive" people, as has sometimes been suggested, but rather in the necessity of persuading native peoples, at a time when they still had considerable military capacities, that their rights would be better protected by reliance on the Crown than by self-help.[^24]

[27] Manitoba Métis Federation v. Canada (Attorney General)^25 considered a difficulty that appeared in this relationship. At the time of confederation or shortly thereafter, Canada agreed to grant 1.4 million acres of land to Métis children.[^26] The federation obtained a declaration that the federal Crown failed to act with diligence in implementing the land grant provision in accordance with the honour of the Crown.

[28] The honour of the Crown "is not a mere incantation, but rather a core precept that finds its application in concrete practices".[^27] The Supreme Court of Canada noted:

This duty has arisen largely in the treaty context, where the Crown's honour is pledged to diligently carrying out its promises: Mikisew Cree First Nation, at para. 51; Little Salmon, at para. 12; see also [page370] Haida Nation, at para. 19. In its most basic iteration, the law assumes that the Crown always intends to fulfill its solemn promises, including constitutional obligations: Badger; Haida Nation, at para. 20. At a minimum, sharp dealing is not permitted: Badger. Or, as this Court put it in Mikisew Cree First Nation, "the honour of the Crown [is] pledged to the fulfilment of its obligations to the Indians": para. 51. But the duty goes further: if the honour of the Crown is pledged to the fulfillment of its obligations, it follows then that the honour of the Crown requires the Crown to endeavour to ensure its obligations are fulfilled. Thus, in review proceedings under the James Bay and Northern Québec Agreement, the participants are expected to "carry out their work with due diligence": Quebec (Attorney General) v. Moses, 2010 SCC 17, [2010] 1 S.C.R. 557, at para. 23. As stated by Binnie J. in Little Salmon, at para. 12, "It is up to the parties, when treaty issues arise, to act diligently to advance their respective interests. Good government requires that decisions be taken in a timely way." This duty applies whether the obligation arises in a treaty, as in the precedents outlined above, or in the Constitution, as here.[^28]

[29] It does not seem out of line to suggest that the revenue sharing agreement was directed to responding to concerns that have appeared in the relationship between the Crown, as represented by the province, and First Nations. Its opening words observe:

WHEREAS The Province and First Nations in Ontario, acting through [Ontario First Nations], have agreed to enter into this Gaming Revenue Sharing and Financial Agreement with the objective of advancing the growth and capacity of First Nations in Ontario in respect of community development, health, education, economic development and cultural development.

[30] The duty prescribed by the honour of the Crown is "narrow and circumscribed".[^29] It is said to apply to treaties and to rights under the Constitution. It is for this reason that counsel for OLG and the province were quick to point out that, by its terms, the revenue sharing agreement is not a treaty.[^30] Thus, it was submitted that the honour of the Crown cannot be relied on to enforce the failure of the Crown to appoint a [page371] representative of Ontario First Nations to the board of directors of OLG. This fails to account for the following:

The ultimate purpose of the honour of the Crown is the reconciliation of pre-existing Aboriginal societies with the assertion of Crown sovereignty. As stated in Taku River Tlingit First Nation v. British Columbia (Project Assessment Director), 2004 SCC 74, [2004] 3 S.C.R. 550, at para. 24:

The duty of honour derives from the Crown's assertion of sovereignty in the face of prior Aboriginal occupation. It has been enshrined in s. 35(1) of the Constitution Act 1982 which recognizes and affirms existing Aboriginal rights and titles. Section 35(1) has, as one of its purposes, negotiation of just settlement of Aboriginal claims. In all its dealings with Aboriginal peoples, the Crown must act honourably, in accordance with its historical and future relationship with the Aboriginal peoples in question.[^31]

(Emphasis added)

[31] Given the past, and the understanding that the relationship involved is not merely commercial, the role of the honour of the Crown and the reconciliation it is directed to may well point to its impact extending beyond rights that arise solely from treaties between First Nations and the Crown.

[32] I make no finding as to whether the honour of the Crown can be relied on to require the province to appoint a representative of Ontario First Nations. This may or may not be something the panel is asked to consider in any arbitration that may proceed. For the purpose of the motion, I say only that the relationship between the Crown and First Nations contributes to the context in which the issues raised are to be considered.

[33] In this case, the substance of what is sought is a declaration that the Province of Ontario has a contractual obligation under s. 2.6 of the revenue sharing agreement to appoint a representative of Ontario First Nations to the board of directors of OLG and a declaration that the province is in breach of the agreement because it has failed to make such an appointment.[^32] It should be said that the amended statement requests a declaration that a particular individual be recognized as an "approved nominee". The statement, in its initial form prior to the amendment, had requested a mandatory order requiring the immediate appointment of the named person. After some discussion, these appeals were argued on the basis that there is no right, held by Ontario First Nations, to the appointment of any specific [page372] person. Section 2.6 of the revenue sharing agreement provides that the appointment shall be "in accordance with and pursuant to the procedures of the province in making such appointments".[^33] What is promised is the appointment of a representative pursuant to a process, not the appointment of the person named.

[34] The position of the Crown and OLG is that the reference to "the procedures of the Province in making such appointments" represents a reliance on the Crown prerogative which, by its operation, is a complete defence to the claim. The Crown prerogative is the name for the residue of discretionary power left in the hands of the Crown, whether such power is exercised by the monarch or by his or her ministers. The authority to make appointments is part of what remains of the prerogative. Its exercise rests solely with the Queen and is not reviewable by the courts. It is not justiciable.

[35] In taking this position, the Crown and OLG rely on the case of Black v. Canada (Prime Minister).^34 It would be difficult to be in Canada today, have any familiarity with the courts and be unaware of the facts that led to that decision. Conrad Black, a Canadian and long-time resident of London, England was advised to expect, and wanted to accept, an appointment to the House of Lords. Such an honour is solely within the gift of the Queen. Jean Chretien, the prime minister of the day, intervened with the Queen and opposed the peerage. In so doing, he relied on the Nickle Resolution, passed by the House of Commons in 1919, requesting the King to refrain from conferring titles on his Canadian subjects. There was a suggestion that the actual reason for the prime minister's opposition to the appointment was personal differences between the two men. The prime minister was said to have been concerned with comments made in a newspaper owned by Conrad Black. The intervention of the prime minister led to the deferral of the appointment. An action was commenced against the prime minister for, among other things, abuse of power, misfeasance in public office and negligence. The prime minister and the Attorney General of Canada brought a motion to dismiss these claims which, in part, relied on the premise that the claims were not justiciable and, therefore, disclosed no reasonable cause of action. The intervention was characterized as an [page373] exercise of Crown prerogative in relation to the granting of honours and not subject to review by the courts.

[36] The granting of honours remains within the prerogative of the Crown:

Unquestionably, the granting of honours is the prerogative of the Crown. The Monarch is "the fountain, parent and distributor of honours, dignities, privileges and franchises": Joseph Chitty, A Treatise on the Law of the Prerogatives of the Crown: And the Relative Duties and Rights of the Subject (London: Butterworths and Son, 1820), at p. 6. Because no statute in Canada governs the conferral of honours, this prerogative has not been displaced by federal law. Nor has it been limited by the common law. As Hogg and Monahan, supra, observe at pp. 18-19, appointments and honours is one area in which the prerogative power "remains meaningful". Their view is consistent with the opinion of Lord Roskill in the important House of Lords decision, Council of Civil Service Unions v. Minister for the Civil Service, [1985] 1 A.C. 374. In his speech in that case Lord Roskill said at p. 418 that the modern exercise of the prerogative includes "the making of treaties, the defence of the realm, the prerogative of mercy, the grant of honours, the dissolution of Parliament and the appointment of ministers as well as others . . .". [Emphasis added.][^35]

[37] Whether the exercise of the prerogative is reviewable by the court requires a deeper analysis. At least into the 1960s, the courts insisted that the source of the power, the prerogative, precluded judicial scrutiny of its exercise.[^36] In Canada, this narrow view has been amended by the application of the Canadian Charter of Rights and Freedoms. If an individual claims that the exercise of a prerogative power violates individual rights, protected by the Charter, the court has a duty to decide the claim.[^37] Apart from the Charter, the expanding scope of Crown liability means that it is no longer tenable to hold that the exercise of a prerogative power is insulated from judicial review simply because it is a prerogative and not a statutory power. The controlling consideration in determining whether the exercise of a prerogative power is judicially reviewable is its subject matter and not its source. Under this approach, the exercise of a prerogative power is reviewable if it affects the rights of individuals.[^38] "At the core of this [page374] subject matter test is the notion of justiciability".[^39] The court must decide

. . . whether the question is purely political in nature and should, therefore, be determined in another forum or whether it has a sufficient legal component to warrant the intervention of the judicial branch.[^40]

[38] To understand the substance of the question, it is necessary to consider the spectrum of decisions involved. At one end are matters of "high policy". This would include decisions to sign a treaty or to declare war. Generally, such decisions are not judicially reviewable. Public policy and public interest considerations far outweigh the rights of individuals.[^41] At the other end of the spectrum are decisions which affect the rights of individuals. An example would be the refusal to issue a passport. This continues to be a prerogative power but, in the modern world, the granting of a passport is not a favour bestowed on a citizen by the state. The possession of the passport offers citizens the freedom to travel and earn a livelihood in the global economy. The English courts have held that the refusal to issue a passport is judicially reviewable.[^42] It is justiciable.

[39] In Black v. Canada (Prime Minister), the Court of Appeal found that the actions of the prime minister, that were the subject of the complaint, reflected his communicating Canada's policy on honours to the Queen. The advice dealt with policy and not the rights of an individual. As such, it fell on the end of the spectrum where the questions were not justiciable and not subject to review by the court.

[40] The Crown and OLG say that the same logic applies here. An appointment to the board of directors of OLGis an exercise of the Crown prerogative that does not reflect on individual rights. It is a matter of policy and not susceptible to review by [page375] the courts. There is a difference between this case and Black v. Canada (Prime Minister). In the latter, the prospective peerage was an honour not dealt with in any contract, agreement or undertaking made by the government of Canada on which others (in particular, Conrad Black) had relied. In this case, the Crown has entered into a contract, which presumably included concessions made by the other side, and then, relying on the Crown prerogative, failed or refused to act on the agreement it had made.

[41] The same distinction can also be made in respect of Guergis v. Novak,[^43] on which the Crown and OLG also rely. The applicant was a member of Parliament and a member of Cabinet. As a result of allegations of criminal misconduct, she was removed from Cabinet, from caucus and as a candidate. She sued a variety of politicians, most particularly the prime minister, members of their staffs, as well as the Conservative Party of Canada and its lawyer. A motion was brought to dismiss the claim on the basis that it disclosed no cause of action. It succeeded. The motion judge, relying on Black v. Canada (Prime Minister), found that "the appointment of Ministers and their dismissal is a core aspect of the Crown prerogative exercised by the Prime Minister".[^44] The court lacked the jurisdiction to review the tort allegations related to the actions of the prime minister.[^45] As in Black v. Canada (Prime Minister), there was no agreement made or contract entered into which bound the Crown and which it failed or refused to act on. The individual involved had no right to be a minister. This was a political decision that rested entirely with the prime minister. There was no legal component that warranted judicial intervention.

[42] The issue at hand is whether the Crown prerogative allows the province to ignore, with impunity, the obligation to appoint a representative of Ontario First Nations to the board of directors which the revenue sharing agreement contains.

[43] The answer begins with a consideration of the request being made in the arbitration. Ontario First Nations seeks a [page376] declaration that the province is obligated, by the contract, to make the appointment and is in breach of that obligation.[^46] A declaration is a finding as to the law or the legal relationship between the parties. In circumstances such as this, a declaration is "of a limited nature" and "is a narrow remedy. It is available without a cause of action, and courts make declarations whether or not any consequential relief is available."[^47]

[44] In Guergis v. Novak, the minister who was removed from Cabinet argued that, while her expulsion was within the Crown prerogative, it did not insulate the Office of the Prime Minister from responsibility for the tortious conduct involved. The motion judge found that this contention, if sustained, would render the prerogative meaningless. "Crown privilege is an important principle of our legal system and it cannot be displaced or attacked collaterally by way of allegations of tortious conduct."[^48] In that case, the alleged tortious conduct and the exercise of the prerogative were interchangeable. They were manifested in the same actions of the people involved. The raising of the former was a collateral attack on the latter. This case is different. The formation of the contract, and the agreement to take on the obligations it represents, were separate from any exercise of the Crown prerogative. The revenue sharing agreement was entered into more than five years ago. No appointment has been made. The arbitration panel could declare the contract breached without detracting from the authority or importance of the Crown prerogative. The revenue sharing agreement calls for the appointment to be made "pursuant to the procedures of the Province for making appointments". The prerogative, by its nature, does not reflect the promise of any process. It is the residue of the authority of the monarch and operates without such constraint.

[45] The idea that the prerogative promises no particular process can be arrived at in another way. In Black v. Canada (Prime Minister), affecting individual rights was one basis on which the exercise of the prerogative could be the subject of review by the courts:

Under the test set out by the House of Lords, the exercise of the prerogative will be justiciable, or amenable to the judicial process, if its subject matter [page377] affects the rights or legitimate expectations of an individual. Where the rights or legitimate expectations of an individual are affected, the court is both competent and qualified to judicially review the exercise of the prerogative.[^49]

(Emphasis added)

[46] However, as is noted in that case, "no Canadian citizen can have a legitimate expectation of receiving an honour. In Canada the doctrine of legitimate expectation informs the duty of procedural fairness; it gives no substantive rights."[^50] The Court of Appeal went on:

But even if the doctrine of legitimate expectations could give substantive rights, neither Mr. Black nor any other Canadian citizen can claim a legitimate expectation of receiving an honour. The receipt of an honour lies entirely within the discretion of the conferring body. The conferral of the honour at issue in this case, a British peerage, is a discretionary favour bestowed by the Queen. It engages no liberty, no property, no economic interests. It enjoys no procedural protection. It does not have a sufficient legal component to warrant the court's intervention. Instead, it involves "moral and political considerations which it is not within the Province of the courts to assess".[^51]

[47] In other words, the exercise of the prerogative holds no promise of procedural fairness in the granting of an honour or making an appointment. In this case, the revenue sharing agreement intervened. It demonstrates the promise of a process. It created a legitimate expectation that the procedures of the province respecting appointments would be followed. It does not promise the appointment of anyone in particular and, thus, does not reflect on the rights of any individual. To the extent that it promises the appointment of a representative of Ontario First Nations, it could be said to represent an exercise (or partial exercise) of the Crown prerogative taken in recognition of the interest Ontario First Nations has in the business of OLG. To put it another way, this is not an issue of high policy like declaring war or signing a treaty. It was a business decision made to resolve litigation.

[48] The Crown prerogative cannot be utilized to avoid a declaration that the contract has been breached. This is so either because the revenue sharing agreement creates a legal [page378] relationship that is independent of the Crown prerogative and subject to a declaration that it has been breached or because the revenue sharing agreement created a legitimate expectation of a process, not a substantive decision and, on this basis, is reviewable. Either way, the claim for a declaration is justiciable.

[49] It should be said that this deals only with the request for a declaration and not any consequential remedy that may be sought. It is generally understood that a declaration does not require subsequent action. The Crown may act in recognition of the declaration, but it does not have to. In this case, should Ontario First Nations be successful, it may be that even with a declaration in place, no appointment will be made. Typically, a declaration does not provide the foundation for a claim for damages. There may be some adjustment to this understanding. In Holland v. Saskatchewan,[^52] a group of farmers obtained a declaration that the government's action reducing their herd certification status was unlawful. Despite the court's ruling, the government took no steps to reinstate the farmers' certification or compensate them for the revenue they lost. The farmers sued. The motion to strike their claim made its way to the Supreme Court of Canada. The court found that it was unclear that an action alleging negligence in the failure to implement a judicial decree could not succeed.[^53] This is something some other court may have to consider if a declaration is issued and no action is taken.

(d) Fettering

[50] As an alternative or subsidiary submission, the Crown and OLG say that, if the claim for a declaration is justiciable, nonetheless, it must fail. This flows from the proposition the revenue sharing agreement could be taken to fetter the discretion of the Crown to make an appointment to the board of directors of OLG. The factum filed on behalf of the Crown makes clear that this concern arises from the request that a particular person be appointed to the board of directors or, at [page379] least recognized as an "approved nominee".[^54] The factum filed on behalf of OLG makes the same point.[^55] As I have already noted, this is not the basis on which the motion was argued. The factum, filed on behalf of Her Majesty the Queen in Right of Ontario, makes the following statement:

Article 2.6 does not, on its properly interpreted terms, fetter the discretion of the Crown. It provides that there shall be an appointee to the board of the OLG that is nominated by [Ontario First Nations], and subsequently appointed by the Crown according to the Crown's normal practices and procedures. This expressly recognizes that the Crown must evaluate the nominee as it otherwise would and be satisfied that the appointment is in the public interest.[^56]

[51] I agree. This statement reflects a proper interpretation of s. 2.6 of the revenue sharing agreement and is not demonstrative of any improper fettering of the discretion of the Crown. Contrary to the suggestion found in the factum filed on behalf of OLG, an appointment, properly made pursuant to this provision, would not "directly fetter the Crown's appointment discretion".[^57] On its face, this would, and should, dispose of the issue.

[52] Both the Crown and OLG express lingering concerns. The Crown is concerned that, if a declaration is made that the Crown breached the revenue sharing agreement, an argument will be made that, while the Crown was free to incur the breach, it may have to compensate Ontario First Nations in damages. OLG remains concerned that the arbitration panel may interpret s. 2.6 of the revenue sharing agreement as including a particular inferred time period by which the appointment of the prospective Ontario First Nations' representative to the board of directors must be made and awarding damages on account of its breach.

[53] The Crown referred to the case of Pacific National Investments Ltd. v. Victoria (City).[^58] A developer entered into an agreement to purchase certain lands that were part of a plan to redevelop property located around the city's harbour. The agreement was binding only if the city passed the requisite zoning, [page380] which it did. When the plans for the development of two water lots became known, objections were raised. As a result, the city decided to re-zone the water lots so as to prevent additional residential development and to restrict the height of buildings. The developer sued for breach of contract and maintained that this "down-zoning" was in breach of the city's implied obligations.

[54] It is clear that municipalities cannot bargain away their legislative powers in advance.[^59] "Municipalities must be free to amend or alter their by-laws as circumstances dictate. They cannot bind themselves or their successors by contract with a third-party to the status quo."[^60] This would be an improper fettering of their legislative power. What is less certain is whether municipalities can be subject to what the case refers to as "indirect fettering". The implication of this idea is that the government remains free and unfettered in its exercise of discretion. Nonetheless, it may be required to pay damages when, in the course of that exercise, it breaches a contract. In Pacific National Investments Ltd. v. Victoria (City), this approach was rejected. There was no basis to distinguish direct fettering from indirect fettering. An agreement to compensate for a legislative decision is no more acceptable than an immediate restriction on the legislative power.[^61]

[55] In Wells v. Newfoundland,[^62] the provincial government entered into a contract with the plaintiff to appoint him to the office of commissioner of the province's public utilities board. [page381] The contract provided for the appointment to last until age 70, subject to good behaviour. The government subsequently replaced the board with a different body, abolishing the plaintiff's position. The Supreme Court of Canada agreed the contract could not fetter the power of the government to abolish the board. The court found that the plaintiff was, nonetheless, entitled to damages for breach of contract. The court reasoned that, in Canada, the government could not abrogate the specific rights of an individual in the absence of explicit statutory intent. The employee should not lose the right to damages simply because the employer was the government.[^63]

[56] The Crown seeks to rely on Pacific National Investments Ltd. v. Victoria (City). Any recognition of the ability to award damages for the failure of the Crown to comply with the revenue sharing agreement would be an indirect fettering of its authority to make appointments. The power to appoint, which is provided for in the Ontario Lottery and Gaming Corporation Act, 1999,[^64] should be treated in the same manner as the power of a municipal council to legislate. The indirect fettering that would occur, if failing to comply with the requirements of s. 2.6 of the revenue sharing agreement could result in an award of damages, would be improper.

[57] It was submitted that Wells v. Newfoundland has no application to this case. There, the agreement was a business obligation taken within the Crown's capacity as an employer. Here, the contractual obligations are specific restraints upon Cabinet's statutory and appointment discretion.[^65] According to OLG, Pacific National Investments Ltd. v. Victoria (City) overrules Wells v. Newfoundland and proposes that the arbitration panel and this court are bound to follow it. It is not clear that this is so. In Rio Algom Ltd. v. Canada (Attorney General),[^66] the court considered the two cases and reviewed the criticism of Pacific National Investments Ltd. v. Victoria (City): [page382]

In their criticism of the majority judgment in Pacific National No. 1, Professors Hogg and Monahan submit, among other things, that: (1) the majority ought to have followed the Supreme Court's decision in Wells v. Newfoundland, 1999 657 (SCC), [1999] 3 S.C.R. 199; (2) the majority's argument in Pacific National No. 1 to distinguish Wells is based on a implausible distinction between business contracts with government and contracts with government and this distinction does not withstand analysis; and (3) when the case returned to the Supreme Court in Pacific National No. 2, the unanimous court arrived at the anomalous decision that an obligation to pay restitution is not an indirect fetter.[^67]

[58] The court concluded that Wells v. Newfoundland was distinguished and not overruled by Pacific National Investments Ltd. v. Victoria (City).[^68] Moreover, I would not be so quick to accept the revenue sharing agreement as something other than a business obligation similar to the agreement referred to in Wells v. Newfoundland. It was a contract entered into to settle litigation which considered who had the right to the profits of a large and successful casino. The revenue sharing agreement is a business agreement and not a legislative act, such as the down-zoning in Pacific National Investments Ltd. v. Victoria (City).

[59] To go back to where these reasons begin, it should not be a common or simple matter for the Crown to breach its agreements with impunity. We should be able to expect more than that:

I acknowledge the possibility that, on rare occasions, the Crown may feel compelled by considerations of public policy to break a contractual undertaking. If there were no doctrines of executive necessity, the ordinary law of contract would apply, and would require the Crown to negotiate with the other party for a variation or release, or to pay damages for its breach of contract. That is surely the right result. It provides compensation for the injured contractor. It requires the public purse to bear the cost of the change of public policy.[^69]

[60] It is not plain and obvious that the revenue sharing agreement is one where such a breach should be permitted.

[61] The decision of the arbitration panel in coming to the jurisdiction order accounts for these concerns.[^70] [page383]

[62] Finally, before leaving the question of damages, it may be worthwhile to point out what Ontario First Nations is seeking under the rubric of damages. The amended statement includes, in the prayer for relief:

. . . damages for all expenses, including legal costs, incurred by or on behalf of [Ontario First Nations] in seeking to require the Province to honour its contractual commitment to appoint an [Ontario First Nation] representative to the OLG Board;[^71]

and

. . . punitive damages.[^72]

[63] It is uncertain what this involves. The former is akin to costs of the litigation (which are separately requested).[^73] While the paragraph refers to "expenses, including legal costs", one has to wonder what or how much can be involved in excess of the cost that would be awarded to Ontario First Nations if they are ultimately successful at the arbitration and the basis on which such an award would be made in this case. The latter are unusual. It is trite to observe that punitive damages are a penalty for the actions of the party against whom they are awarded. I can do no more than express the hope that some discussion between the parties might clarify the understanding of what is involved and allow this aspect of the matter to be resolved without taking up more time in court, should it be decided to proceed further with this motion, or before the arbitration panel should it proceed there.

[64] I turn now to the "lingering concern" of OLG. It suggests that it is not open to the arbitration panel to consider s. 2.6 of the revenue sharing agreement as implying a time frame by which the representative of Ontario First Nations must be appointed to the board of directors of OLG. To acknowledge or imply such a term would be an improper fettering of the discretion of the Crown.

[65] It should be made clear what the Crown and OLG say are the implications of this submission. Counsel for OLG submitted that his position would be the same even if, after 50 years, no representative of Ontario First Nations had been appointed to the board of directors of OLG. Counsel for the Crown was slightly more circumspect. Acknowledging that the revenue [page384] sharing agreement has a 25-year term, he submitted that his position would be the same even as the agreement was coming to an end. What this makes clear is that the right to the appointment of a representative to the board of directors is no right at all. As the Crown and OLG see it, the inability of any time frame to be implied exculpates them from ever having to comply with the revenue sharing agreement. As I see it, the issue is not whether a specific time frame should be inferred. The question is whether, after the passage of a sufficient amount of time, it is open to the arbitration panel to say: "As a result of the time that has passed it is clear that the Crown has no intention of complying with its obligation under s. 2.6 of the Revenue Sharing Agreement."

[66] In raising this concern, OLG relies on the case of R. v. Dominion of Canada Postage Stamp Vending Co.[^74] The postmaster general and the respondent company entered into an agreement for the erection of stamp vending machines. The agreement provided that it should be in force for a stipulated period. In an action on the agreement, it was contended that the licence was irrevocable until the expiration of a stipulated period. The court found that the licence was granted, by the postmaster general, under an express statutory power to grant licences to agents and that the licence was revocable. The minister could not, by agreement, deprive himself of a power which it was his public duty to exercise.

[67] The case does not stand for the proposition that the governmental authority was free to cancel the licence, on a whim, or with impunity if it did so prior to the end of the stipulated period:

. . . if the agreement for the giving or the continuing of a licence, or the circumstances under which it is given or continued, are such as to make it inequitable that the licence should be revocable at the will of the licensor, a court will exercise its equitable jurisdiction to prevent the unjust revocation of the licence. If the agreement itself contains a clause providing for its determination that method of terminating it must be followed. If no such provision is made then reasonable notice must be given and the court may in applying equitable remedies select that remedy which is most suitable to the circumstances of the particular case.[^75]

[68] The court determined that the company, whose licence was terminated, had a cause of action for the loss sustained through being deprived of its right to sell stamps.[^76] In the case [page385] I am asked to decide, it should not be possible for the Crown to simply "run out the clock". R. v. Dominion of Canada Postage Stamp Vending Co. leaves open the possibility that a court (or the arbitration panel) may exercise an equitable jurisdiction to find that, given the amount of time that has passed, the Crown has no intention of appointing a representative of Ontario First Nations to the board of directors of OLG and, as a result, declare that the revenue sharing agreement has been breached.

[69] It is not plain and obvious that Ontario First Nations cannot succeed on the arbitration. If this requires the Crown, as part of an arbitration, to review its procedures for making such appointments, this is not an intrusion into the royal prerogative. It is the procedure to which the revenue sharing agreement refers and results from the obligations undertaken by the Crown in executing that contract.

[70] It follows that the appeal of the jurisdiction order is dismissed.

(e) The withdrawal order

[71] OLG submitted that the arbitration panel was in error when it allowed the withdrawal of the arbitration against it, leaving the Crown as the only respondent. The decision of the arbitration panel is set out in the following paragraph:

The amended claim relates only to s. 2.6 of the Revenue [Sharing] Agreement and to the appointment of a nominee by the Province to the OLG board. OLG has no say in who is appointed or terminated to or from its board by the Province. There is no allegation that affects any of the areas in which OLG is a signatory to the agreement. While the Strategic Plan is referred to in the pleading, its merit or lack of merit is not before us. Its only significance is that an important policy change was effected without input from a representative from the First Nations. As such, we do not see how OLG's interests can be affected if we continue without it as a party to the arbitration.[^77]

[72] I agree. Section 2.6 of the revenue sharing agreement does not engage OLG. The issue is solely and only between Ontario First Nations and the Crown. It is the former that s. 2.6 says has a right to the appointment of a representative to the board of directors and the latter who has the obligation to make the appointment. As the arbitration panel correctly noted, OLG has no role to play in the selection of members of its board.

[73] The arbitration panel is not, as OLG would have it, being invited to "tamper" with the makeup of the board of directors. [page386] Contrary to what is said in the factum filed on behalf of OLG, by the time the motion was argued, counsel for Ontario First Nations had conceded that s. 2.6 did not provide his clients with the right to have a particular individual appointed.[^78] The dispute is only about the process, a process to which, pursuant to the agreement, OLG has no right to participate in.

[74] I return to the proposition that, in Canadian society, there is an appropriate and natural expectation that government, and those who represent or act in its interests, will abide by the agreements that they have made. OLG is a Crown corporation. It signed the revenue sharing agreement. In doing so, it accepted that a representative of Ontario First Nations would be appointed to its board of directors. Given that the casino that was at the centre of the original dispute is on land of a First Nation (Casino Rama) and that the revenue sharing agreement provides Ontario First Nations with 1.7 per cent of the gross revenue of OLG, this seems to be a reasonable result of whatever negotiations precipitated the arrangement the revenue sharing agreement puts in place. It seems that OLG wishes to step back from the agreement it has made rather than accept the appointment provided for. OLG appears intent on supporting the proposition that the Crown is under no legal obligation requiring it to make the appointment and insisting on its own right to take part in any arbitration that considers the issue.

[75] The Arbitration Act provides:

43(2) An arbitral tribunal shall make an order terminating the arbitration if the claimant withdraws the claim, unless the respondent objects to the termination and the arbitral tribunal agrees that the respondent is entitled to obtain a final settlement of the dispute.[^79]

[76] OLG proposes that this section of the Arbitration Act should be read such that it only applies to a withdrawal of the entire arbitration. It should not be read so narrowly. In this case, Ontario First Nations (the claimant) wants to withdraw against OLG (the respondent insofar as the withdrawal is concerned). OLG has objected. The complaint is that the arbitration panel (the arbitral tribunal) has determined that the respondent does not have a right to a final settlement. No relief is sought against it. In effect, there is nothing to settle. Any other finding would provide a party with no direct involvement in the dispute with the right to continue to participate. The inability of the arbitral [page387] tribunal to allow the withdrawal would demonstrate that it was unable to control its own process.

[77] Section 9.1 of the revenue sharing agreement allows for all parties to that agreement to be served with notice of a dispute.[^80] However, if it is not resolved and the party who gave notice wishes it to be resolved, s. 9.2 becomes operative. It says, in part:

In the event that an acceptable resolution of the Dispute is not achieved pursuant to section 9.1 and the party giving notice wishes to resolve the matter, then the matter shall be referred for determination in accordance with Schedule 9.2, which sets out the sole and exclusive procedure for the resolution of such disputes[.]

[78] There is nothing in this clause which dictates that all parties to the revenue sharing agreement, though they may all have been given notice of the dispute under s. 9.1, continue to have a right to participate under s. 9.2 and Schedule 9.2. As the arbitration panel pointed out, Schedule 9.2 provides:

Subject to the Arbitration Act, the Agreement and this Schedule 9.2, the Arbitrators may conduct the arbitration in such manner as the arbitrators consider appropriate.[^81]

and

The Arbitrators may make preliminary, interim, interlocutory, partial and final awards. Any award shall be considered to be validly made if it is approved by the majority of the Arbitrators. An award may grant any remedy or relief which the Arbitrators considered just and equitable and consistent with the intentions of the Parties under the Agreement. The Arbitrators shall state in the award whether or not the Arbitrators view the award as final or interim, for purposes of any judicial proceedings in [page388] connection with such award. Subject to section 39 of the Arbitration Act, the Arbitrators' final award shall be made within 30 days of the conclusion of the Hearing.[^82]

[79] These sections serve to support the proposition that the arbitration panel is to have a large measure of control over its process. They do not confirm the idea that all parties to the revenue sharing agreement have a right to participate throughout the dispute and arbitration.

[80] Finally, OLG submits that it has an interest in the arbitration arising out of allegations that

it made "false assurances" to Ontario First Nations its member would soon be appointed to the OLG board;[^83]

in particularizing its allegations of bad faith against the province, Ontario First Nations says that while the appointment of its representative to the board was being delayed, OLG, with the concurrence of the province, embarked on the development of the strategic plan;[^84]

the chair of OLG made statements to the prospective nominee regarding the timing of his appointment to the OLG board which were not realized.[^85]

[81] These concern allegations of fact made in support of the claims made against the province. They do not create an interest of a sort which requires that OLG be a party. There is nothing that requires the making of "a full answer and defence". It may be that the parties involved will be asked to or will wish to give evidence at the arbitration. If they are asked, they may well seek to have their own representation. Any requirement for procedural fairness can be met by this or other means. Ultimately, it is a matter that should be left to the arbitration panel. Reliance on these facts does not create an interest requiring that OLG be made a party. Simply put, the arbitration panel has concluded that OLG is not a party "whose presence is necessary to enable it to adjudicate effectively and completely on the issues in the preceding".[^86] [page389]

[82] It follows that the appeal of the withdrawal order is dismissed.

Conclusion

[83] The appeal, in all its parts, is dismissed.

Costs

[84] If the parties are unable to agree as to costs, I will consider written submissions on the following terms:

(1) On behalf of Ontario First Nations, no later than 15 days after the release of these reasons. Such submissions are to be no longer than four typed pages, double-spaced, not including any cost outline or bill of costs and case law that may be provided.

(2) On behalf of Her Majesty the Queen in Right of Ontario and Ontario Lottery and Gaming Corporation, no later than ten days thereafter. Each of the submissions are to be no longer than four typed pages, double-spaced, not including any cost outline or bill of costs and case law that may be provided.

(3) If necessary, on behalf of Ontario First Nations, submissions in reply, such submissions are to be no longer than three pages, double-spaced.

(4) In the event that either Her Majesty the Queen in Right of Ontario or Ontario Lottery and Gaming Corporation seek costs to which Ontario First Nations has responded, if necessary, submissions in reply, such submissions are to be no longer than 1[cents] pages each.

Appeal dismissed.

Notes

[^1]: S.O. 1991, c. 17, s. 43.

[^2]: Interim award (decision on the withdrawal), November 16, 2012, at para. 20.

[^3]: Revenue sharing agreement, s. 9.1 and s. 9.2.

[^4]: Statement [of the claimant], June 4, 2012, para. 17.

[^5]: R.S.O. 1990, c. P.27, s. 14(1) says:

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.

[^6]: Reasons on the interim motion (interim relief, dated August 22, 2012), at paras. 40-41.

[^7]: Motion regarding jurisdiction of the arbitration panel (dated November 16, 2012), at para. 47.

[^8]: Interim award (withdrawal motion, dated November 16, 2012), at para. 25.

[^9]: (2009), 2009 ONCA 642, 97 O.R. (3d) 161, [2009] O.J. No. 3747 (C.A.).

[^10]: Inforica Inc. v. CGI Information Systems and Management Consultants Inc., supra, ibid., at para. 16.

[^11]: Ibid., at para. 16.

[^12]: Ibid., at para. 18.

[^13]: Charlebois v. Enterprises Normand Ravary Ltée (2006), 2006 8873 (ON CA), 79 O.R. (3d) 504, [2006] O.J. No. 1114 (C.A.), at paras. 11 and 12, referring to Ball v. Donais (1993), 1993 8613 (ON CA), 13 O.R. (3d) 322, [1993] O.J. No. 972 (C.A.), at p. 324 O.R.; and Manos Foods International Inc. v. Coca-Cola Ltd., 1999 3022 (ON CA), [1999] O.J. No. 3623, 40 C.P.C. (4th) 113 (C.A.).

[^14]: R.R.O. 1990, Reg. 194, rule 23.01 says:

23.01(1) A plaintiff may discontinue all or part of an action against any defendant,

(a) before the close of pleadings, by serving on all parties who have been served with the statement of claim a notice of discontinuance (Form 23A) and filing the notice with proof of service;

(b) after the close of pleadings, with leave of the court; or

(c) at any time, by filing the consent of all parties.

(2) If a party to an action is under disability, the action may be discontinued by or against the party only with leave of a judge obtained on motion under rule 7.07.1.

(Emphasis added)

[^15]: (2006), 2006 12955 (ON CA), 80 O.R. (3d) 365, [2006] O.J. No. 1621 (C.A.), at para. 20; see, also, Bank of Nova Scotia v. Schussler (1980), 1980 1582 (ON SC), 28 O.R. (2d) 161, [1980] O.J. No. 3559 (H.C.J.), at paras. 5 and 8; and Toronto (City) v. Lakewood Developments Inc., [1980] O.J. No. 1418 (Div. Ct.), at paras. 1-3.

[^16]: Black v. Canada (Prime Minister) (2001), 2001 8537 (ON CA), 54 O.R. (3d) 215, [2001] O.J. No. 1853 (C.A.), at para. 26, referring to N. Cox, "The Dichotomy of Legal Theory and Political Reality: The Honours Prerogative and Political Unity" (1998-99), 14 Australian Journal of Law and Society 15 at 19 ("it is clear that the major prerogatives apply throughout to the Commonwealth, and are applied as a pure question of law").

[^17]: "A party may move before a judge . . . (b) to strike out a pleading on the ground that it discloses no reasonable cause of action or defence. . .".

[^18]: Motion regarding jurisdiction of the arbitration panel (dated November 16, 2012), at para. 8 ("Counsel for the moving party, OLG, agrees that, for the purpose of this motion, it is similar to striking a statement of claim and therefore every allegation in the amended Statement is considered true.").

[^19]: Revenue sharing agreement, s. 9.2.

[^20]: 887574 Ontario Inc. v. Pizza Pizza Ltd., 1995 7417 (ON SC), [1995] O.J. No. 936, 23 B.L.R. (2d) 259 (Gen. Div.), at paras. 13-23, leave to appeal to the C.A. refused [1995] O.J. No. 1645 (C.A.); Liberty Mutual Insurance Co. v. Bank of Nova Scotia, 2008 37060 (ON SC), [2008] O.J. No. 2929, 48 B.L.R. (4th) 239 (S.C.J.), at para. 34; Zurich Insurance Co. v. Co-Operators General Insurance Co., 2008 19786 (ON SC), [2008] O.J. No. 1694, 62 C.C.L.I. (4th) 207 (S.C.J.) at para. 6; AWS Engineers and Planners Corp. v. Deep River (Town), 2005 467 (ON SC), [2005] O.J. No. 68, 249 D.L.R. (4th) 478 (S.C.J.), at paras. 100-107; Lombard Canada Ltd. v. Royal & SunAlliance Insurance Co. (2008), 2007 82792 (ON SC), 94 O.R. (3d) 62, [2008] O.J. No. 5239 (S.C.J.), at paras. 40 and 42-43, where the following is said, at (para. 42):

Considering all these circumstances, there would be much to be said for a deferential standard of review that would look to the reasonableness of the arbitrator's decision, particularly on questions of mixed fact and law, such as those at issue here. For two reasons, I do not think that "reasonableness" is the appropriate standard in this case. First, in both the Act and the Arbitration Act 1991, the Legislature has left it to the parties to define their appeal rights. It is reasonable to conclude as did Mr. Justice MacPherson in Pizza Pizza, above, that the parties intended that there would be a "full and clean appeal on the merits" when they stipulated that either party could appeal on a question of law or of mixed fact and law. Their intentions in that regard should be respected. Second, the long and generally consistent line of authority on these issues has applied the "correctness" standard applicable to appeals in private arbitrations. The parties are entitled to have the appeal heard according to the standard of reviewùcorrectnessùthat has almost universally been applied to cases of this nature.

[^21]: Revenue sharing agreement, s. 2.6.

[^22]: Agricultural Research Institute of Ontario v. Campbell-High (2002), 2002 10432 (ON CA), 58 O.R. (3d) 321, [2002] O.J. No. 996, 157 O.A.C. 116 (C.A.), at para. 28, quoting from Wells v. Newfoundland, 1999 657 (SCC), [1999] 3 S.C.R. 199, [1999] S.C.J. No. 50, 177 D.L.R. (4th) 73, at para. 46.

[^23]: Ibid., at paras. 29 and 30.

[^24]: Manitoba Métis Federation Inc. v. Canada (Attorney General), 2013 SCC 14, [2013] S.C.J. No. 14, 355 D.L.R. (4th) 577, at para. 66, quoting from Brian Slattery, "Understanding Aboriginal Rights" (1987), 66 Can. Bar Rev. 727, at p. 753.

[^26]: Manitoba Act, 1870, S.C. 1870, c. 3 (reprinted in R.S.C. 1984, App ii, No. 6), s. 31.

[^27]: Manitoba Métis Federation Inc. v. Canada (Attorney General), supra (fn. 24), at para. 73.

[^28]: Ibid., at para. 79; see, also, as referred to in the paragraph: Mikisew Cree First Nation v. Canada (Minister of Canadian Heritage), [2005] 3 S.C.R. 388, [2005] S.C.J. No. 71, 2005 SCC 69; Beckman v. Little Salmon/Carmacks First Nation, [2010] 3 S.C.R. 103, [2010] S.C.J. No. 53, 2010 SCC 53; Haida Nation v. British Columbia (Minister of Forests), [2004] 3 S.C.R. 511, [2004] S.C.J. No. 70, 2004 SCC 73; and R. v. Badger, 1996 236 (SCC), [1996] 1 S.C.R. 771, [1996] S.C.J. No. 39.

[^29]: Ibid., at para. 81.

[^30]: Revenue sharing agreement, s. 10.1 (e)(iv), which says: "(e) Nothing contained in this Agreement shall: . . .(iv) be deemed to constitute any kind of treaty or treaty relationship between the Province and First Nations in Ontario within the meaning of Section 35 of the Constitution Act, 1982".

[^31]: Manitoba Métis Federation Inc. v. Canada (Attorney General), supra (fn. 24), at para. 66.

[^32]: Amended statement, at para. 17(b) and (b.2).

[^33]: Section 2.6 of the revenue sharing agreement is quoted in its entirety, at para. 21, above.

[^35]: Ibid., at para. 36.

[^36]: Ibid., at para. 45.

[^37]: Ibid., at para. 46.

[^38]: Ibid., at para. 47, and, in particular, the quote from Council of Civil Service Unions v. Minister for the Civil Service, [1985] 1 A.C. 374, [1984] 3 All E.R. 935 (H.L.), at p. 417 A.C.

[^39]: Ibid., at para. 50.

[^40]: Ibid., at para. 50, quoting from Reference re Canada Assistance Plan (British Columbia), 1991 74 (SCC), [1991] 2 S.C.R. 525, [1991] S.C.J. No. 60, 58 B.C.L.R. (2d) 1, at p. 545 S.C.R.

[^41]: Ibid., at para. 52.

[^42]: Ibid, at paras. 53 and 54. The idea that there is a spectrum or continuum of actions or decisions beginning with those that are judicially reviewable and moving to those that are not is referred to in M.N.R. v. Coopers and Lybrand Ltd., 1978 13 (SCC), [1979] 1 S.C.R. 495, [1978] S.C.J. No. 97, at p. 505 S.C.R. It is true that the paragraph noted refers to the appointment of the head of a Crown corporation as a determination that would be inappropriate for judicial intervention. This observation is entirely outside the factual circumstances of the case and is obiter dicta.

[^43]: (2012), 2012 ONSC 4579, 112 O.R. (3d) 118, [2012] O.J. No. 3943 (S.C.J.), appeal reported at (2013), 116 O.R. (3d) 280, [2013] O.J. No. 2975, 2013 ONCA 449. The appeal deals primarily with the claims in defamation and does nothing more than acknowledge the motion judge's conclusions dealing with the application of the Crown prerogative.

[^44]: Ibid., at para. 13.

[^45]: Ibid., para. 15.

[^46]: Revenue sharing agreement, s. 17(b) and (b.2).

[^47]: Manitoba Métis Federation Inc. v. Canada (Attorney General), supra (fn. 24), at para. 143.

[^48]: Guergis v. Novak, supra (fn. 43) (S.C.J.), at para. 15.

[^49]: Black v. Canada (Prime Minister), supra (fn. 34), at para. 51.

[^50]: Ibid., at para. 61, citing Baker v. Canada (Minister of Citizenship and Immigration), 1999 699 (SCC), [1999] 2 S.C.R. 817, [1999] S.C.J. No. 39, 174 D.L.R. (4th) 193, at pp. 838-42 S.C.R., pp. 212-14 D.L.R.

[^51]: Ibid., at para. 62, citing Operation Dismantle Inc. v. Canada, 1985 74 (SCC), [1985] 1 S.C.R. 441, [1985] S.C.J. No. 22, 18 D.L.R. (4th) 481, 59 N.R. 1, 13 C.R.R. 287, at p. 465 S.C.R.

[^52]: 2008 SCC 42, [2008] 2 S.C.R. 551, [2008] S.C.J. No. 43.

[^53]: Ibid., at para. 14. Subsequently, an application was made to join a third party to the action. It was dismissed (Holland v. Saskatchewan (Agriculture, Food and Rural Revitalization), [2009] S.J. No. 551, 2009 SKQB 334). The action was then certified as a class proceeding ([2010] S.J. No. 32, 2010 SKQB 32).

[^54]: Factum of Her Majesty the Queen in Right of Ontario, at paras. 57 and 63, as well as the amended statement, at para. 17(b.1).

[^55]: Factum of the appellant, Ontario Lottery and Gaming Corporation, at paras. 62 and 67.

[^56]: Factum of Her Majesty the Queen in Right of Ontario, at para. 56.

[^57]: Factum of the Ontario Lottery Corporation, at para. 74.

[^58]: 2000 SCC 64, [2000] 2 S.C.R. 919, [2000] S.C.J. No. 64.

[^59]: Ibid., at para. 56, quoting Galt-Canadian Woodworking Machinery Ltd. v. Cambridge (City) (1982), 1983 1893 (ON CA), 36 O.R. (2d) 417, [1982] O.J. No. 2562, 135 D.L.R. (3d) 58 (Div. Ct.), at pp. 419-20 O.R., at p. 63 D.L.R., affd (1983), 1983 3103 (ON CA), 41 O.R. (2d) 544, [1983] O.J. No. 2909, 146 D.L.R. (3d) 768 (C.A.).

[^60]: Ibid., at para. 56, quoting Capital Regional District v. Saanich (District), 1980 712 (BC SC), [1980] B.C.J. No. 1931, 115 D.L.R. (3d) 596 (S.C.), at p. 605 D.L.R.

[^61]: Ibid., at paras. 63, 64 and 73. Reference was made to 1579203 Ontario Ltd. v. Ontario, 2007 21966 (ON SC), [2007] O.J. No. 2349, 158 A.C.W.S. (3d) 707 (S.C.J.) as an example of a situation where a claim for damages following a regulatory change was found to represent a fettering of the power of the Lieutenant Governor-in-Council. The situation there was different than it is here. In that case, it was determined that there could be no implied term to a contract that damages would be paid in response to an amendment to the regulation where the amendment was specifically permitted by the applicable legislation. In the case I am asked to decide, the underlying proposition is that the provision in the revenue sharing agreement requiring the appointment of a representative of Ontario First Nations to the board of directors of OLG has the same impact and should be treated as having the same effect as the amendment to the regulation. To my mind, it does not.

[^62]: Supra, at fn. 22.

[^63]: Ibid., at paras. 41, 45-49.

[^64]: S.O. 1999, c. 12, Sch. L, s. 2(2): "The Corporation is composed of at least five members to be appointed by the Lieutenant Governor in Council" and s. 5(1): "The board of the Corporation is composed of the members of the Corporation."

[^65]: Factum of the Ontario Lottery Corporation, at para. 73, quoting Pacific National Investments Ltd. v. Victoria (City), supra (fn. 58), at paras. 61, 65 and 69.

[^66]: [2012] O.J. No. 100, 2012 ONSC 550 (S.C.J.).

[^67]: Ibid., at paras. 142-55 (quoting para. 149).

[^68]: Ibid., at para. 155.

[^69]: Ibid., at para. 28, quoting P.W. Hogg, Liability of the Crown, 2nd ed. (Toronto: Carswell, 1989), at pp. 171-72.

[^70]: Motion regarding jurisdiction of the arbitration panel, November 16, 2012 (decision of the panel), at paras. 36-40.

[^71]: Amended statement, at para. 17(c).

[^72]: Ibid., at para. 17(d).

[^73]: Ibid., at para. 17(h).

[^74]: 1930 87 (SCC), [1930] S.C.R. 500, [1930] S.C.J. No. 24, 1930 CarswellNat 38.

[^75]: Ibid., at para. 36.

[^76]: Ibid., at para. 38.

[^77]: Interim award (decision on the withdrawal), November 16, 2012, at para. 25.

[^78]: Factum of the Ontario Lottery Corporation, at paras. 99 and 100.

[^79]: Arbitration Act, s. 43(2).

[^80]: Section 9.1 states:

In the event any dispute, claim, difference or question (a "Dispute") arises among any of the parties concerning the construction, meaning, effect, implementation of or compliance with Article 2 (save and except for any dispute arising out of or in connection with the provisions of section 2.5), Article 4, Article 5 or Article 8 (save and except for any dispute arising out of or in connection with the provisions of sections 8.2 or 8.3) of this Agreement and a party wishes to resolve such matter, then such party shall provide notice to the other parties of the same. The parties receiving such notice shall have a reasonable period of time to consider and, if it believes fit, address the matter or discuss the concern with the party giving the notice, such period not to exceed 45 days. If the matter is addressed to the reasonable satisfaction of the party giving notice within such 45 day period, the Dispute shall be deemed to be resolved and shall not be the basis for further remedies or termination of this Agreement under sections 9.5 or 9.6.

[^81]: Revenue sharing agreement, Sch. 9.2, s. 8.

[^82]: Ibid., at Sch. 9.2, s. 18.

[^83]: Amended statement, at para. 7.

[^84]: Ibid., at para. 72(iii).

[^85]: Ibid., at para. 102.

[^86]: Ibid., Factum of the Appellant, Ontario Lottery and Gaming Corporation, at para. 104, quoting from Rules of Civil Procedure.

End of Document