Glen Andrews, Ivan Burton, Rick Kean v. Richard Thomas Rose, 2019 NLSC 42

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Andrews v. Canada (Attorney General) , 2019 NLSC 42 Date : February 19, 2019 Docket : 200601T1519 Between: Glen Andrews, Ivan Burton, Rick Kean and Richard Thomas Rose Plaintiff And: Attorney General of Canada Defendant Before: Justice Alphonsus E. Faour Place of Hearing: St. John’s, Newfoundland and Labrador Dates of Hearing: June 12, 13, 14 and July 17, 2018

Summary: This is an application by the Federal Crown for a

summary trial seeking dismissal of the Plaintiffs’ action in contract. In considering whether the evidence supported the components required in establishing the existence of a contract between the parties, the analysis reveals the elements do not exist. The application is granted and the Plaintiff’s action is dismissed. Appearances: John R. Sinnott, Q.C. Appearing on behalf of the Plaintiff Jessica Thompson and Appearing on behalf of the Defendant

Tokunbo Omisade Authorities Cited: CASES CONSIDERED: Andrews v. Canada (Attorney General), 2008 NLTD 145, aff’d 2009 NLCA 70; Andrews v. Canada (AttorneyGeneral), 2014 NLCA 32; Dalley v. Northern Arm (Town), 2016 NLTD(G) 68; McCabe v. Verge (1999), (NL CA),182 Nfld. & P.E.I.R. 135, 1999 CarswellNfld 283; Donovan Homes Ltd. v. Modern Paving Ltd., 2011 NLCA 39; GenRep Ltd./Ltee v. G& D Shipping Ltd., 2012 NLCA 50; Olivieri v. Sherman, 2007 ONCA 491; Pitcher v. Downer, 2013 NLTD(G) 82, rev’d 2017 NLCA13; Creston Moly Corp. v. Sattva Capital Corp., 2014 SCC 53; 100193 P.E.I. Inc. v. R., 2015 FC 932; Wells v. Newfoundland, (SCC), [1999] 3 S.C.R. 199; Happy Adventure Sea Products

(1991) Ltd. v. Newfoundland & Labrador (Minister of Fisheries& Aquaculture), 2006 NLCA 61; Andrews v. Canada (Attorney General), 2009 NLCA 70 STATUTES CONSIDERED: Fisheries Act, R.S.C., 1985, c. F-14, Fishery (General) Regulations S.O.R./93-53; Rules of the SupremeCourt, 1986, S.N.L. 1986, c. 42, Sched. D. REASONS FOR JUDGMENT Faour, J.: INTRODUCTION [1] This is an application by the Federal Crown for a

summary trial. Dismissal of the Plaintiff’s action in contract is sought. [2] The action was commenced on April 7, 2006. The Plaintiffs are, or were, crab fishermen from various communities in theProvince adjacent to Division 3K and who had formed a loose association of full-time crab harvesters (the “Association). [3] The Plaintiffs allege that certain commitments made by the Federal Minister of Fisheries and Oceans in 1994 respecting crabquotas constituted a contractual arrangement. They say that contract was breached in 2000 when a subsequent Minister changed thequota arrangement.

They claim damages for that breach, as the reduction in their quota allocations was not in accord with what they saywere the contractual commitments of the Minister. Since it is an action in contract, and not one for judicial review of the Minister’sdecision, the Plaintiffs argue that the proceeding is properly before this Court. [4] The Defendant does not take issue with the basic facts. It agrees that the quota arrangement was changed. However, it saysthat the facts do not form the basis for a contract.

Moreover, the Defendant submits that the decisions on quotas were within theexclusive discretion of the Minister and, therefore, cannot be the subject of a contract. Background [5] In the early 1990s there was a crisis in the cod fishery off the coast of this Province. In response, the federal governmentdeclared a moratorium on the harvesting of cod on July 2, 1992. That meant there would be no income from the fishery for thousands offishermen. In the following years there was a significant increase in the stocks of crab.

The Minister of Fisheries and Oceans, forreasons of social and economic policy, wished to allocate some of that increase to those displaced by the moratorium. The relevantbackdrop to this action is set out in the Plaintiffs’ amended Statement of Claim, of which paragraphs 8-10 state: 8. Between 1984 and 1989 landings of snow crab for the Newfoundland region were in the 6,700 ton to 9,700 ton range, were11,000 in 1990 and increased each year in the 1990’s to 69,000 tons in 1999, and remained well over 50,000 tons in the years 2000-2004.

Total allowable catches for the Newfoundland Region also increased in the 1980’s and reached 11,000 tons in 1990, and increasedeach year throughout the 1990’s to 61,185 tons in 1999 and the total allowable catch in the years 2000-2005 was 51,169 tons, 52,267tons, 56,981 tons, 56,240 tons, 53,740 tons, and 49,943 tons respectively. The total quota for Division 3K increased from 8,575 tons in1993 to 18,200 tons in 1999 and has remained since then substantially above the 1993 quota. 9. The Plaintiffs and each of them did not share in the dramatic increases in landings, total allowable catches, and quotas within 3K.

Instead a commitment was made by the Defendant to the Plaintiffs and each of them and to 3K Fulltime Crab Fishermen generally thatthe long term (1988-1993) level in traditional areas of approximately 3,100 tons shared by 3K Fulltime Crab Fishermen would bemaintained and this allocation for the 3K fulltime crab fishing fleet in traditional areas would not be reduced below the long term level of3,100 tons unless conservation of crab stocks in areas fished by the 3K fleet required an overall reduction in quota below thatexperienced in 1993. 10.

The commitment made by the Defendant to maintain the 3K full time crab fleet at its long term (1988-1993) level in traditionalareas of approximately 3,100 tons and not to reduce such allocation below this long term level unless conservation required an overallreduction in quota below that experienced in 1993 was given in exchange for agreement by the Plaintiffs and each of them and the full

time 3K Crab fishing fleet generally whereby they would not participate in proportionate increases in the 1990’s and would be reduced in1995. [6] The Statement of Claim goes on to allege that all of the elements of a contract were present in the discussions between theMinister and the Plaintiffs in the fall of 1994.

Since the Minister was interested in reallocating some of the expected increase in crabstocks to other inshore fishermen to lessen the impact of the moratorium, the Plaintiffs say they agreed to forgo what they felt was theirentitlement to increases in their share of the quota proportionate to the increase in the overall Total Allowable Catch (TAC). Theconsideration on the part of the Plaintiffs was their agreement to the resulting reallocation, and their promise not to oppose the Minister’splan, in exchange for the promise of the Minister that their quota would not fall below the specified minimum.

When, after 2000, theirquota was reduced below the agreed amount, they allege a breach of that agreement. The agreement was based on a commitment by theMinister that their allocation would not be reduced below a certain minimum, except if necessary for conservation. Their claim is basedon the losses suffered when the subsequent Minister failed to honour the commitment made. The damages are the reduction in value oftheir snow crab landings during the relevant period. They claim cumulative losses of in excess of $3,000,000. [7] There is some history here.

After the Statement of Claim was issued, the government brought an application to strike out theStatement of Claim, which was successful. The application judge, in approving the application, followed the precedent of an earlieraction involving one Bert Andrews (Andrews v. Canada (Attorney General), 2008 NLTD 145, aff’d 2009 NLCA 70). However, unlikethe decision of the Court of Appeal in Bert Andrews, in this case, the Court of Appeal, in a decision cited as Andrews v. Canada(Attorney General), 2014 NLCA 32 decided that the claim should not be struck out and should proceed to trial.

There, the issues ofwhether there was a viable cause of action would be argued and played out. The matter was remitted to this Court for a hearing on themerits. Issues [8] This proceeding raises three issues: (

i) Is the

Summary Trial procedure appropriate in this case? (ii) Was a Contract formed between the parties such that the Government of Canada is liable? (iii) Does the Plaintiffs’ claim offend the anti-fettering doctrine? [9] Both parties agreed that the

Summary Trial procedure is appropriate to determine the question. I agree and will not considerfurther the factors set out in the decision in Dalley v. Northern Arm (Town), 2016 NLTD(G) 68. Without addressing these factors, I findthat the threshold stage has been met, and it is appropriate for me to consider the merits of the issues in this proceeding on the basis of aSummary Trial pursuant to Rule 17A.

The parties have also agreed that the question before me is on liability alone, and accordingly,they have not addressed the assessment of damages. [10] Having addressed the first issue I will proceed with analysis of the second issue. It is unnecessary for me to deal with the thirdissue at length because of my ruling on the second issue; however, I will make some comments about it after I finish a detaileddiscussion of the main issue. A. The Issue of Viable Cause of Action in Contract [11] As noted above, the basic facts of the matter are not in dispute.

Counsel for Canada accept the basic facts as set out by thePlaintiffs, but, of course, not the

interpretation placed on them. They agree that crab quotas increased throughout the 90s, and for severalyears after 1995 the quota allocated to the 3K harvesters stayed above 3,100 tonnes. They also agree that it was reduced in themanagement plan of 2000. They agree with the facts forming the premise of the Plaintiffs’ case, and acknowledge that if there is acontract as alleged, then the quota amounts cited by the Plaintiffs are accurate. The issue to determine is whether the facts surroundingthe discussions with the Minister constitute the formation of a contract.

This question requires an examination of the elements ofcontract formation, namely: offer, acceptance, consideration, intention to create legal relations, and certainty of terms. These elements ofa contract are essentially settled law, and neither party in this proceeding took issue with this structure of analysis. [12] The Defendant argues that in the discussions between the Minister and the Plaintiffs, any commitments made by the Ministerare not contractual in nature as they speak to a consultation process leading to the exercise of ministerial discretion, which is notjusticiable.

To conclude that a contract was formed would be to offend the anti-fettering doctrine. The Plaintiffs maintain the Defendantexercised any discretion he may have had over quotas and made an agreement having the force of a contract.

a) Contract Formation [13] It is settled law that there are several elements which must be present in the formation of a contract. In McCabe v. Verge(1999), (NL CA), 182 Nfld. & P.E.I.R. 135, 1999 CarswellNfld 283, the Court of Appeal in this Provincedetermined the existence of a contract arising from settlement discussions. At paragraph 21 the Court stated: 21 Accordingly, there was a valid contract of settlement entered into during the telephone conversation.

All of the elements of offer,acceptance, consideration, intention to create legal relations and certainty of terms were present. … [14] In Donovan Homes Ltd. v. Modern Paving Ltd., 2011 NLCA 39, the Court of Appeal reaffirmed the notion that certainty ofterms must be present. In a reference to the McCabe decision written by Green, J., the court commented on the issue of certainty ofterms, at paragraph 33: 33 Justice Green's statement characterizes "certainty of terms" as an element of a contract. It is well established that certainty of a

contract's essential terms and completeness of a contract, in that it must contain the terms essential to its operation, are required in orderfor a contract to be enforceable. … [15] However, at paragraph 37, the Court also noted that some terms may not be essential to the formation of a contract: 37. The authorities leave no doubt that essential terms which go to the core of an agreement must be settled in order for a contract tobe enforceable.

Equally, there is no doubt that non-essential terms and details do not have to be settled in order for legal effect to begiven to the reasonable expectation of the parties. Indeed, in the case of a contract meant to endure over an extended period of time, itmay be that details or other non-essential matters are not even able to be determined at the time the parties agree to contract. [16] Also see GenRep Ltd./Ltee v. G & D Shipping Ltd., 2012 NLCA 50 where the Court of Appeal provided a similar analysis atparagraph 15: 15.

The existence of the basic elements of a contract — offer, acceptance and consideration — raise questions of mixed fact and lawand often involve factual findings derived directly or inferred from the evidence respecting the conduct and actions of the parties. [17] It is also accepted that the test to contract formation is an objective one: a subjective view of one party is insufficient to createbinding legal relations. Objectively, one must be convinced that there was a consensus ad idem. The Ontario Court of Appeal in Olivieriv.

Sherman, 2007 ONCA 491 discussed the attributes of reaching agreement at paragraph 44-45: 44. A determination as to whether a concluded agreement exists does not depend on an inquiry into the actual state of mind of one ofthe parties or on the parole evidence of one party's subjective intention. See Lindsey v. Heron Co. (1921), (ON CA), 64D.L.R. 92 (Ont. C.A.). Where, as here, the agreement is in writing, it is to be measured by an objective reading of the language chosenby the parties to reflect their agreement.

As was stated by Middleton J.A. in Lindsey at 98-9, quoting Corpus Juris, vol. 13 at 265:3 The apparent mutual assent of the parties essential to the formation of a contract, must be gathered from the language employed by them,and the law imputes to a person an intention corresponding to the reasonable meaning of his words and acts. It judges his intention by hisoutward expressions and excludes all questions in regard to his unexpressed intention.

If his words or acts, judged by a reasonablestandard, manifest an intention to agree in regard to the matter in question, that agreement is established, and it is immaterial what maybe the real but unexpressed state of his mind on the subject. 45. Accordingly, in my view, it was an error in principle for the motion judge to decide this issue based on the subjective intent of oneside to the bargain rather than on an objective reading of the counter-offer. [18] In this Province, Marshall, J. in Pitcher v.

Downer, 2013 NLTD(G) 82 (rev’d on other grounds 2017 NLCA 13) noted theimportance of objectively finding agreement before a contract may be found. She said at paragraph 32: 32. Agreement is the essence of a contract: G.H.L. Fridman, The Law of Contract (Second ed., 1986), at page 3. Therefore, to be avalid contract, the parties to a contract must have a meeting of the minds, which is referred to as "consensus ad idem". [19] She went on to clarify that such agreement must be found on an objective basis at paragraph 45: 45.

Further, with respect to the Plaintiff's submissions regarding the absence of a meeting of the minds or "consensus ad idem", thePlaintiff was of the view that the test for determining whether there was consensus ad idem is that of the "objective, reasonablebystander". In support of this contention, the Plaintiff's counsel referred to the case of Gunvaldsen-Klaassen v. Bulpitt, 2009 NSSC 66(N.S. S.C.), where the Nova Scotia Supreme Court referred to G.H.L. Fridman in The Law of Contract (Fifth ed., 2006) and stated asfollows, at paragraph 32: 32.

The determination of a valid agreement is discussed by Fidman (sic) in The Law of Contract (Fifth Ed.; 2006) at p. 15: Constantly reiterated in the judgments is the idea that the test of agreement for legal purposes is whether parties have indicated to theoutside world, in the form of the objective reasonable bystander, their intention to contract and the terms of such contract. The law isconcerned not with the parties' intentions but with their manifested intentions.

It is not what an individual party believed or understoodwas the meaning of what the other party said or did that is the criterion of agreement; it is whether a reasonable man in the situation ofthat party would have believed and understood that the other party was consenting to the identical terms. As Fraser C.J.A. said in RonGhitter Property Consultants Ltd. v.

Beaver Lumber Co.: the parties will be found to have reached a meeting of the minds, in other words be ad idem, where it is clear to the objective reasonablebystander, in light of all the material facts, that the parties intended to contract and the essential terms of that contract can be determinedwith a reasonable degree of certainty. . . .

Sometimes it is a simple matter to decide what the parties have manifested to each other, and consequently, whether they have agreed, and if so, upon what. This is especially true where a document containing their agreement has been prepared and signed by the parties. If the plain wording of the document reveals a clear and unambiguous intent, it is not necessary to go further.

Indeed, once that has been done, it may not be possible to have recourse outside such document, either to other written material or to parol evidence from the parties or anyone else, in order to explain, or otherwise clarify what is contained in the document. If there is no single document to which reference can be made in order to decide if a contract exists between the parties, but a series of negotiations, then everything that occurs between the parties relevant to the alleged contract must be considered by the court which is faced with the problem of deciding the issue.

From what they have said, done, or written, in combination if necessary, there must be established a bargain or an agreement. ... [ 20 ] In both the Olivieri and Pitcher cases the courts were concerned with determining the existence of a contract where written documents were in evidence. In this case, notwithstanding the Crab Management Plan (CMP)’s mention of the minimum quota for the fleet, the verbal negotiations between the parties were not reduced to writing.

Therefore, the parties’ actions and testimony form the evidence from which an objective bystander must determine whether a contract was formed. [ 21 ] In making a determination whether a set of facts constitutes elements in the formation of a contract, the Supreme Court of Canada has commented on the importance of a contextual approach: Creston Moly Corp. v. Sattva Capital Corp. , 2014 SCC 53 , at paragraphs 56-58 . [ 22 ] In the context of public policy and Ministerial setting of policy, the case of 100193 P.E.I. Inc. v. R. , 2015 FC 932 is helpful.

The basis of the alleged contract was a speech by the Minister in the House of Commons. In an action similar to the current matter, the Plaintiffs sued on an alleged contract. At trial, the court articulated a series of questions which may be relevant in this case. The court stated, at paragraph 49: 49. Even taken at face value, this evidence immediately raises many questions. For instance: were these alleged representations made at one time or at different times? Which representations constituted the offer? Did the offer have any terms when it was made? Did any negotiations take place? Was the offer accepted?

When did the Plaintiffs accept the offer? Was anyone appointed as an agent of the fishers, or did they all individually accept the offer? How did they communicate their acceptance of the offer? If the agreement was made orally, where did they accept the offer? What "legal options" did the commercial fishers give up? [ 23 ] In that case, the court posed these questions in response to a claim that a contract existed between the Plaintiffs and the Minister.

With the foregoing in mind, I turn to the evidence of whether there was, objectively, an offer, an acceptance, whether consideration was present, whether the evidence discloses an intention to create legal relations, and whether there was sufficient certainty with respect to terms of the alleged agreement. (

i) Offer and Acceptance: Offer [ 24 ] The Plaintiffs allege that the contract was formed in 1994. At that time, then Minister of Fisheries, the Honourable Brian Tobin, is said to have offered the 3K fleet 3,100 tonnes of crab quota for an indefinite time as long as conservation was not in issue. The promise was made, according to the Plaintiffs, in exchange for their support for a significant reallocation of crab quota. [ 25 ] Two Plaintiffs testified to the conversations they had with Minister Tobin.

Both of them, Rick Kean and Ivan Burt were members of the Executive of the Association of full-time crab harvesters in the 3K division. They both referred to three meetings during the fall of 1994 that were critical to the formation of a contract. The first was at the Newfoundland Hotel in St. John’s. The second was at the Minister’s Regional Office in the Baine Johnson Building in St. John’s. The third was at the Minister’s Office in Ottawa on December 4, 1994, arising from an invitation from the Minister for the Plaintiffs to travel to Ottawa to discuss the issue of crab quotas.

While the witnesses were unable to identify the exact dates of the first two meetings, all accepted that the meetings took place. [ 26 ] Mr. Kean was not present at the first meeting, but Mr. Ivan Burt was in attendance. Both men testified that at the meeting held at the Newfoundland Hotel, the Minister wanted their support for his plan for new entrants into the crab fishery. They said he promised that their quota would not go below 3,100 tonnes, and would be included in the CMP for the following year.

They also said that part of that offer was the Last In, First Out (LIFO) principle, that new entrants would be the first to leave the fishery should conservation require a reduction. This would provide protection for those with the longest commitment and, hence, the greatest investment in the fishery. They said the Minister offered a guarantee of the minimum level of quota in exchange for their support with his new plan to bring new entrants into the fishery. [ 27 ] Mr. Tobin testified that he recalled being aware of the concerns of the fishermen in the 3K zone.

He spoke of the challenges of managing a resource with many competing interests. At the relevant time, there were thousands of fishermen and plant workers negatively affected by the cod moratorium imposed in 1992. He said the scientists advised him that at the same time as the cod stocks had diminished almost to the point of extinction, it appeared that the crab stock was growing and was quite healthy. His dilemma was how to allocate the increase in crab stocks. One approach would have been to let it go to the existing license holders.

Alternatively, he was interested in “sharing the wealth” with those displaced by the moratorium. He was of the view that there was room to allow allocations to other fishermen. [ 28 ] He recalled the first meeting with the Plaintiffs at the Newfoundland Hotel. He didn’t deny that a discussion of the new entrants and some minimum level of quota took place. But he was adamant there was no quid pro quo – a guarantee of quota and the LIFO principle in exchange for support. He said the Minister did not have the authority to make that kind of promise. He said in his

testimony that he objected “strongly to the notion of a contract.” [ 29 ] Mr. Kean and Mr. Burton testified that the second meeting at the Baine Johnson Building in St. John’s raised the same issues. Both were present at that meeting. They said they expressed their concern about the Minister’s plan. Mr. Kean said his concerns were both for the stock – that overfishing might lead to the same outcome that ended the cod fishery – and for his personal circumstances – he had invested in a brand-new fishing vessel and had a significant debt as a result. Both men said that Mr.

Tobin repeated his offer to guarantee a minimum quota in exchange for support, and that he would apply the LIFO principle to any future reductions because of conservation requirements. [ 30 ] Mr. Tobin recalled the meeting at the Baine Johnson Building. He didn’t specifically recall using the figure of 3,100 tonnes, but it was written in the CMP for 1995, so it was safe to assume it was discussed. But, he said, the fact of discussing it is not a guarantee of a minimum quota. [ 31 ] Mr.

Tobin acknowledged that in his discussions he would have reassured the fishermen about his intention to allocate a minimum level of quota, but he adamantly denied that the plan was contingent on their support. He said there was no contract. As for the LIFO principle, he noted that it was not included in the CMP, indicating that it was not part of his reassurance.

He did confirm that his intent at the time was to attempt to ensure some stability for the fulltime fleet in 3K, but that he was trying to develop a plan whereby large numbers of inshore fishermen might benefit from the significant increase in the biomass of crab. [ 32 ] Subsequent to the second meeting, the Minister invited the representatives of the Association of harvesters in 3K to come to Ottawa to meet for a further discussion on the issue.

At that meeting on December 4, 1994, both men said the Minister again asked for support for his plan for new entrants in exchange for assurance about the 3,100-tonnes minimum quota for the 3K fulltime fleet. [ 33 ] Mr. Tobin did not deny that the meeting took place, but again, strongly objected to the notion of a contract. He agreed that the figure of 3,100 tonnes was probably discussed, as it was in the CMP for the following years. He reiterated that he did not seek their consent for his plan. He said he did not need it.

But as a Minister of the Crown, he would usually try to seek support for any new policy initiative. He said any discussions would have been in that context. [ 34 ] Mr. Burton and Mr. Kean said they could not confirm that their Association was in agreement until they met with the members. They said that following the Ottawa meeting such a meeting took place in Gander.

There were no minutes taken at the meeting, and no correspondence with the Minister about the terms of any agreement. [ 35 ] The testimony of the three men depict two different perspectives on the discussions at the three meetings held some 24 years ago. Mr. Tobin was adamant that as Minister, he lacked the power to contract for future amounts and any discussions with the Plaintiffs were in the context of consultations in pursuance of his policy role.

He acknowledged that the 3,100 tonnes was in the CMP and that he hoped to have the fleet’s support in his decision, but he said it was not an offer in the contractual sense. The Plaintiffs on the other hand believe that a firm offer was made by the Minister: 3,100 tonnes unless conservation dictated otherwise and if so, then the LIFO principle would apply. [ 36 ] The elements of the offer, according to the Plaintiffs, was the assurance that their quota would not go below 3,100 tonnes, and that if it did, then LIFO would apply.

The Plaintiffs say that the insertion of the quota amount in the CMP for 1995 was evidence of a contract. That quota was included in the CMP for subsequent years until 2000. In the CMP for that year, a lower quota was stated, giving rise to this action. In all, the amount of quota discussed was included in the CMP for five years, and it was reduced in subsequent years. As for LIFO, there is no mention of it in the CMP for any of the years. [ 37 ] The evidence supports the fact that discussions took place.

However, a determination that in the context of the Minister’s role any comments would have amounted to an offer as the Plaintiffs allege is not credible. An objective observer would have seen these discussions as part of the Minister’s policy-making role. In that role, he would have had many discussions with various stakeholders. [ 38 ] The Plaintiffs’ case also has some difficulty with the other side of the alleged deal. They say that the offer of an assured quota was made in exchange for their support.

However, it was clear that the Minister did not need their support in order to proceed with his plan for the crab fishery. As a politician and Minister responsible for fisheries policy he sought their support. However, in a legal sense, their support was not necessary. [ 39 ] Having regard to the circumstances of a Minister in a political and public policy role, it is hard to see that the representations made in the meetings to which the Plaintiffs have referred were anything more than consultations with stakeholders in an industry with many competing interests.

While the Plaintiffs may have considered that an offer arose from the discussions, when one considers, objectively, the circumstances surrounding the meetings, I cannot find that a consensus ad idem was achieved. The evidence does not satisfy me that an offer was, in fact, made. [ 40 ] If the meetings to which the evidence refers gave rise to an offer in contract, the other elements of contract formation have to be examined.

I will consider the issue of acceptance next. (ii) Offer and Acceptance: Acceptance [ 41 ] The evidence on acceptance of the Minister’s “offer” came from the affidavits and testimony of Ivan Burton and Rick Kean. As executive members of the Association of 3K fulltime crab fishermen, one or both of them were present at the meetings with the Minister, as well as meetings of the Association. [ 42 ] Mr. Kean said in his testimony that the Minister’s proposal was in exchange for their support of his plan.

When asked how that support would be manifested, he said that the members of the Association would not oppose him publicly on what he intended to do. He said their opposition was out of concern for the crab stocks, and they did not want crab to be depleted by over-fishing as had happened with cod stocks.

[ 43 ] Mr. Kean said they did not accept the Minister’s proposal at any of the meetings, including the last one in Ottawa on December 4, 1994. He said they had to consult with the members of the Association. A few days after the Ottawa meeting, the association of crab fishermen met at a hotel in Gander. It appears they discussed what had happened in the Ottawa meeting, but no minutes were kept of the proceedings at the meeting. There was no other record of what happened at the meeting. There was no letter to either the Association members or to the Minister recording the terms of an agreement. Both Mr.

Kean and Mr. Burton agreed no communication was sent to the Minister outlining acceptance of what the Minister had discussed. [ 44 ] For the purposes of this stage of the analysis, if I accept that the Minister, on behalf of the Defendant, made an offer, when can it be said that the Plaintiffs accepted this offer? Presumably the Association approved it at the meeting, but there is no record of the meeting. Neither Mr. Kean nor Mr.

Burton could point to a decision or any action of the Plaintiffs that indicated acceptance nor any communication of acceptance to the Minister, either in writing or by other means. [ 45 ] As a general rule, it is not enough for one to whom an offer is made to assent inwardly; the offeree must communicate acceptance to the offeror, or to someone authorized by the offeror to receive it. There was no evidence of communication of the acceptance to the Minister or the Department or anyone authorized by the offeror to receive it. [ 46 ] I conclude that even if there was an offer, there was no acceptance.

Acceptance by the offeree must be communicated to the offeror. There was no communication. Therefore there was no acceptance, which could be part of the formation of a contract. (iii) Consideration [ 47 ] Consideration is an essential part of a contract. Consideration is something of value that passes from one party to another. Usually consideration is the price paid for the subject of the contract.

However, forbearance from doing something to which a party has a legal right has been found to constitute consideration: ( GenRep at para. 18. ) [ 48 ] In this case, the Plaintiffs argue that consideration in this matter was twofold: first, a promise to support the Minister’s plan, not oppose it; and second, their agreement to the resulting reallocation of quota., which meant they would receive less than their expectation. That reallocation would limit their quota in subsequent years. They argue that their agreement to the plan constituted their giving up a benefit. Mr.

Burton, in his testimony, said that he knew the Minister did not require the support of the 3K fleet, but wanted it. [ 49 ] There are several issues to consider. First, there is no evidence that a declaration of support, or even non-opposition, was issued by the Plaintiffs. So it is a live issue as to whether any consideration actually passed. [ 50 ] Secondly, even if their forbearance could be seen as consideration, the quota was something to which they had no entitlement beyond the current year. By

section 10 of the Fishery (General) Regulations S.O.R./93-53 , made under authority of the Fisheries Act , R.S.C., 1985, c. F-14 (the “ Act ”), a license is valid for only one year. A license holder had entitlement to quota for the term of the license, and by specific wording in the document, had no entitlement beyond that. While it was accepted that the practice of the Department was to renew the licenses annually, the Act and Regulations are quite specific in the limited nature of the entitlement.

They had no legal entitlement to give up as consideration for the alleged contract. [ 51 ] I accept that consideration may be very small. Some legal texts say a “peppercorn” is sufficient. But the concept of consideration requires something to be given or promised in exchange for the promise to be enforced. Even if the elements of offer and acceptance were present, the argument of the Plaintiffs on the issue of consideration is weak. While they did not oppose the Minister’s plan, they did not communicate that intent.

The Minister did not require their support to proceed with his plan, so there was no benefit passing from the Plaintiffs to the Minister. And finally, even if they agreed to accept a limit on their quota, the reality is they had no entitlement beyond the current year. [ 52 ] Accordingly, the Plaintiff has not established to my satisfaction that there was consideration for the alleged agreement. (iv) Intention to Create Legal Relations [ 53 ] In considering all of the circumstances, to find a contract there must be evidence that both parties intended to be bound.

Minister Tobin testified that he would not create a legal contract guaranteeing anyone an amount of fishing quota. He said it would be contrary to the Minister’s role of managing, conserving and developing the fisheries in the public interest. In any event, he said he did not have the authority to make a contract in respect of quota, as it would fetter his discretion in managing the fishery. He said quota in the fishery is a common property resource, and he was not able to make a contract and never intended to do so. His affidavit emphasized this position, at paragraph 6: 6.

As Minister, I never would have intended to create a legal contract with any fisher guaranteeing them an amount of fishing quota. The role of the Minister of Fisheries and Oceans is to manage, conserve and develop Canadian fisheries, a common property resource, on behalf of Canadians, in the public interest; not on behalf of any individual fishers or fishery associations. [ 54 ] The Plaintiffs’ evidence also does not support an intent to create legal relations. Mr. Burton and Mr.

Kean both testified that while these discussions were very important to their livelihood, none of the discussions were ever reduced to writing. They both said that they did not consult legal counsel, nor did they commit any aspect of the discussions to writing. Even the meetings of the Association had no record of proceedings, nor was there any correspondence with the Minister’s office or departmental offices to confirm the intent. [ 55 ] In Mr. Burton’s testimony he confirmed the absence of many of the certainties one would expect in a contractual relationship.

He said there was no discussion of the duration of any commitment. He confirmed the Minister never said that the quota would never change. He specifically said that their objective was to have a reference to the discussions in the CMP. He said, “it was all we could hope for.” Mr. Kean testified much to the same effect. He said “we wanted it in the CMP. We were trying to protect our quota.” I take it that this was an acknowledgment on the part of both men that it was a discussion about policy, not contract. The CMP was issued each

year and was valid for one year. [ 56 ] I accept that in retrospect, the Plaintiffs operated under the belief that the commitment had legal effect. However, their actions and understandings at the time do not objectively support this

interpretation of the discussions. The Minister, in his testimony, did not agree that there was any intent to form a contract, nor did he think he had the power to contract. This supports a finding that at the time, there was no intention to create legal relations. (

v) Contents [ 57 ] The final element in determining whether a contract was formed relates to the certainty of its contents. A good starting point is the comment of Boswell, J. in the trial decision in 100193 PEI Inc. In paragraph 49 (quoted above) he raised several questions that are relevant: i. Did the offer have any terms when it was made? ii. Was the offer accepted, and when was the offer accepted? iii. Who were the parties to the alleged agreement, and what was the role of the individual members of the Association in accepting the offer? iv. What was the duration of the offer? v.

What “legal options” (consideration) did the Plaintiffs give up? i. Terms [ 58 ] The only terms noted by the Plaintiffs were the quota of 3,100 tonnes and the acceptance of the LIFO principle in exchange for support. I accept that the quota was discussed and was inserted into the CMP for 1995 and several subsequent years. As for the LIFO principle, it may have been discussed, and Mr. Tobin did not deny that it could have been discussed, but it was not reflected in any of the future CMPs the Department issued.

This provision lacks the certainty required to ground a contract. [ 59 ] As for the support that was to be the quid pro quo , there was never any definition put around this. It was never determined how the support would be communicated or who would declare it. More importantly, Mr. Tobin said he was not looking for consent to his plan, since the Plaintiffs did not have a veto. He was looking for support of a fisheries policy in a policy-making context. The provision of support was too vague to be a contractual term. ii.

Acceptance [ 60 ] As discussed above, there was no definitive acceptance of the Minister’s plan. There was no indication of acceptance by the Plaintiffs at any of the meetings held with the Minister, and the meeting of the Association did not result in any communication of acceptance. iii. Parties [ 61 ] I accept that the parties were sufficiently defined for the purposes of a contract. While there was some uncertainty as to the membership of the Association at any particular time, the Plaintiffs were clearly indicated and identifiable.

However, from the perspective of performance of any requirements of the contract, it is uncertain as to whom would have been responsible to indicate support, if it had been forthcoming. iv. Duration [ 62 ] The plan of the Minister resulted in the quota of 3,100 tonnes being placed in the CMP for 1995-99. It was in 2000 and onward the quota was changed. The Plaintiffs confirmed that no duration was discussed with the Minister, but that their expectations were that the quota would be in effect indefinitely. Mr. Kean said he expected to have the quota as long as he had a license.

However, he also agreed that the Minister made no comment about duration. In the context of the alleged contract, duration would be an essential term. It was not discussed, and, other than the one-year duration of each CMP, there is no evidence to support any period of time during which the quota would be maintained, and certainly no evidence of an indefinite quota. In addition, it would be unreasonable, if there was a contract, to have such a commitment to be indefinite. The Minister could not agree to such a term as it would fetter his ability to manage the fishery. v. “Legal Options”

[63] The Plaintiffs say they agreed to take a lower quota than that to which they felt they should have been entitled. However, theygave up nothing, as they had no entitlement beyond the current licensing year. As a common property resource, the Plaintiffs had noproprietary interest in quota. It was granted on an annual basis by licenses issued by the Department under the direction of the Minister. The Plaintiffs had no right to sue for quota no matter how long they had been the beneficiaries of licensed quota. Therefore, there wasnothing they could offer as consideration since they had no legal entitlement beyond the current year.

b) Summary [64] On the evidence before me, I am unable to find that there was a contract entered into between the Plaintiffs and the Minister.

Even if it could be said that there was a form of an offer made, to consist of the quota and the LIFO principle in exchange for support,and I have found there was no offer, the allegations of contractual formation fail on all the other elements. [65] There was no indication of acceptance by the representatives of the Association at the meetings with the Minister, nor wasthere evidence of communication of acceptance by the members of the Association following the meeting in Gander. [66] There was no valid consideration.

The promise to support, or to not oppose, the Minister’s plan, does not constituteconsideration. In particular, in a policy-making and political context, support does not carry with it any legal connotation. It does not gobeyond the idea of consultation with stakeholders in the formation of policy. Further, the Plaintiffs did not give up anything to whichthey had a legal entitlement. In alleging an agreement to accept 3,100 tonnes annually, there would have to be some evidence that theyhad a proprietary interest in a higher quota.

The legal regime in place indicates that they had no interest beyond the current year. Therewas nothing that could constitute consideration for the alleged agreement. [67] On the issue of an intention to create legal relations, as I have noted, even the Plaintiffs’ account of the discussions with theMinister did not disclose that they felt this was a process that would result in a binding agreement. They were hoping to influence thecontents of future CMPs, not enter into legal relations. [68] Finally, there is no evidence of certainty of essential terms that would constitute the contract.

Indeed, even if I were to find thatthere was an offer and acceptance of that offer, the formation of a contract fails when one tries to delineate its terms. I am not convincedthat there was a consensus ad idem of the parties – in either the terms of the agreement, or in intention to form an agreement. [69] One further point needs to be stated. The witnesses for the Plaintiffs lauded Mr. Tobin for his consultative efforts. Mr. Keansaid that he “. . . was good at talking to fishermen.” Mr. Burton said, “. . . Tobin was a good Minister of Fisheries.

He listened to us.” Itseems to me that he was fulfilling his role as Minister in consulting with stakeholders. To say now that his practice of consulting withfishermen would lead to legal relations and binding agreements would be to punish a good minister and reward a minister who refused toconsult. One of the downsides to making this a contract is the chilling effect it could have on any future consultations for thedevelopment of policy. In a democracy with a vibrant political process, that would be unacceptable. B.

Ministerial Discretion and the Anti-Fettering Doctrine [70] Notwithstanding that my decision on the question of contract formation resolves the matter, I will deal, albeit briefly, on thethird issue of whether the anti-fettering doctrine prohibits such a contract. [71] The Plaintiffs argued that, notwithstanding the rule against fettering discretion, the Minister had full powers to contract. Insection 4 of the Department of Fisheries and Oceans Act, R.S.C., 1985, c. F-15, the Minister is authorized to exercise all of the powers ofParliament in the specified subject matter, involving fisheries, oceans, etc.

It was argued that this includes the power to contract. [72] It was acknowledged that there might be constitutional limitations, in particular, the prohibition against binding a successor. InWells v. Newfoundland, (SCC), [1999] 3 S.C.R. 199, the Supreme Court of Canada provided that contracts with theCrown may be binding even if legislation changes the administrative regime supporting the contract.

On that basis, damages may beclaimed even if the policy behind the contract changes lawfully. [73] The principles outlined in the Wells case, however, are applicable to contracts in the context of employment or services. Theydo not deal with the same issue as fettering in a policy context. In Happy Adventure Sea Products

(1991) Ltd. v. Newfoundland &Labrador (Minister of Fisheries & Aquaculture), 2006 NLCA 61 the Court of Appeal explicitly affirmed the anti-fettering doctrine. Inthat case, the Minister had entered into a written agreement that required the issuance of a processing license for specified minimumamounts of crab in subsequent years. The court held that the agreement fettered the Minister’s discretion, and therefore wasunenforceable. It stated, at paragraphs 27-28: 27.

The conclusion follows in the case before this Court that the Agreement is unenforceable to the extent that it fetters the discretionof the Minister to issue or refuse a fish processing licence, or to attach terms and conditions that the Minister considers appropriate(subsection 5(2) of the Act), and advisable and necessary (subsection 32(2) of the regulations). 28. In the result, the companies' applications for a declaration that the Minister is prevented from reducing their crab quota, anddamages related to the requested declaration, must fail.

It is not necessary to proceed with a consideration of the second issue, that is,whether the applications judge erred in his

interpretation of the Agreement. [74] An examination of the Wells and Happy Adventure cases highlights the distinction between contracts relating to business oremployment, and those that affect ministerial discretion in a policy context. The Wells case supports the proposition that even followinglegislation abolishing his position, the Plaintiff still retained the benefit of the contract of employment. It was argued that it can beapplied in this case, in that the existence of a contract does not prevent the government from changing the policy, but it is still obligatedto honour any consequences arising from breach of the contract due to the policy change.

[ 75 ] Apart from the requirement to prove a contract, this case is quite different. In Wells , the contract was for services and was quite distinct from the legislative enactment that created the position. In this case, the alleged contract goes to the heart of the policy issue and would have the effect of abridging the Minister’s discretion to manage the fishery. [ 76 ] In Andrews v. Canada (Attorney General) , 2009 NLCA 70 , the Court of Appeal was dealing with identical issues as before this Court in this matter.

The Plaintiffs were other members of the 3K Crab Fishermen’s Association who, like the Plaintiffs in this action, claimed damages arising from the same circumstances. The court affirmed a lower court’s decision to strike the action. Its comments on the discretion of the minister are germane to this action. At paragraph 83, the court stated the applicable principles: 83. To summarize, the above decisions support several conclusions.

First, where, pursuant to legislation, a minister is authorized to exercise discretion in the public interest, that discretion may not be constrained for future use or fettered either directly or indirectly, unless the legislation otherwise provides. Indirect fettering includes exposing the minister or government to liability for damages or payment of compensation for failure to exercise the discretion in a particular way.

Despite the apparent harshness of the result, an agreement, implied undertaking or representation having the effect of fettering the minister's authority is unenforceable and damages are not available. … [ 77 ] In applying the law to the same set of facts grounding the current action, the court went on to state at paragraph 84: 84. Applying these principles to the appeal now before this Court leads to the conclusion that it is plain and obvious the appellant fishers' action cannot succeed.

In accordance with the legislation, the Minister is clothed with discretion to issue crab licences, and to include a condition regarding quota, for "the proper management and control" of the fishery or for the "conservation and protection of fish" (see paragraph 66, above). Crab licences are issued annually resulting in yearly exercise of the Minister's discretion. That discretion must be exercised in the public interest and may not be fettered directly or indirectly.

A claim for damages for failure to exercise the discretion in a particular manner amounts to an improper indirect fettering of the Minister's discretion. As a result, the fact that the Minister made a "commitment" to the appellant fishers some years earlier cannot ground a claim in damages. … [ 78 ] Notwithstanding its decision in Bert Andrews , the Court of Appeal in this case decided that the issue should not be decided on a striking application but should go to a trial on the merits.

However, the principles stated apply to find that if there were a contract, it would offend the anti-fettering doctrine governing ministerial discretion and would thereby be unenforceable. These principles are equally applicable in a trial on the merits of this action. If I had found the existence of a contract, it would therefore be unenforceable and damages would not be available. As I have found that the Plaintiffs have not made out the elements of the contract they allege, it is not necessary for me to issue a decision on this aspect of the matter. Disposition [ 79 ] The Defendant’s application for

summary judgement in this matter is granted. The Plaintiffs’ action in contract is dismissed, as the facts on which they rely do not constitute the basis for a contract. Judgment is entered for the Defendant. [ 80 ] The Defendant Crown shall have its costs in respect of this trial in accordance with Column 3 of the Scale of Costs attached as an Appendix to Rule 55 of the Rules of the Supreme Court, 1986 , S.N.L. 1986, c. 42, Sched. D . _____________________________ Alphonsus E. Faour Justice