HJS Farms Limited v. Nova Scotia (Natural Resources)

HJS Farms Limited v. Nova Scotia (Natural Resources) Court Supreme Court Date 2018-09-18 Citation 2018 NSSC 222 Docket Ant No. 469753 Judge/Registrar/Adjudicator Scaravelli, Nicoll M. (Honourable Justice) Document Type Decision Decision Content SUPREME COURT OF Nova Scotia Citation: HJS Farms Limited v. Nova Scotia (Natural Resources), 2018 NSSC 222 Date: 2018-09-18 Docket: Ant No. 469753 Registry: Antigonish HJS FARMS LIMITED Applicant and NOVA SCOTIA (MINISTER OF NATURAL RESOURCES) Respondent Judge: The Honourable Justice N. M. Scaravelli Hearing: Decision: Antigonish, Nova Scotia, May 28th, 2018 September 18, 2018 Counsel: Christopher Boyd, for HJS Farms Limited Sheldon Choo for Nova Scotia Department of Justice Introduction [1] The applicant, an incorporated farm, seeks judicial review of a decision of the Minister of Natural Resources rejecting its application for a land exchange. The denial of the applicant’s exchange request was decided by the Eastern Regional Integrated Resource Management Team (the IRM) under the Department of Natural Resources (DNR) Land Exchange Policy. The applicant says the IRM failed to follow its own policy and that its decision was therefore unreasonable. The applicant also claims that there was a denial of natural justice, in the form of a reasonable apprehension of bias. For the reasons that follow, the application is dismissed. Background [2] On December 28, 2015, Hugh Sullivan, the principal of HJS Farms Ltd., wrote to the Land Administration Division of the Department of Natural Resources, proposing an exchange of privately-owned property from HJS to the Crown in return for Crown land, pursuant to s. 7 of the Crown Lands Act, R.S.N.S. 1989, c. 114, and the Department’s Land Exchange Policy. The HJS application was passed to the Integrated Resource Management Team (IRM) in January 2016, which commenced the assessment process under the Policy. [3] In March 2016, an IRM report indicated that the following individuals did not recommend the exchange: the Forest Technician, Gregory Keizer; the Regional Biologist, Mark Pulsifer; the Regional Forester, Timothy Bailey; the Regional Surveyor, Andy DeCoste; and the Land Administration Coordinator, Jeffrey Wadden. Cindy Steele, Manager of Acquisitions and Disposals informed Mr.. Sullivan by phone that the application was not recommended, and he later received written notice from Frank Dunn, the Deputy Minister. The letter from Mr. Dunn, dated May 12, 2016, set out several reasons for not recommending the exchange: A significant silviculture investment (valued at more that $100,000) has been made in the requested Crown lands, from which the department expects to obtain a reasonable rate of return; Appraisals indicate that your lands are 24 percent operable while the Crown lands are 100 percent operable; The Crown lands you have requested … have greater growing capacity for growing timber than the lands you have offered in exchange; Despite the land you have offered being an inholding surrounded by Crown lands, the proposed exchange would add about 4.2 km of boundaries, which would require maintenance by the department, due to the creation of orphan parcels of Crown lands remaining adjacent to the lands you have requested. [4] Mr. Dunn concluded that “[i]t would not be in the best interest of the Province to complete the land exchange you have proposed.” [5] Mr. Sullivan continued to pursue the matter. In a letter to Mr. Pulsifer, on June 15, 2016, he alleged that the IRM report “severely damaged my application and appraisals by unfairly degrading my lands and exaggerating the investments made to the Crown lands.” He accused the IRM of supplying “false information…” He alleged, among other things, errors in the Department’s assessment of operable area, growing capacity, and boundary line maintenance. Mr.. Pulsifer replied on 20 June, stating that “at no time did any DNR staff make any knowingly false or prejudicial report.” He went on to say: … IRM recommendations were based on the information available at the time. In this instance the lack of historical records meant that some assumptions had to be made which [in hindsight] did overestimate silvicultural investment on the Crown. However, that being said, the total silvicultural investment on the Crown was substantial and is viewed as a loss to the Crown if the trade was to proceed. We do acknowledge the misunderstanding [of] the term ‘operable’ and the implications that this had on the review; but this does not change the fact that the Crown has a greater area and percentage of ‘useable space’. Similarly, with your last two concerns about growing capacity and boundary lines, a trade would result in the loss of better growing ground, and a net increase in boundary lines; both of which are not in the Crown’s favor. During our last meeting in my office I explained that for the IRM review to recommend in favor of a trade there must be a ‘clear overall benefit to the Crown’ that acknowledges multiple values, otherwise there is no reason for the Crown to proceed. The information that you have provided helps clarify and provide some details that may have otherwise been lacking to this point, but does not demonstrate sufficient benefit to the Crown if this trade was to move forward as proposed… [6] Mr. Sullivan persisted, writing to Cindy Steele, Manager, Acquisitions and Disposals, on July 2, 2016. Referring to the Deputy Minister’s letter of May 12, he wrote: … After reviewing the letter it appeared obvious to me that the IRM report intentionally misrepresented the facts by exaggerating the investments made on the Crown lands and degrading the value of my lands by stating that only 24% of my land is operable… [7] Mr. Sullivan retained a forestry consultant, Chuck Bowers, who had raised various issues regarding the reasons given for rejecting the exchange proposal. Mr. Sullivan addressed several of these issues – including operable area, growing capacity, and boundary line maintenance – and accused the IRM personnel of deceit and collusion. He went on to offer an amended proposal: It is evident that the IRM report was wrong in several aspects and with seven or eight personnel involved it appears that collusion was at the forefront. These actions severely damaged my application including the appraisals by unfairly degrading my lands and exaggerating the investments made to the Crown lands. Off course when wrong information is provided wrong decisions will follow. It is even more concerning as to why they would do this. However, to further facilitate an exchange and make the swap more advantages [sic] to the Crown, I am reducing the requested area from 170 acres to 135 acres which would include the elimination of parcel 4 and the Northern portions or parcels 5 and 6 as shown on attached aerial photos. Using the same methodology that my appraiser used, this would reduce the value of the requested Crown land by $11,000 resulting in an appraisal of $53,000 whereas the appraisal of my land would remain at $69,000. The silviculture investment of $22,400 would be decreased as well. In summary the Crown would gain 65 acres of land with an appraisal advantage of $16,000 and the elimination of 3.6 km of boundary maintenance. [8] IRM staff reviewed the new proposal. On July 22, 2016, Mr. Pulsifer wrote to Steven Delorey, Regional Director, Eastern Region, with comments on Mr. Sullivan’s July 2 letter to Cindy Steele. He noted Mr. Sullivan’s accusations of deceit and collusion, remarking that Mr. Sullivan’s frustration with the decision to decline his offer is understandable; however, the suggestion that this IRM team deliberately manipulated the facts to orchestrate the eventual decision is not. At no time were IRM staff anything but professional and objective in their assessment of this exchange. As you are aware, IRM staff were instructed to complete their assessment and provide a recommendation within four hours. [9] Mr. Pulsifer noted that because of the time constraints, the initial assessment of silvicultural investment was based on a desk review rather than a field investigation, necessitating “certain assumptions that contributed to the high initial valuation of silviculture investment.” A later field investigation had reduced the estimated investment to around $60,000; according to Mr. Pulsifer, Mr. Sullivan’s claim that the Crown investment was only $22,400 was too low. [10] As to Mr. Sullivan’s claims that the IRM had mischaracterized the operable area, Mr. Pulsifer agreed that staff had “incorrectly interpreted op area as meaning ‘area suitable for forest management’ rather than ‘areas where operational harvesting could presently occur’.” He agreed that this had resulted in a devaluation of Mr. Sullivan’s property on paper, adding that “further field investigations have shown that portions of the property have severe limitations due to wet ground or wetland conditions”. He also noted that the Crown land was rated more highly on a “site class” analysis. As to boundary lines, Mr. Pulsifer wrote that maintenance was “less of an issue than … creation of new boundary lines. We accept that … maintenance of Crown boundary lines will be easier because of blueberry production. The IRM recommendation to not accept this exchange was based in part on the net amount of new internal Crown boundary line created through this proposed exchange.” [11] The IRM assessed the new proposal submitted by Mr. Sullivan, which they again recommended declining. In a memorandum to Steven Delorey on July 22, 2016, Mr. Pulsifer wrote: (1) Area: HJS Farms property at Black River, Richmond County is approximately 79 ha (200 acres) including a ~12 ha (30 acre) transmission line right of way. Crown lands at Keppoch, Antigonish County total 54 ha (135 acres). An exchange would benefit the Crown for this value. (2) Silvicultural investment: No visible silviculture investment on private land. Crown investment based on field investigation is conservatively calculated [2016 rates] at $28,000 [36 ha plantation +0.6 ha PCT] + $18,000 [roads] for a total of $46,000. (3) Site class: HJS Farms lot has a lower SC and growing potential (SC4-5; 50/50%) as compared to the Crown (SC5-6; 30/70%). PTA assessments and wet areas mapping on private land indicate wet ground on largest 2 stands. Crown has less wet areas. Crown has greater growing potential. (4) Access: HJS Farms lot has poor access on site (haul road wet and discarded poles in ditch), although there are good Crown roads leading to woodlot. Crown land at Keppoch has excellent access with solid bases. Some brushing on Crown required. (5) Standing wood volume: Approximately 23 ha of HJS Farms lot harvested 25 years ago and now is comprised of low quality intolerant hardwood. 1665 tonnes merchantable wood volume (all species). Some of the best merchantable softwood occurs on poorly drained soils or too close to the river to be harvested because it falls within the 20 m SMZ. Crown has approximately 828 tonnes of merchantable wood for all species. (6) Operable area: Several forest stands field checked on the private lot were determined to fall within the NS Forest Ecosystem Classification (FEC) “wet forest” Forest Type which indicates wetland conditions in these stands that can affect operability. Significant portion of best wood was inaccessible because of stream. Minor amounts of steep slope. Crown stands are easily over 90% operable. (7) Boundary line establishment and maintenance: Exchange would benefit Crown in Richmond County by eliminating 3.6 km of Crown boundary. Boundary line maintenance at Keppoch would not be an issue because of the nature of the land use (blueberries); however, there would still be a net increase of 4 km of new Crown boundary established [not including roads]. (8) Wildlife: Both sites have ‘moderate’ wildlife values for habitat, but the potential loss of habitat for species at risk such as moose and birds such as olive-sided flycatchers is a negative for the Crown. [12] Mr. Sullivan was accordingly informed by letter on September 23, 2016, that “although your revised proposal … would add an additional 65 acres to DNR’s land base, that would not balance the loss of values identified for the Crown lands (including the silviculture investment, the better growing potential and that they contain less wetlands). Additionally, there would be an increased cost to the department for maintenance related to acquiring approximately 4.2 km of new boundary lines.” [13] Mr. Sullivan replied with a new proposal on December 5, 2016. He provided a land comparison summary prepared by Charles Bowers for Scott & Stewart Forestry. In replying to Walter Fanning’s request to look at the new materials, Mark Pulsifer wrote: I will take a closer look at Mr. Sullivan’s latest letter and the attached reports. I would prefer that this review not become a ‘my forester is better than your forester’ debate, but I have to support my staff. The economic angle is one that the IRM team has never been in a good position to evaluate whether it is job creation, impact on local economy or potential royalties from aggregate. At the end of the day the IRM team only makes recommendations based on current knowledge and understanding of the situation. We can only comment on the areas where we have the expertise to do so. If a bigger picture decision is made that is counter to the IRM recommendation I fully accept that. I will review Mr. Sullivan’s response again and then we can discuss as a group if you wish. [Emphasis added.] [14] Mr. Pulsifer wrote to Steven Delorey on December 9, attaching comments by two Regional Crown land Foresters, Mark MacPhail and Tim Bailey, both of whom advised “that the decision should remain as before, that this trade as proposed is neither in the best interest, or a benefit to the Crown, and therefore, the trade is not recommended based on the values assessed.” Mr. Pulsifer added that he agreed with this view but went on to observe: “That being said, the matter of local economics has not been factored into our decision. The IRM group does not have the capability to fairly assess this value.” [15] On February 9, 2017, Julie Towers, Deputy Minister of Natural Resources, informed Mr. Sullivan that “after reviewing your third submission, staff still find that your proposed trade is not sufficiently advantageous to the Crown in terms of operational area, capacity to grow wood, and woodlot road quality to warrant further consideration.” She added, “[t]his decision is based on the available information, and not on any particular bias. Our position remains that your proposed trade is not in the best interest of the Crown.” [16] Mr. Sullivan replied with further supplementary material on August 20, 2017. He attached a report by Dr. Edward Bailey, which, he wrote, “along with previous reports clearly shows that our proposed swap is very advantages [sic] to the Crown.” The Bailey report identified the following alleged benefits to the Crown: - Increased total land area (65 acres) - Increased productive forest land area (15 ac or 11%) - Increased potential timber production (9%) - Increased actual timber production (9%) - Elimination of any responsibility for boundary line maintenance on the Black River property since it is surrounded by crown on all side. With regard to the Keppoch lands, Mr. Sullivan has agreed to establish and maintain these block boundaries. It should be noted that 1 side, and for some blocks, 2 sides of each of the 5 blocks is coincident with existing roads, thereby, minimizing the total kilometers of line requiring maintenance - A boost to the local economy. Converting 90 acres of poorly stocked stands and failed or partially plantations to blueberry production will result in significantly increased expenditures over and above the status quo, amounting to over ½ million dollars in the first 5 years and almost 1.7 million dollars by the year 2040. These increased expenditures will directly benefit both the Provincial Government and the local economy by providing jobs and increased sales for local business. [17] The new material was reviewed by the IRM staff, but their conclusion did not change. The foresters noted in particular, that “a significant portion of the stands on the private parcel are dominated by intolerant hardwood species”, which had little market value. He concluded there was no obvious benefit to the crown in the trade. [18] Deputy Minister Julie Towers wrote to Mr. Sullivan on September 21, 2017 and informed him that the IRM team had considered the Bailey report. She wrote: Although your private lands would consolidate existing Crown land inholdings and reduce boundary line maintenance, it remains questionable that the exchange would significantly increase the resource base for the Crown. There has been extensive Silviculture treatments in the past on the Crown lands with little to no Silviculture investment on the private lands. Appendix 6 in Dr. Bailey’s report shows the Forest Type map and stand composition of the private lands. This shows a significant portion of the stands on the private lands dominated by intolerant hardwood species. Field work conducted by DNR staff confirm these stands to be in the Wet Deciduous stand grouping. A cruise of the Crown lands in 2016 supports Dr. Bailey’s report regarding site class and staff also acknowledge the failed plantations. However, staff found that the majority of species found on site are preferred commercial species. Staff also found that 74% of the Crown lands to be stocked at 60% or better. In your land comparison report it states that there is 150 acres of operable land on the private lands and 130 acres on the Crown lands. You also acknowledge the land capability (LC) on the Crown land is superior. Dr. Bailey has summarized this as; 119cds/ac/yr. on the Crown lands and 116.9cds/ac/yr. on the private lands, with the private lands having a slightly superior timber yields attributed to the difference in acreage. Listed in Dr. Bailey’s land comparison summary Crown land as; 161 cords per year for the Crown lands and 175 cords per year for the private land, however, from a commercial forestry perspective this does not meet the clear benefit objective when a significant portion of the cords being grown on the private lands are comprised of intolerant hardwood in [sic] which has little market value. Our position remains that your proposed trade is not on the best interest of the Crown. DNR considers this matter closed. [19] Mr. Sullivan filed a notice for judicial review on October 27, 2017, followed by an amended notice on January 2, 2017. Governing legislation and policy The Crown Lands Act [20] The Crown Lands Act, RSNS 1989, c 114 (the Act), accords “general supervision and management of this Act and the regulations” to the Minister (s 4(1)), who may “from time to time designate persons to act on behalf of the Minister” (s 4(2)). Section 5 sets out the Minister’s powers: 5 The Minister has supervision, direction and control of (a) the acquisition, registration, survey and sale or disposition of Crown lands; and (b) the administration, utilization, protection and management of Crown lands, including (i) access to and travel on Crown lands, (ii) habitats for the maintenance and protection of wildlife on Crown lands, (iii) harvesting and the renewal of timber resources on Crown lands, (iv) forest recreation on Crown lands, and (v) matters that may be assigned pursuant to this Act and the regulations, but not including land owned or claimed by the Province specifically under the jurisdiction of another member of the Executive Council or a department, branch or agency of the Government other than the Department. [21] The Act provides, at s 7(c), that “[w]ith the approval of the Governor in Council, the Minister may … (c) exchange Crown lands for privately owned land…” The Land Exchange Policy [22] The Department of Natural Resources Land Exchange Policy (revised 1 April 2008) permits the exchange of Crown land for private land “where the acquisition of the privately held land has a clear benefit to the Province of Nova Scotia.” The “Policy Objectives” are “[t]o establish criteria to guide Department staff: in advising prospective applicants; in reviewing applications; and in making recommendations regarding exchanges of privately held lands for Crown lands.” [23] The Minister “reserves the right to waive any of the terms and conditions” of the Policy. In describing the Department’s mandate, the Policy states, at section 3: The Department owns and manages Crown lands for all the citizens of Nova Scotia. Because it is entrusted to manage lands for public use, the Department must ensure that responsible and sustainable management, and public use and benefit, take priority over individual or private use. There is no statutory obligation to exchange lands. Land exchanges should rather be viewed as the Department’s opportunity to broaden and/or increase the resource base and the land values significant to Nova Scotians. An inclusive and consistent land exchange policy is needed for future consideration of land exchange proposals. The following policy will assist applicants and department personnel in evaluating the merits of a particular exchange. The goal is to promote exchanges which produce an advantage to the province and to discourage those which do not produce an advantage. The process of submitting a land exchange application is costly and time consuming. The evaluation of land exchange proposals creates substantial demand on Department personnel… [Emphasis added.] [24] Section 8 of the Policy sets out the Policy Directives, including the following, at ss 8(A) and 8(C): Land Exchange Policy Directives A. Land Acquisition Criteria: Exchanges may be made only where the lands to be acquired by the Crown meet the following criteria: i. at least one of the following: (1) they have more than 50% of their boundary in common with Crown land, (2) they border on Crown land and utilize boundaries not requiring periodic maintenance (e.g. roads, rivers) such that the length of the boundary requiring maintenance is reduced, or (3) they adjoin other privately held land located within a major block of Crown land such that acquisition would lead to future consolidation of land units; ii. have free and clear title that can be obtained by the Crown under the Land Registration Act; iii. have no associated undue restrictions imposed on the conveyance, which the Department is not prepared to accept; iv. have no known or suspected environmental liabilities, contamination, or public safety issues; and, v. must be of equal or greater monetary value (as determined by appraisal or timber cruise prepared in accordance with the Terms of Reference found in the Appendix) than the Crown land being exchanged. … C. Land Disposal Criteria: Exchanges may be made only where the lands to be disposed of by the Crown: i. have no known ecological, cultural, or scientific importance; ii. are not a coastal, riparian, or wetland resource; iii. do not border on navigable lakes or waterways; iv. are not required to provide access to Crown land (including submerged land) or Crown resources; v. are free of Departmental commitments; vi. have less than 50% of their boundary in common with other Crown lands; and, vii will not sever a larger parcel of Crown land into two or more separate parcels, or otherwise diminish the integrity of the Crown block. [25] The procedures connected with applications for land exchanges are set out at section 9 of the Policy. With respect to the IRM review process, it states, at ss 9(C): Review: Exchanges are subject to review by the Department’s Regional IRM team. Evaluations are conducted based on the Policy Directive described in Section 8. Should the IRM review determine that the exchange is not a clear benefit to the Crown, the exchange will be declined, and the applicant advised of the reason for the rejection by the Manager, Acquisitions and Leases Section. [26] Pursuant to s 9(H) of the Policy, a land exchange proposal that the IRM recommends may lead to a submission for the Governor-in-Council; the Policy states that “[a]ll land exchanges with the Department are subject to the review and assent of Cabinet.” Judicial review [27] Civil Procedure Rule 7.02(2)(a) permits a person to seek “judicial review of a decision within the supervisory jurisdiction of the court…” The applicant on this application requests certiorari, that is, the quashing of the decision. While certiorari is no longer the correct name for it, this remedy is available pursuant to Rule 7.11(b), which permits the court to “grant any order in the court’s jurisdiction that will give effect to a decision on a judicial review, including … (b) an order setting aside the decision under review, or part of it, and terminating any legal process flowing from the decision, or the part…” Review of the substantive decision [28] The first ground on which the applicant challenges the decision is the assertion that it was contrary to the [Land Exchange] Policy, arbitrary, and unreasonable. Standard of review [29] As the majority of the Supreme Court of Canada stated in Dunsmuir v New Brunswick, 2008 SCC 9, [2008] SCJ No 9, where the standard of review applicable to a particular category of question has not been previously determined, the court must identify the proper standard of review. It does not appear that the specific issue of the standard of review governing a review of a decision to refuse a land transfer under the Crown Lands Act has been determined. [30] In Dunsmuir, the majority noted various factors relevant to determining the standard of review: 55 A consideration of the following factors will lead to the conclusion that the decision maker should be given deference and a reasonableness test applied: - A privative clause: this is a statutory direction from Parliament or a legislature indicating the need for deference. - A discrete and special administrative regime in which the decision maker has special expertise (labour relations for instance). - The nature of the question of law. A question of law that is of "central importance to the legal system ... and outside the ... specialized area of expertise" of the administrative decision maker will always attract a correctness standard (Toronto (City) v. C.U.P.E., [2003] 3 S.C.R. 77, at para. 62). On the other hand, a question of law that does not rise to this level may be compatible with a reasonableness standard where the two above factors so indicate. [31] As the applicant notes, the Policy contains no privative clause; the Department has specialized expertise in utilization of Crown Lands in general and exchange of Crown Lands for private lands in particular; and this proceeding does not feature any question of law of central importance to the legal system or outside the decision-maker’s expertise. These factors all point to deference, and therefore to a reasonableness standard. As the respondent points out, the decision under review is a discretionary decision guided by a policy, arising under the decision-maker’s home statute and involving the application of the expertise of the Department’s staff. [32] There is no dispute between the parties – and no plausible argument to the contrary – that the standard of review on this issue is reasonableness. The Dunsmuir majority had the following to say about the substance of the reasonableness standard: 47 Reasonableness is a deferential standard animated by the principle that underlies the development of the two previous standards of reasonableness: certain questions that come before administrative tribunals do not lend themselves to one specific, particular result. Instead, they may give rise to a number of possible, reasonable conclusions. Tribunals have a margin of appreciation within the range of acceptable and rational solutions. A court conducting a review for reasonableness inquires into the qualities that make a decision reasonable, referring both to the process of articulating the reasons and to outcomes. In judicial review, reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process. But it is also concerned with whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law. 48 … What does deference mean in this context? Deference is both an attitude of the court and a requirement of the law of judicial review. It does not mean that courts are subservient to the determinations of decision makers, or that courts must show blind reverence to their interpretations, or that they may be content to pay lip service to the concept of reasonableness review while in fact imposing their own view. Rather, deference imports respect for the decision-making process of adjudicative bodies with regard to both the facts and the law. The notion of deference "is rooted in part in a respect for governmental decisions to create administrative bodies with delegated powers" (Mossop, [1993] 1 S.C.R. 554 at p. 596, per L'Heureux-Dubé J., dissenting). We agree with David Dyzenhaus where he states that the concept of "deference as respect" requires of the courts "not submission but a respectful attention to the reasons offered or which could be offered in support of a decision": "The Politics of Deference: Judicial Review and Democracy", in M. Taggart, ed., The Province of Administrative Law (1997), 279 at p. 286 (quoted with approval in Baker, [1999] 2 S.C.R. 817 at para. 65, per L'Heureux-Dubé J.; Ryan, [2003] 1 S.C.R. 247 at para. 49). 49 Deference in the context of the reasonableness standard therefore implies that courts will give due consideration to the determinations of decision makers. As Mullan explains, a policy of deference "recognizes the reality that, in many instances, those working day to day in the implementation of frequently complex administrative schemes have or will develop a considerable degree of expertise or field sensitivity to the imperatives and nuances of the legislative regime": D. J. Mullan, "Establishing the Standard of Review: The Struggle for Complexity?" (2004), 17 C.J.A.L.P. 59, at p. 93. In short, deference requires respect for the legislative choices to leave some matters in the hands of administrative decision makers, for the processes and determinations that draw on particular expertise and experiences, and for the different roles of the courts and administrative bodies within the Canadian constitutional system. [33] The Nova Scotia Court of Appeal summarized the reasonableness analysis as follows in Archibald v Nova Scotia (Utility and Review Board), 2010 NSCA 27, [2010] NSJ No 171: 22 I will add a few words on the meaning of "reasonableness" for a reviewing court. In Dunsmuir, Justices Bastarache and LeBel said "reasonableness" has components of process and outcome. (a) For process, the reviewing court considers whether the decision under review expresses a justifiable, intelligible and transparent reasoning path to the tribunal's conclusion. This is not a correctness analysis in disguise. Rather, the reviewing court determines whether it can understand how the tribunal reached its outcome, and whether the tribunal's reasons afford to the reviewing court the raw material for the reviewing court to perform its next task of assessing whether the tribunal's conclusion inhabits the range of acceptable outcomes. (b) The court then assesses the outcome's acceptability through the lens of deference to the tribunal's "expertise or field sensitivity to the imperatives or nuances of the legislative regime". This respects the legislators' decision to leave certain choices within the tribunal's ambit, constrained by the boundary of reasonableness. The reviewing court does not ask whether the tribunal's conclusion is right or preferred. Rather the court tracks the tribunal's reasoning path, and asks whether the tribunal's conclusion is one of what may be several acceptable outcomes. The Land Exchange Policy [34] The Crown maintains that the decision not to accept the exchange was reasonable. There is no obligation to accept an exchange. The Minister has a discretion. [35] The Minister’s ability to delegate duties to officials is in accordance with the “Carltona principle”, which the Supreme Court of Canada discussed in R v Harrison, [1977] 1 SCR 238, 1976 Carswell BC 155, where Dickson J (as he then was) said, for the court: 14 .... Thus, where the exercise of a discretionary power is entrusted to a minister of the Crown it may be presumed that the acts will be performed not by the Minister in person but by responsible officials in his department: Carltona Ltd. v. Commrs. of Works, [1943] 2 All E.R. 560. The tasks of a minister of the Crown in modern times are so many and varied that it is unreasonable to expect them to be performed personally. It is to be supposed that the minister will select deputies and departmental officials of experience and competence, and that such appointees, for whose conduct the minister is accountable to the legislature, will act on behalf of the minister, within the bounds of their respective grants of authority, in the discharge of ministerial responsibilities. Any other approach would but lead to administrative chaos and inefficiency… [36] The Minister in this case rejected successive proposals for land exchanges on the basis that there was no clear benefit to the Crown. Officials carrying out delegated duties had expertise that is entitled to deference. According to the Crown, the Policy should be read in accordance with the modern approach to statutory interpretation, as described in Bell ExpressVu Limited Partnership v Rex, 2002 SCC 42, [2002] SCJ No 43: 26 In Elmer Driedger's definitive formulation, found at p. 87 of his Construction of Statutes (2nd ed. 1983): Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament. [37] The same approach applies when interpreting regulations, with the qualification that regulations must be read in the context of their enabling Act, having regard to the language and purpose of the Act in general and more particularly the language and purpose of the relevant enabling provisions. Clear Benefit [38] The Policy requires a “clear benefit” to the Province as a condition for an exchange. The applicant submits that “it is fair to assume that ‘clear benefit’ in this context means clear and unambiguous. The benefit need not be large just [sic] apparent and inarguable.” [39] The applicant notes that twice in the record there are indications from the Deputy Minister that the proposed land exchange appeared to be beneficial to the Crown. In each case, these were remarks made in the context of directing questions at the IRM staff in response to Mr. Sullivan’s proposals. It is telling that the Minister ultimately accepted the IRM recommendation. [40] In interpreting the phrase “clear benefit”, the Crown cites a Cambridge English Dictionary definition of “clear”: “Certain, having no doubt, or obvious.” The Crown argues that this sets a high threshold especially in light of the various considerations from a variety of disciplines that must be taken into account. The Crown also points to the language in the Policy indicating that its goal is to promote exchanges which produce an advantage to the Province and to discourage those which do not produce an advantage. The Crown says the Department’s conclusion was justifiable and transparent on [the] face of the record and was communicated to Mr. Sullivan on multiple occasions over the course of almost two years. The Crown notes that the applicant agrees that the comparison of the operability of the Private Lands and Crown Lands was controversial. Based on the definition cited above, the Crown maintains, the benefit was not certain, obvious, or beyond doubt. On a reasonableness standard, the Crown say, deference should be given to a Minister operating in her home statute, within an area of her own expertise. Section 8 of the Policy [41] The applicant submits that all the criteria for a land exchange under ss 8(A) and 8(C) of the Policy are met. At worst, the applicant argues, the proposal was deficient “in trivial ways that did not seem to trouble the IRM.” [42] The applicant says that (with respect to para 8(A)) the private lands are a single parcel of rectangular shape that is completely surrounded by Crown lands, thus satisfying the fifty percent criterion of para 8(A)(i)(1). HJS has clear title to the lands and there are no undue restrictions or environmental or safety issues raised by the Department. The applicant’s appraisals indicate that the private lands are more valuable than the Crown Lands, particularly with the reduced Crown acreage being sought in the revised application. [43] As for the attributes of the Crown Lands under para 8(C), the applicant says there is no known ecological, cultural, or scientific importance to the Crown Lands. While there were references to certain endangered species in IRM communications in the record, conservation was not expressly cited as a reason for rejecting the HJS proposal, and at some points the Department indicated a willingness to entertain a lease proposal, indicating that loss of habitat was not a concern. Further, the Crown Lands are not a coastal common riparian or wetland resource; they do not border a navigable lake or waterway; and they are not required to provide access to other Crown lands or Crown resources. As to Departmental commitments, the applicant notes that the Crown lands are subject to a harvest license with Port Hawkesbury Paper, but the Department did not cite this as a reason for rejecting the applicant’s proposal. As to whether the Crown Lands have less than fifty percent of their boundary in common with other Crown Lands, the applicant notes that the Crown Lands are surrounded by other Crown property and says HJS has agreed to maintain any new boundary lines with Crown property. The applicant also notes that one Departmental staffer, Walter Fanning, stated in an e-mail that boundary lines were a secondary concern. Finally, the applicant says, a subdivision or exchange would not result in the creation of more Crown parcels or otherwise diminish the integrity of the Crown block. [44] The applicant says the deficiencies consistently emphasized by the IRM are the following: silviculture investment on the Crown Lands; higher operability and greater growing capacity of the Crown Lands; and the creation of boundaries to be maintained by the Crown. The applicant says none of these are found in the Policy, and, to the extent that the first three factors relate to the relative value of the Crown Lands and the Private Lands, the Department has taken no issue with the Taylor appraisal prepared on the applicant’s behalf. [45] As to the silviculture investment referenced by the Department, the applicant maintains that the Bowers report indicated that the efficacy of the silviculture investment was “minimal”, and that the Department’s estimates of the amount invested had fallen throughout the process, from $140,000 to $46,000. [46] With respect to the “operability” of the respective lands, the applicant cites the indication in the MacMullin report that the operability of the Crown and Private lands was highly similar, suggesting a “clear benefit” to the Crown due to the fact that the private lands as described in the revised application are significantly larger than the Crown Lands. [47] The applicant says the indication in various reports of a slightly higher growing capacity on the Crown Lands is balanced by the fact that the Private Lands are more fully stocked. Like operability, the applicant says, growing capacity is a consideration going to the market value of the property, which also supports finding a clear benefit to the Crown. [48] As to boundary lines, the applicant notes the indications that this was not a central consideration for the Department, and that HJS has indicated its readiness to maintain any new boundary lines. [49] As such, the applicant submits, none of the Department’s concerns establish even an ambiguous negative return for the Crown, and the only reasonable conclusion is that the exchange proposed in the revised application would result in a clear and unambiguous benefit to the Crown. Analysis [50] At each stage the Department provided the applicant with detailed and specific reasons for not recommending his proposal. Each time Mr. Sullivan advanced a new proposal or submitted new material, the IRM team considered it and the Department provided him with specific reasons for maintaining their position. The record demonstrates a “justifiable, intelligible and transparent” reasoning path as noted in Archibald. [51] The applicant’s position amounts to this: it was unreasonable under the Policy for the IRM not to accept the various experts’ opinions provided by Mr. Sullivan, and the IRM’s objections to the exchange are answerable by the appraisals he provided. He argues that concerns about comparative silviculture investment, operability, and growing capacity were resolved by the two appraisals. He takes the position that there was only one reasonable outcome. [52] This is not objectionable per se; as the majority said in McLean v British Columbia (Securities Commission), 2013 SCC 67, [2013] SCJ No 67: 38 It will not always be the case that a particular provision permits multiple reasonable interpretations. Where the ordinary tools of statutory interpretation lead to a single reasonable interpretation and the administrative decision maker adopts a different interpretation, its interpretation will necessarily be unreasonable -- no degree of deference can justify its acceptance... In those cases, the "range of reasonable outcomes" (Canada (Citizenship and Immigration) v. Khosa, 2009 SCC 12, [2009] 1 S.C.R. 339, at para. 4) will necessarily be limited to a single reasonable interpretation -- and the administrative decision maker must adopt it. … 40 … [U]nder reasonableness review, we defer to any reasonable interpretation adopted by an administrative decision maker, even if other reasonable interpretations may exist. Because the legislature charged the administrative decision maker rather than the courts with "administer[ing] and apply[ing]" its home statute (Pezim, at p. 596), it is the decision maker, first and foremost, that has the discretion to resolve a statutory uncertainty by adopting any interpretation that the statutory language can reasonably bear. Judicial deference in such instances is itself a principle of modern statutory interpretation. 41 Accordingly, the appellant's burden here is not only to show that her competing interpretation is reasonable, but also that the Commission's interpretation is unreasonable. And that she has not done. Here, the Commission, with the benefit of its expertise, chose the interpretation it did. And because that interpretation has not been shown to be an unreasonable one, there is no basis for us to interfere on judicial review -- even in the face of a competing reasonable interpretation. [Emphasis added.] [53] The applicant does not deny that the comparisons of operability and relative growing capacity were controversial. He points out the initial errors in the IRM assessment of silviculture investment but does not address the IRM’s position that there has been a degree of investment on the Crown lands, but little or none on his. Nor does he give any clear answer to the IRM’s view that the stands on the private land are of a lower grade overall than those on the Crown land. He simply insists that the view of his experts must prevail over those of the subject matter experts who comprise the IRM. The court is in no position on judicial review to make a definitive technical determination under the Land Exchange Policy. This is why the decision-maker is entitled to deference. As the Supreme Court of Canada has made clear, where there are multiple reasonable outcomes, the decision will only be quashed if it was actually unreasonable. [54] The applicant has advanced a correctness argument under the guise of a reasonableness argument. He addresses reasonableness by the bald assertion that his is the only reasonable position. There is no acknowledgement of the deference due to the Department in making the determination of whether there is a “clear benefit” to the Province. In my view the applicant has not shown that the decision was unreasonable. [55] The second ground on which the applicant challenges the Minister’s decision is the claim that the IRM’s conduct raised a reasonable apprehension of bias, resulting in a denial of the duty of fairness. [56] As to the standard of review, denial of natural justice is a question of law reviewable on a correctness standard. As stated in Dunsmuir, the court will not show deference and undertake its own analysis of the question. The Court of Appeal confirmed this in Nova Scotia (Attorney General) v MacLean, 2017 NSCA 24, [2017] NSJ No 89, where Saunders JA remarked that a “reasonable apprehension of bias is an issue of procedural fairness and, where found, results in a loss of jurisdiction.” As to bias itself, he said: 40 The "test" regarding what constitutes a reasonable apprehension of bias appears in the oft-quoted dissenting judgment of de Grandpré, J. in Committee for Justice and Liberty v. National Energy Board, [1978] 1 S.C.R. 369 at para 40: ...the apprehension of bias must be a reasonable one, held by reasonable and right-minded persons, applying themselves to the question and obtaining thereon the required information, that test is "what would an informed person, viewing the matter realistically and practically -- ...conclude? Would he think that it is more likely than not that Mr.. Crowe, whether consciously or unconsciously, would not decide fairly. 41 In relation to what constitutes the "reasonable person", the qualifications are not limited to just being "reasonable". The law requires a fully informed "reasonable person". That is: ...a person who approaches the question of whether there exists a reasonable apprehension of bias with a complex and contextualized understanding of the issues in the case. The reasonable person understands the impossibility of judicial neutrality but demands judicial impartiality. [R. v. S.(R.D.)( R.D.S.), [1997] 3 S.C.R. 484] [57] The applicant points to several items in the record that it says support the allegation that there was a reasonable apprehension of bias in the IRM’s approach to the exchange proposal. [58] The applicant says, the record shows that IRM participants acknowledged mistakes on certain points in their handling of the matter. The Crown agrees. For instance, in an e-mail dated 22 July 2016, Mark Pulsifer wrote to Steven Delorey, and said: In reading Mr. Sullivan’s response to Cindy [Steele] it is obvious from his language that he feels that the Deputy’s decision to decline his offer was based on inaccurate and therefore prejudicial information. In his letter Mr. Sullivan claims that IRM staff intentionally misrepresented facts by exaggerating investments on the Crown, made deceitful comments that devalued his property and the credibility of his appraiser, and colluded from the beginning to facilitate the recommendation. Mr. Sullivan’s frustration with the decision to decline his offer is understandable; however, the suggestion that this IRM team deliberately manipulated the facts to orchestrate the eventual decision is not. At no time were IRM staff anything but professional and objective in their assessment of this exchange. As you are aware, IRM staff were instructed to complete their assessment and provide a recommendation within four hours. In his letter, Mr. Sullivan outlines four points from the IRM review that he feels unfairly misrepresents his case and lead [sic] to the decision to decline his offer. 1. Silvicultural investment. Because of time constraints for a recommendation on this exchange, the initial IRM assessment of silvicultural investment on the Crown was based on a desk top review only. This necessitated certain assumptions that contributed to the high initial valuation of silviculture investment. Further field investigation at a later date indicated that some of these assumptions were not valid [or could not be validated] which would reduce investment estimates to $60,000+ based only on initial plantation establishment and road construction. Other treatments may have occurred but because there are no records of such, or obvious evidence on the ground, revised estimates do not include these. Mr. Sullivan’s estimate of silvicultural investment on the Crown [$22,400] is low. 2. Operable area. In Mr. Sullivan’s documentation from his appraiser the term ‘OP Area’ [Operable Area] is referred to under the heading ‘Stand Details’ in his Photo Cruise Summary table for the HJS Farms property. In that table the amount of ‘op area’ is listed as 24%. IRM staff incorrectly interpreted op area as meaning ‘area suitable for forest management’ rather than ‘areas where operational harvesting could presently occur’. Mr. Sullivan is correct that our misinterpretation devalued his property [on paper], and this was acknowledged at our meeting here in Antigonish on 14 June 2016. That being said, further field investigations have shown that portions of the property have severe limitations due to wet ground or wetland conditions. [59] The underlined passages are the only ones cited by the applicant in its brief. The message is quoted in the brief in such a way as to make it appear that the sentence about the IRM staff being required to complete an assessment within four hours is the beginning of the paragraph about silvicultural investment. Mr. Sullivan suggests that the errors indicate bias because the IRM did not change its position after acknowledging the errors. But it does not follow that correcting acknowledged errors must result in a different outcome. [60] The applicant also points to Cynthia Steele’s remark, in an e-mail to several members of the team on July 4, 2016, that “FYI…he never goes away”, calling it an “impatient and injudicious comment” which does not “in and of itself … establish bias.” (The Crown notes that a handwritten note on the same e-mail says, “discussed with Cindy, decided we will wait for response from field staff before preparing LA’s response.”) [61] On December 5, 2016, Deputy Minister Frank Dunn wrote to Walter Fanning, among others, that Mr. Sullivan makes a compelling case if accurate and he has 3rd party forestry folks attest to it. If that is the case I (Julie) need to know.” Mr. Pulsifer, after being forwarded this message by Mr. Fanning, responded: I will take a closer look at Mr. Sullivan’s latest letter and the attached reports. I would prefer that this review not become a ‘my forester is better than your forester’ debate, but I have to support my staff. The economic angle is one that the IRM team has never been in a good position to evaluate whether it is job creation, impact on local economy or potential royalties from aggregate. At the end of the day the IRM team only makes recommendations based on current knowledge and understanding of the situation. We can only comment on the areas where we have the expertise to do so. If a bigger picture decision is made that is counter to the IRM recommendation I fully accept that. I will review Mr. Sullivan’s response again and then we can discuss as a group if you wish. [Emphasis added.] [62] The underlined passage – the only part of this message quoted in the applicant’s brief – purportedly represents “evidence supporting the notion that presenting a united bureaucratic front was more important to IRM than a clear-headed objective analysis of evidence.” Comments of this kind are discussed by Brown and Evans in Judicial Review of Administrative Action in Canada, vol. 3 (Carswell: loose-leaf) at 11:3350, albeit in the context of tribunal hearings: … Nor will an expression of momentary impatience or loss of equanimity by a tribunal member result in disqualification, particularly where it was merely an attempt to control the manner of proceeding. Similarly, a sarcastic comment when a party refused to give evidence, or an ill-chosen and insensitive phrase, will not, without more, lead to disqualification. [63] When placed in the context of the rest of the message, the applicant’s gloss on this isolated passage is undermined. These words cannot plausibly be read as anything other than an indication that the IRM would continue to advise within its area of expertise, while acknowledging that other considerations might change the ultimate result. In any event, it does not appear that even Mr. Sullivan takes the position that this remark on its own is disqualifying. [64] On August 30, 2017, after receiving the Bailey report, Mr. Wadden wrote to Mr. Pulsifer, “[w]ill take another look at the presented report on return next week. Up front, without looking at it, still not recommended.” The applicant emphasizes the second sentence, calling it a clear indication that a member of the IMR. team is unwilling to approach additional information relevant to the Revised Application with an open mind and that Mr. Wadden was “hostile to the evidence”; at the very least, the applicant argues, it does not give the impression of someone with a willingness to be convinced by fresh information. [65] The Crown agrees that this phrase suggests that he did not an open mind to reviewing the material received in August 2017. However, the Crown submits that the comment could simply have reflected frustration with Mr. Sullivan’s ongoing allegations against the Department’s staff while he (and they) had spent significant time reviewing and responding to a trade that up to that point did not demonstrate a clear benefit to the Province. [66] The applicant goes on to argue that Mr. Wadden attempted to walk back the comment in his August 30 e-mail in another e-mail the next day, in which he wrote: While preparing a response to the most recent information … yesterday, I want to make it clear and reinforce my previous email. This was not meant to diminish any additional information supplied to the file, nor was it meant to have any bias opinion to the proponent. This was simply to show that: 1. I have full support to all staff who have been involved with this file over the last 2 years, and it is clear, this is not a benefit to the Crown. Staff have spent countless hours and resources revisiting this file and have once again been challenged. 2. The subject Crown Lands are listed as IRM Class 2, and are under a Forest Utilization License Agreement … with Port Hawkesbury Paper… There has been extensive silviculture investment in the past on these parcels of interest. PHP have expressed in a letter that they are not in support of the exchange. 3. The subject Crown Lands consist of 2 Property Identification numbers … that combine for a total area of 1435 hectare… This exchange would create 2 private parcel holdings of 9.1 and 7.4 ha., all of which would be surrounded by the available 637 ha. of available Crown Land… There would also be 4 private parcel inholdings of 13.6, 7.5, 8.1 and 7.9 ha., all of which would be surrounded by the available 797 ha. of available Crown Land… From a land planning perspective, it is questionable whether we should even pursue these type of portion trades in the first place. This only leads to multiple private inholdings, that is ultimately fragmenting the greater landscape level Crown land area. Maybe we need to revisit the Land Exchange Policy? [67] The applicant’s claim that the underlined passage – the only part of this message quoted in its brief – is no more than an attempt to walk back the comment of the previous day is belied by placing the remark in context. The applicant adds, without elaboration, that it is “difficult for HJS to accept the latter email as a sincere expression of Wadden’s state of mind regarding the Revised Application.” That, of course, is not the standard for finding a reasonable apprehension of bias. [68] The record indicates that, as the Crown submits, Mr. Wadden did review the material in an impartial way, even if he was not entirely neutral. The Crown notes the remark from RDS, cited in MacLean, that “[t]he reasonable person understands the impossibility of judicial neutrality, but demands judicial impartiality.” [69] Sara Blake, in Administrative Law in Canada, 6th ed (Toronto: LexisNexis, 2017) at pars 3.48—50 and 3.53regarding prejudgment as a bias issues state: In cases that are not strictly adjudicative, the extent to which a member may hold opinions before deciding a case depends on the circumstances. Greater leeway is enjoyed by investigators, by those who decide policy issues and by elected officials than by adjudicators. … To disqualify an elected [tribunal] member, it must be shown that the member prejudged the matter to such an extent that representations to the contrary would be futile. The same test applies to all decisions that are based on policy considerations regardless of whether the decision maker is elected or appointed. Persons who decide such questions must keep an open mind. Their expression of strong opinions prior to a hearing does not, alone, disqualify them. … Regulators who decide applications often develop the case through investigation, discussions and correspondence before coming to a final decision. The expression of preliminary views by the regulator does not give rise to a reasonable apprehension of bias so long as the regulator kept an open mind before making a final decision. [70] In my view, the claim that the IRM team had pre-judged the application to such an extent that it can be said that they individually, or the IRM collectively, did not approach the application with an open mind is not sustainable. [71] A finding of reasonable apprehension of bias requires “a complex and contextualized understanding of the issues in the case”, as the court held in RDS. The applicant’s assertion of bias, by contrast, rests on several remarks taken out of context and given exaggerated weight in the context of the entire dealings between Mr. Sullivan and the Department. [72] The applicant argues that the remarks in the record that have been isolated in its brief indicate that the “IRM quickly decided to reject the application (both original and revised)” and that “[w]hen errors in their analysis were subsequently pointed out, there was no consideration given to changing their recommendation.” As such, the applicant submits, an informed person viewing the matter realistically and having though the matter through, would think it more likely than not that the IRM, consciously or unconsciously, would not decide the Revised Application fairly. As I understand the applicant’s position on the bias issue, it emanates directly from his position on the substantive issue: since the only reasonable conclusion was that his proposal would bring a “clear benefit” to the Province, the only possible reason for rejecting it was bias. [73] In my view the record belies this position: while the applicant has isolated several remarks indicating some impatience on the part of some individuals involved in the process, the record indicates that his successive rounds of correspondence were analyzed against the backdrop of the “clear benefit” analysis. This did not stop Mr. Sullivan from making claims of fabrication and deceit when he did not get the answer he wanted. Nevertheless, the IRM team reviewed and considered each of his submissions and explained its reasons for concluding that it would not bring a “clear benefit.” Examined in the context of the record, an informed person, viewing the matter realistically would not find a reasonable apprehension of bias. [74] Costs payable to the respondent in the amount of $1,000 inclusive. ____________________________ Scaravelli, J.