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Second Thoughts? Alberta Court of Appeal Issues Rare Decision Reconsidering Prior Injunction Ruling

Second Thoughts? Alberta Court of Appeal Issues Rare Decision Reconsidering Prior Injunction Ruling
July 3, 2020

On June 29, 2020, in AC and JF v. Her Majesty the Queen in Right of Alberta, the Alberta Court of Appeal (ABCA) unanimously granted an application to reconsider a decision issued by the ABCA only nine months earlier. The ABCA agreed that its prior ruling in Alberta Union of Provincial Employees v. Alberta (Prior Decision) met the test for reconsideration. In that ruling, the majority of the ABCA modified the test for granting an injunction to suspend the operation of legislation pending a ruling on its constitutionality.

Successful applications to reconsider prior ABCA decisions are extraordinarily rare. The ruling to reconsider the Prior Decision is one of only a handful of cases where the ABCA has agreed to reconsider one of its earlier decisions. In doing so, the ABCA signalled the need for clarity on the proper legal test for interim injunctions that seek to suspend the operation of new legislation. Increasingly, parties are resorting to the courts for injunctive relief to prevent the implementation of legislation before the constitutionality of the law is determined. However, with conflicting decisions on the appropriate legal test in Alberta and across the country, the issue is clearly a difficult one where courts are divided.

The reconsideration of the Prior Decision is likely to be heard by an equally rare five-member ABCA, potentially setting the stage for a final showdown at the Supreme Court of Canada.

PRIOR DECISION

Leading up to the Prior Decision, the Alberta Union of Provincial Employees obtained an interim injunction from the chambers judge suspending the Alberta government's implementation of Bill 9, the Public Sector Wage Arbitration Deferral Act. The chambers judge applied the well-known three-part test for an interim injunction. He found that there was a genuine issue to be tried, namely whether Bill 9 was an unconstitutional infringement of the rights of the union members. He concluded that there was irreparable harm to the collective bargaining relationship and that the balance of convenience favoured the union. As a result, the lower court stayed the operation of Bill 9 pending trial.

On appeal, a sharply divided ABCA allowed the appeal and set aside the interim injunction. Writing for the majority, Justices Watson and Slatter cite the familiar three-part test for injunctions. In addition, the majority also adopts and relies on other principles in cases involving injunctions to prevent the implementation of legislation, including “a strong presumption that legislation is constitutional.”

In a strong dissent, Madam Justice Paperny found that the chambers judge had properly applied the three-part test and that the decision was entitled to deference on appeal. In particular, she disagreed with any modification of the test for injunctive relief and rejected the majority's presumption of constitutional validity.

ABCA DECISION

Fast forward nine months, and the ABCA has now decided that the Prior Decision is worthy of a second look.

In AC and JF v. Her Majesty the Queen in Right of Alberta, the chambers judge granted an injunction suspending the implementation of certain amendments to Alberta's Child, Youth and Family Enhancement Act and the Child, Youth and Family Enhancement Regulation. Those amendments reduced the maximum age eligibility for participants in the financial assistance program.

The Alberta government is appealing that decision. One of the key issues in the appeal is whether the Prior Decision incorrectly modified and created a more stringent test that is applicable when an interim injunction is sought to prevent the implementation of legislation. In order to seek clarity, an application was brought to have the ABCA reconsider the Prior Decision.

In a short three-page decision, the ABCA unanimously found that the Prior Decision should be reconsidered. The ABCA began by noting that the power to reconsider prior decisions should be exercised cautiously and sparingly. The ABCA then analyzed the five-factor test for granting reconsideration. In particular, the ABCA noted that the majority's adoption of a more stringent test for injunctive relief and its reliance on a "strong presumption of constitutionality" in the Prior Decision was out of sync with other Canadian courts. Although the ABCA did not address whether the Prior Decision had an obvious, demonstrable flaw, it emphasized the need for clarity given the sharply divergent views on the correct legal test. Finally, the ABCA also noted that the Prior Decision had not been circulated to the entire ABCA for comment or approval.

As a result, the ABCA granted permission to reconsider the Prior Decision. Given the contentious nature of the issue, the ABCA will likely appoint a five-member panel of the ABCA for the reconsideration hearing.

CONCLUSION

Litigants are increasingly relying on the powerful tool of injunctive relief to halt the operation of legislation that they ultimately wish to challenge in a trial. The stakes are high for both litigants seeking to challenge legislation and governments seeking to defend and implement duly enacted legislation. The conflicting decisions on the appropriate legal test for injunctions with respect to legislation expose the divisions within the courts. By making the very rare decision to reconsider one of its own prior decisions, the ABCA has signalled the need for clarity on a key emerging legal issue.

For further information, please contact:

Dalton W. McGrath              +1-403-260-9654
Michael O'Brien                    +1-403-260-9753
 
or any other member of our Litigation & Dispute Resolution group.