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serving all of Canada and International clients since 1996.

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Telephone: 416-203-9500

1. News & Upcoming Events

  • Aerospark Press has just published the 2022 release by Rui Fernandes for his 3 Volume Transportation Law.
  • Saisha Mahil has joined the firm as an associate lawyer. She was called to the Ontario bar in 2020. Jamal Rehman will be joining the firm as an associate lawyer. He was also called to the Ontario bar in 2020.
  • Gordon Hearn will be representing the Firm at Globalaw’s Americas Regional Meeting taking place March 27-29, 2022 at Miami, Florida. Fernandes Hearn LLP is a member of the Globalaw™ international network of law firms.
  • Gordon Hearn will be participating in the “Innovating Your Freight Brokerage Against Potential Risk” panel discussion at the Transportation Intermediaries Association Capital Ideas 2022 Conference on April 8, 2022 in San Diego, California.
  • Rui Fernandes, Gordon Hearn, Kim Stoll and Carole McAfee Wallace will be attending the Transportation Lawyers Association Annual Conference being held in Williamsburg, Virginia on May 11-14, 2022. Kim Stoll will be attending in her capacity as Executive Committee Member-at- Large.
  • The Canadian Board of Marine Underwriters will be holding is Spring Conference (virtually) on May 26th, 2022.

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2. Russian Sanctions and Effect on the Sale and Transportation of Goods

Canada has announced and implemented various rounds of sanctions and economic measures in response to the Russian invasion of Ukraine. These sanctions and measures include the prohibition of exports of goods requiring permits, and restrictions on dealings with various Russian entities and individuals, including large Russian financial institutions, Russian elites, and hundreds of members of the Russian lower house of parliament. Effective February 24, 2022, Canada has cancelled any existing valid permits for exports to Russia. Imports of Russian goods are also affected.

Export and Import Contracts

If the sanctions preclude a company from exporting/importing its products and supplies to/from Russia, the company will need to review its supply contacts to prepare itself for possible claims for non-performance. In conducting this review, companies should be aware of and analyze possible defenses they may have to such claims. Further, these companies must be aware of the possibility that their suppliers will invoke the same defenses if the companies bring claims against these suppliers.

Issues and situations to be reviewed include:
a) what does the contract say?
b) at what stage is the financial transaction? Are the goods in transit? Has a letter of credit been issued? Has a bill of lading been issued?
c) who has title to the goods?
d) when does the risk pass?

Force Majeure

Contracts often include force majeure provisions, which set forth reasons excuse a party’s performance under a contract as a result of specified events. These events typically include wars, invasions, insurrections, riots, acts of God, other causes beyond the control of a party and orders, and possibly regulations or restrictions imposed by governmental authorities.

Under the common law, force majeure is not implied in a contract. There must be a contractual clause. Clauses in use vary and should be reviewed. Force majeure clauses are interpreted strictly as they seriously impact a party’s rights. Interpretation involves an objective test.

Accordingly, a company affected by the Russian sanctions must ascertain whether its supply contracts contain force majeure provisions and whether the Russian sanctions constitute an event that excuses full or delayed performance under the contract.

Most force majeure clauses provide that performance is excused only for the length of time the force majeure event exists and then up to a certain time i.e. 90 days. If it then goes beyond the 90 days the other party can terminate the agreement. The party invoking force majeure must engage in efforts to mitigate the effects of the force majeure event. This analysis may require, for example, determining whether the Russian invasion, which is an undeclared war on Ukraine, can excuse performance, or whether the sanctions fall within the scope of other provisions of the force majeure provisions, thereby excusing performance or delayed performance.

Some contractual clauses are in effect force majeure clauses without the name. For example, in the following clause appears in certain OOCL bills of lading, allowing the carrier to cancel any outstanding booking or contract of carriage or to reroute the shipment. And the cost for doing so is for the account of the cargo owner. The clause states:

Without prejudice to any rights or privileges of the Carriers under covering Bills of Lading, dock receipts or booking contracts or under applicable provisions of law, in the event of war, hostilities, warlike operations, embargoes, blockades, port congestion, strikes or labour disturbances, regulations of any governmental authority pertaining thereto or any other official interferences with commercial intercourse arising from the above conditions and effecting the Carrier’s operations, the Carriers reserve the right to cancel any outstanding booking or contract of carriage. At carrier’s option, cargo in transit may be enrouted to a different discharge port or destination for cargo delivery. Any additional cost associated to this arrangement shall be for account of cargo.

Frustration

Frustration is part of the common law and a “frustration clause” is not required in a contract. Frustration occurs where a situation has arisen for which the parties made no provision in the contract and performance of the contract becomes “a thing radically different from that which was undertaken by the contract.” Much like in the force majeure context, performance of the contract must become impossible; it is not enough that the contract become more onerous, or even significantly more difficult, but still possible to perform. Rather, a party must show that the original purpose of the contract has been frustrated, and it would be unjust for them to be bound to the contract under the existing circumstances.

For example, in the Alberta Court of Appeal decision in 1966 in Taylor v. Caldwell the defendants had agreed to rent out a music hall to the plaintiffs on four specific dates; the plaintiffs were going to give a series of concerts. This purpose was specified in the contract. Before any of the concerts took place, the music hall was destroyed by fire through no fault of the parties. The Court found the contract at an end due to frustration, stating “The principle seems to us to be that, in contracts in which the performance depends on the continued existence of a given person or thing, a condition is implied that the impossibility of performance arising from the perishing of the person or thing shall excuse the performance.”

A company affected by the Russian sanctions must ascertain whether the contract entered into has become frustrated i.e. impossible to perform. An analysis of the terms of the contract is needed to determine the consequences. Is the entire contract terminated? What are the consequences of termination? Are their penalty clauses?

Transportation Contracts

The shipping sector is already seeing companies divest themselves of connections with Russia, and some countries are developing restrictions on port access by Russian-owned vessels. Large shipping container lines have suspended service to Russia. The world’s three biggest shipping lines have suspended non-essential deliveries to Russia, joining a growing list of companies shunning Moscow amid Western sanctions over its invasion of Ukraine. Danish shipping giant Maersk, Switzerland-based MSC and France’s CMA CGM all have announced that they would no longer take bookings for goods from Russia and were suspending most deliveries to the country.

Some banks have reportedly paused their Russian activities and may refuse to issue, confirm or advise letters of credit directly or indirectly connected with Russian parties and Russia-related transactions.

From a practical view, vessel operations around the world continue to trade amid the new sanctions. Companies that may have entered into, or are contemplating entering into, charterparties or other shipping or sales contracts that may be affected by the wide-ranging Russian sanctions should carefully consider existing or future contractual relationships. Contract should be carefully entered into or reviewed. Usually, a charterparty would include a sanctions clause on their rider terms (e.g. BIMCO Sanctions Clause for Time Charter Parties 2020, BIMCO Sanctions Clause for Container Vessel Time Charter Parties 2021 or BIMCO Sanctions Clause for Voyage Charter Parties 2020) which aims to address the commercial implications and further allocate the liabilities between the parties, in the event that sanctions affect or even prevent the performance of the charter.

In accordance with those clauses, at the date of the charterparty and throughout its duration the parties warrant that they are not a ‘sanctioned party’ as defined in the clause and further agree that if such warranty is breached, then the party not in breach is entitled to terminate and/or claim damages. The warranty on behalf of the owners extends to the vessel’s registered owners, bareboat charterers, immediate disponent owners, managers, the Vessel and any substitute. Equally, the warranty on behalf of the charterers extends to any sub-charterers, shippers, receivers and cargo interests.

Bills of lading and dock receipts or other negotiable instruments and non-negotiable sea waybills issued by the ocean carriers for all sorts of shipments might present a problem when goods arrive and have to be released to consignees at destination. Additionally, if any intermediary (e.g., a forwarder or non-vessel operating common carrier) is involved, they may be affected. Practices such as telex release and express release bills of lading may come under additional scrutiny by authorities monitoring trade to ensure sanctions are not breached. Consequently, it is more important than ever to vet counterparties for sanctions risk. “Know your client” is ever more important. Reference to companies, organizations and individuals on sanction lists needs is required.

Insurance Generally

According to multiple analysts, the insurance market is exposed in a number of areas, including political risk insurance (PRI), aviation, war, trade credit, and marine cargo/war. It is understood that the credit and energy insurance markets will also come under strain.

Analysts at Peel Hunt wrote about PRI: “This includes claims relating to expropriation, war, embargoes, and border closures due to government intervention. We anecdotally understand that the total insured limit for PRI insurance across Ukraine and Russia is c.$2.0bn (a very rough guestimate). Hence, whilst exposure seems manageable, even a single-digit share would be a sizeable loss for the market.”

Those same analysts wrote: “Given that markets have had some warning running into this conflict, insurers have had time to go through their exposures and either put them on notice or trigger any war exclusions.”

What is clear is that the cost of insurance is likely to go up dramatically in the years to come.

Cargo Insurance

In response to the current sanctions climate, marine insurers utilize a variety of strategies to handle and minimize sanctions-related risk.

Enhanced “know your client” and due diligence procedures have been implemented or be implemented.  Marine insurers must have robust “know your client” procedures to ensure that no new insurance business involves insuring a sanctioned entity, and that any commercial activity arising from this business does not involve a sanctionable element.

Exclusions to cover are also being reviewed, revised and updated. Marine insurers include provisions in their policies / rules which:

  • exclude coverage of an insured loss or claim if it arises from sanctionable activity; and
  • include termination / cessation of insurance provisions which terminate cover for an insured ship if the ship has engaged in sanctionable activity and /or if the provision of insurance to that ship exposes the insurer to sanctions.

Such provisions allow insurers to minimize sanctions exposure and ensure that the insurer does not engage in sanctionable activity. The following provisions are from a typical cargo insurance policy.

Coverage is provided against any physical loss and/or damage to the subject matter insured under the terms and conditions of this Policy.

Excludes shipments to countries subject to Canadian Trade restrictions.
Please refer to this Government of Canada website for a current list of sanctions imposed by the Government of Canada.

Trade and Economic Sanctions Clause
Notwithstanding any other terms under this agreement, Insurer shall not be deemed to provide coverage or will make any payments or provide any service or benefit to the Insured or other party to the extent that such cover, payment, service, benefit and/or any business or activity of the Insured would violate any applicable trade or economic sanctions law or regulation.

It is inevitable that many companies and individuals will be affected by the sanctions. In addition to increased costs for goods and services, the risk of complications in the sale and transportation of goods has increased dramatically. Companies and individuals should review their contracts and take steps to minimize the risks.

Rui Fernandes

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3. Disconnecting from Work Policy

On December 2, 2021 the Ontario Employment Standards Act, 2000 (“ESA”) was amended to require certain employers to implement a written “disconnecting from work” policy. “Disconnecting from work” is defined as “not engaging in work-related communications, including emails, telephone calls, video calls or the sending or reviewing of other messages, so as to be free from the performance of work.”  This requirement does not apply to those employers who are subject to the Canada Labour Code, such as interprovincial or cross border trucking companies.

Employers who had 25 or more employees in Ontario on January 1, 2022 are required to have a written disconnecting from work policy in place by no later than June 2, 2022.  In determining whether the 25 employee threshold has been met, employers must include employees who work part-time and those on a leave of absence.  If an employer has multiple locations in Ontario, the employees at each location are added together.  This employee “count” must be done each January 1st and if an employer is required to implement a disconnecting from work policy in future years, it must do so by March 1st of that year.

While the ESA provides that the written policy shall contain information as may be prescribed, no regulation has been passed in this regard.  Instead, the Ministry of Labour, Training and Skills Development (the “Ministry”) recently released a guideline for employers to use when developing their written policy.   The Ministry confirms that the written policy must apply to all employees in Ontario, including managers and supervisors, executives and those who hold positions that are otherwise exempt from certain sections of the ESA, such as overtime or hours of work.  While the policy must apply to all employees, it is possible to have different policies (either in one document or multiple documents) that apply to different groups of employees.

With respect to what should be included in the policy, the Ministry is clear that the policy does not need to provide a right for the employee to disconnect from work, over and above the limits on working hours already set out in the ESA (see: hours of work and eating periods, vacation, public holidays).  The policy should set out the employer’s expectations, if any, of employees to read or reply to work-related emails or answer work-related phone calls after they are finished work. The employer may set out different expectations depending on the time of day of the communications, the subject matter of the communications, and who is contacting the employee (i.e. the employee’s supervisor, a colleague or a client/customer).  The Ministry also suggests that the policy set out requirements for employees to turn on an “out-of-office” notification or change their voice mail message when they are not scheduled to work.

The policy must contain the date on which it was prepared, along with date on which any changes are made.

If your workplace is required to have a disconnecting from work policy, it must be in writing and made available to all employees as a printed document, an attachment to an email so long as the employee can print a copy, or in a link to the document online, if the employee has a reasonable opportunity to access the document and print it.  It must be provided to the employees within 30 days of being prepared or changed, and new hires are to receive a copy within 30 days of being hired.  Employers must retain a copy of every written disconnecting from work policy for 3 years after the policy is no longer in effect.

While the Ministry may not have been as clear as we expected when it comes to what must be included in a disconnecting from work policy, what is clear is that if you had at least 25 employees as of January 1, 2022, you must ensure that you have this written policy in place, by June 22, 2022.

Carole McAfee Wallace

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More interesting 2022 February Articles!

4. The “Dead-end” for Convoys?: The Keeping Ontario Open for Business Act, 2022

The Ontario Government introduced legislation on March 21, 2022 in response to the recent “Convoy” interference in downtown Ottawa and at the Windsor-Detroit border crossing.

In connection with this roll out, Ontario Premier Doug Ford announced that “Ontario is a strong, reliable trading partner, and we are signaling to the world that we continue to be open for business … We will do everything in our power to protect our workers, job creators and international trade relationships from any future attempts to block our borders. The world can be confident that Ontario is open for business.”

Other government officials added further context.  “Our government is focused on public safety and ensuring that people and goods can move across our international borders unimpeded,” said Solicitor General Sylvia Jones. “That’s why we are taking the steps necessary to protect international border crossings, which are critical to the public. These measures are narrow in scope and will not impact the right to peaceful, lawful and temporary protests.”

“We are taking swift action to provide police and prosecutors with new tools to keep people safe and protect the vital economic lifelines that drive the prosperity of our communities,” said Attorney General Doug Downey. “We will never hesitate to protect people’s jobs and prioritize public safety.”

“Hundreds of millions of dollars worth of essential goods for people and businesses pass across our international borders every day,” said Caroline Mulroney, Minister of Transportation. “Taking steps to ensure our border crossings can continue to operate regularly in the event of disruptions like those experienced earlier this year is vital to the ongoing safety and security of the people of Ontario and our economy.”

The Draft Legislation

The Keeping Ontario Open for Business Act, 2022 would, if passed, better enable the province to respond immediately to future disruptions to international border crossings such as bridges and airports when those disruptions interfere with public safety, the economy and international trade.

The legislation (Bill 100), officially labelled An Act to enact legislation to protect access to certain transportation infrastructure and which will be named the Keeping Ontario Open for Business Act (the “Act”), has been introduced for “first reading” by the Ontario Legislature (*1).

The Act establishes prohibitions and enforcement mechanisms to prevent persons from impeding access to, egress from or ordinary use of “protected transportation infrastructure”, defined as “any land or water border crossing point between Ontario and the United States, any airport that regularly accommodates flights directly between Ontario and a country other than Canada (as prescribed by regulation) and any other transportation infrastructure that is of significance to international trade”.

The Ontario Trucking Association (the “OTA”) Applauds the Introduction of Keeping Ontario Open for Business Act  

In a statement dated March 21, 2022, the OTA welcomed the new proposed legislation.   OTA president and CEO, Stephen Laskowski stated that “there are more than 16,000 commercial trucks that cross the Ontario-US border each day … These trucks are moving Ontario’s economy and when they are delayed in getting to market, our economy and those industries who rely on the trucking sector are negatively impacted. The Keeping Ontario Open for Business Act will protect Ontario’s economy and send a strong message to our American customers that our borders are being protected.”

Mr. Laskowski further commented that “The multiple-hour delays created by illegal blockades greatly disrupted the personal and professional lives of our hard-working truck drivers. With the enactment of this legislation, truck drivers can expect quick action against border blockades, which prevent them from doing their jobs, delivering freight on time and getting home safely to their families at the end of their work shift”.

Key Provisions and Highlights of the New Legislation

1. Subject to a few listed exceptions, the Act prohibits persons from impeding access to or egress from, or the ordinary use of, protected transportation infrastructure, or from directly or indirectly causing such access, egress or ordinary use to be impeded, if the impediment has or is reasonably expected to have the effect of disrupting ordinary economic activity or interfering with the safety, health or well-being of members of the public. There are also prohibitions against from knowingly aiding person engaged in such activity.

2. The Act provides various enforcement powers and procedures for the authorities to deal with infractions. For example, police officers may direct persons to cease contravening the prohibited conduct, including ordering the dispersal or removal of objects being used in the prohibited activity. In this regard the legislation specifically includes vehicles in the definition of “object”.

3. Police officers will be authorized to direct owners or operators of vehicles being used in prohibited conduct to remove the vehicles. If they are not removed, they may be removed by police officers.

4. Police officers may maintain possession of and store objects that have been removed for up to 30 days – with related costs and charges being treated as a debt due by the owner of the object and other specified persons.

5. Police officers will have the authority to direct persons contravening the law to surrender their driver’s licence which will then be suspended for 14 days.

6. Police officers will be able to seize the number plates displayed on offending vehicles with the plate portion of the permit for the vehicle being suspended for 14 days.

7. The Act provides significant enforcement powers concerning operators of commercial motor vehicles: the Registrar of Motor Vehicles may make an order, without a hearing, suspending or cancelling the plate portion of a permit for a commercial motor vehicle or trailer or a Commercial Vehicle Operator’s Registration (CVOR) certificate, if the holder of the permit or certificate has contravened the new law or is the owner or operator of a commercial motor vehicle or trailer that has been used in a contravention of the law. If such an order has been made, the number plates displayed on the commercial motor vehicle or trailer may be seized. A request may thereafter be made for the order to be modified or rescinded, with the Registrar of Motor Vehicles then being required to review and consider the request. The suspension is not only in effect for the vehicle identified as being involved in the protest but is in effect for the entire company’s fleet associated with that CVOR holder.

8. The Act provides penalties for infractions: upon conviction, the maximum punishment for breaching any offence under the new legislation, except a failure to identify oneself, is one-year imprisonment and/or a fine of up to $100,000 for an individual. Directors and officers of corporations can face up to $500,000 in fines or up to one year imprisonment or both. Corporations can face up to $10,000,000 in fines. Failure to comply with the proposed requirement to identify oneself would result in a fine of up to $5,000, which is the default penalty under the Provincial Offences Act.

9. Police officers are empowered to direct persons to provide identifying information for the purpose of commencing a proceeding under theProvincial Offences Act.

10.The Act also provides for specific powers of arrest without a warrant.

11. An application may be made to the Ontario Superior Court of Justice for an order restraining a person from continuing a contravention under the Act.

12. The Act is subject to a mandatory legislative review following the first anniversary from the date when the law comes into effect.

Conclusion

We will report on the status of the Keeping Ontario Open for Business Act, 2022 in a future edition of The Navigator.  Time will tell whether the legislation serves as an effective deterrent to future transportation infrastructure disruptions.

Gordon Hearn

(*1) The legislative process, from “idea to binding law” is as follows in Ontario.  The proposed law is introduced for “First Reading” with an explanation for its purpose. The bill then moves to a “Second Reading” where the proposed law is debated in principle.  If the bill moves forward, it is referred to a Standing or a Select Committee for review, which may involve public hearings and solicitation from relevant interests and stakeholders as concerns possible amendments. The Committee then reports back to the Legislature with the proposed law, followed by a “Third Reading” where the bill is then voted into law.  Upon passage, the bill is then signed by the Lieutenant Governor – becoming law by “Royal Assent” – which comes into force on the date set out in the legislation or by government proclamation.

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5. Safe Manning on B.C. Ferries

The recent decision of Justice Pamel in British Columbia Ferry and Marine Workers’ Union v. Canada (Transport), 2022 FC 209 illustrates that judges will not interfere with an administrative body’s decision lightly, especially where the decision involves a decision maker’s home statute and specialized knowledge.

Justice Pamel’s first four paragraphs of the decision set out the facts:

[1] In January 2020, British Columbia Ferry Services Inc. [BC Ferries], a publicly owned Canadian company and Canada’s largest ferry operator, took delivery in Vancouver of two newly built Island Class ferries, the Island Aurora and the Island Discovery [collectively, the Island Class ferries], as part of its fleet renewal program to replace two of its aging passenger and vehicle ferries operating on routes within the coastal waters of British Columbia. As Canadian flagged vessels registered in Victoria, the Island Class ferries are subject to the provisions of the Canada Shipping Act, 2001, SC 2001, c 26 [Act], and its regulations, in particular the Marine Personnel Regulations, SOR/2007-115 [MPR], which, along with the Act, require a vessel to be staffed with a sufficient number of competent crew for its safe operations and to have issued a safe manning document [SMD] specifying the minimum complement of crew—minimum safe manning levels [MSM levels]—as well as the remaining information set out in paragraph 202(3)(b) of the MPR.

[2] In March 2020, BC Ferries applied to Transport Canada for two SMDs for each of the new ferries, along with a proposal on MSM levels; two SMDs were requested for each ferry so as to accommodate fluctuations in passenger levels throughout the year. Transport Canada may issue multiple SMDs for a vessel setting different MSM levels to reflect the varying circumstances in which the vessel operates, such as the number of passengers or the nature of operations. BC Ferries’ application for a Class A SMD proposed a minimum complement of six crew for up to 394 passengers—a total of 400 people on board—while the application for a Class B SMD proposed five crew for up to 220 passengers—a total of 225 people on board. In April 2020, Transport Canada issued to BC Ferries a Class A SMD [the A Licence] with an MSM level of seven crew (one more than what BC Ferries proposed) when up to 400 people are on board, and a Class B SMD [the B Licence] with an MSM level of six crew (again one more than what BC Ferries proposed) when up to 225 people are on board.

[3] Following discussions between BC Ferries and Transport Canada—discussions which included the Canadian Ferry Association—on May 19, 2020, BC Ferries submitted a new application for a Class C SMD for the Island Class ferries, this time proposing an MSM level of five crew members (a master, a mate, an engineer, a deckhand and a single rating) for up to 150 people on board, which Transport Canada assessed and issued on May 25, 2020 [the C Licence] after concluding that a complement of five crew members met the standards set out in the MPR with up to 145 passengers on account of the Island Class ferries’ “automation, modern technology, alternative arrangements and additional equipment.” Transport Canada also advised BC Ferries that it was required to ensure that the Island Class ferries comply with all requirements of the MPR and the Fire and Boat Drills Regulations, SOR/2010-83 [FBDR], “at all times, particularly the effectiveness of the muster lists in meeting these requirements”. The two aging passenger and vehicle ferries which the Island Class ferries were meant to replace regularly sailed with a minimum complement of six and seven crew respectively.

[4] The British Columbia Ferry and Marine Workers’ Union [Union]—the trade union certified under the British Columbia Labour Relations Code, RSBC 1996, c 244, to represent, inter alia, the crew aboard the Island Class ferries—seeks judicial review of the decision to issue the C Licence to BC Ferries on the grounds that the Island Class ferries cannot, with a complement of five crew members, meet several of the BC Ferries’ fleet-and vessel-specific safety operations policies [the safety policies and procedures], including bridge watch, passenger control, rescue operations and firefighting, which are part of BC Ferries’ Safety Management System [SMS]—a system-based process to organize information for the management and mitigation of risk developed as part of the International Management Code for the Safe Operation of Ships and for Pollution Prevention [ISM Code]—nor the applicable statutory and regulatory requirements, including the MPR.

Justice Pamel was not persuaded that the decision by Transport Canada to issue the C Licence was unreasonable, stating:

I am being asked to reassess the evidence and substitute my own judgment for that of an experienced and professional five‑member panel at Transport Canada which, after not allowing an MSM level of five crew for up to 220 passengers, reviewed the material and determined that an MSM level of five was sufficient with up to 145 passengers on board; this I will not do and I am therefore dismissing the present application for judicial review.

In arriving at his decision Justice Pamel reviewed the current state of the law with respect to judicial review by a court of a decision made by an administrative tribunal. He noted that reasonableness is the applicable standard of review as set out by the Supreme Court of Canada in Canada (Minister of Citizenship and Immigration) v.  Vavilov, 2019 SCC 65 (“Vavilov”). When assessing whether a decision is reasonable, it is not simply a question of whether the decision falls within a range of possible outcomes, but rather “whether the decision bears the hallmarks of reasonableness — justification, transparency and intelligibility — and whether it is justified in relation to the relevant factual and legal constraints that bear on the decision” (Vavilov at paras 83 and 99).

Justice Pamel also noted that in addition, the review of an administrative decision cannot be divorced from the institutional context in which the decision was made, and in conducting a reasonableness review, the reviewing judge should be attentive to the application of specialized knowledge by the decision-makers; “[t]his demonstrated experience and expertise may also explain why a given issue is treated in less detail” (Vavilov at paras 91 and 93). Moreover, assessments and determinations legitimately drawn from the expertise or specialization of administrative decision-makers, all other things being equal, similarly may be unconstrained and may be harder to set aside.

Justice Pamel concluded at paragraph 22:

In any event, the decision to issue the C Licence is the result of the assessment by a regulatory body with specialized knowledge and expertise in the complex area of navigation and shipping, whose role it is to review what is tantamount to a permit or licence request and make certain that the applicable standards for the safe operation of vessels required by the governing statute and regulations have been respected. Although the issuance of an SMD is mandatory for the Minister upon receipt of an application (subsection 202(3) of the MPR), the determination of MSM levels pursuant to section 207 of the MPR is discretionary and subject to the assessment by Transport Canada that compliance with subsections 207(3) to (6) of the MPR has been met—this requires, I would add, expertise in ship operations and the application of the principles of good seamanship by the Transport Canada marine safety inspectors.

Rui Fernandes

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This newsletter is published to keep our clients and friends informed of new and important legal developments. It is intended for information purposes only and does not constitute legal advice. You should not act or fail to act on anything based on any of the material contained herein without first consulting with a lawyer. The reading, sending or receiving of information from or via the newsletter does not create a lawyer-client relationship. Unless otherwise noted, all content on this newsletter (the “Content”) including images, illustrations, designs, icons, photographs, and written and other materials are copyrights, trade-marks and/or other intellectual properties owned, controlled or licensed by Fernandes Hearn LLP. The Content may not be otherwise used, reproduced, broadcast, published,or retransmitted without the prior written permission of Fernandes Hearn LLP.

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