Even after a project obtains regulatory approvals, opponents can still offer up challenges in the courtroom. Statutory appeal mechanisms, appeals with leave and judicial reviews can all slow projects before shovels break ground, costing project proponents time and money. In this video, Andrew Bernstein and Yael Bienenstock outline some of the counter-measures and remedies that can be sought to get a project back on track and on budget.
Video transcript
Andrew Bernstein (00:12): Hi, everyone. I'm Andrew Bernstein, and I'm here with my colleague Yael Bienenstock. We're partners in Torys' litigation practice, and we're here to do the next video on navigating project disputes.
Yael Bienenstock (00:22): So, let's pick up where we left off. You got through the regulatory process and your project is approved. You're ready to put shovels in the ground. Andrew, are you in the clear or are there still legal risks?
Andrew Bernstein (00:33): Well Yael, getting permits and approvals from regulators is definitely a good thing, but it's not the end of the road because there are ways that opponents of your project might challenge those approvals. Sometimes there's statutory appeal mechanisms which actually provide a right to appeal of the approval. If the approval is federal, that would be to the federal courts and if it's provincial, it would be to the relevant provincial court.
Other times, there's not a full-fledged right to appeal, but there's a statutory right to ask the court whether they're willing to hear an appeal. So, an appeal with leave, as it's known, and the courts are pretty generous in granting leave. And even if there's no appeal rights at all, an opponent has the option of bringing a judicial review in which they say to the court that the regulatory decision to grant your permit was either unreasonable, lack procedural fairness, or done without proper consultation with Indigenous groups.
Now, it's hard to win a judicial review, but they can take a while and they create a certain amount of uncertainty, which is never a good thing for projects. So, I'm sure one of the questions that our audience has is whether you can still build while one of these challenges is winding its way through the courts?
Yael Bienenstock (01:43): Excellent question. So, the answer to that really depends on what the other side - the challenger or the opponent, the people who really don't like the project - what they decide to do. And they have a couple of options. One of the things they can do is they can bring a motion to stay the initial approval until the judicial review or the appeal has been resolved.
And so, they would bring a motion. They would first challenge, as Andrew described, and bring a judicial review or bring an appeal, and then in the context of that proceeding, they would, at the beginning of the proceeding, bring a motion for a stay. And these are usually heard pretty quickly. So, you can find out the answer early in the process.
But the upshot is if they bring a motion for the stay and the stay is granted, then you won't be able to build while the case is winding its way through the courts. Now, that sounds like bad news for projects. It is bad news for projects. But the good news is the bar on one of these motions is pretty high.
So, the other side is going to need concrete evidence that if the court doesn't grant a stay, they're going to suffer irreparable harm. And what that means is harm that can't be quantified or compensated for by costs. Now, most things actually can be compensated for with money. And so these motions are often dismissed on that basis. The court says they don't have evidence of irreparable harm.
And therefore we're dismissing it. The other, the other sort of thing you can use as your strategy is you can say in response to one of these motions, maybe there's one aspect of building that might fall into the category of irreparable harm, but we'll stay away from that. We'll stick to things that can be undone if the court ultimately finds against us.
The other thing to know is that one aspect of the test is a bit of a balancing test, between looking at the harm that the challenger will suffer if the approval is not stayed, versus the harm that the project will suffer if it is stayed. And so, you, as project sponsor, can put in evidence that says if we don't start now, we're going to miss a building season or we're going to lose our contractors and we won't be able to be compensated for any of that, and that's something the court should take into account.
Yael Bienenstock (03:53): So, on balance, yes, there is something that challengers can do to stop the project in their tracks, but there's a good chance that they will lose that motion, and you will be able to keep building. So, Andrew, assuming there is no stay or injunction, what happens and how long does it all take?
Andrew Bernstein (04:10): Okay, so the good news is that it's hard to get a stay or an injunction. The bad news is that if you build while one of these judicial reviews is proceeding. To some extent, you're taking the risk, right? Because the... if the court ultimately quashes the approval, then the risk is on you, you've started building. Most proponents do it anyway because it already takes a long time to get permits.
Delays could be—can cause significant expense, and it takes a long time for these processes to actually wind their way through the courts. So, a judicial review might take a year, even if it's on a relatively fast track, then you're going to have several months for a decision. Then there can be appeals. And, you know, a really committed opponent might even try to ask the Supreme Court of Canada to hear something. So, you can be in a world where, you know, 3 or 4 years after you have obtained your approvals, you're still fighting off judicial proceedings or the spectre of judicial proceedings.
So, most of the time, proponents aren't willing to wait that long. They take the risk and they start. So Yael, I think another thing that's related to why proponents typically take the risk to start, is the kinds of remedies that courts grant in these kinds of judicial processes. So, could you talk about that?
Yael Bienenstock (05:33): Sure. So, if a challenger wins, the most common remedy by far is for the court to quash the original regulatory approval and then send it back to the original regulatory body to redetermine in a way that's consistent with the court's reasons.
And so, the court might say, yes, we agree with the challenger that the regulatory body got it wrong, here's why, regulatory body: go fix that. And during that period of time when your regulatory approval is quashed, you won't be able to build the project. Unless of course, you're appealing that decision, the court decision. And you bring a motion to stay that decision, in which case now you, of course, have the uphill battle of proving irreparable harm that we talked about before.
So, Andrew, this all sounds a little bit messy. What's the best way to prepare yourself for success in case a regulatory approval is challenged?
Andrew Bernstein (06:23): So, I would say this. The key is not just to win at first instance by getting your permit or approval, but to do it in a way that holds up. And so, you know, it's very... you're really, when you're in that process, you're really going to want to make sure that things are done quickly. And you may not have an enormous amount of patience for all of the process that has to happen.
But ultimately, it's in your interest to ensure that the processes are being followed meticulously, corners aren't being cut and the approval that you ultimately receive will hold up in court. And that's a topic covered in another video in this series. So, thanks everyone.
Yael Bienenstock (07:01): Thank you.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
