Canada v. Geophysical Services Incorporated
2022 NSCA 41
Nova Scotia Court of Appeal, December 6, 2021
Facts: As part of Canada's efforts to define the outer limits of its continental shelf under the United Nations Convention on the Law of the Sea (UNCLOS), the federal government commissioned seismic surveys in the Atlantic and Arctic Oceans. Following a request for proposals, the contract was awarded to a foreign-flagged vessel. Geophysical Services Incorporated (GSI), which owned a Canadian-flagged seismic survey vessel capable of performing the work, challenged the award. GSI alleged that the work was subject to the licensing requirements of the Coasting Trade Act, which generally reserves certain marine activities to Canadian vessels unless a licence is obtained for a foreign vessel. Transport Canada determined that no coasting trade licence was required because the surveys constituted ocean research and were conducted outside Canada's territorial sea. GSI subsequently commenced an action alleging unlawful interference with economic relations, negligent infliction of economic loss, unjust enrichment, misfeasance in public office, and conspiracy. On summary judgment, all claims except misfeasance in public office and conspiracy were dismissed. Both parties appealed.
Decision: GSI's appeal was dismissed and the Crown's cross-appeal was allowed. Summary judgment was granted dismissing all of GSI's claims.
Held: The Court of Appeal agreed with the dismissal of GSI's claims for unlawful interference with economic relations, negligent infliction of economic loss, and unjust enrichment. However, it concluded that the motion judge erred in permitting the claims for misfeasance in public office and conspiracy to proceed. The material facts were not genuinely in dispute, and the applicability of the Coasting Trade Act was a legal issue capable of determination on summary judgment. The Court held that Transport Canada's determination that the Act did not apply to the survey work had never been challenged by way of judicial review and could not be collaterally attacked through a civil damages action. The evidentiary record was also insufficient to support the claims for misfeasance in public office or conspiracy. Accordingly, the action was dismissed in its entirety.