By Sean Parker
On February 19, 2015, the Supreme Court of Canada declined to hear an appeal challenging a finding that settlement agreements reached through the Environmental Appeals Board's mediation process are privileged. In May 2014, the Alberta Court of Appeal issued its decision in Imperial Oil Limited v. Alberta (Information and Privacy Commissioner) where the Court held that the Alberta Information and Privacy Commissioner ("Privacy Commissioner") erred in concluding that an agreement between Imperial Oil Limited ("IOL") and Alberta Environment (as it was then called) reached through a mediation process was not privileged and therefore had to be disclosed in response to an information request under the Province's Freedom of Information and Protection of Privacy Act.
The matter has a lengthy history, but in short:
- Between 1923 and 1975 IOL operated an oil refinery in southeast Calgary, and when the refinery was decommissioned the land was developed into the Lynnview Ridge residential subdivision. Petroleum and lead contamination was discovered in the lands after numerous houses had been built on it. IOL eventually bought back over 90% of the affected residences.
- Commencing in about 2001, Alberta Environment issued environmental protection orders against IOL to remediate affected lands. IOL appealed some of those orders to the Environmental Appeals Board. Section 11 of the Environmental Appeal Board Regulation contemplates the mediation of appeals as an alternative to conducting a formal hearing.
- After preliminary negotiations, IOL and Alberta Environment entered into an "Agreement to Mediate" on October 27, 2003. The mediation was ultimately successful and resulted in the signing of a "Remediation Agreement" in March of 2005. As a result, Alberta Environment withdrew two environmental protection orders and IOL abandoned the appeals that it had filed against those orders. As the Environmental Appeals Board was not required to adjudicate the dispute, it closed its files.
- The City of Calgary later applied for a copy of the Remediation Agreement under the Freedom of Information and Protection of Privacy Act. Certain parts of the Remediation Agreement were made public, and the City was given other portions on conditions intended to preserve its confidentiality, but Alberta Environment refused to disclose the entire document on the basis that some information was confidential and exempt from production.
- The City of Calgary then applied to the Privacy Commissioner, who ordered that the entire Remediation Agreement be disclosed to the City as it did not fall under any exceptions in the Freedom of Information and Protection of Privacy Act.
- IOL applied for judicial review of the Privacy Commissioner's decision, and it was quashed by a chambers judge.
- The Privacy Commissioner appealed the chambers judge's decision to the Court of Appeal.
The Court of Appeal upheld the chambers judge's ruling that the Privacy Commissioner's decision was unreasonable. The Court of Appeal looked at both the specific language of the Agreement to Mediate and broader legal principles applicable to settlement discussions when concluding that the disputed information should not be disclosed. The Court of Appeal held at paragraphs 52 and 58:
...Not only did the Agreement to Mediate specifically refer to confidentiality and
privilege, it also existed in the context of the common law assumption that settlement
discussions and mediations are both confidential and privileged...
The [Privacy] Commissioner was incorrect in concluding that the Remediation
Agreement is not privileged. At common law mediations and the resulting settlements
are privileged...There are a few narrow exceptions, but none applies here...
The Court of Appeal dealt with a number of issues regarding privacy legislation and review of administrative decisions in this case. However, confirmation of the privileged and confidential status of settlement agreements reached through the Environmental Appeals Board's mediation process is a clear and important finding for parties dealing with environmental regulators in Alberta. This decision also reaffirms the Environmental Appeals Board's policies for resolving disputes before it, and validates the Board's interpretation of its enabling legislation in this regard.