The highest court in Quebec has dismissed an appeal in the Magic Palace case from the Kahnawake Gaming Commission (KGC), which had argued that provincial courts lack the power to weigh in on its regulatory decisions.
Marcus Bankuti, The Eastern Door, Local Journalism Initiative Reporter
In its ruling, the Court of Appeal of Quebec confirms the Superior Court of Quebec’s November 2024 decision that provincial courts have the power to review KGC decisions, despite the KGC being a First Nations entity established by the Kahnawake Gaming Law, which gives the KGC the responsibility of granting and revoking gaming licenses.
The ruling handed down this week is the latest development in the litigation brought by shuttered gaming facility Magic Palace and its owners, Stanley Myiow and Barry Alfred, who have been fighting for the right to reopen – along with an eye-watering damages claim of $220 million.
“It’s a big positive that the ruling is in our favour, but the delay is obviously affecting the business,” said lawyer Pierre L’Ecuyer, who is not a civil lawyer, but who has been involved in counselling and representing Magic Palace over the years. The civil litigation, including this appeal, is being handled by Woods, a civil law firm.
L’Ecuyer pointed out the business has now been closed for nearly two full years. “Even if they told them to reopen, they would need to recruit new employees. The damages are humongous,” he said.
“I still don’t understand the reason it was closed in the first place. The logic behind the KGC and behind the Council, I can’t explain it.”
The appeal stems from KGC filing an application for a declinatory exception, arguing that a Quebec statute that grants courts the power to review decisions rendered by persons or bodies under the authority of Quebec Parliament should not apply to it.
Magic Palace has continually argued that it has been trapped in a legal “catch-22.” Months after allegations of criminal ties and activities emerged in media reports, the KGC suspended the gaming facility’s license. However, when the Mohawk Council of Kahnawake (MCK) announced the next day that it had terminated the electronic gaming devices (EGD) royalty agreement on which that license depends, the KGC declared the license invalidated altogether and that there would therefore be no hearing.
Magic Palace has argued this has left it with nowhere to challenge a process it has characterized as unjust and lacking in due process.
In its analysis of the lower court’s ruling, the Court of Appeal wrote that the key issue in this dispute is not jurisdiction, but rather powers in matters of judicial review.
The court wrote that in its application for declinatory exception, the KGC does not allege that Magic Palace filed its originating application in the wrong court or tribunal.
“Its sole contention is that the remedies sought by the respondents are unavailable – full stop – because its licensing decisions are private decisions that are outside the scope of the Superior Court’s general power of judicial review. It does not dispute that, should its argument fail, the merits of the case ought to be decided by the Superior Court,” writes Court of Appeal court judge Frédéric Bachand.
The court opted not to interrogate the claim that the KGC is a private entity rather than public, which was agreed upon by all parties, but writes that this is of no relevance.
“As the Supreme Court emphasized in Highwood, the constitutionally protected common law power of judicial review held by Canadian superior courts rests on the rule of law’s requirement that all exercises of public authority find their source in law.
The judgement also refers to the recent Supreme Court of Canada ruling in Mohawk Council of Kanesatake v. Sylvestre to support the finding that the Quebec statute at issue “cannot be interpreted solely in light of its wording” but must also take into account the spirit of the provisions and the values of rationality and consistency.
Bachand goes on to write that the Superior Court maintains judicial review powers over private entities within Quebec, even if not necessarily within its jurisdiction.
“I cannot think of a principled reason why the National Assembly would have intended to vest the Superior Court with the power to direct a person holding an office in a private entity not under the authority of the Parliament of Quebec to perform a particular act, or enable it to dismiss a person illegally occupying an office within such an entity, while at the same time denying it the power to review or quash decisions made by these same private bodies. This is an arbitrary distinction which, if accepted, would lead to illogical – and thus absurd – outcomes.”
The KGC highlighted that this decision does not pertain to the merits of Magic Palace’s case, in response to a request from The Eastern Door.
“The Quebec Court of Appeal ruled on a preliminary motion about jurisdiction, specifically whether the Quebec Superior Court can judicially review decisions of the Kahnawà:ke Gaming Commission (KGC),” said the KGC in a statement.
“The Court of Appeal’s decision does not address the specifics of Magic Palace’s case against the KGC and does not rule on its merits. It does not assess whether Magic Palace’s application is well-founded. Rather, it simply concludes that the Quebec Superior Court may hear Magic Palace’s application for judicial review, essentially because the KGC is situated in Quebec.”
The MCK did not respond to a request for comment.
