Wireless Code - Motion For Leave To Appeal - Book of Authorities

Court File No. FEDERAL COURT OF APPEAL B E T W E E N: BELL CANADA, BELL MOBILITY INC., MTS INC.
, NORTHERNTEL, LIMITED PARTNERSHIP, ROGERS COMMUNICATIONS PARTNERSHIP, SASKATCHEWAN TELECOMMUNICATIONS, TLBEC, SOCIT EN COMMANDITE and TELUS COMMUNICATIONS COMPANY Applicants - and AMTELECOM LIMITED PARTNERSHIP, BRAGG COMMUNICATIONS INC., DATA & AUDIO-VISUAL ENTERPRISES WIRELESS INC., GLOBALIVE WIRELESS MANAGEMENT CORP., HAY COMMUNICATIONS CO-OPERATIVE LIMITED, HURON TELECOMMUNICATIONS CO-OPERATIVE LIMITED, MORNINGTON COMMUNICATIONS CO-OPERATIVE LIMITED, NEXICOM MOBILITY INC., NORTHWESTEL INC., PEOPLES TEL LIMITED PARTNERSHIP, PUBLIC MOBILE INC., QUADRO COMMUNICATIONS CO-OPERATIVE INC., QUEBECOR MEDIA INC., SOGETEL MOBILIT INC., THUNDER BAY TELEPHONE, VAXINATION INFORMATIQUE, CONSUMERS COUNCIL OF CANADA, DIVERSITYCANADA FOUNDATION, MEDIA ACCESS CANADA, MOUVEMENT PERSONNE DABORD DU QUBEC, PUBLIC INTEREST ADVOCACY CENTRE, CONSUMERS ASSOCIATION OF CANADA, COUNCIL OF SENIOR CITIZENS ORGANIZATIONS OF BRITISH COLUMBIA, OPENMEDIA.CA, SERVICE DE PROTECTION ET DINFORMATION DU CONSOMMATEUR, UNION DES CONSOMMATEURS, CANADIAN WIRELESS TELECOMMUNICATIONS ASSOCIATION, COMMISSIONER FOR COMPLAINTS FOR TELECOMMUNICATIONS SERVICES INC., COMPETITION BUREAU OF CANADA, GLENN THIBEAULT, HER MAJESTY THE QUEEN IN RIGHT OF ALBERTA, GOVERNMENT OF MANITOBA, GOVERNMENT OF THE NORTHWEST TERRITORIES, HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO, ATTORNEY GENERAL OF QUEBEC, GOVERNMENT OF YUKON, OFFICE OF THE PRIVACY COMMISSIONER OF CANADA, CATHERINE MIDDLETON, TAMARA SHEPHERD, LESLIE REGAN SHADE, KIM SAWCHUK, BARBARA CROW, SHAW TELECOM INC., TERRY DUNCAN, GLENN FULLERTON, TANA GUINDEBA, NASIR KHAN, MICHAEL LANCIONE, ALLAN MUNRO, FREDERICK A. NAKOS, RAINER SCHOENEN and DANIEL SOKOLOV Respondents BOOK OF AUTHORITIES OF THE APPLICANTS (Motion for leave to appeal, to expedite, to authorize service by email and to dispense with further service)
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Torys LLP 79 Wellington St. W., Suite 3000 Box 270, TD Centre Toronto, ON M5K 1N2 John B. Laskin Tel:416.865.7317 / Fax: 416.865.7380 jlaskin@torys.com Myriam Seers Tel: 416.865.7535 / Fax: 416.865.7380 mseers@torys.com Lawyers for the Applicants
TABLE OF CONTENTS
Tab 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Martin v. Canada (Minister of Human Resources Development), [1999] F.C.J. No. 1972 Dikranian v. Quebec (Attorney General), 2005 SCC 73 R. v. Walker, [1970] S.C.R. 649 Bell Canada v. C.T.E.A., [2003] 1 S.C.R. 884 British Columbia (Attorney General) v. Parklane Private Hospital Ltd., [1975] 2 S.C.R. 47 Apotex Inc. v. Merck & Co., 2011 FCA 329 Bell Canada v. Canada (C.R.T.C.), [1989] 1 S.C.R. 1722 Bell Canada v. Bell Aliant Regional Communications, 2009 SCC 40 R. v. S.(S.), [1990] 2 S.C.R. 254 Apotex Inc. v. Wellcome Foundation Ltd., [1998] F.C.J. No. 859 (C.A.) Del Zotto v. Canada (Minister of National Revenue - M.N.R.), [2000] F.C.J. No. 573 Telewizja Polsat S.A. v. Radiopol Inc., 2005 FC 1179 Ruth Sullivan, Sullivan on the Construction of Statutes, 5th ed. (Markham, Ont.: LexisNexis, 2008)
TAB 1
Page 1 1999 CarswellNat 2765, 178 F.T.R. 159 (note), 252 N.R. 141, [1999] F.C.J. No. 1972
1999 CarswellNat 2765, 178 F.T.R. 159 (note), 252 N.R. 141, [1999] F.C.J. No. 1972 Martin v. Canada (Minister of Human Resources Development) Mervyn K. Martin, Appellant and The Minister of Human Resources Development, Respondent Federal Court of Appeal Malone J.A., Robertson J.A., Strayer J.A. Heard: December 16, 1999 Judgment: December 16, 1999 Docket: A-229-98 Thomson Reuters Canada Limited or its Licensors (excluding individual court documents). All rights reserved. Proceedings: reversing (1998), 1998 CarswellNat 336, 153 F.T.R. 124, C.E.B. & P.G.R. 8334 (Fed. T.D.) Counsel: Mr. Ronald Cronkhite , for Appellant. Mr. Jan Brongers , for Respondent. Subject: Public; Labour and Employment Social assistance --- Federal pension plans Types of benefits Disability pension Entitlement Criteria Applicant was physical labourer with grade 8 education Applicant injured back and applied for disability benefits Doctors advised applicant to avoid bending, lifting or twisting Minister refused to pay benefits and review tribunal dismissed appeal on ground that most of medical reports indicated applicant was capable of doing some kind of sedentary work Pension Appeals Board denied leave to appeal to it on basis that Board would not come to any different conclusion from that of tribunal Board found that applicant had not shown he was incapable of doing any gainful employment Applicant sought judicial review of refusal of leave to appeal Application granted Proper test in reviewing decisions relative to leave to appeal to Pension Appeals Board was whether appellant could show some arguable ground upon which proposed appeal might succeed In refusing leave on basis that appellant had not shown he was incapable of doing any type of work Board had gone much further and considered whether appellant could succeed on merits It was arguable the Canada Pension Plan's requirement for severe disability that claimant be incapable regularly of pursuing any substantially gainful occupation meant something less than claimant showing he was incapable of doing any type of work Board had erred in law in applying incorrect test and placing too heavy burden on appellant Appeal should be allowed and application for leave to appeal remitted for reconsideration. Cases considered by Malone J.A. :
2013 Thomson Reuters. No Claim to Orig. Govt. Works
Ernewein v. Canada (Minister of Employment & Immigration) (1979), [1980] 1 S.C.R. 639, 103 D.L.R. (3d) 1, 14 C.P.C. 264, 30 N.R. 316 (S.C.C.) referred to Kerth v. Canada (Minister of Human Resources Development) (1999), C.E.B. & P.G.R. 8363 (headnote only) (Fed. T.D.) applied Kurniewicz v. Canada (Minister of Manpower & Immigration) (1974), 6 N.R. 225 (Fed. C.A.) applied MacDonald v. Montreal (City), [1986] 1 S.C.R. 460, 27 D.L.R. (4th) 321, (sub nom. Montreal (City) v. MacDonald) 67 N.R. 1, 25 C.C.C. (3d) 481 (S.C.C.) referred to Statutes considered: Canada Pension Plan, R.S.C. 1985, c. C-8 s. 42(2)(a)(i) considered Federal Court Act, R.S.C. 1985, c. F-7 s. 27 pursuant to APPEAL from order dismissing application for judicial review of decision of Pension Appeals Board refusing appellant's application for leave to appeal to Board. Malone J.A.: 1 This is an appeal pursuant to section 27 of the Federal Court Act from the order of Madame Justice Tremblay-Lamer dated March 6, 1998. Madame Justice Tremblay-Lamer dismissed an application for judicial review of the decision of the Vice-Chairman of the Pensions Appeal Board ('PAB") dated November 26, 1996 who had refused the appellant's leave to appeal to the PAB. 2 Briefly the facts relevant to this appeal as found by the motions judge are as follows: The Applicant has worked all his life as a physical labourer. He has a grade 8 education. In September 1994, he applied for disability benefits. He was forced to stop working in June 1993 after experiencing severe back pain. His doctors advised him to avoid bending, lifting or twisting, and to walk 2 or 3 miles a day to help alleviate the pain. The Applicant contends that his pain is constant and, in order to obtain relief, he must lie down on two to three occasions a day for approximately one half-hour at a time. The pain also interferes with his sleep. The Minister refused to pay the Applicant benefits. An appeal of the Minister's decision was filed with the Review Tribunal, which eventually dismissed it. The Tribunal held that the Applicant was not entitled to disability benefits because there was no objective medical evidence that he was incapable of doing any type of work. In fact, most of the medical reports indicated that he was capable of doing some kind of work. The Applicant appealed the decision to the Pension Appeals Board. However, leave was denied by the ViceChairman who felt that the Board could not come to any different conclusion from that reached by the Review Tribunal. Specifically, he stated:
The medical evidence does not support the contention that the applicant is incapable regularly of pursuing any gainful occupation. It shows he is limited as to what work he can do, but supports the Minister's contention that less physically demanding work would be within his capacity. As to the applicant's educational qualifications, any limitations flowing from the that consideration are not based on disability. 3 In dismissing the application for judicial review Madam Justice Tremblay-Lamer held that the proper test for determining whether the Court can overrule a decision in such cases is the legality of the decision and not its correctness, citing Ernewein v. Canada (Minister of Employment & Immigration) (1979), [1980] 1 S.C.R. 639 (S.C.C.) . In other words, unless the Vice-Chairman considered irrelevant factors or acted contrary to law, the Court should show deference towards its decision (MacDonald v. Montreal (City), [1986] 1 S.C.R. 460 (S.C.C.) at p. 507. Based on the foregoing principles Madam Justice Tremblay-Lamer concluded: I do not agree with the Applicant that the Review Tribunal applied the wrong test in determining whether he was deemed disabled. While the Review Tribunal did not mention the specific words "substantially gainful occupation", it does not necessarily mean that it did not apply the correct test. In my opinion, when it stated that there was no objective medical evidence that the Applicant was incapable of doing 'any type of work", it was referring to sedentary work as opposed to manual labour. The Applicant's medical condition does not restrict him from pursuing sedentary work. The fact that the Vice-Chairman refused to grant leave because the medical evidence supported the conclusion that less demanding work would be within the Applicant's capacity was not unreasonable. I find that there was sufficient material to support his conclusion. 4 Subsequent to the above decision, Madam Justice Reed in Kerth v. Canada (Minister of Human Resources Development) (1999), C.E.B. & P.G.R. 8363 (headnote only) (Fed. T.D.) August 13, 1999, also considered the standard of review to be applied by the Federal Court of Canada, Trial Division in reviewing decisions relative to leave to appeal applications to the PAB. 5 Justice Reed found that a leave to appeal proceeding is a preliminary step to a hearing on the merits. As such "it is a first and lower hurdle for the applicant to meet than that that must be met on the hearing of the appeal on the merits" (see page 6 of decision). The Court relied on the case of Kurniewicz v. Canada (Minister of Manpower & Immigration) (1974), 6 N.R. 225 (Fed. C.A.) at p. 230 for the proposition that some arguable ground upon which the proposed appeal might succeed is needed in order for leave to be granted. 6 On examination of the reasons given by the PAB Vice-Chairman in refusing leave to appeal it is evident that he went much further than merely considering whether an arguable case or question of law or jurisdiction had been raised and instead considered whether the appellant could succeed on the merits. This is an error of law. The Vice-Chairman stated (Appeal Book , page 60): It is difficult to see how the Board could come to any different conclusion from that reached by the Review Tribunal. The medical evidence does not support the contention that the applicant is incapable regularly of pursuing any gainful occupation. It shows he is limited as to what work he can do, but supports the Minister's contention that less physically demanding work would be within his capacity. As to the applicant's education qualifications, any limitation flowing from that consideration are not based on disability. Leave to appeal cannot be justified.
7 We are of the respectful view that the Vice-Chairman of the PAB in making his decision applied an incorrect test and placed too heavy a burden on the appellant when assessing the application for leave to appeal. In our view there is at least an arguable case as to the proper interpretation of subparagraph 42(2)(a)(i) of the Canada Pension Plan which requires that for a disability to be severe the claimant must be "incapable regularly of pursuing any substantially gainful occupation". The Review Tribunal, however, assumed that the appellant had to show that he is "incapable of doing any type of work". 8 The appeal should be allowed and the order of Madam Justice Tremblay-Lamer dated March 6, 1998 set aside. The application for judicial review shall be allowed and the application for leave to appeal to the PAB should be remitted for reconsideration. Appeal allowed. END OF DOCUMENT
TAB 2
Page 1 2005 CarswellQue 10752, 2005 SCC 73, 260 D.L.R. (4th) 17, [2005] 3 S.C.R. 530, 342 N.R. 1
2005 CarswellQue 10752, 2005 SCC 73, 260 D.L.R. (4th) 17, [2005] 3 S.C.R. 530, 342 N.R. 1 Dikranian c. Qubec (Procureur gnral) Harry Dikranian, Appellant v. Attorney General of Quebec, Respondent Supreme Court of Canada Abella J., Bastarache J., Binnie J., Charron J., Deschamps J., LeBel J., McLachlin C.J.C. Heard: March 10, 2005 Judgment: December 2, 2005 Docket: 30243 Thomson Reuters Canada Limited or its Licensors (excluding individual court documents). All rights reserved. Counsel: Leon J. Greenberg, Guy St-Germain, for Appellant Mario Normandin, for Respondent Subject: Public; Contracts; Corporate and Commercial Education law --- Colleges and universities Students Student loans Under Act respecting financial assistance for students, Minister of Education issues to students loan certificates authorizing students to enter into loan with financial institution, guaranteeing loan and paying interest during exemption period after completion of studies Student entered into student loans with bank; final certificate, signed in 1996, provided that student had to start paying interest in January 1999 Act enacted in 1997 reduced exemption period by one month Other Act enacted in 1998 provided that student had to pay interest right upon completion of studies Student completed studies in January 1998 and learned, in June 1998, that interest was already being charged and that loan was payable as of December 1998 Student was authorized to start class action against Attorney General of Qubec for reimbursement of interest paid on loans Class action dismissed Student's appeal dismissed Student's appeal to Supreme Court of Canada allowed Vested rights only exist where juridical situation is individualized, concrete and is materialized Signing of loan certificate by bank and student transformed certificate into contract and crystallized parties' rights and obligations Act of 1997 contained no transitional provision revealing legislature's clear and unambiguous intent to apply new provisions to reduce borrowers' rights Mere fact of favouring immediate and future application of Act of 1997 did not authorize government to violate rights conferred by contract to student Act of 1997 did not apply to contracts already entered into as it did not mention them Act of 1998 stated in s. 13 that Act only applied to "juridical situations in progress" at time of Act's coming into force "[J]uridical situations in progress" meant student who has received but not yet signed loan certificate Legislature distinguished between "juridic-
al situations in progress" and "contractual situations in progress", and s. 13 did not say it applied to latter or to contracts Loan contract was signed and entered into before Act of 1998 came into force and continued to produce effects despite Act, as contract's conclusion fixed, crystallized and finalized contract's rights and obligations, which included repayment terms Principle against inteference with vested rights applied given ambiguity of s. 13 of Act of 1998 Right to not pay more interest acquired upon formation of contract Matter was sent back to Superior Court in order to determine claims method for affected students, amounts owed by government and payment procedures. Statutes --- Retroactivity and retrospectivity Vested rights General Under Act respecting financial assistance for students, Minister of Education issues to students loan certificates authorizing students to enter into loan with financial institution, guaranteeing loan and paying interest during exemption period after completion of studies Student entered into student loans with bank; final certificate, signed in 1996, provided that student had to start paying interest in January 1999 Act enacted in 1997 reduced exemption period by one month Other Act enacted in 1998 provided that student had to pay interest right upon completion of studies Student completed studies in January 1998 and learned, in June 1998, that interest was already being charged and that loan was payable as of December 1998 Student was authorized to start class action against Attorney General of Qubec for reimbursement of interest paid on loans Class action dismissed Student's appeal dismissed Student's appeal to Supreme Court of Canada allowed Vested rights only exist where juridical situation is individualized, concrete and is materialized Signing of loan certificate by bank and student transformed certificate into contract and crystallized parties' rights and obligations Act of 1997 contained no transitional provision revealing legislature's clear and unambiguous intent to apply new provisions to reduce borrowers' rights Mere fact of favouring immediate and future application of Act of 1997 did not authorize government to violate rights conferred by contract to student Act of 1997 did not apply to contracts already entered into as it did not mention them Act of 1998 stated in s. 13 that Act only applied to "juridical situations in progress" at time of Act's coming into force "[J]uridical situations in progress" meant student who has received but not yet signed loan certificate Legislature distinguished before between "juridical situations in progress" and "contractual situations in progress", and s. 13 did not say it applied to latter or to contracts Loan contract was signed and entered into before Act of 1998 came into force and continued to produce effects despite Act, as contract's conclusion fixed, crystallized and finalized contract's rights and obligations, which included repayment terms Principle against inteference with vested rights applied given ambiguity of s. 13 of Act of 1998 Right to not pay more interest acquired upon formation of contract Matter was sent back to Superior Court in order to determine claims method for affected students, amounts owed by government and payment procedures. Statutes --- Interpretation Particular words Miscellaneous words Under Act respecting financial assistance for students, Minister of Education issues to students loan certificates authorizing students to enter into loan with financial institution, guaranteeing loan and paying interest during exemption period after completion of studies Student entered into student loans with bank; final certificate, signed in 1996, provided that student had to start paying interest in January 1999 Act enacted in 1997 reduced exemption period by one month Other Act enacted in 1998 provided that student had to pay interest right upon completion of studies Student completed studies in January 1998 and learned, in June 1998, that interest was already being charged and that loan was payable as of December 1998 Student was authorized to start class action against Attorney General of Qubec for reimbursement of interest paid on loans Class action dismissed Student's appeal dismissed Student's appeal to Supreme Court of Canada allowed Act of
1998 stated in s. 13 that Act only applied to "juridical situations in progress" at time of Act's coming into force "[J]uridical situations in progress" meant student who has received but not yet signed loan certificate Legislature distinguished before between "juridical situations in progress" and "contractual situations in progress", and s. 13 did not say it applied to latter or to contracts Loan contract was signed and entered into before Act of 1998 came into force and continued to produce effects despite Act, as contract's conclusion fixed, crystallized and finalized contract's rights and obligations, which included repayment terms Principle against inteference with vested rights applied given ambiguity of s. 13 of Act of 1998 Right to not pay more interest acquired upon formation of contract. Droit de l'ducation --- Collges and universits tudiants Prts tudiants Selon la Loi sur l'aide financire aux tudiants, le ministre de l'ducation dlivre aux tudiants un certificat de prt qui les autorise contracter un emprunt auprs d'une institution financire et qui garantit le prt et paie les intrts pendant une priode d'exemption aprs la fin des tudes tudiant a contract des prts tudiants avec une banque; le dernier certificat, sign en 1996, prvoyait le paiement du prt et des intrts partir de janvier 1999 Loi adopte en 1997 a raccourci d'un mois la priode d'exemption Autre loi adopte en 1998 a prvu le paiement des intrts ds la fin des tudes tudiant a fini ses tudes en janvier 1998 et a appris, en juin 1998, que les intrts avaient dj commenc tre imputs et que le prt tait payable partir de dcembre 1998 tudiant a t autoris intenter un recours collectif contre le Procureur gnral du Qubec afin d'obtenir le remboursement des intrts pays Recours collectif rejet Pourvoi de l'tudiant rejet Pourvoi de l'tudiant la Cour suprme du Canada accueilli Droit acquis n'existe que si la situation juridique considre est individualise et concrte et qu'elle est matrialise Signature du certificat de prt par la banque et l'tudiant a transform ce dernier en un contrat et a cristallis les droits et obligations des parties Loi de 1997 ne contenait aucune disposition transitoire rvlant l'intention claire et non ambigu du lgislateur d'appliquer les nouvelles dispositions pour rduire les droits des emprunteurs Seul fait de prconiser l'application immdiate et future de la Loi de 1997 n'autorisait pas le gouvernement porter atteinte aux droits confrs l'tudiant par son contrat Loi de 1997 ne mentionnant pas les contrats dj conclus, elle ne s'appliquait pas eux Selon son art. 13, la Loi de 1998 s'appliquait aux situations juridiques en cours lors de son entre en vigueur [S]ituations juridiques en cours s'entendait d'un tudiant qui a reu son certificat de prt mais ne l'a pas encore sign Lgislateur a dj distingu entre les situations juridiques en cours et les situations contractuelles en cours , et l'art. 13 ne disait pas s'appliquer ces dernires ou aux contrats Contrat de prt a t sign et conclu avant la Loi de 1998 et continuait de produire ses effets malgr celle-ci, puisque ses droits et obligations, dont les modalits de remboursement, ont t fixs, cristalliss et arrts par la conclusion du contrat Principe du respect des droits acquis s'appliquait vu l'ambigut de l'art. 13 de la Loi de 1998 Droit de ne pas payer plus d'intrts a t acquis la formation du contrat Dossier tait renvoy la Cour suprieure afin qu'elle dtermine le mode de rclamation des tudiants touchs, les montants dus par le gouvernement et les modalits de paiement. Lois --- Retroactivit et rtrospectivit Droits acquis Gnral Selon la Loi sur l'aide financire aux tudiants, le ministre de l'ducation dlivre aux tudiants un certificat de prt qui les autorise contracter un emprunt auprs d'une institution financire et qui garantit le prt et paie les intrts pendant une priode d'exemption aprs la fin des tudes tudiant a contract des prts tudiants avec une banque; le dernier certificat, sign en 1996, prvoyait le paiement du prt et des intrts partir de janvier 1999 Loi adopte en 1997 a raccourci d'un mois la priode d'exemption Autre loi adopte en 1998 a prvu le paiement des intrts ds la fin des tudes tudiant a fini ses tudes en janvier 1998 et a appris, en juin
1998, que les intrts avaient dj commenc tre imputs et que le prt tait payable partir de dcembre 1998 tudiant a t autoris intenter un recours collectif contre le Procureur gnral du Qubec afin d'obtenir le remboursement des intrts pays Recours collectif rejet Pourvoi de l'tudiant rejet Pourvoi de l'tudiant la Cour suprme du Canada accueilli Droit acquis n'existe que si la situation juridique considre est individualise et concrte et qu'elle est matrialise Signature du certificat de prt par la banque et l'tudiant a transform ce dernier en un contrat et a cristallis les droits et obligations des parties Loi de 1997 ne contenait aucune disposition transitoire rvlant l'intention claire et non ambigu du lgislateur d'appliquer les nouvelles dispositions pour rduire les droits des emprunteurs Seul fait de prconiser l'application immdiate et future de la Loi de 1997 n'autorisait pas le gouvernement porter atteinte aux droits confrs l'tudiant par son contrat Loi de 1997 ne mentionnant pas les contrats dj conclus, elle ne s'appliquait pas eux Selon son art. 13, la Loi de 1998 s'appliquait aux situations juridiques en cours lors de son entre en vigueur [S]ituations juridiques en cours s'entendait d'un tudiant qui a reu son certificat de prt mais ne l'a pas encore sign Lgislateur a dj distingu entre les situations juridiques en cours et les situations contractuelles en cours , et l'art. 13 ne disait pas s'appliquer ces dernires ou aux contrats Contrat de prt a t sign et conclu avant la Loi de 1998 et continuait de produire ses effets malgr celle-ci, puisque ses droits et obligations, dont les modalits de remboursement, ont t fixs, cristalliss et arrts par la conclusion du contrat Principe du respect des droits acquis s'appliquait vu l'ambigut de l'art. 13 de la Loi de 1998 Droit de ne pas payer plus d'intrts a t acquis la formation du contrat Dossier tait renvoy la Cour suprieure afin qu'elle dtermine le mode de rclamation des tudiants touchs, les montants dus par le gouvernement et les modalits de paiement. Lois --- Interprtation Mots particuliers Divers mots Selon la Loi sur l'aide financire aux tudiants, le ministre de l'ducation dlivre aux tudiants un certificat de prt qui les autorise contracter un emprunt auprs d'une institution financire et qui garantit le prt et paie les intrts pendant une priode d'exemption aprs la fin des tudes tudiant a contract des prts tudiants avec une banque; le dernier certificat, sign en 1996, prvoyait le paiement du prt et des intrts partir de janvier 1999 Loi adopte en 1997 a raccourci d'un mois la priode d'exemption Autre loi adopte en 1998 a prvu le paiement des intrts ds la fin des tudes tudiant a fini ses tudes en janvier 1998 et a appris, en juin 1998, que les intrts avaient dj commenc tre imputs et que le prt tait payable partir de dcembre 1998 tudiant a t autoris intenter un recours collectif contre le Procureur gnral du Qubec afin d'obtenir le remboursement des intrts pays Recours collectif rejet Pourvoi de l'tudiant rejet Pourvoi de l'tudiant la Cour suprme du Canada accueilli Selon son art. 13, la Loi de 1998 s'appliquait aux situations juridiques en cours lors de son entre en vigueur [S]ituations juridiques en cours s'entendait d'un tudiant qui a reu son certificat de prt mais ne l'a pas encore sign Lgislateur a dj distingu entre les situations juridiques en cours et les situations contractuelles en cours , et l'art. 13 ne disait pas s'appliquer ces dernires ou aux contrats Contrat de prt a t sign et conclu avant la Loi de 1998 et continuait de produire ses effets malgr celle-ci, puisque ses droits et obligations, dont les modalits de remboursement, ont t fixs, cristalliss et arrts par la conclusion du contrat Principe du respect des droits acquis s'appliquait vu l'ambigut de l'art. 13 de la Loi de 1998 Droit de ne pas payer plus d'intrts a t acquis la formation du contrat. In Quebec, the student loan scheme is governed by An Act respecting financial assistance for students (AFAS) and by the Regulation respecting financial assistance for students (RFAS). The scheme provides for the issuance to the student of a loan certificate in which the Minister of Education authorizes the student to take out a loan with a financial institution. The certificate guarantees the loan in case of a student's failure to pay and pays the
interest during the exemption period stated in the certificate. The student then enters into a contract with a financial institution; the government is not party to the contract but does dictate some terms of the contract. In 1997, the National Assembly enacted a law reducing by a month the exemption period for payment of the interest and reimbursement of capital by the student. In May 1998, the National Assembly enacted legislation stating that the student would have to pay the interest as soon as his or her studies were completed. Student D obtained his last student loan in 1996. The loan certificate provided that D had to start reimbursing the capital and pay the interest on the loan upon the expiry of the exemption period, i.e. January 1, 1999. D completed his studies in January 1998. He learned from his bank, in July 1998, that the interest on his loan had started to run on June 1, 1998 and that the capital would be payable as of December 1, 1998. In August 1998, D paid the loan's capital and paid, under protest, the interest incurred from June 1st to the reimbursement day. D was then authorized to bring a class action against the Attorney General of Quebec. His action was dismissed. His appeal was dismissed by the majority of the Court of Appeal. He appealed to the Supreme Court of Canada. Held: The appeal was allowed. Per Bastarache J. (McLachlin C.J.C., Binnie, LeBel, Abella, Charron JJ. concurring): The scheme put in place by the AFAS and the RFAS is complete, and does not require the application of the Civil Code or its application Act. The Quebec Interpretation Act should apply, which establishes the acquired (or vested) rights principle in its s. 12. Vested rights exist where the juridical situation examined is tangible, concrete, distinctive and where it is constituted at the time the new legislation enters into force. The mere possibility of invoking legislation should thus not base a vested rights claim. In this case, D and his bank signed the loan certificate provided by the Minister, thus transforming it into a contract and crystallizing the parties' rights and obligations. Moreover, the Act implicitly recognizes the contractual relationship established between the student and the financial institution. The Act of 1997, which reduced the exemption period by one month, did not contain any transitional provision revealing the intent of the legislature. Thus, nothing allowed a finding that the legislature had a clear and unambiguous intention to apply the new provisions to reduce the borrowers' rights. Merely favouring an immediate and future application of the Act of 1997 did not authorize the government to infringe the rights granted to D by his contract. The Act of 1997 did not mention the contracts already entered into and could thus apply to them. Moreover, there was nothing in the record that could show the legislature intended to infringe vested rights. As for the Act of 1998, its s. 13 provided that it applied to "juridical situations in progress". That expression could not concern all student loans entered into before and after the new provisions came into force. Section 13 did not clearly state the legislature's intent to alter the terms of the loan contracts entered into prior to May 1, 1998. D properly submitted that, in the scheme's general context, "juridical situations in progress" means a student who has received his or her loan certificate, but who has yet to sign it with the financial institution. Section 13 did not provide that the Act of 1998 applied to "contracts" or "contractual situations", and the Quebec legislature had made a distinction in the past between "juridical situations in progress" and "contractual juridical situations in progress". These expressions thus had to refer to different realities. In this case, the contract was signed and entered into before the Act of 1998 came into force. Its effects continued despite that Act, since the rights and obligations flowing from it, including the repayment terms, were fixed and crystallized as soon as it was entered into. As s. 13 of the Act of 1998 was ambiguous, the principle against interference with vested rights should apply.
The right was provided for by the legislation but was later put in the private contract. Therefore, the rights and obligations were granted to the parties not by the legislation, but by the contractual agreement upon its formation. The right not to pay more interest and the right to the exemption were thus vested upon the contract's formation. They were no longer in progress as they had been definitely crystallized, determined and established by the contract. Finally, the administrative reasons given by the government, such as a uniform and equal treatment of students who complete their studies at the same time, could not allow ignoring the private contract's explicit wording. It was quite normal that students who obtained their loans at different times and signed the loan contracts knowingly would be treated differently. The government expressed its intent in the loan certificate and nothing justified ignoring the private contract's explicit wording. The class action was therefore allowed. The student borrowers whose loans were in progress on July 1, 1997 or on May 1, 1998 had a vested right in respect of the length of the exemption period provided for by the contract; that right was not affected by the Acts of 1997 or of 1998. The matter was sent back to the Superior Court to determine the claims method for affected students, the amounts owed by government and the payment procedures. Per Deschamps J. (dissenting): By declaring that s. 13 of the Act of 1998 applied to juridical situations in progress, the Quebec legislature clearly indicated that that Act immediately applied to the exemption period for the interest payable by D to his financial institution. The expression "juridical expressions in progress" included both situations in the process of being formed as well that the effects of any given juridical situation. The expression "juridical expression" is large; it encompasses both the constitution of the situation as well as its extinguishment and effects. Nothing justified finding that the legislature, in using "juridical situations in progress", intented to refer to juridical situations in the process of being formed, but not to juridical situations in the process of producing effects. The juridical situation is created as soon as the student is granted the loan certificate. It does not cease to be "in progress" when the student signs the loan certificate with the financial institution, thus transforming it in a loan contract. An interpretation that denies that a juridical situation is still "in progress" when it has been formed, has not been extinguished and is producing effects is not consistent with the theory on which the legislature relied. In this case, the obligation to pay the interest flowed from the contract, and the interest exemption period was clearly in progress. As the duration of the exemption period was legislated, it could be modified by legislation of immediate application. Moreover, the interpretation of Bastarache J., i.e. that transitional provision concerned only the received but unsigned certificate, was so narrow that one could not believe the legislature could have intended the scope of the Act to be so restricted. An interpretation that restricts the application of new legislation to a very limited number of cases should be rejected. The exemption period was modified for the future. It is open to the legislature to state in its laws provisions that may seem harsh. It is not up to the courts to interfere in the legislative process. Au Qubec, le rgime de prt tudiant est rgi par la Loi sur l'aide financire aux tudiants (LAFE) et par le Rglement sur l'aide financire aux tudiants (RAFE). Ce rgime prvoit la dlivrance l'tudiant d'un certificat de prt dans lequel le ministre de l'ducation autorise l'tudiant contracter un emprunt auprs d'une institution financire reconnu. Le certificat garantit le prt en cas de dfaut de paiement par l'tudiant et prend sa charge le paiement des intrts pendant la priode d'exemption stipule dans le certificat. L'tudiant conclut alors un contrat de prt avec une institution financire auquel le gouvernement n'est pas partie, mme s'il dicte certaines des modalits du contrat. En 1997, l'Assemble nationale a adopt une loi raccourcissant d'un mois la priode d'exemption du paiement des intrts et du remboursement du capital par l'tudiant. En mai 1998, l'Assemble
nationale a adopt une autre loi spcifiant cette fois-ci que l'tudiant devait payer les intrts ds la fin de ses tudes. L'tudiant D a a obtenu son dernier prt tudiant en 1996. Le certificat de prt prvoyait que l'tudiant devait commencer rembourser le capital et payer les intrts sur le prt l'expiration de la priode d'exemption, soit le 1er janvier 1999. D a termin ses tudes en janvier 1998. En juillet 1998, il a appris de sa banque que les intrts sur le prt taient dbits depuis le 1er juin 1998 et que le capital serait exigible compter du 1er dcembre 1998. En aot 1998, il a rembours le capital du prt et a pay, sous prott, les intrts courus du 1er juin au jour de son remboursement. Il a ensuite t autoris intenter un recours collectif contre le Procureur gnral du Qubec. Son recours a t rejet. Son appel a t rejet la majorit de la Cour d'appel. Il a interjet appel en Cour suprme du Canada. Arrt: Le pourvoi a t accueilli. Bastarache, J. (McLachlin, J.C.C., Binnie, LeBel, Abella, Charron, JJ., souscrivant son opinion): Le rgime mis en place par la Loi et le Rglement est complet, ne ncessitant pas l'application du Code civil ou de sa loi d'application. Il y avait lieu d'appliquer la Loi d'interprtation du Qubec, qui consacre le principe des droits acquis son art. 12. Il y a droits acquis lorsque la situation juridique considre est individualise, concrte, singulire et lorsqu'elle tait constitue au moment de l'entre en vigueur de la nouvelle loi. La seule possibilit de se prvaloir d'une loi ne saurait donc fonder une prtention de droit acquis. En l'espce, D et son institution financire ont sign un certificat de prt fourni par le ministre, le transformant de ce fait en un contrat et cristallisant les droits et obligations des parties. D'ailleurs la LAFE reconnat implicitement le lien contractuel tabli entre l'tudiant et l'institution financire. La Loi de 1997, qui rduisait d'un mois la priode d'exemption, ne contenait aucune disposition transitoire rvlant l'intention du lgislateur. Rien ne permettait donc de conclure l'intention claire et non ambigu du lgislateur d'appliquer les nouvelles dispositions de faon rduire les droits des emprunteurs. Le seul fait de prconiser une application immdiate et future de la Loi de 1997 n'autorisait pas le gouvernement porter atteinte aux droits confrs D par son contrat. La Loi de 1997 ne mentionnait pas les contrats dj conclus et pouvait donc s'appliquer eux. D'ailleurs, rien au dossier ne permettait d'imputer au lgislateur la volont de porter atteinte des droits acquis. Quant la Loi de 1998, elle prvoyait son art. 13 qu'elle s'appliquait aux situations juridiques en cours . Cette expression ne pouvait viser tous les prts tudiants conclus avant et aprs l'entre en vigueur des nouvelles dispositions. L'article 13 n'nonait pas clairement l'intention du lgislateur de changer les conditions des contrats de prts conclus pralablement au 1er mai 1998. D avait raison de prtendre que, dans le contexte gnral du rgime, l'expression situations juridiques en cours s'entendait d'un tudiant qui avait reu son certificat de prt, mais qui ne l'avait pas encore sign conjointement avec son institution financire. L'article 13 ne prvoyait pas que la Loi de 1998 s'appliquait aux contrats ou aux situations contractuelles et le lgislateur qubcois a dj fait une distinction par le pass entre les situations juridiques en cours et les situations juridiques contractuelles en cours . Celles-ci devaient donc se rapporter des ralits diffrentes. En l'espce, le contrat a t sign et conclu avant l'entre en vigueur de la Loi de 1998. Il continuait de produire ses effets malgr celle-ci, puisque les droits et obligations en dcoulant avaient t fixs et cristallis ds sa conclusion. Ces droits et obligations comprenaient bien sr les modalits de remboursement, des clauses essentielles de tout contrat de prt. L'article 13 de la Loi de 1998 tant ambigu, il y avait lieu d'appliquer le principe du respect des droits acquis.
Le droit tait prvu par la loi, mais il tait ensuite insr dans un contrat priv. C'tait donc l'accord contractuel qui, ds sa formation, a confr les droits et obligations aux parties, et non la loi. Le droit de ne pas payer plus d'intrts et le droit l'exemption ont donc t acquis la formation du contrat. Ils n'taient plus en cours, ils avaient t cristalliss, arrts et tablis dfinitivement par le contrat. Finalement, les raisons administratives invoques par le gouvernement, comme un traitement uniforme et gal des tudiants terminant leurs tudes en mme temps, ne pouvait permettre de faire abstraction du libell explicite du contrat priv. Il tait tout fait normal que des tudiants qui ont obtenu leurs prts des moments diffrents et ont sign en pleine connaissance des cause des conventions de prt diffrentes soient traits diffremment. Le gouvernement a exprim sa volont dans le certificat de prt et il n'y avait pas lieu d'ignorer le libell explicit du contrat priv. Le recours collectif tait donc accueilli. Les tudiants emprunteurs dont le prt tait en cours au 1er juillet 1997 ou ceux dont le prt tait en cours au 1er mai 1998 bnficiaient d'un droit acquis quant la dure de la priode d'exemption prvue par le contrat, ce droit n'tant pas touch par les Lois de 1997 et de 1998. Le dossier tait renvoy la Cour suprieure pour qu'elle dtermine le mode de rclamation, les montants dus par Qubec, ainsi que les modalits de paiement. Deschamps, J. (dissidente): En dclarant que l'art. 13 de la Loi de 1998 s'appliquait aux situations juridiques en cours, le lgislateur qubcois a clairement indiqu que cette loi s'appliquait avec effet immdiat la priode d'exemption de paiement des intrts payables par D son institution financire. L'expression situations juridiques en cours incluait tant les situations en cours de formation que les effets d'une situation juridique donne. L'expression situation juridique est vaste; elle englobe tant la constitution de la situation que son extinction et ses effets. Rien ne permettait de conclure que, en utilisant l'expression situations juridiques en cours , le lgislateur voulait dsigner les situations juridiques en cours de constitution mais non les situations juridiques en cours d'effet . La situation juridique est cre ds que le certificat de prt est accord l'tudiant. Elle ne cesse pas d'tre en cours lorsque l'tudiant signe le certificat de prt conjointement avec l'institution financire, transformant le certificat en contrat de prt. Une interprtation qui nie qu'une situation juridique est encore en cours lorsqu'elle est forme, non teinte et produit des effets ne respecte pas la thorie sur laquelle le lgislateur s'est fond. En l'espce, l'obligation de payer les intrts dcoulait du contrat et la priode d'exemption du paiement des intrts tait clairement en cours. La dure de la priode d'exemption tait d'origine lgislative, elle pouvait tre modifie par une loi d'application immdiate. De plus, l'interprtation du juge Bastarache, soit que seul le certificat reu mais non sign tait vis par la disposition transitoire, tait si troite que l'on ne pouvait croire que le lgislateur avait pu vouloir limiter ainsi la porte de la LAFE. Il y avait lieu de rejeter une interprtation qui limitait l'application d'une loi nouvelle un nombre trs limit de cas. La priode d'exemption tait modifie pour l'avenir. Le lgislateur est libre d'noncer dans ses lois des dispositions qui peuvent paratre dures. Il n'appartient pas aux tribunaux de s'immiscer dans le processus lgislatif. Cases considered by Bastarache J.: Abbott v. Minister for Lands (1895), [1895] A.C. 425 (Australia P.C.) referred to Bell ExpressVu Ltd. Partnership v. Rex (2002), 2002 SCC 42, 2002 CarswellBC 851, 2002 CarswellBC 852, 100 B.C.L.R. (3d) 1, [2002] 5 W.W.R. 1, 212 D.L.R. (4th) 1, 287 N.R. 248, 18 C.P.R. (4th) 289, 166 B.C.A.C. 1, 271 W.A.C. 1, 93 C.R.R. (2d) 189, [2002] 2 S.C.R. 559 (S.C.C.) referred to Dikranian c. Qubec (Procureur gnral) (1999), 1999 CarswellQue 2360 (Que. S.C.) referred to
piciers unis Mtro-Richelieu inc., division "Econogros" c. Collin (2004), (sub nom. piciers Unis MtroRichelieu Inc. v. Collin) 326 N.R. 89 (Eng.), (sub nom. piciers Unis Mtro-Richelieu Inc. v. Collin) 326 N.R. 89 (Fr.), [2004] 3 S.C.R. 257, 2004 SCC 59, 2004 CarswellQue 2400, 2004 CarswellQue 2401, 244 D.L.R. (4th) 1 (S.C.C.) followed Gustavson Drilling (1964) Ltd. v. Minister of National Revenue (1975), [1977] 1 S.C.R. 271, [1976] C.T.C. 1, 75 D.T.C. 5451, 66 D.L.R. (3d) 449, 7 N.R. 401, 1975 CarswellNat 330, 1975 CarswellNat 376 (S.C.C.) considered Holomis v. Dubuc (1974), 56 D.L.R. (3d) 351, 1974 CarswellBC 380 (B.C. S.C.) referred to Ishida v. Itterman (1974), [1975] 2 W.W.R. 142, 1974 CarswellBC 283 (B.C. S.C.) referred to Kluz v. Massey-Ferguson Finance Co. (1973), [1974] S.C.R. 474, 41 D.L.R. (3d) 390, 1973 CarswellSask 147, 1973 CarswellSask 147F (S.C.C.) referred to Location Triathlon Inc. c. Boucher-Forget (1994), [1994] R.J.Q. 1666, 1994 CarswellQue 2093 (Que. S.C.) referred to Marchand c. Duval (1973), [1973] C.A. 635 referred to Nepean (Township) v. Leikin (1971), 1971 CarswellOnt 678, [1971] 1 O.R. 567, 16 D.L.R. (3d) 113 (Ont. C.A.) referred to Qubec (Commission de protection du territoire agricole) v. Venne (1989), 4 R.P.R. (2d) 1, [1989] 1 S.C.R. 880, 24 Q.A.C. 162, 95 N.R. 335, 1989 CarswellQue 63, 1989 CarswellQue 108 (S.C.C.) considered Quebec (Expropriation Tribunal) v. Quebec (Attorney General) (1986), 66 N.R. 380, [1986] 1 S.C.R. 732, 35 L.C.R. 1, 1986 CarswellQue 118, 1986 CarswellQue 111F (S.C.C.) considered Scott v. College of Physicians & Surgeons (Saskatchewan) (1992), [1993] 1 W.W.R. 533, 95 D.L.R. (4th) 706, 100 Sask. R. 291, 18 W.A.C. 291, 1992 CarswellSask 354 (Sask. C.A.) considered Spooner Oils Ltd. v. Turner Valley Gas Conservation Board (1933), [1933] S.C.R. 629, [1933] 4 D.L.R. 545, 1933 CarswellAlta 50 (S.C.C.) considered Steele-Smith v. Acme (Village) School District (1932), [1933] S.C.R. 47, [1933] 1 D.L.R. 545, 1932 CarswellAlta 79 (S.C.C.) considered Upper Canada College v. Smith (1920), (sub nom. Smith v. Upper Canada College) 61 S.C.R. 413, (sub nom. Smith v. Upper Canada College) [1921] 1 W.W.R. 1154, 57 D.L.R. 648, 1920 CarswellOnt 20 (S.C.C.) considered Cases considered by Deschamps J.: piciers unis Mtro-Richelieu inc., division "Econogros" c. Collin (2004), (sub nom. piciers Unis MtroRichelieu Inc. v. Collin) 326 N.R. 89 (Eng.), (sub nom. piciers Unis Mtro-Richelieu Inc. v. Collin) 326 N.R. 89 (Fr.), [2004] 3 S.C.R. 257, 2004 SCC 59, 2004 CarswellQue 2400, 2004 CarswellQue 2401, 244 D.L.R. (4th) 1 (S.C.C.) considered
Medovarski v. Canada (Minister of Citizenship & Immigration) (2005), 2005 SCC 51, 2005 CarswellNat 2943, 2005 CarswellNat 2944 (S.C.C.) considered Statutes considered by Bastarache J.: Aide financire aux tudiants, et la Loi sur les Collges d'enseignement gnral et professionnel, Loi modifant la, L.Q. 1996, c. 79 en gnral referred to Aide financire aux tudiants, Loi modifant la, L.Q. 1997, c. 90 en gnral referred to art. 13 considered Aide financire aux tudiants, Loi sur l', L.R.Q., c. A-13.3 en gnral referred to art. 15 referred to art. 23 [abr. et. rempl. 1997, c. 90, art. 4] referred to art. 23 [mod. 1996, c. 79, art. 5] referred to art. 24 referred to art. 24 [mod. 1997, c. 90, art. 5] referred to art. 27 referred to art. 28 referred to art. 29 referred to art. 40 referred to art. 41 referred to art. 62 referred to Application de la rforme du Code civil, Loi sur l', L.Q. 1992, c. 57 en gnral referred to art. 2 referred to art. 3 considered Code civil du Qubec, L.Q. 1991, c. 64
en gnral referred to art. 625 referred to art. 1372 referred to art. 1385 referred to art. 1387 referred to art. 1457 referred to Interprtation, Loi d', L.R.Q., c. I-16 en gnral referred to art. 12 referred to Protection du consommateur, Loi sur la, L.R.Q., c. P-40.1 en gnral referred to Statutes considered by Deschamps J.: Aide financire aux tudiants, et la Loi sur les Collges d'enseignement gnral et professionnel, Loi modifant la, L.Q. 1996, c. 79 en gnral referred to Aide financire aux tudiants, Loi modifant la, L.Q. 1997, c. 90 en gnral referred to art. 13 referred to Aide financire aux tudiants, Loi sur l', L.R.Q., c. A-13.3 en gnral referred to art. 15 referred to art. 23 referred to art. 23 [abr. et. rempl. 1997, c. 90, art. 4] referred to art. 23 [mod. 1996, c. 79, art. 5] referred to art. 24 referred to art. 24 [mod. 1997, c. 90, art. 5] referred to
art. 27 referred to art. 28 referred to art. 29 referred to art. 40 referred to art. 41 referred to art. 62 referred to Application de la rforme du Code civil, Loi sur l', L.Q. 1992, c. 57 en gnral referred to art. 4 referred to Code civil du Qubec, L.Q. 1991, c. 64 en gnral referred to Regulations considered by Bastarache J.: Aide financire aux tudiants, Loi sur l', L.R.Q., c. A-13.3 Aide financire aux tudes, Rglement sur l', R.R.Q., 1981, c. A-13.3, r. 1 en gnral referred to art. 56 referred to APPEAL by student from judgment reported at Dikranian c. Qubec (Procureur gnral) (2004), 2004 CarswellQue 65 (Que. C.A.), dismissing his appeal from judgment dismissing his class action against Attorney General of Quebec seeking reimbursement of interest paid on student loans. POURVOI de l'tudiant l'encontre de l'arrt publi Dikranian c. Qubec (Procureur gnral) (2004), 2004 CarswellQue 65 (C.A. Qu.), qui a rejet son pourvoi l'encontre du jugement qui avait rejet son recours collectif contre le Procureur gnral du Qubec visant obtenir le remboursement des intrts pays sur des prts tudiants. Bastarache J.: 1 Introduction 1 The class action giving rise to this appeal was instituted by Mr. Dikranian on behalf of approximately 70,000 students; it concerns the recovery of interest paid on student loans granted under the former Act respecting financial assistance for students, R.S.Q., c. A-13.3 ("AFAS"), and the Regulation respecting financial assistance for students, R.R.Q., c. A-13.3, r. 1 ("RFAS").
2 The problem in the case at bar stems from the fact that the loans were made under private contracts between individual financial institutions and students while the repayment terms have been set by the government in the AFAS and the RFAS. The Minister of Education (the "Minister") has imposed these terms by incorporating them into a loan certificate that must be obtained to enter into a contract of loan, to which the Minister is not a direct party. 3 The instant case results from two amendments to the AFAS and the RFAS - one in 1997 and the other in 1998 - that reduced the period during which students are exempt from making interest payments and repayments on the principal. It must first be established whether, considering that the first amendment contained no transitional provisions, that amendment applied to loans that had already been granted. It will then be necessary to determine the meaning and scope of the transitional provision in the second legislative amendment, according to which the new provisions apply to "juridical situations in progress". 4 The student aid plan in place prior to the AFAS was based on administrative contracts (see the Web site of Quebec's Aide financire aux tudes, www.afe.gouv.qc.ca/english); under that plan, the government set the terms of the contract and could amend them as it saw fit at any time. Under the current plan, however, a certificate is issued in which the Minister guarantees the loan should the student default on it (AFAS, ss. 27, 28 and 29) (see Appendix) and pays the interest during the exemption period (AFAS, s. 24) (see Appendix). After the certificate is issued, the student enters into a private contract with a financial institution. Although the government dictates some of the terms of the contract by incorporating them in the certificate it issues, it is not a party to the contract. The government neither grants the loan nor approves it. The government makes parallel commitments in accordance with the AFAS. The issue here is whether, in the instant case, the changes to these legal obligations have had the effect of limiting the rights conferred on the student in his or her contract with the financial institution. 5 This means that there is no need for me to consider the exact nature of the legal relationship between the government and the student. The substantive issue is whether the National Assembly can alter the private law relationship between the financial institution and the student and, if so, whether the legislative amendments of 1997 and 1998 satisfy the conditions under which it may do so. 2 Origin of the Case 6 Student loans in Quebec are governed by the AFAS. The Minister issues, to a student who is entitled to it under the RFAS, a loan certificate authorizing the student to contract a loan with a financial institution recognized by the Minister within 90 days. The government pays the interest (AFAS, s. 24) and guarantees the repayment of the principal. Before 1997, the legislation exempted students who had completed their studies from paying interest on their loans for a period specified in the loan certificate. 7 On July 1, 1997 (the day the first amending statute came into force), the National Assembly reduced the period during which student borrowers were exempt from making interest payments and repayments on the principal by one month: An Act to amend the Act respecting financial assistance for students and the General and Vocational Colleges Act, S.Q. 1996, c. 79, s. 5 ("Amending Act, 1997"). For students who, like the appellant, completed their studies during the winter trimester, the date on which interest payments and repayments on the principal were to begin was brought forward from January 1, 1999 to December 1, 1998. Effective May 1, 1998 (the day the second amending statute came into force), students had to begin paying the interest as soon as they completed their studies: An Act to amend the Act respecting financial assistance for students, S.Q. 1997, c. 90,
ss. 4 and 5 ("Amending Act, 1998"). 8 The appellant obtained student loans between 1990 and 1996. He signed the last loan certificate with his financial institution, the Royal Bank of Canada, on November 15, 1996. The certificate issued by the Minister stated that the appellant could borrow an additional $4,255, which, after the amounts were consolidated, increased the total of his student loans from $22,510 to $26,765. The appellant completed his studies on about January 31, 1998, in the winter trimester. According to clause 10 of the loan certificate, he had to begin repaying the principal and paying the interest on the loan upon the expiration of the exemption period, that is, on January 1, 1999. 9 Around July 21, 1998, the appellant inquired about the repayment of his loan. A Royal Bank representative informed him verbally that interest on the loan had been debited since June 1, 1998 and that the principal would be repayable as of December 1, 1998, in accordance with the directives issued by Aide financire aux tudiants. As a result of the 1997 and 1998 legislative amendments, the appellant was being charged interest on his loan that, under the certificate signed in 1996, was supposed to have been paid by the Minister. 10 On August 7, 1998, the appellant repaid the principal of the loan and paid, without prejudice, $308.53 for the interest accrued from June 1 to August 6, 1998. 11 The appellant was authorized to institute, on behalf of himself and other students forming a specific group, a class action against the respondent, the Attorney General of Quebec, seeking reimbursement of the interest paid on the loans that had been granted (Dikranian c. Qubec (Procureur gnral), [1999] J.Q. No. 2086 (Que. S.C.), per Lvesque J.). He argued that Quebec's Ministre de l'ducation had to pay that interest in accordance with the loan certificate issued before the legislative amendments were passed. 3 Judicial History 12 On December 13, 2001, Journet J. of the Superior Court dismissed the appellant's action. On January 27, 2004, a majority of the Court of Appeal dismissed his appeal, Rothman J.A. dissenting. 3.1 Superior Court ([2002] R.J.Q 969) 13 Journet J. began by rejecting the appellant's arguments based on the provisions of the Civil Code of Qubec, S.Q. 1991, c. 64 ("C.C.Q."), concerning contracts of adhesion as well as his arguments relating to the Consumer Protection Act, R.S.Q., c. P-40.1. He found that the rights and obligations of the financial institution and the student were governed by the statute and the regulation, and not by the loan certificate. The rights and obligations were not imposed by one of the parties to the contract, as is the case with a contract of adhesion. They simply flowed from the exercise of statutory or regulatory powers. In his view, a mandatory provision of a statute or regulation cannot be nullified pursuant to the C.C.Q. on the ground that, because it is incorporated into a contract, it is contractual in nature. This would be [TRANSLATION] "to confuse and distort concepts of nullity that were incompatible with each other the rules of nullity applicable to contracts on the one hand and the rules of nullity and invalidity applicable to statutes and regulations on the other..." (at para. 76). Journet J. was of the opinion that the loan certificate was not in itself a contract but rather a juridical act issued pursuant to an enactment governing the rights and obligations of the parties referred to therein. 14 Journet J. then addressed the question of the retroactivity of the legislation. In his view, the issue was the immediate applicability of the legislation, not its retroactive application. He noted that the two amending stat-
utes did not state that their provisions would take effect before they came into force. He added the following: [TRANSLATION] Section 13 of the 1997 statute states that the new provisions of the Act are applicable to the juridical situations in progress at the time of their coming into force. This statutory provision shows that the legislature intended the new legislation to apply immediately to all existing and future loans. The Court does not see how it could conclude that the two new statutes created different juridical situations for loans made before and after their enactment. In the absence of a provision to the contrary, every statute must apply immediately, both to contracts entered into before and to those entered into after it comes into force. The Court notes that there cannot be multiple sets of repayment terms for students completing their studies in the same trimester unless specific legislative provisions so indicate. The Court must favour an interpretation that results in the uniform application of one legislative scheme rather than a multiplicity of schemes. The interpretation suggested by [the appellant] for dealing with the temporal effect of the 1996 and 1997 statutes on the [AFAS] leads to unfair and different treatment of students who are nonetheless in the same situation, that is, who complete their studies in the same trimester and with the same loan amount to repay. If we accept the argument of [the appellant], only some of these students, he being one of them, would have to pay less interest on their loans and would thus obtain benefits not granted to others. [at paras. 88-92] 15 Finally, on the issue of vested rights, Journet J. noted that none of the students concerned, the appellant included, had completed their studies at the time the two statutes giving rise to the conflicting interpretations were enacted. The appellant had accordingly not taken advantage of the exemptions provided for in the original statute as of the time when the new provisions were enacted. He could not therefore claim to have vested rights. 3.2 Court of Appeal ([2004] Q.J. No. 303 (QL)) 16 The appellant appealed from this judgment but was unsuccessful.
3.2.1 Forget J.A. 17 Forget J.A., Beauregard J.A. concurring, was of the opinion that the appeal should be dismissed. His brief reasons for judgment read as follows: [TRANSLATION] With due respect for the opinion of Rothman J.A., I am of the view that the trial judgment was correct. While the relationship between the student and the financial institution can be characterized as contractual, the same cannot be said of the relationship between the student and the government under the Act respecting financial assistance for students, which implements a public program to facilitate access to education. The amendments introduced by the 1996 and 1997 statutes applied immediately and governed active loans. I would dismiss the appeal with costs. [at paras. 48-51] 3.2.2 Rothman J.A.
18 Rothman J.A. accepted the appellant's arguments. To begin with, he found that the loan certificate imposed obligations on the appellant that were clearly contractual in nature. He wrote the following: While it is true, as the trial judge indicates, that the financial assistance programs created under the Act are worthy social programs designed to encourage equal accessibility to education for all Quebec students, the program of student loans contemplated in the Act did nevertheless impose contractual obligations upon students who obtained these loans, contractual obligations which included conditions as to the repayment of the capital of the loans as well as conditions concerning the payment of interest. One of the conditions in this contract stipulated the period of the loans during which the student was to be exempt from the payment of interest. The certificate of loan, issued by the Department and signed by the student as well as the financial institution, is in the form of a contract and the clauses setting out the conditions of the loan contain numerous references to "this contract". Any reasonable borrower or lender reading the document would consider himself bound by a contract. And while it is true that the Department did not itself sign the document, it was the Department that issued it to the student and it was the Department that had stipulated the conditions of repayment of capital and the exempt period for the payment of interest by the student. The Department was, moreover, itself contractually involved in the loan made to the student in that it guaranteed the repayment of the capital of the loan as well as the payment of interest to the financial institution, including the payment of interest for the period during which the student was exempt from interest payment. In sum, while the programs created under the Act can fairly be characterized as social and educational, the obligations and the rights of students under their loan agreements with the lenders were substantially contractual. I do not wish to suggest, of course, that the Financial Assistance for Education Expenses Act did not govern the relationship between the lending banks and the students and the relationship between the Banks and the Government. ..... But that being said, once it has been concluded that the contractual rights and obligations of a student borrower and a lender bank satisfy the requirements of the statute and the regulations, we must logically look to the contract concluded and the law that then existed to determine the rights and obligations of the borrowing student. Unless the subsequent amendments to the law are expressly stipulated to be retroactive or are retroactive by necessary implication, I can see no basis for applying provisions in the amendments in conflict with the rights of the parties under their contract and the law which was applicable when it was concluded.... On signing the contract of loan, the student had no reason to believe that the Government might, by simple legislative amendment, rewrite his contract with the bank and modify his interest obligation. Nor, in the absence of an intention, expressed or tacit, to impair the rights of the student under his loan contract, do I see any basis for interpreting the amendments in a manner that would have that effect. [at paras. 21-27] 19 Rothman J.A. pointed out that the 1997 and 1998 amendments, if applicable, would have had the effect
of retroactively reducing the interest exemption period provided in the appellant's loan certificate. Yet this would have offended the principle against the retroactivity of legislation. He stated: "I can see no necessary implication that would require this interpretation" (at para. 33). He added the following: Nor can I easily accept that the phrase "[juridical situations in progress]" was intended to make the 1997 and 1998 amendments applicable so as to reduce the interest exemption period provided in the previously existing statute and in the contract signed by the borrowing student and the lending bank. In my respectful opinion, once the loan was approved by the Department and the contract of loan was signed by the student and the bank, appellant's obligation to pay interest and his exemption from the payment of interest were not "[juridical situations in progress]". They were rights and obligations which were no longer "in progress". They were crystallized, finalized and definitively concluded under the terms and conditions of the contract. There is no suggestion in the law or the contract that the obligations of the student or the bank as regards the payment of interest by the student or the duration of the exemption period were subject to discussion or change. These were matters definitively concluded in the contract insofar as appellant and the Bank were concerned. Appellant had no right to demand that the exemption period be extended and the Bank had no right to demand that the exemption be reduced. The Government had no right to demand that its guarantee in favour of the bank be reduced. What "[juridical situations]" remained "[in progress]"? Absolutely none. [at paras. 34-35] 20 Rothman J.A. then noted that, in the absence of an express or tacit intention to do so, a new law should not be read as impairing vested rights. He wrote: In the 1998 amendment, Sec. 13 provided that the amending provisions would apply to "[juridical situations in progress at the time of their coming into force]." While it is true that when the 1998 amendment came into force, appellant had not yet ended the period of exemption provided in his contract, I find it hard to imagine that the Legislature intended, in adopting the 1998 amendment, to change the interest exemption period of a contract of loan that had previously been concluded merely on the basis that the period of exemption had not yet expired. When appellant undertook the loan, he did so under specific conditions for repayment of capital and payment of interest. There was no suggestion in the certificate of loan issued by the Department or in the contract that these conditions might be changed at any time. Nor is an interest exemption period, by its nature, of a kind that would be subject to periodic change. Appellant had every right to expect that his obligations for the repayment of capital and the payment of interest were those set out in the contract and that these conditions would be respected. Appellant fulfilled his obligations in repaying the loan and paying the interest on the loan under the terms required under his contract. In the absence of very clear terms in the amending statutes establishing that the Legislature intended to impair appellant's rights under his existing contract, I can see no reason why the Government should not respect the rights and obligations existing under that contract. If that means the payment of interest by the Government for the period of exemption in the contract, so be it. That was the basis on which the certificate was issued and the contract was signed. I would find it very difficult to interpret the words "[juridical situations in progress]" as evidence of an intention on the part of the Legislature to vary the terms of a loan contract that was concluded prior to the
coming into force of the new law. [Emphasis in original; at paras. 39-43] 4 Analysis 21 Simply put, the Court must answer the following questions: whether the version of the AFAS in force on November 15, 1996, when the certificate was signed, governs the interest exemption period applicable upon the completion of studies; and whether the new legislative provisions altered the terms of the contract of loan that had been entered into before they came into force. 22 As a preliminary matter, I would like to make it clear that the plan set up by the AFAS and the RFAS is a complete one. This appeal does not concern the application of either the Act respecting the implementation of the reform of the Civil Code, S.Q. 1992, c. 57 ("Implementation Act"), or the transitional provisions set out in that Act. Nor is it either helpful or necessary to refer to the rules relating to consumer protection. 4.1 Legal Nature of the Relationship Between the Parties 4.1.1 Contractual Relationship 23 The starting point for this analysis is the observation that there is a private law contract between the student and the financial institution, and the terms of the contract leave no doubt in this regard (arts. 1372, 1385 and 1387 C.C.Q.). The two parties signed the loan certificate and made specific undertakings. There is no question that the contractual relationship between the student and the financial institution has a special feature, as the Minister, who is not a signatory, has unilaterally undertaken to guarantee the loan and pay the interest for a certain time. 24 It appears that the AFAS implicitly recognizes the contractual relationship established between the student and the financial institution. The version of s. 15 that was in force at the time of the events that led to the dispute provided as follows: 15. The Minister shall issue, to a student who is entitled to it and who is enrolled or deemed to be enrolled within the meaning of the regulation, a loan certificate authorizing him to contract a loan with a financial institution recognized by the Minister. The modalities of presentation of the certificate and payment of the loan shall be determined by regulation. Before the amendments, the verb "contract" was also used in ss. 40, 41 and 62 of the AFAS and in s. 56 of the RFAS. 25 In short, any reasonable borrower or lender reading the document would consider himself or herself bound by a contract, as Rothman J.A. stated. It also appears that all the parties involved in this case recognize the contractual relationship between the student and the financial institution. 4.1.2 Contract of Loan: Loan Certificate 26 The contract of loan signed by the student and the financial institution on September 15, 1996 contains the following clauses: This contract is signed in accordance with the prescriptions of the Act respecting financial assistance for
students (R.S.Q., c. A-13.3), the Regulation thereunder (A-13.3, r.1) and the prescriptions of the Loan Guaranty Program for the Purchase of a Microcomputer, if applicable. Without restricting the scope of the above, the parties also agree to the following: Loan under the Act Respecting Financial Assistance for Students 5. The student is exempt from payment of interest on the principal loaned by the financial institution, under the Act respecting financial assistance for students, for the exemption period defined in section 23 of the Act, which is cited in clause 10 of this contract. ..... 10. Exemption period "means the period beginning on the date on which the borrower obtains a first loan or on which he becomes a full-time student again after having ceased to be so, and ending 1 on 1 April, for a borrower who completes or abandons his full-time studies during or at the end of the preceding summer trimester; 2 on 1 August, for a borrower who completes or abandons his full-time studies during or at the end of the preceding autumn trimester; 3 on 1 January, for a borrower who completes or abandons his full-time studies during or at the end of the preceding winter trimester" (R.S.Q., c. A-13.3, s. 23). Under the contract of loan, the appellant, who completed his studies on January 31, 1998 (winter trimester), was therefore obliged to repay the principal and assume the interest payments on his loan as of the expiration of the exemption period, that is, on January 1, 1999. 27 The reference to the AFAS has the effect of incorporating the relevant provisions of the AFAS. Moreover, this reference relates specifically to the juridical situation that existed when the certificate was signed, that is, before the legislative amendments. Rothman J.A. shared this view: But that being said, once it has been concluded that the contractual rights and obligations of a student borrower and a lender bank satisfy the requirements of the statute and the regulations, we must logically look to the contract concluded and the law that then existed to determine the rights and obligations of the borrowing student. [at para. 26] 28 Thus, the substantive issue is whether the rights conferred by the contract of loan can be unilaterally modified by the legislature, which is not a signatory to the contract. 4.2 Vested Rights 29 Before considering the question of vested rights, I would like to note that a distinction must be drawn between the principle of vested rights and the principle against retroactivity. This issue is of great importance here. The Attorney General of Quebec submits that the principle of the retroactivity of legislation is not in issue and asks the Court to apply the principle of the retrospectivity of legislation that was recently reiterated in, piciers unis Mtro-Richelieu inc., division "Econogros" c. Collin, [2004] 3 S.C.R. 257, 2004 SCC 59 (S.C.C.).
However, it should be noted right away that piciers Unis dealt with the application of the Implementation Act, ss. 2 and 3 of which indicate that "the recent reform of the Civil Code is based not on the principles established at common law, principles which give great importance to vested rights. Rather, it is a system essentially based on the ideas of the French jurist Paul Roubier, a system which clearly dispenses with the notion of vested rights" (P.-A. Ct, The Interpretation of Legislation in Canada (3rd ed. 2000), at p. 118). This appeal does not concern a dispute resulting from the coming into force of the C.C.Q. We must therefore apply the Interpretation Act, R.S.Q., c. I-16, which gives effect to the principle of "acquired rights" in s. 12. 4.2.1 Distinctions Between Vested Rights and Retroactivity 30 Vested rights result from the crystallization of a party's rights and obligations and the possibility of enforcing them in the future. Professor Ct writes that, "[w]ithout being retroactive, a statute can affect vested rights; correspondingly, a statute can have a retroactive effect and yet not interfere with vested rights" (at p. 156). In general, it will be purely prospective statutes that will threaten the future exercise of rights that were vested before their commencement: Ct, at p. 137. 31 Although the courts have in the past analysed the same question from the perspective of either the presumption against interference with vested rights or the presumption against retroactive legislation, there remains, as the submissions of the parties in the instant case demonstrate, a clear distinction between these two rules of construction: Qubec (Commission de protection du territoire agricole) v. Venne, [1989] 1 S.C.R. 880 (S.C.C.), at p. 906; Quebec (Expropriation Tribunal) v. Quebec (Attorney General), [1986] 1 S.C.R. 732 (S.C.C.), at pp. 741 and 744; Gustavson Drilling (1964) Ltd. v. Minister of National Revenue (1975), [1977] 1 S.C.R. 271 (S.C.C.), at pp. 279 and 282. 4.2.2 Statement of Principle 32 The principle against interference with vested rights has long been accepted in Canadian law. It is one of the many intentions attributed to Parliament and the provincial legislatures. As E. A. Driedger states in Construction of Statutes (2nd ed. 1983), at p. 183, these presumptions ...were designed as protection against interference by the state with the liberty or property of the subject. Hence, it was "presumed", in the absence of a clear indication in the statute to the contrary, that Parliament did not intend prejudicially to affect the liberty or property of the subject. This had already been accepted by Duff J. in Upper Canada College v. Smith (1920), 61 S.C.R. 413 (S.C.C.), at p. 417: ...speaking generally it would not only be widely inconvenient but "a flagrant violation of natural justice" to deprive people of rights acquired by transactions perfectly valid and regular according to the law of the time. (See also Steele-Smith v. Acme (Village) School District (1932), [1933] S.C.R. 47 (S.C.C.), at p. 51; R. Sullivan, Sullivan and Driedger on the Construction of Statutes (4th ed. 2002), at pp. 569-70.) 33 The leading case on this presumption is Spooner Oils Ltd. v. Turner Valley Gas Conservation Board, [1933] S.C.R. 629 (S.C.C.), at p. 638, where this Court stated the principle in the following terms: A legislative enactment is not to be read as prejudicially affecting accrued rights, or "an existing status" ( Main v. Stark [ (1890), 15 App. Cas. 384, at 388]), unless the language in which it is expressed requires
such a construction. The rule is described by Coke as a "law of Parliament" (2 Inst. 292), meaning, no doubt, that it is a rule based on the practice of Parliament; the underlying assumption being that, when Parliament intends prejudicially to affect such rights or such a status, it declares its intention expressly, unless, at all events, that intention is plainly manifested by unavoidable inference. 34 The principle has since been codified in interpretation statutes. The Interpretation Act is no exception: 12. The repeal of an act or of regulations made under its authority shall not affect rights acquired ... and the acquired rights may be exercised ... notwithstanding such repeal. 4.2.2.1 Rule of Construction 35 In the past, this Court has stressed that the presumption against interference with vested rights could be applied only if the relevant legislation were ambiguous, that is, reasonably susceptible of two constructions (see Gustavson Drilling, at p. 282; Acme (Village) School District, at p. 51; Venne , at p. 907). 36 This statement must be qualified somewhat in light of this Court's recent decisions. As Professor Sullivan says, care must be taken not to get caught up in the last vestiges of the literal approach to interpreting legislation: In so far as this language echoes the plain meaning rule, it is misleading. The values embodied in the presumption against interfering with vested rights, namely avoiding unfairness and observing the rule of law, inform interpretation in every case, not just those in which the court purports to find ambiguity. The first effort of the court must be to determine what the legislature intended, and ... for this purpose it must rely on all the principles of statutory interpretation, including the presumptions. [at p. 576] Since the adoption of the modern approach to statutory interpretation, this Court has stated time and time again that the "entire context" of a provision must be considered to determine if the provision is reasonably capable of multiple interpretations (see, for example, Bell ExpressVu Ltd. Partnership v. Rex, [2002] 2 S.C.R. 559, 2002 SCC 42 (S.C.C.), at para. 29). 4.2.2.2 Criteria for Recognizing Vested Rights 37 Few authors have tried to define the concept of "vested rights". The appellant cites Professor Ct in support of his arguments. Ct maintains that an individual must meet two criteria to have a vested right: (1) the individual's legal (juridical) situation must be tangible and concrete rather than general and abstract; and (2) this legal situation must have been sufficiently constituted at the time of the new statute's commencement (Ct, at pp. 160-61). This analytical approach was used by, inter alia, the Saskatchewan Court of Appeal in Scott v. College of Physicians & Surgeons (Saskatchewan) (1992), 95 D.L.R. (4th) 706 (Sask. C.A.), at p. 727. 38 I am satisfied from a review of the case law of this Court and the courts of the other provinces that the analytical framework proposed by the appellant is the correct one. 39 A court cannot therefore find that a vested right exists if the juridical situation under consideration is not tangible, concrete and distinctive. The mere possibility of availing oneself of a specific statute is not a basis for arguing that a vested right exists: Ct, at p. 161. As Dickson J. (as he then was) clearly stated in Gustavson Drilling, at p. 283, the mere right existing in the members of the community or any class of them at the date of
the repeal of a statute to take advantage of the repealed statute is not a right accrued (see also Abbott v. Minister for Lands, [1895] A.C. 425 (Australia P.C.), at p. 431; Attorney General of Quebec, at p. 743; Kluz v. MasseyFerguson Finance Co. (1973), [1974] S.C.R. 474 (S.C.C.); Scott, at pp. 727-28). In other words, the right must be vested in a specific individual. 40 But there is more. The situation must also have materialized (Ct, at p. 163). When does a right become sufficiently concrete? This will vary depending on the juridical situation in question. I will come back to this point later. Suffice it to say for now that, just as the hopes or expectations of a person's heirs become rights the instant the person dies (see, for example, Marchand c. Duval, [1973] C.A. 635, at p. 637, and art. 625 C.C.Q.), and just as a tort or delict instantaneously gives rise to the right to compensation (see, for example, Holomis v. Dubuc (1974), 56 D.L.R. (3d) 351 (B.C. S.C.); Ishida v. Itterman (1974), [1975] 2 W.W.R. 142 (B.C. S.C.); and arts. 1372 and 1457 C.C.Q.), rights and obligations resulting from a contract are usually created at the same time as the contract itself (see Ct, at p. 163). 4.2.3 Application to the Legislation at Issue 41 The government submits that the two amending statutes applied immediately and therefore necessarily had the effect of changing the repayment terms, since those terms concerned the future effects of the contract. According to the government, this result is justified by the rule relating to the retrospective application of legislation. It argues that repayment in accordance with the terms set out in the contract was merely an expectation. A contextual analysis favours this result, it submits, since the plan applies each year to a large number of students who, out of fairness, must be subject to the same repayment terms. The government adds that administering loans on an individual basis would be problematic. Also, it would directly undermine the integrity of the plan, which must be uniform, and this is another indication that the legislature could not have intended that loans be administered on an individual basis. 42 The appellant submits that his situation is a tangible one governed by a private contract the administration of which is the responsibility of a financial institution, not the government. He points out that the certificate was amended in 1997 to require him to comply with the repayment terms that would be in effect at the time he had to begin repaying the loan. The appellant thus argues that the two statutes modifying the legal obligations that are assumed and must in all cases be performed by the parties are retroactive. However, since retroactivity is not specified, it cannot be imposed. 4.2.3.1 Amending Act, 1997 43 The basic fact remains that the appellant and the financial institution signed a loan certificate provided by the Minister, thereby turning the certificate into a contract and crystallizing the parties' rights and obligations. 44 The Amending Act, 1997, which shortened the interest exemption period by one month, does not contain any transitional provision that might reveal the legislature's intent. In short, there is nothing to justify a conclusion that the legislature clearly and unambiguously intended to apply the new provisions so as to limit the rights of borrowers. Moreover, it seems obvious to me that just because the government argues for the immediate and future application of the Amending Act, 1997 does not mean it is authorized to interfere with rights conferred on the appellant in his contract. The Amending Act, 1997 does not refer to contracts that have already been entered into and therefore cannot apply to them. Moreover, I can find no evidence in the record that justifies imputing to the legislature an intention to interfere with vested rights. Nevertheless, let us continue with the review of the amending statutes.
4.2.3.2 Amending Act, 1998 45 In the Amending Act, 1998, the legislature provided for transitional measures in s. 13. It is the second paragraph of this section that interests us: 13. The provisions introduced by sections 2 and 3 of this Act are applicable in respect of the years of allocation subsequent to their coming into force. The other provisions introduced by this Act and the first regulations made thereunder are applicable to the juridical situations in progress at the time of their coming into force. The issue is therefore what the expression "juridical situations in progress" means. The majority of the Court of Appeal, as well as Journet J. of the Superior Court, found that the expression covered all student loans contracted before and after the coming into force of the new legislation. I do not agree. 46 First of all, it is necessary to determine the true scope of this section: does it clearly state the legislature's intention to change the terms of contracts of loan entered into prior to May 1, 1998? I do not think so. 47 It will be helpful at this point to set out the legal steps for obtaining a student loan. The following passage is from the appellant's factum (at para. 101): We would submit that there are two legal steps required for the obtaining of a Student Loan: first, the issuance of the Loan Certificate by the Minister and second, the signing of the Loan Certificate by the student and the Financial Institution to conclude a contract. The first step, by which the student obtains his Loan Certificate, creates the student's right to proceed to the second step and receive his Student Loan in accordance with the specific terms and conditions indicated on the Loan Certificate. If a change in the law were to modify the terms and conditions of student loans, this change (in the absence of clear legislative language) would not apply to modify or amend Loan Certificates already issued, as long as the student who had received it, signed it within the stipulated delay (90 days as per section 60 of the Regulation respecting financial assistance for education expenses, R.R.Q., c. A-13.3, R-1). In other words, by the mere receipt of his Loan Certificate, a student would have a right to sign the Loan Certificate and obtain his Student Loan in accordance with the terms and conditions of the Loan Certificate, notwithstanding a change in the governing law. In my opinion, the appellant is correct to submit that, in the general context of the plan, the expression "juridical situations in progress" applies to a student who has received a loan certificate but not yet signed it (nor has the financial institution done so). 48 Section 13 does not provide that the amendments apply to contracts or "contractual situations". Yet it appears that in the past the Quebec legislature has drawn a distinction between "legal (juridical) situations which exist" and contractual situations which exist", as it used both expressions in the Implementation Act (in the Implementation Act, the equivalent used for the words "en cours" was "which exist", while in the Amending Act, 1998 the equivalent used for the same words was "in progress"). Section 3 of the Implementation Act contains the expression "legal situations which exist": 3. The new legislation is applicable to legal situations which exist when it comes into force. Any hitherto unfulfilled conditions for the creation or extinction of situations in the course of being cre-
ated or extinguished are therefore governed by the new legislation; it also governs the future effects of existing legal situations. Section 4 of the same statute contains the expression "contractual situations which exist": 4. In contractual situations which exist when the new legislation comes into force, the former legislation subsists where supplementary rules are used to determine the extent and scope of the rights and obligations of the parties and the effects of the contract. However, the provisions of the new legislation apply to the exercise of the rights and the performance of the obligations, and to their proof, transfer, alteration or extinction. We need not, in the instant case, define these expressions in the context of the Implementation Act, which, as I mentioned above, is based on the ideas of P. Roubier (see P.-A. Ct and D. Jutras, Le droit transitoire civil: Sources annotes (1994)). It is nonetheless significant that both expressions have been used by the Quebec legislature, which means that they must refer to different realities. 49 In the case at bar, a contract was signed and entered into before new provisions came into force. The contract continued to produce its effects notwithstanding those provisions. The rights and obligations resulting from the contract were fixed and crystallized as soon as the contract was entered into (see P. Roubier, Le droit transitoire: conflits des lois dans le temps (2nd ed. 1993), at pp. 315-16; H., L. and J. Mazeaud and F. Chabas, Leons de droit civil, t. 1, vol. 1, Introduction l'tude du droit (11th ed. 1996), No. 147). Naturally, this included the repayment terms, which are essential clauses in any contract of loan. On this point, I adopt the following words of Rothman J.A.: Nor can I easily accept that the phrase "[juridical situations in progress]" was intended to make the 1997 and 1998 amendments applicable so as to reduce the interest exemption period provided in the previously existing statute and in the contract signed by the borrowing student and the lending bank. In my respectful opinion, once the loan was approved by the Department and the contract of loan was signed by the student and the bank, appellant's obligation to pay interest and his exemption from the payment of interest were not "[juridical situations in progress]". They were rights and obligations which were no longer "in progress". They were crystallized, finalized and definitively concluded under the terms and conditions of the contract. [at para. 34] 50 In light of the ambiguity of s. 13 of the Amending Act, 1998, we must apply the principle against interference with vested rights. 51 The cases dealing with purely statutory rights that an individual did not exercise prior to a legislative amendment are of no help here (see Gustavson Drilling; Attorney General of Quebec; Venne). In the instant case, the right was provided for in legislation but was later incorporated into a private contract (between the student and the financial institution) in which the parties freely, and on an informed basis, defined their rights and obligations. It was the contract (not the legislation) that created rights and obligations for the parties as soon as it was formed (see Ct, at p. 163; piciers Unis, at para. 48; Nepean (Township) v. Leikin (1971), 16 D.L.R. (3d) 113 (Ont. C.A.); Location Triathlon Inc. c. Boucher-Forget, [1994] R.J.Q. 1666 (Que. S.C.)). The right not to pay more interest than the contract specified was also acquired at that time. 52 With regard to the administrative grounds raised by the government, particularly the need for consistent
and equal treatment of students who complete their studies at the same time, they cannot lead the Court to disregard the express wording of the private contract. On this point, Rothman J.A. wrote the following: With great respect, I do not think this is a question of treating students uniformly nor even treating all students equitably. It is rather a question of respecting the difference in contractual rights and obligations concluded prior to the amendments. I can see nothing equitable in impairing the contractual rights and obligations that were concluded prior to the amendments on the basis that all students should be treated uniformly in their conditions of loan repayment. There is nothing equitable in treating students less favourably than they were entitled to be treated under their contracts and under the law that was applicable when the contracts were concluded. [at para. 46] It is perfectly normal for some students who completed their studies on the same date to be treated differently if they obtained their student loans at different times and signed different loan agreements on an informed basis. It is the very foundation of the individualized contractual right that leads to this result. In determining the scope of the obligations of the parties to the contract, there is no reason to disregard the date the contract was entered into in favour of the date studies were completed; the government expressed its intention in the loan certificate. 5 Conclusion 53 The Quebec legislature's involvement in student loans clearly makes such loans one component of a social program designed to improve access to education. However, it is impossible to disregard the fact that the legislature intended its program to be based on private contractual obligations, even though several terms of the contract were to be imposed on students. The contract of loan between the student and the financial institution, which arises out of the loan certificate issued by the Minister, creates rights and obligations as soon as the contract is entered into. This explains the need not to interfere with vested rights. 54 I would therefore allow the appellant's action: (1) student borrowers with student loans that were active on July 1, 1997 have a vested right with respect to the duration of the exemption period applicable when the contracts were signed, as this right was not affected by the Amending Act, 1997; and (2) students with loans that were active on May 1, 1998 have a vested right with respect to the duration of the exemption period applicable when the contracts were signed, as this right was not affected by the Amending Act, 1998. The case is remanded to the Superior Court to determine the method for making claims, the amounts owed by Quebec and the payment procedures. 55 For these reasons, the appeal is allowed and the judgments of the Court of Appeal and the Superior Court are set aside, with costs throughout. English version of the reasons delivered by Abella J., Binnie J., Charron J., LeBel J., McLachlin C.J.C.: Concurring. Deschamps J.: 56 In declaring, in s. 13, that the Act to amend the Act respecting financial assistance for students, S.Q. 1997, c. 90 ("AFAS"), applied to juridical situations in progress, the Quebec legislature clearly indicated that the
statute applied with immediate effect to the exemption period for the payment of interest by the appellant to his financial institution. 57 As this Court held in piciers unis Mtro-Richelieu inc., division "Econogros" c. Collin, [2004] 3 S.C.R. 257, 2004 SCC 59 (S.C.C.), common law concepts that place a strong emphasis on vested rights do not apply where an approach based on the immediate application of legislation and the concept of juridical situations in progress is adopted. Thus, the doctrine of vested rights should not be relied on to decide the instant case. 58 Bastarache J. is of the opinion that the expression "juridical situations in progress" applies only to situations that are still being formed (at para. 47) and that the effects of the contract continue to be governed by the legislation in force when the contract was entered into (at para. 49). I myself believe that the expression includes both situations that are being formed and the effects of a given juridical situation. 59 In using the expression "situations juridiques en cours" (in English, "juridical situations in progress" in the AFAS, but "legal situations which exist" in the context of the transitional law relating to the implementation of the Civil Code of Qubec), the Quebec legislature drew inspiration from jurist Paul Roubier's work on transitional law (Droit civil qubcois (looseleaf ed.), vol. 8, at para. DT1 555, "Conflit de loi dans le temps"). Since transitional law is precisely what we are concerned with in the instant case, I consider it relevant to refer to his writings to determine the scope of the expression (P. Roubier, Le droit transitoire: conflits des lois dans le temps (2nd ed. 1993)): [TRANSLATION] The term "legal [juridical] situation" was chosen intentionally as being the most encompassing. We consider it better than "vested rights" because it is not subjective in nature ... we also consider it better than "legal relationship" ... which implies a direct relationship between two persons, whereas a legal situation can be unilateral and can be set up against any person whomsoever. ..... To understand the difficulties that may result from the temporal effect of a statute, one need only note that legal situations generally do not come about all at once; they develop over time, such that the new statute may come into effect at a certain point in this development.... However, this is where an essential distinction must be drawn as regards the development of the successive moments of a legal situation: there is a dynamic phase, which is the moment when the situation is created (and also when it is extinguished), and there is a static phase, which is the period when the situation produces its effects. [at pp. 181-82] [Emphasis added.] 60 If we rely on Roubier's use of the expression "legal situation", this concept encompasses at once the formation of the situation, its extinction and its effects. In light of this work, there is no reason to conclude that, when the legislature used the words "juridical situations in progress", it intended to refer to juridical situations in the process of being formed but not to juridical situations in the process of producing effects. 61 Ct and Jutras (P.-A. Ct and D. Jutras, Le droit transitoire civil: Sources annotes (1994)), commenting on Roubier's theory, also include in the expression "legal situations which exist" not only to the dynamic phase, that is, the formation and extinction of a juridical situation, but also to the static phase, that is, its effects:
[TRANSLATION] In Roubier's system, once a rule has been tied to a given legal situation, a distinction must be drawn based on whether the rule relates to the situation's creation or extinction or determines its effects. There are two phases in the development of legal situations: the dynamic phase, which corresponds to their formation and extinction, and the static phase, which corresponds to their effects. This distinction between the dynamic (formation and extinction) phase and the static (effects) phase of a legal situation is echoed in the second paragraph of sections 2 and 3 of the Implementation Act. [at para. 1.048] 62 It is true that these comments relate to the Act respecting the implementation of the reform of the Civil Code, S.Q. 1992, c. 57 (the "Implementation Act"), and that we do not have to interpret that statute here. However, we cannot disregard the fact that the same legislature, in the same decade, used the same expression for a concept that originated in the same legal works. 63 The Quebec Court of Appeal has also held that the expression "legal situation" includes effects: [TRANSLATION] Even where it is created unilaterally and there is no immediate legal relationship, the concept of "legal situation" applies to the existence of legal effects from the moment the situation arises. [Emphasis added.] (Montral (Ville) v. 9013-5286 Qubec inc., [2002] Q.J. No. 2361 (QL), at para. 18) 64 Thus, when a loan certificate is issued to a student, a juridical situation (a situation that produces legal effects) is created. This situation does not cease to be "in progress" when the student and the financial institution together sign the certificate, transforming it into a contract of loan. To adopt the approach suggested by Bastarache J. would mean that the legislature has split the concept into two parts: the formation of the contract and its effects (at para. 47). I cannot accept this interpretation. An interpretation that denies that a juridical situation is still "in progress" when it has been formed, has not been extinguished and is producing effects is not consistent with the theory on which the legislature relied. 65 In the case at bar, the obligation to pay interest flowed from the contract, and the interest exemption period was clearly in progress. Since the duration of this exemption period was legislated, it could be modified by legislation of immediate application. 66 It is also strange to limit the scope of the expression by referring to s. 4 of the Implementation Act. This section establishes a specific rule for contractual situations governed by the Civil Code of Qubec, S.Q. 1991, c. 64. In such situations, new legislation applies only "to the exercise of the rights and the performance of the obligations, and to their proof, transfer, alteration or extinction". The section does not say that effects are excluded from the expression "legal situations which exist". Moreover, the Implementation Act deals with the dynamic and static phases in the same way, regardless of whether the situation is a contractual situation or any other legal situation. It is thus clear that effects are included in the legal situation concept. 67 Furthermore, an interpretation according to which the transitional provision applies to "a student who has received a loan certificate but not yet signed it (nor has the financial institution done so)" is so narrow that I cannot convince myself that the legislature could have intended to limit the scope of the AFAS in this way. In Medovarski v. Canada (Minister of Citizenship & Immigration), 2005 SCC 51 (S.C.C.) , at para. 43, the Court rejected an interpretation that limited the application of new legislation to a very limited number of cases. I believe that the same principle of interpretation applies in the instant case. 68 In piciers-Unis Mtro-Richelieu, the Court did not hesitate to recognize the retrospectivity of a provi-
sion of the Civil Code of Qubec. Retrospective effect is but one aspect of the concept of the immediate effect of legislation. In The Interpretation of Legislation in Canada (3rd ed. 2000), at p. 154, Professor P.-A. Ct says the following on this subject: Where a new statute is declared applicable, for the future, to situations underway, we say it has immediate effect. This notion is used here to describe a situation not only where the facts contemplated by the rule are underway at the moment the law is modified (what Hron calls the general effect of the new statute), but also to describe situations where it is the legal effects of the rule which are underway (what Hron calls the retrospective effect of the statute). It is in fact the retrospective aspect of the legislation that is in issue in the instant case. The exemption period has been modified for the future. 69 The concept of the immediate effect of legislation has been recognized by the commentators and by the courts. In its terse majority judgment in the case at bar, the Court of Appeal merely applied a concept it was familiar with. The legislature is free to enact statutory provisions that may seem harsh. It is not the place of the courts to interfere in the legislative process. 70 For these reasons, I am of the opinion that the decision of the majority of the Court of Appeal was correct. I would dismiss the appeal. Appeal allowed. Pourvoi accueilli. Appendix Act respecting financial assistance for students, R.S.Q., c. A-13.3 15. The Minister shall issue, to a student who is entitled to it and who is enrolled or deemed to be enrolled within the meaning of the regulation, a loan certificate authorizing him to contract a loan with a financial institution recognized by the Minister. The modalities of presentation of the certificate and payment of the loan shall be determined by regulation. 23. For the purposes of this subdivision, "period of exemption" means the period beginning on the date on which the borrower obtains a first loan, or on which he becomes a full-time student again after having ceased to be so, and ending (1) on 1 April, for a borrower who completes or abandons his full-time studies during or at the end of the preceding summer trimester; (2) on 1 August, for a borrower who completes or abandons his full-time studies during or at the end of the preceding autumn trimester; (3) on 1 January, for a borrower who completes or abandons his full-time studies during or at the end of the preceding winter trimester.
24. The Minister shall pay to any financial institution which has made an authorized loan the interest on the balance of such loan at the rate fixed by regulation, as long as the borrower is a full-time student and during his period of exemption. ..... 27. In the event of the death of a borrower, the Minister shall reimburse the amount of the loan to the financial institution. 28. The Minister shall reimburse to any financial institution the losses in principal and interest resulting from an authorized loan. 29. The Minister is subrogated by operation of law in the rights of a financial institution to which he makes a repayment under section 27 or 28. 40. After having been notified in accordance with the provisions of paragraph 1 of section 39, or after having been otherwise informed of a change which may affect the amount of financial assistance to be granted to a student, the Minister shall reconsider the duly completed file of the student and render his decision. However, in no case may the decision reduce the amount of or cancel a loan which has already been contracted. 41. The Minister may, where an application is produced after the time prescribed or where the provisions of paragraph 2 of section 39 have been contravened, refuse an application, reduce the amount of or cancel the financial assistance, or demand the reimbursement of any financial assistance already paid in the form of a bursary. However, in no case may the Minister reduce the amount of or cancel a loan which has already been contracted. 62. Any loan contracted under the Student Loans and Scholarships Act shall be deemed to have been contracted under the provisions of this Act. ..... An Act to amend the Act respecting financial assistance for students and the General and Vocational Colleges Act, S.Q. 1996, c. 79 5. Section 23 of the said Act is amended (1) by replacing the word "April" in paragraph 1 by the word "March"; (2) by replacing the word "August" in paragraph 2 by the word "July"; (3) by replacing the word "January" in pa0ragraph by the word "December".
An Act to amend the Act respecting financial assistance for students, S.Q. 1997, c. 90 4. Section 23 of the said Act is replaced by the following section: 23. For the purposes of this subdivision, "period of exemption" means the period beginning on the date on which the borrower obtains a first loan or on which the borrower resumes being a full-time student, and ending on the date determined in accordance with the regulations. 5. Section 24 of the said Act is amended (1) by replacing the words "his period of exemption" in the third and fourth lines of the first paragraph by the words "the additional period ending on the date determined by the regulation"; (2) by inserting the words "and provided the person is in a precarious financial situation within the meaning of the regulation" after the word "Minister" in the first line of subparagraph 2 of the second paragraph. 13. The provisions introduced by sections 2 and 3 of this Act are applicable in respect of the years of allocation subsequent to their coming into force. The other provisions introduced by this Act and the first regulations made thereunder are applicable to the juridical situations in progress at the time of their coming into force. Appeal allowed with costs, DESCHAMPS J. dissenting. Solicitors for the appellant: Sternthal Katznelson Montigny, Montral. Solicitors for the respondent: Bernard, Roy & Associs, Montral. END OF DOCUMENT
TAB 3
Page 1 1970 CarswellNat 339, [1970] S.C.R. 649, 11 D.L.R. (3d) 173
1970 CarswellNat 339, [1970] S.C.R. 649, 11 D.L.R. (3d) 173 R. v. Walker Her Majesty the Queen, Appellant and Wilfred Alan Walker, Respondent Her Majesty the Queen, Appellant and M.E. Clark & Son Ltd., Respondent Supreme Court of Canada Cartwright C.J. and Fauteux, Abbott, Martland, Judson, Ritchie, Hall, Spence and Pigeon JJ. Judgment: October 27, 1969 Judgment: October 28, 1969 Judgment: March 20, 1970 Thomson Reuters Canada Limited or its Licensors (excluding individual court documents). All rights reserved. Proceedings: On appeal from the Exchequer Court of Canada Counsel: C.R.O. Munro, Q.C., and A.S. Ross, for the appellant. G.H. Steer, Q.C., and G.A.C. Steer, Q.C., for the respondents. Subject: Property Landlord and Tenant --- Renewal of lease Option to renew Perpetual renewal Leases of land in National Park Enforceability of perpetual renewal clauses Dominion Forest Reserves and Parks Act, S.C. 1911, c. 10. Jasper Park was established in 1911 under the authority of the Act. In 1909, Regulations were enacted which provided that the "Minister of the Interior" shall have power . . . to . . . issue leases for . . . lots for any term not exceeding forty-two years, with the right of renewal". In 1913 there were enacted Regulations which authorized the Minister to lease lots ". . . for a period of forty-two years renewable in like periods at a rental to be fixed by the Minister". The Regulations also set out certain conditions which an applicant for a lease had to comply with. Respondents leased lots in the Park for a term of 42 years, the leases giving respondents rights of renewal for further terms of 42 years in perpetuity. When the original leases expired, the Minister tendered renewal leases for a period of 42 years without any further right of renewal. Respondents obtained a declaration that the renewal leases should give them the right of perpetual renewal. On appeal, held, the appeal should be dismissed. The Minister had authority to issue leases under either set of Regulations. The leases were in fact issued under the 1913 Regulations as the Minister had insisted on respondents fulfilling conditions which in reality were those outlined in the 1913 Regulations and these Regulations gave authority for the perpetual renewal clause in re-
spondents' leases. Crown, having purported to act under the authority of one set of Regulations, could not impugn the authority of its agent so to act unless it could be established that the Regulations he relied upon did not give the requisite authority to act. Crown was not entitled to impeach its own act because the agent could have acted, more properly, under another set of Regulations, if he did not elect so to do. The judgment of Cartwright C.J. and Fauteux, Martland, Ritchie, Hall and Spence JJ. was delivered by Martland J.: 1 Under date of October 1, 1924, a lease was made by His Majesty, King George the Fifth, represented by the Minister of the Interior, as lessor, to one Julia E. Follett, as lessee, of a lot situated in Jasper Park (now Jasper National Park) in the Province of Alberta. It is agreed that the respondent Walker is entitled to enforce the right, title and interest of the lessee. A lease in similar terms was made by the said lessor to Joseph Thomas Norquay, under date of October 1, 1925, and it is agreed that the respondent M.E. Clark & Son Ltd. is entitled to enforce the right, title and interest of the lessee. 2 Each of the leases was executed, on behalf of the Crown, by the Deputy Minister of the Interior.
3 Both leases were for a term of 42 years from the date of the lease, and each provided for an annual rent of Eight Dollars up to January 1, 1930, and for the next 10 years, and for every subsequent period of 10 years, or less, such yearly rental as might be fixed by the lessor, or, if not agreed to by the lessee, as might be determined by a Judge of the Exchequer Court to be the full annual value of the tenement at the date of determination. 4 Each lease provided that if, at the expiration of its term, the lessee desired to take a renewal lease of the demised premises, if the lessee had given six months' notice in writing to the Minister, had paid the rents reserved, and had observed, performed, fulfilled and abided by the stipulations, terms and conditions of the lease, His Majesty, His successors or assigns would grant a lease for a second term of 42 years, containing the like stipulations, terms and conditions as contained in the initial lease, save as to rent. Failing agreement as to the rent under the renewal lease, it was provided that it should be determined by three arbitrators, one to be named by the Minister, one by the lessee, and the third to be chosen by the two so named. A further clause of the lease provided for further renewals for terms of 42 years subject to like stipulations, terms and conditions, subject to rentals to be determined in the manner provided in respect of the first renewal. 5 The respondents paid the rentals provided in their respective leases, and observed the stipulations, terms and conditions of such leases. They each gave notice of their desire to renew in accordance with the provisions of the leases. The Crown has, in each case, refused to issue a renewal lease, in the terms of the agreement. 6 The respondents filed a petition of right in the Exchequer Court seeking an order declaring their entitlement to renewal leases, in the terms provided in the initial leases. 7 The respondents were successful at trial[FN1] in obtaining the declaration which they sought, save only as to those provisions of the initial leases which related to the manner of determining the rental payable under renewals of the leases (i.e., by arbitration). The learned trial judge held that it was not within the power of the Minister of the Interior, under the relevant regulations, applicable when the leases were made, to include such a provision in the leases. In his opinion the rentals to be paid had to be fixed by the Minister. 8 From this judgment the Crown has appealed, and the respondents have applied to vary the judgment at trial, in so far as it decided, as mentioned in the preceding paragraph, that a renewal lease could not be granted, in
accordance with the terms of the initial lease, in regard to the provision as to the determination of the rental payable under the renewal lease. 9 The appellant seeks to justify what, on its face, appears to be a refusal by the Crown to perform its contract, on two grounds: (a) That the relevant regulations, in effect when the leases were made, did not give to the Minister the power to issue leases, renewable at the option of the lessee, for successive terms of 42 years, in perpetuity. (b) That at the time the respondents sought renewal of their leases, the Minister was prohibited by the National Parks Act, 1930 (Can.), c. 33, and regulations made pursuant to it from issuing leases in the terms of the covenant for renewal. 10 Dealing with the first point, I wish to deal briefly with the legislative background of the applicable statute and the regulations which were in effect when the leases were executed. 11 In 1883, by chapter 17 of the Statutes of Canada of that year, an Act was passed to amend and consolidate the several Acts respecting public lands of the Dominion. It applied to public lands in Manitoba and the several Territories of the Dominion. This statute was the forerunner of The Dominion Lands Act, R.S.C. 1886, c. 54, and later R.S.C. 1906, c. 55. This Act was replaced in 1908 by 1908 (Can.), c. 20. 12 The Rocky Mountains Park Act was enacted in 1887, as 1887 (Can.), c. 32. It established, as a single park, the Rocky Mountains Park, later Banff Park. 13 The Dominion Forest Reserves Act, 1906 (Can.), c. 14, provided that Dominion lands, within Manitoba, Saskatchewan, Alberta and British Columbia, as described in the Act, should be withdrawn from sale, settlement and occupation under The Dominion Lands Act and be set apart as Dominion Forest Reserves in order to protect and improve the forests for the purpose of maintaining a permanent supply of timber, to maintain conditions favourable to a continuous water supply and to protect so far as the Parliament of Canada has jurisdiction, the animals, fish and birds within the respective boundaries of such reserves and otherwise to provide for the protection of the forests in the said provinces. 14 In 1907, pursuant to the authority of s. 194 of the Dominion Lands Act, R.S.C. 1906, c. 55, which empowered the Governor in Council to set aside lands in Alberta, or the Yukon Territory, on, adjacent to, or in the vicinity of the Rocky Mountains, as forest parks, Jasper Forest Park was set apart and established as a forest park, by P.C. 1323. The description of the lands included in this Park was amended in 1909 by P.C. 1068. 15 In 1911, The Dominion Forest Reserves and Parks Act, 1911 (Can.), c. 10, was enacted. Up to this point, the situation was that one park, the Rocky Mountains Park, had been withdrawn from Dominion Lands, and various forest reserves, including Jasper Forest Park, had been similarly withdrawn under the provisions of The Dominion Forest Reserves Act. 16 The 1911 Act withdrew the lands described in it as reserves from sale, settlement and occupancy under the Dominion Lands Act. It also provided, by s. 18, for the designation of reserves or areas within forest reserves as Dominion Parks. Section 18, as it appeared in the 1911 Act, was repealed in 1913 (c. 18, S.C. 1913) and re-
placed by a new s. 18 to which I will now refer. The relevant parts of this section are as follows: 18. The Governor in Council may, by proclamation, designate such reserves or areas within forest reserves or such other areas as he sees fit, the title to which is vested in the Crown in the right of Canada, to be and to be known as Dominion Parks, and they shall be maintained and made use of as public parks and pleasure grounds for the benefit, advantage and enjoyment of the people of Canada, and the provisions of this Act governing forest reserves, excepting section 4, shall also apply to the Dominion Parks. 2. The said parks shall, subject to the direction of the Minister of the Interior, be under the control and management of the Commissioner of Dominion Parks, or such person as is selected for that purpose by the Governor in Council. 3. The Governor in Council may make regulations (a) for the protection, care, management, control, maintenance and improvement of Dominion Parks, and their use and enjoyment as public parks and pleasure grounds; (b) for the conduct of persons residing in or making use of any park; (c) for the lease for any terms of years of such parcels of land in the parks as he deems advisable in the public interests, for public purposes, for the construction of buildings for ordinary habitation, for purposes of trade and industry and for the accommodation of persons resorting to the parks; (d) for the maintenance and improvement of properties in the parks that have been sold or leased; (e) prescribing the class and style of buildings and other structures to be erected in the Parks and the materials of which they must be built, and for classifying building and fire areas; 17 It will be noted that all the provisions of the Act governing forest reserves also applied to Dominion Parks, other that s. 4, which gave the control and management of reserves to the Director of Forestry, whereas s. 18(2) gave the control and management of Dominion Parks to the Commissioner of Dominion Parks. 18 Section 17(b) of the 1911 Act, as amended in 1913, empowered the Governor in Council to make regulations for: the cutting and removal of timber, the working of mines, quarries and mineral deposits, the removal of sand, gravel, earth, stone or any other material, the pasturage of cattle, the use of hay lands, the establishment and use of reservoirs, water-power sites, power transmission lines, telegraph and telephone lines, and any other use not inconsistent with the purposes of this Act, and the granting of leases and permits therefor; (The emphasis is my own.) 19 Jasper Park, and four other Dominion Parks, were established by P.C. 1338, in 1911, under the authority of the 1911 Act. The order in council designated the parks with the phrase "the following tracts located within forest reserves." The lands which were leased to the respondents were within a Dominion Park and also within a forest reserve. 20 I now turn to consider the provisions of those regulations to which reference has been made in this case.
21 Two years prior to the establishment of Jasper Park as a Dominion Park, regulations were enacted, entitled "Regulations of the National Parks of Canada", by P.C. No. 1340, in 1909. The order in council rescinded the regulations previously applicable to the Rocky Mountains Park. 22 Section 2 of the 1909 regulations appeared under a heading "Residence in the Parks", and provided as follows: 2. The Minister of the Interior shall have power to cause such portions of the Parks as from time to time he may designate to be surveyed and laid out in building lots, for the construction thereon of buildings for ordinary habitation and purposes of trade and industry, and for the accommodation of persons resorting to the Parks, and may issue leases for such lots for any term not exceeding forty-two years, with the right of renewal, at rentals to be from time to time fixed by him; also to set apart such portions of the Parks as he may think proper for the sites of market-places, jails, court-houses, places of public worship, burying grounds, benevolent institutions, squares, and for other similar public purposes. 23 In 1913, following the amendment to the 1911 Act, there were enacted, by P.C. 2028, regulations entitled "Regulations for Dominion Forest Reserves." 24 Section 1(d) stated that: "Dominion Lands" means lands of the Dominion of Canada which are within or which comprise any Dominion Forest Reserve to which the provisions of "The Dominion Forest Reserves and Parks Act" apply. 25 Section 64 provided as follows: 64. The Minister is authorized to lease lands for the following purposes, and under the conditions hereinafter provided: (a) ... (b) ... (c) Summer resort lots. Conditions governing the leasing of lands for above purposes: (a) ... (b) ... (c) leases for building lots within duly established summer resorts, on such form as is approved by the Minister, may be granted for a period of forty-two years renewable in like periods at a rental to be fixed by the Minister. Such rental shall be subject to readjustment in the year 1920 and at the end of each period of ten years thereafter. Before a lease is issued in favour of any applicant he shall be required to execute an agreement by which he will undertake to erect and complete within one year to the satisfaction of the forest officer in charge of the reserve a building for residential purposes according to plans and specifications previously approved by the said forest officer, and on fulfilment of the terms of the
agreement the lease shall be granted. No building shall be erected or used for other than residential purposes except by special authorization of the Minister. (d) Leases shall not be transferable without the written consent of the Minister. 26 Julia E. Follett and Joseph Thomas Norquay, the respective predecessors in title of the respondents, each applied for a lease on forms prepared by the Department of the Interior. Each application contained the following paragraph: In making this application I understand that the applicant has no authority to exercise any rights whatever under this application until an agreement has been issued also that before any building operations are commenced plans and specifications in duplicate must be filed with the Superintendent of the Park and a building permit secured. 27 In each case, prior to the granting of the lease, the applicant undertook to erect and did erect and complete a building, according to plans approved by the Superintendent of Jasper Park, which was a prerequisite to the granting of the lease. 28 Each of the leases, in the clause governing rental, contained a provision for a readjustment of rental for the ten-year period commencing on January 1, 1930, and for each ten-year period, or part thereof, during the balance of the term. 29 The leases were in a form prepared by the Crown and submitted to the lessees. It appears clearly to me that, in insisting on the building requirement, and in providing for rental readjustments, the Crown had in mind the requirements of s. 64 of the 1913 regulations. 30 Dealing with the issue as to whether it was the 1909 regulations or the 1913 regulations which governed, the learned trial judge said this: The submission of the respondent on this question is that the said referred to 1913 Regulations passed pursuant to the 1913 amendment to The Dominion Forest Reserves and Parks Act were Regulations in respect to "Forest Reserves" only and were not Regulations which in any way related to "National (Dominion) Parks"; and further and instead that the Regulations with respect to "National (Dominion) Parks" which are relevant and were existing in 1923-1925 and were the authority under which both these subject leases were originally granted, were the said 1909 Regulations as re-established by the Governor in Council by Order in Council P.C. 1336 dated June 6, 1911, made under section 18(2) of The Dominion Forest Reserves and Parks Act, Statutes of Canada 1911, chapter 10. In my view, the submission of the respondent on this question is the correct statement of the applicable law. 31 The 1909 regulations, to which reference is made in this passage, had been enacted before The Dominion Forest Reserves and Parks Act was passed. At the time of enactment there was only one Dominion Park, i.e., The Rocky Mountains Park, and it is not clear under what statutory authority they had been enacted. They were, however, re-established in 1911, as is pointed out by the learned trial judge, and, under them, the Minister of the Interior was given authority to issue leases of lands in Dominion Parks.
32 It is, however, clear that when the leases in issue here were granted they were issued, not under the 1911 regulations, but under the 1913 regulations. The requirement for the construction of an approved building as a prerequisite to the lease, the incorporation in the leases of the provision for readjustments of rental at the end of ten-year periods, and the provisions contained in the leases for renewals all relate to those regulations. 33 The 1913 regulations were enacted very shortly after the 1913 amendment to The Dominion Forest Reserves and Parks Act. The 1913 amendment to s. 18 made the provisions of the Act governing forest reserves applicable to Dominion Parks. Section 19 of The Dominion Forest Reserves and Parks Act provided as follows: 19. Every regulation made under this Act shall be published for four consecutive weeks in The Canada Gazette, and shall thereupon have the same force and effect as if herein enacted, and the said regulations shall be laid before Parliament during the first fifteen days of the then next session thereof. Provided that any regulation made by the Governor in Council under the provisions of this Act, with respect to the matters mentioned in paragraph (b) of section 17 and paragraph (c) of section 18 of this Act, shall remain in force until the day immediately succeeding the day of prorogation of the session of Parliament next after the date of such regulation, and no longer, unless during that session such regulation is approved by resolution of both Houses of Parliament. 34 Chapter 44 of the Statutes of Canada, 1928, provided as follows: 1. Orders in Council or Regulations heretofore made by the Governor in Council under authority of The Railway Belt Water Act, chapter forty-seven of the statutes of 1912; The Dominion Forest Reserves and Parks Act, chapter ten of the statutes of 1911; The Dominion Lands Act, chapter twenty of the statutes of 1908; the Rocky Mountains Park Act, chapter sixty of the Revised Statutes of Canada, 1906, or the Yukon Act, chapter sixty-three of the Revised Statutes of Canada, 1906, are hereby declared to have the same force and effect as if they had been approved by both Houses of Parliament as required by said Acts respectively. 35 The effect of these provisions is that the 1913 regulations were given the same force and effect as if they had been enacted as a part of The Dominion Forest Reserves and Parks Act, and, accordingly, by virtue of s. 18(1) of that Act, their provisions, governing forest reserves, also applied to Dominion Parks. 36 In my opinion, the Minister had authority under the Act and under the 1913 regulations to issue the leases which he did. Section 64 of those regulations authorized the Minister to lease "lands." The lands here referred to are obviously the "Dominion Lands" defined in s. 1(d) as meaning "lands of the Dominion of Canada which are within or which comprise any Dominion Forest Reserve to which the provisions of 'The Dominion Forest Reserves and Parks Act' apply." The lands defined in the two leases are within this definition. 37 The situation is, therefore, that the Crown has granted the two leases in question relying upon the 1913 regulations, which provide adequate authority. Having done that, is it now open to the Crown to contend that such leases should have been issued under the earlier 1909 regulations and that they are only valid to the extent that they comply with those regulations? In my opinion, the Crown, having purported to act under the authority of one set of regulations, cannot impugn the authority of its agent so to act unless it can be established that the regulations he relied upon do not give the requisite authority to act. The Crown is not entitled to impeach its own act because the agent could have acted, more properly, under another set of regulations, if he did not elect so to do.
38 In the present case the Minister had authority to issue leases of park lands under either of the two sets of regulations unless it can be established that one excludes the other. By their terms, neither set purports to exclude the other. It is argued that, by implication, the 1909 regulations excluded the leasing powers under the later 1913 regulations in respect of lands in Dominion Parks. This view was not taken by the Minister at the time he issued the leases, and I am not prepared to accept the contention in light of the fact that the enactment of the 1913 regulations occurred, subsequent in time, and very shortly after the amendment of the statute, which made them applicable to Dominion Parks, and without any provision to exclude their application to such parks. If there were any doubt on this point, I think the view expressed many ears ago by Lord Coke in St. Saviour's Southwark (Churchwardens) case[FN2], respecting the construction of Crown grants, would properly be applicable in considering this submission: If two constructions may be made of the King's grant, then the rule is, when it may receive two constructions, and by force of one construction the grant may according to the rule of law be adjudged good, and by another it shall by law be adjudged bad; then for the King's honour, and for the benefit of the subject, such construction shall be made that the King's charter shall take effect, for it was not the King's intent to make a void grant, and therewith agrees Sir J. Moleyn's case in the sixth part of my reports. 39 In my opinion the leases were properly issued pursuant to the 1913 regulations and, consequently, no question arises as to the authority to provide for successive renewals. 40 It is, however, contended that the clauses of the leases governing renewals are invalid because they provide that the rental payable on renewals, failing agreement between the parties, is to be determined by arbitration. It is urged that the Minister's power under the regulations is to fix such rentals and that, having failed to do this, and there being therefore no provision as to the rental payable on renewals, the renewal clause cannot stand. 41 On this issue, the learned trial judge was of the view that the Minister did not have power to introduce the arbitration provision into the renewal clause, but held that this portion of the clause was severable, leaving the rest of the clauses unaffected. On this point he concluded as follows: As to this, I am of opinion firstly, that the offending words are severable from each of the renewal clauses and can be disregarded, leaving the rest of the clauses unaffected; and secondly, that, on the true interpretation, these clauses do reserve to the designated Minister the power to fix the rent from time to time in the way it always was intended. It was intended that the designated Minister fix the rent payable pursuant to leases renewed under such covenants to renew by way of a general Regulation applicable to all leases of the same category as the subject leases in National Parks and not by a series of single Regulations applicable only to each individual lease of lands in National Parks, and therefore the subject leases do not lack this essential term of an agreement to renew the lease, namely, the rent to be paid. 42 Section 18(3)(c) of The Dominion Forest Reserves and Parks Act, which authorizes the enactment of regulations for leasing, contains no stipulation as to the method of fixing rentals. 43 The learned trial judge was of the view that the 1909 regulations applied which provided for the issuing of leases "with the right of renewal, at rentals to be from time to time fixed" by the Minister.
44 The 1913 regulation authorizes leasing "on such form as is approved by the Minister, ... for a period of forty-two years renewable in like periods at a rental to be fixed by the Minister." The regulation itself stipulates that such rental shall be subject to readjustment in the year 1920 and at the end of each period of 10 years thereafter. This provision does not contemplate, as does the 1911 regulation, a periodic fixing of rent from time to time by the Minister, as renewals occur. It contemplates that the Minister shall fix the rental at the time the lease is made. It also provides that such rental shall be readjusted in the year 1920 and at the end of each ten-year period thereafter. This makes it clear that the Minister is only required to fix the initial rental. It is that rental which is to be readjusted periodically. 45 The leases in question here were on a form approved by the Minister. They were for a period of 42 years, renewable in like periods, and they were at a rental fixed by the Minister. In my opinion it was within the authority of the Minister to execute them. The Minister was not required to fix the rentals payable on renewals of the lease, but it was in his discretion to approve the form of lease, and therefore, in my opinion, he did not lack authority to make the provision which he did when he approved the form of the lease, so long as the requirements of the regulations were observed, as I think they were. 46 I turn now to the second point urged by the appellant, that is, that at the time the respondents sought renewals of their leases the Minister was prohibited by the National Parks Act, 1930 (Can.), c. 33, and regulations from issuing leases in the terms of the covenants for renewal. 47 The appellant states its proposition in this way, i.e., that a person in the position of the Minister, who contracts to renew a lease, in effect contracts to exercise his authority to issue a lease in the future and such a contract is always subject to the continuing existence of such authority. If such authority does not exist at the time the contract is to be performed the Minister is discharged from his obligation. 48 This submission overlooks the fact that the leases here in question were not made with the Minister, but were made with the Crown. The Minister prescribed the form of the lease, and the leases were executed on behalf of the Crown by the Deputy Minister of the Interior, but the Minister's role was not that of principal. He was only an agent. 49 In view of this fact, the appellant's submission in reality is that if the Crown enters an agreement, executed on its behalf by an agent, to do something in the future, the Crown ceases to be obligated to perform its covenant if, at the time of performance, the agent then lacks authority to do that which has been promised. In my opinion such a contention cannot be sustained. The Crown, just as much as individuals, is obligated to perform its contracts. Such obligation may be discharged by appropriate statutory provisions, but in the absence of clear statutory authority, it cannot evade that obligation. The obligation is not to be avoided merely because the power of the Minister to make new leases is less broad than it was when the original lease was made. 50 The case of Rayonier B.C. Limited v. City of New Westminster[FN3], relied on by the appellant is not comparable to the present case. In that case a municipality had leased land to a company with a first right of renewal, but "subject always to the lessor's right to lease." The lease exempted the company from payment of tax on land. During the term a new Municipal Act was enacted forbidding the granting by municipalities of tax exemptions. 51 At the expiration of the term the parties negotiated as to rent and agreed to a renewal, but the municipality subsequently declined to renew on the same terms as to tax exemption. It was held that, while the company had a right to renew, this was subject to the right of the municipality to lease, and the municipality could not
grant a renewal lease containing the tax exemption. 52 The section of the Municipal Act which was applicable provided specifically that the Council of a municipality should not grant assistance to an industrial or commercial enterprise by granting exemption from taxation. 53 In the Rayonier case the lessor was subject to provincial legislation concerning its powers and it had been forbidden by statute to grant any exemption from taxation. In the present case there is no statutory prohibition which prevents the appellant from performing its obligation. The situation is only that, as to the granting of new leases, the powers of the Minister have been defined in terms less broad than before. 54 The appellant relies upon the provisions of s. 6 of the National Parks Act, originally 1930 (Can.), c. 33, now R.S.C. 1952, c. 189, which read: Public lands within the Parks shall not be disposed of or located or settled upon, and no person shall use or occupy any part of such lands, except under the authority of this Act or the regulations. 55 Under the current regulations authority is given for the granting of leases for a term not exceeding 42 years, with an option to renew for a term not exceeding 21 years. 56 The appellant concedes that if the covenant to renew in the leases had given to the respondents an absolute right of renewal, the repeal of legislative authority would not affect that right. But the appellant contends that the covenant to renew did not confer an absolute right, but a right subject to the continuation of the Minister's authority to grant a lease in the terms of the covenant for renewal. 57 I can find no such limitation in the covenant for renewal, which specifically provided that, if the lessee had complied with the terms of the lease, and had given the required notice of a desire to renew, then His Majesty, His successors or assigns shall and will grant unto the lessee the said demised premises for a second term of forty-two years, by a lease containing the like stipulations, terms and conditions as are in these presents expressed and contained, except as to the rent to be paid by the lessee during such second term.... 58 The renewal clauses also contained the provision that: ...it being the true intent and meaning of these presents that at the end of the hereby granted term of fortytwo years and also at the end of every renewal term of forty-two years, so to be granted as aforesaid, and upon the observance and fulfilment of, and compliance with the like requirements as are hereinbefore provided with respect to such first and second renewals, there shall be granted a further renewal term or lease of the said demised premises, containing the like stipulations, terms and conditions, and at a rent fixed and determined, as are hereinbefore respectively provided, and so on forever. 59 The National Parks Act and the regulations enacted pursuant thereto are not to be construed as applying retrospectively so as to take away rights already created. They lay down rules applicable from the date of enactment regarding the disposition of property in National Parks, but in the absence of clear and specific terms to
that effect they should not be interpreted so as to divest the respondents of contractual rights and equitable interests already validly granted to them. For this proposition I adopt the language of Wright J. in Re Athlumney [FN4]: Perhaps no rule of construction is more firmly established than this that a retrospective operation is not to be given to a statute so as to impair an existing right or obligation, otherwise than as regards matter of procedure, unless that effect cannot be avoided without doing violence to the language of the enactment. 60 The limitations imposed by the National Parks Act, and the regulations enacted under its authority, do not purport to take away and should not be construed so as to take away those rights which the respondents already had. 61 The appellant, however, contends that by their very terms the leases were subject to any regulations subsequently enacted, and relies upon the fifth clause of the leases, which reads as follows: FIFTH: That this lease and any renewal thereof, shall be subject to all Regulations for the control and management of Dominion Parks now in force, or which may hereafter be made from time to time in that behalf, by the Governor in Council. 62 This issue was dealt with by the learned trial judge in the following terms: As to the fourth question, namely, whether the fifth covenant in each of the subject leases makes applicable all Regulations for the control and management of National Parks in force at the original dates of the subject leases, or which were made thereafter from time to time in that behalf by the Governor in Council, the suppliants submit that this provision refers to Regulations which may be made from time to time which are in the nature of police regulations, and not of the type, such as is the case here, empowering or not, the designated Minister to do what is in issue in this action. The respondent on the other hand submits that this provision makes all leases such as the subject leases subject to all Regulations for the control and management of the parks in force at the original date of the leases or which thereafter may be made from time to time by the Governor in Council without limitation as to type. I am of the view that the suppliants' submission is the true interpretation of the meaning of the fifth covenant in the subject leases. 63 I agree with this conclusion and find support for it in the wording of s. 18 of The Dominion Forest Reserves and Parks Act, which applied when the leases were executed. Subsection (3) of this section dealt with the power of the Governor in Council to make regulations, and para. (a) empowered the making of regulations: for the protection, care, management, control, maintenance and improvement of Dominion Parks, and their use and enjoyment as public parks and pleasure grounds. (The emphasis is my own.) 64 But the granting of leases was not effected under that paragraph. A separate paragraph governed the power to make regulations:
(c) for the lease for any terms of years of such parcels of land in the parks as he deems advisable in the public interests, ... 65 Parliament itself differentiated between regulations to govern the control and management of parks, and those which govern the leasing of lands within parks. When the leases speak of "Regulations for the control and management of Dominion Parks" they are speaking of regulations enacted under para. (a) and not regulations under para. (c). 66 For these reasons, I would dismiss the appeal, with costs, and would allow the respondents' application to vary the judgment at trial. The judgment of Abbott and Judson JJ. was delivered by Judson J. (dissenting): 67 The common issue in these two appeals is whether two lessees of lands in Jasper National Park have a right of perpetual renewal. One lease was granted in 1924, the other, in 1925. Each was for a term of 42 years and each granted to the lessee the rights of renewal in perpetuity in the following unmistakable terms: that at the expiry of the first term of 42 years the Crown would grant a second term of 42 years, and then at the expiry of the second term of 42 years, if the lessee should be desirous of renewing, the Crown would grant a further renewal of 42 years, and so on forever. When the original leases expired, the Minister tendered renewal leases for a period of 42 years without any further right of renewal. These, the respondents refused to accept and by petition of right claimed a declaration that the renewal leases should give them the right of perpetual renewal. The Exchequer Court[FN5] found in their favour and the Crown appeals from that judgment. 68 My opinion is that the leases were issued and could only be issued pursuant to the regulations of the National Parks of Canada made on June 21, 1909, by Order in Council P.C. 1340, and re-established by Order in Council P.C. 1336, dated June 6, 1911, pursuant to subs. (2) of s. 18 of The Dominion Forest Reserves and Parks Act, 1911 (Can.), c. 10. Section 2 of those regulations authorized the Minister to issue leases in the following terms: 2. The Minister of the Interior shall have power to cause such portions of the Parks as from time to time he may designate to be surveyed and laid out in building lots, for the construction thereon of buildings for ordinary habitation and purposes of trade and industry, and for the accommodation of persons resorting to the Parks, and may issue leases for such lots for any term not exceeding forty-two years, with the right of renewal, at rentals to be from time to time fixed by him; also to set apart such portions of the Parks as he may think proper for the sites of market-places, jails, court-houses, places of public worship, burying grounds, benevolent institutions, squares, and for other similar public purposes. This section gives the Minister the power to issue a lease for a term not exceeding 42 years, "with the right of renewal", at rentals that are to be from time to time fixed by him. "With the right of renewal" does not mean "with the right of renewal in perpetuity" and does not authorize the inclusion of such clause in the renewal lease. 69 Because of the submission of the lessees that their leases with the covenant for perpetual renewal came under the regulations of August 8, 1913, and not the regulations of June 6, 1911, it was necessary for the learned trial judge to make a complete examination of the legislation and regulations relating to national parks and forest reserves. This he did and I adopt his analysis and do not repeat it here. His summary is:
In 1923-1924 when the respective said subject leases of the suppliants were granted by the respondent, the Regulations in force firstly, respecting "National (Dominion) Parks" and, secondly, respecting "Forest Reserves" were as follows: (i) Respecting "National (Dominion) Parks The June 21, 1909 Regulations made by Order in Council P.C. 1340, as re-established by Order in Council P.C. 1336 dated June 6, 1911, passed under the enabling authority of subsection (2) of section 18 of The Dominion Forest Reserves and Parks Act (ii) Respecting "Forest Reserves" The Regulations made by Order in Council P.C. 2028 dated August 8, 1913, (rescinding the Regulations of January 13, 1908 and October 19 (October 12) 1910) as further amended by Order in Council P.C. 2349 dated September 24, 1913 (which rescinded section 75 of the Regulations relating to Forest Reserves established by Order in Council of August 8, 1913 and substituted a new section 75). 70 The significance of the August 8, 1913, regulations is that they authorize leases "for a period of 42 years renewable in like periods". The 1913 regulations are obviously more favourable to the position taken by the lessees than the 1911 regulations. But the learned trial judge held, correctly in my opinion, that the 1913 regulations related to "Forest Reserves" and in no way related to "National (Dominion) Parks", and that leases in the parks were governed by the 1911 regulations. The learned trial judge then applied the 1911 regulations and held that the words "with a right of renewal" gave the Minister power to grant leases containing a covenant giving the right of renewal in perpetuity. With this conclusion, as I have said, I do not agree. 71 The 1913 regulations required an undertaking to build, to be executed before the granting of the lease. But the fact that the Minister, as a prerequisite to the granting of these leases, exacted from the applicants an undertaking to build according to plans to be submitted, does not mean that his authority to act came from the 1913 regulations relating to forest reserves. One of the lots was on a lake and the other was within the townsite of Jasper. It was entirely reasonable and within his power to require those building agreements. There was no reason to grant these leases ahead of need and for speculative purposes. 72 One source of confusion is the legislative treatment of "Forest Reserves" and "National Parks". These were dealt with by separate statutes until 1911. Again, I adopt the summary of the learned trial judge: So, putting it another way, originally the "Forest Reserves" and "National Parks" were dealt with in separate statutes until 1911. The Parks were first dealt with by the Rocky Mountains Park Act, Statutes of Canada 1887, chapter 32 and the Forest Reserves were first dealt with by The Dominion Forest Reserves Act, Statutes of Canada 1906, chapter 14. Then in 1911, these two Acts were repealed and from that date until 1930, "Forest Reserves" and "National Parks" were dealt with by one Act, The Dominion Forest Reserves and Parks Act, Statutes of Canada 1911, chapter 10. In 1930, by the Imperial Statute 21 Geo. V, chapter 26, the British North America Act 1930, the "Forest Reserves" (inter alia) owned by Canada situated in the Province of Alberta, were transferred to the Province of Alberta, but the Government of Canada for Canada retained ownership of the "National Parks", the Indian lands, veterans' lands and other lands and things, all of which is spelled out in that statute and the agree-
ments forming part of it. 73 Although the 1911 statute dealt with both reserves and parks, regulations made pursuant to that statute dealt separately with parks and reserves and were authorized by separate sections. This was noted by the learned trial judge: At all times, the Regulations dealing with "Forest Reserves" were different from the Regulations dealing with "National (Dominion) Parks." A consideration of the history of the "National (Dominion) Parks" Regulations demonstrates that the Regulations relating to "Forest Reserves" never did apply to "National (Dominion) Parks." 74 Section 17 of the 1911 Act authorized the making of regulations dealing with forest reserves. Subsection (b) of this section mentioned the granting of leases in connection with certain problems of management in the following terms: (b) the cutting and removal of timber, the working of mines, quarries and mineral deposits, the removal of sand, gravel, earth, stone or any other material, the pasturage of cattle, the use of hay lands, the establishment and use of reservoirs, water-power sites, power transmission lines, telegraph and telephone lines, and the granting of leases and permits therefor. It will be noted that the power to grant leases says nothing about the terms of these leases. 75 Section 18 of the 1911 Act authorized the making of regulations for Dominion Parks. Subsection (c) of s. 18(2) deals with leasing: (c) the lease for any term of years of such parcels of land in the parks as he deems advisable in the public interest, for public purposes, for the construction of buildings for ordinary habitation and purposes of trade and industry, and for the accommodation of persons resorting to the parks; ... 76 The 1913 Act, 3-4 Geo. V, c. 18, was an amending Act. It repealed s. 18 of the 1911 Act and enacted a new section 18. I will quote the new 18(1) and 18(3)(c): 18. The Governor in Council may, by proclamation, designate such reserves or areas within forest reserves or such other areas as he sees fit, the title to which is vested in the Crown in the right of Canada, to be and to be known as Dominion Parks, and they shall be maintained and made use of as public parks and pleasure grounds for the benefit, advantage and enjoyment of the people of Canada, and the provision of this Act governing forest reserves, excepting section 4, shall also apply to the Dominion Parks. 3. The Governor in Council may make regulations (c) for the lease for any terms of years of such parcels of land in the parks as he deems advisable in the public interests, for public purposes, for the construction of buildings for ordinary habitation, for purposes of trade and industry and for the accommodation of persons resorting to the parks. 77 The above sections are the statutory authority for the making of regulations relating, first, to forest reserves and, second, to parks. There always were, both before and after the 1913 Amending Act, separate regula-
tions for the two entities, each of which had its own problems requiring separate treatment. There were separate regulations when the leases in question were granted. 78 The lessees argue that the last words of para. 1 of the new s. 18 enacted by the 1913 Amending Act, "the provisions of this Act governing forest reserves, excepting section 4, shall apply also to the Dominion Parks," give the Minister power to grant leases of park lands under the forest reserve regulations rather than the park regulations. I do not agree with this argument. It is contrary to the co-existence of separate sections authorizing separate regulations for forest reserves in parks and the co-existence of the separate regulations themselves. When these leases of property in the park were granted, the only statutory authority was s. 18 relating to parks and the corresponding park regulations. The purpose of the controversial words in the new s. 18 is not to make s. 17 and the regulations thereunder applicable to both reserves and parks but simply to repeat the general principle that one Act deals with both reserves and parks, a principle which, as Gibson J. noted, marked a departure in the history of legislation dealing with these matters. 79 A large part of the argument before us was therefore devoted to this question: Are the 1911 park regulations applicable which authorized the lease for 42 years "with a right of renewal", or are the 1913 forest reserve regulations applicable which authorized a period of 42 years "renewable in like periods". I have stated above that Gibson J. held that the 1911 park regulations applied and that they were enough to support the right of renewal in perpetuity. The lessees appeal to the 1913 forest reserve regulations and rely on the words "renewable in like periods" as supporting their right to renewal in perpetuity. My opinion is that neither form of wording supports such a right. 80 The law relating to covenants for perpetual renewal contained in a lease is not in doubt. A covenant for renewal in a lease only establishes a right to renewal in perpetuity when strict words indicate that to be the unequivocal intention of the parties. There is no doubt about this principle. (Re Jackson and Imperial Bank of Canada[FN6] and Auld v. scales[FN7], and 23 Hals., 3rd ed., p. 627.) If a lessee appeals to a statute and regulations made thereunder as supporting a right to perpetual renewal, is he entitled to a different standard? I think not. The statute and the regulations must give him that right expressed with the same clarity that is demanded in the case of a covenant for renewal contained in a lease. 81 Even if the covenants in question did grant a right of perpetual renewal, which they did not, they would nonetheless be ineffective, since in another respect they purport to do something not allowed by either the 1911 or the 1913 regulations. Section 2 of the 1911 regulations authorizes the Minister to issue leases "at rentals to be from time to time fixed by him." Section 64(c) of the 1913 regulations uses the words "at a rental to be fixed by the Minister." Both regulations clearly require the Minister and the Minister alone to fix rent under the lease. 82 In the first of the two covenants for renewal clauses in each of the subject leases, there appear the following words: ...except as to the rent to be paid by the lessee during such second term, and that the amount of such rent, in case His Majesty, His successors or assigns, and the lessee shall fail to agree thereupon, shall be fixed and determined by the award and arbitrament of three arbitrators... The second covenant for renewal clause, dealing with renewal after the expiration of the second term, contains the words:
...the amount of rent to be payable under such second renewal lease to be fixed and determined in the manner above provided and set forth.... The covenants purport to allow the rent to be fixed by arbitration in certain circumstances. But neither the 1911 nor the 1913 regulations permit such arbitration. The words in the covenant dealing with the fixing of rent by arbitration are therefore ineffective. 83 However, I would not invalidate, for this reason alone, whatever right of renewal the lessees may have. It is sufficient to say in these reasons that they have no right of renewal in perpetuity and that in any renewal lease the rent must be fixed by the Minister. The judgment of the Exchequer Court, although it gives the right of perpetual renewal does say that the rent must be fixed by the Minister. The lessees moved to vary the judgment to this extent. 84 I would allow the appeal with costs, dismiss the motion to vary with costs and reverse the judgment of the Exchequer Court so as to provide that the lessees are not entitled to any of the relief sought in their Petition of Right. The Crown is entitled to costs in the Exchequer Court. Pigeon J. (dissenting in part): 85 In these two cases I agree entirely with the conclusions of the trial judge[FN8]. Having had the advantage of reading the reasons of my brothers Martland and Judson, I wish to indicate briefly why I am unable to agree with either of them. 86 In my view, the provision in the regulations authorizing leases of land in the national parks "with the right of renewal" should not be construed restrictively so as to authorize only a single renewal for the maximum term of forty-two years. The usual rules of statutory interpretation should be applied. In itself, the phrase applies to any right of renewal known to the law, and this includes the right of renewal in perpetuity. Under a wellknown rule of construction, where there is no distinction in the text, none should be introduced except for a special reason. No such reason is apparent. 87 Furthermore, the authorized representatives of the Crown have construed the regulation as authorizing leases with the right of renewal in perpetuity and the executed lease so provides. In order to escape from the binding force of those leases, the Crown must show that the regulations do not authorize the right of renewal that was granted. This is not established by showing that renewal clauses in conveyances are presumed not to be in perpetuity. 88 Concerning the cases referred to by my brother Judson, I must say with respect that Re Jackson and Imperial Bank of Canada[FN9] appears wrongly decided. It is in direct contradiction of Hare v. Burges[FN10], in which it was held that: Although, prima facie, a lessor shall not be taken to have intended to enter into a covenant for perpetual renewal, yet if there be in the lease expressions indicative of such an intention, the Court will give effect thereto. Lease for lives, with a covenant on the death of either of the cestuis que vie to execute a renewed lease at the same rent and subject to the same covenants "including this present covenant:" Held, a covenant for perpetual renewal, and lessee entitled to have inserted in the renewed lease a covenant for renewal totidem
verbis with that contained in the original lease, but with the name of the new cestui que vie substituted for that of the deceased. 89 Respecting Auld v. Scales[FN11], it must be noted that this question was considered only by Estey J. and it was clearly obiter. Also, he concluded his remarks thereon by saying (at pp. 555, 556): The same observations distinguish the case of Northchurch Estates Ltd. v. Daniels ([1946] 2 All E.R. 524), where the lease was for a period of one year certain with an option in the tenant to renew the tenancy from year to year on identical terms and conditions as hereinafter stated, notice of such intention to renew the tenancy to be given in writing on or before December 25 in each year. Evershed J. held this to create the right of a perpetual renewal. At p. 526 he stated: The language used includes the phrase "the option to renew the tenancy from year to year", and it says further that notice of that intention is to be given on or before Dec. 25 "in each year". Those words seem to me to be very strong indications indeed that what was in the minds of the parties was that, so long as the tenant exercised his option within the time stated, he could go on from year to year ad infinitum renewing his tenancy. 90 I cannot agree with my brother Martland that the applicable regulations are those concerning forest reserves because, in my view, the definition of "lands" clearly reveals the intention of having this apply only to lands in forest reserves. At the time the regulations were made, as well as at the time the leases were executed, the lands with which we are concerned were not in a forest reserve but in a national park. The fact that some actions were taken in accordance with the provisions of the forest reserves regulations cannot make these applicable because they could be amended only by the authority empowered to make them, that is the Governor General in council. 91 For a similar reason I cannot agree that the provision for fixing the rental by arbitration was validly stipulated. The regulations provided for leases at a rental to be fixed by the Minister. They had the same legal effect as a statute so providing. Administrative discretion was thereby conferred on the Minister that was not subject to review by any other authority (Calgary Power Ltd. et al. v. Copithorne[FN12]). A right of review could not be created by a Minister executing a lease. This would have the effect of impeding the exercise by future incumbents of the discretion that was to be theirs exclusively: delegatus non potest delegare. 92 I am therefore of the opinion that the trial judge correctly held that the arbitration clause was not authorized. It would have meant that the rental, instead of being in the discretion of the Minister at the time when it would have to be fixed anew, instead of being established on any basis that the Minister would see fit, would, on the contrary, have to be established at a reasonable level in the opinion of arbitrators. This is entirely different from a discretionary level. 93 However, it appears to me that the trial judge correctly held that the provision for arbitration is severable. It is in the nature of the right of review of the Minister's decision. The renewal clause can be given full effect without it, the lessee having to take the renewal at the rental fixed by the Minister if he desires to exercise his right. In other words, his only option is to renew on the terms agreed with the Minister, and this is fully in accordance with the regulations and effective by itself.
94
For the above reasons I would dismiss the appeal with costs and the cross-appeal without costs.
Appeal dismissed and motion to vary the judgment of the Exchequer Court allowed, with costs, Abbott and Judson JJ. dissenting and Pigeon J. dissenting in part. Solicitors of record: Solicitor for the appellant: D.S. Maxwell, Ottawa. Solicitors for the respondents: Milner & Steer, Edmonton. FN1 [1969] 1 Ex. C.R. 419. FN2 (1613), 10 Co. Rep. 66 b at 67b, 77 E.R. 1025 at 1027. FN3 (1961), 36 W.W.R. 433, (1962), 32 D.L.R. (2d) 596. FN4 [1898] 2 Q.B. 547 at 551-552. FN5 [1969] 1 Ex. C.R. 419. FN6 (1917), 39 O.L.R. 334. FN7 [1947] S.C.R. 543 at 554. FN8 [1969] 1 Ex. C.R. 419. FN9 (1917), 39 O.L.R. 334. FN10 (1857), 4 K. & J. 45. FN11 [1947] S.C.R. 543. FN12 [1959] S.C.R. 24. END OF DOCUMENT
TAB 4
Page 1 2003 CarswellNat 2427, 2003 SCC 36, 2003 C.L.L.C. 230-021, 227 D.L.R. (4th) 193, 306 N.R. 34, 3 Admin. L.R. (4th) 163, [2004] 1 W.W.R. 1, 109 C.R.R. (2d) 65, [2003] 1 S.C.R. 884, 46 C.H.R.R. D/495, 242 F.T.R. 318 (note), REJB 2003-43800, J.E. 2003-1227
2003 CarswellNat 2427, 2003 SCC 36, 2003 C.L.L.C. 230-021, 227 D.L.R. (4th) 193, 306 N.R. 34, 3 Admin. L.R. (4th) 163, [2004] 1 W.W.R. 1, 109 C.R.R. (2d) 65, [2003] 1 S.C.R. 884, 46 C.H.R.R. D/495, 242 F.T.R. 318 (note), REJB 2003-43800, J.E. 2003-1227 Bell Canada v. C.T.E.A. Bell Canada, Appellant v. Communications, Energy and Paperworkers Union of Canada, Femmes Action and Canadian Human Rights Commission, Respondents and Attorney General of Canada, Attorney General of Ontario, Canadian Labour Congress, Public Service Alliance of Canada and Canada Post Corporation, Interveners Supreme Court of Canada McLachlin C.J.C., Gonthier, Iacobucci, Major, Bastarache, Binnie, Arbour, LeBel, Deschamps JJ. Heard: January 23, 2003 Judgment: June 26, 2003 Docket: 28743 Thomson Reuters Canada Limited or its Licensors (excluding individual court documents). All rights reserved. Proceedings: affirming (2001), 9 C.C.E.L. (3d) 228 (Fed. C.A.); reversing (2000), 5 C.C.E.L. (3d) 123 (Fed. T.D.) Counsel: Roy L. Heenan, John Murray, Thomas Brady and David Stratas, for appellant Peter C. Engelmann, Jula Hughes and Fiona Campbell, for respondent Communications, Energy and Paperworkers Union of Canada No one for respondent Femmes Action Ian Fine and Philippe Dufresne, for respondent Canadian Human Rights Commission Donald J. Rennie and Alain Prfontaine, for intervener Attorney General of Canada Sara Blake and Karin Rasmussen, for intervener Attorney General of Ontario Andrew Raven and David Yazbeck, for intervener Public Service Alliance of Canada Mary F. Cornish and Fay Faraday, for intervener Canadian Labour Congress Brian A. Crane, Q.C., and David Olsen, for intervener Canada Post Corporation Subject: Constitutional; Civil Practice and Procedure; Public
Human rights --- Practice and procedure Judicial review Grounds Apprehension of bias Subsections 27(2) and (3) of Canadian Human Rights Act are not inconsistent with s. 2(e) of Canadian Bill of Rights or with constitutional principle of adjudicative independence, and are not inoperable or inapplicable Sections 48.1 and 48.2 of Canadian Human Rights Act are not inconsistent with s. 2(e) of Canadian Bill of Rights or with constitutional principle of adjudicative independence, and are not inoperable or inapplicable Canadian Human Rights Tribunal does not lack independence and impartiality because of power of Canadian Human Rights Commission to issue guidelines binding on tribunal concerning class of cases Canadian Human Rights Tribunal does not lack independence and impartiality because of tribunal chair's power to extend tribunal members' terms of office in ongoing inquiries. Droits de la personne --- Procdure Contrle judiciaire Motifs Crainte de partialit Articles 27(2) et 27(3) de la Loi canadienne sur les droits de la personne ne sont pas incompatibles avec l'art. 2e) de la Dclaration canadienne des droits ou avec le principe constitutionnel de l'indpendance judictionnelle; ils ne sont donc pas sans effet ou inapplicables Articles 48.1 et 48.2 de la Loi canadienne sur les droits de la personne ne sont pas incompatibles avec l'art. 2e) de la Dclaration canadienne des droits ou avec le principe de l'indpendance juridictionnelle; ils ne sont donc pas sans effet ou inapplicables Tribunal canadien des droits de la personne n'est pas dpourvu de l'indpendance et de l'impartialit requises du fait que la Commission canadienne des droits de la personne a le pouvoir d'mettre des ordonnances qui lient le Tribunal l'gard d'une catgorie de cas donns Tribunal canadien des droits de la personne n'est pas dpourvu de l'indpendance et de l'impartialit requises du fait que le prsident du Tribunal a le pouvoir de prolonger le mandat des membres du Tribunal dans les affaires dont ils sont saisis. Two unions and an employee association filed complaints against an employer alleging gender discrimination in the payment of wages, contrary to the Canadian Human Rights Act. The employer moved before a panel of the Canadian Human Rights Tribunal for an order that the tribunal was incapable of providing a fair hearing in accordance with the principles of natural justice. The tribunal dismissed the employer's motion. The employer applied for judicial review of that decision. The Federal Court Trial Division quashed the tribunal's decision. The judgment was appealed, but the appeal was adjourned in light of amendments to the Act intended to remedy the problems of procedural fairness identified by the Trial Division. The power to extend appointments of tribunal members beyond their expiry dates was transferred from the Minister of Justice to the tribunal chair and the Canadian Human Rights Commission's guideline-making power was limited to issuing guidelines with respect to the interpretation of the Act in relation to "a class of cases" rather than a particular case. The tribunal rejected the employer's subsequent arguments that the amendments did not cure the problems of procedural fairness and directed that the hearing of the original complaints should proceed. The employer applied for judicial review of that decision. The Federal Court Trial Division allowed the employer's application, holding that the chair's discretionary power to extend appointments did not leave tribunal members with sufficient guarantee of tenure and that even the commission's narrowed power to issue guidelines unduly fettered the tribunal. The commission, the unions, and the employee association appealed. The appeal was allowed. The employer appealed. Held: The appeal was dismissed.
The commission's guideline-making power under s. 27(2) and (3) of the Canadian Human Rights Act would not lead an informed person, viewing the matter realistically and practically, after having thought the matter through, to apprehend a likelihood of bias. The argument that the guideline-making power of the commission unduly fettered the tribunal overlooked that the guidelines are a form of law and mistakenly conflated impartiality with the complete freedom to decide a case in any manner. Impartiality is being influenced only by relevant considerations, such as evidence before the tribunal and any applicable laws. Predispositions that simply reflect applicable law do not undermine impartiality. The requirement that the tribunal apply all the relevant law, including guidelines formulated by the commission, did not, on its own, raise a reasonable apprehension of bias. No evidence supported the argument that the tribunal was more likely to favour the commission during a hearing because the commission has the power to issue guidelines binding it. When appearing before the tribunal, the commission is in the same position as any representative of government who appears before an administrative board or tribunal. The public does not, in other contexts, assume that a decision-maker will favour submissions by government representatives simply because the decision-maker must apply the laws made by the government. The overlapping functions of the commission, which include formulating guidelines, investigating complaints, and acting as prosecutor before the tribunal, are not unusual for an administrative agency and do not give rise to a reasonable apprehension of bias. There was no evidence presented that the commission had attempted to use its guideline-making power to influence the tribunal's views. The only guidelines that applied to the complaints against the employer had been introduced several years before the complaints were brought. The commission's guideline-making power under s. 27(2) and (3) of the Act is constrained and is subject to judicial review, and no guideline can be applied retroactively. Any party before the tribunal may challenge a guideline on the basis that it was issued by the commission in bad faith or for an improper purpose, and no guideline can purport to override the requirements of procedural fairness governing the tribunal. The tribunal is empowered to question or set aside guidelines that are in violation of the law. The power of the tribunal chair to extend the appointments of tribunal members in ongoing inquiries does not deprive members of sufficient security of tenure or threaten their impartiality. Just as the discretionary power of the chief justice and the judicial councils of the provincial courts to extend the tenure of judges does not compromise the judges' independence, the discretionary power of the tribunal chair does not compromise the independence of tribunal members in a way that contravenes common law procedural fairness. A reasonable person would not conclude that tribunal members might be illegitimately pressured to adopt the views of the chair. Deux syndicats et une association d'employs ont dpos des plaintes contre l'employeur, lui reprochant de pratiquer la disparit salariale entre les hommes et les femmes, contrevenant ainsi la Loi canadienne sur les droits de la personne. L'employeur a prsent une requte devant une formation du Tribunal canadien des droits de la personne visant obtenir une ordonnance dclarant que le Tribunal n'tait pas en mesure de procder une audition impartiale en conformit avec les principes de justice naturelle. Le Tribunal a rejet la requte de l'employeur. Ce dernier a demand le contrle judiciaire de la dcision du Tribunal. La Section de premire instance de la Cour fdrale a annul la dcision du Tribunal. Un appel a t interjet l'gard de ce jugement, mais il a t ajourn en raison de modifications apportes la Loi, qui devaient permettre de rgler les problmes d'quit procdurale identifis par la Section de premire instance. La Loi a t modifie afin de transfrer du ministre de la Justice au prsident du Tribunal le pouvoir de prolonger les mandats des membres du Tribunal au-del de leur date de terminaison et afin de limiter le pouvoir de la Commission canadienne des
droits de la personne d'mettre des ordonnances relativement l'interprtation donner la Loi l'gard d'une catgorie de cas donns , plutt qu' l'gard d'une affaire en particulier. Le Tribunal a rejet les arguments subsquents de l'employeur, soit que les modifications ne rglaient pas les problmes d'quit procdurale, et a ordonn la tenue de l'audience pour entendre les plaintes initiales. L'employeur a demand le contrle judiciaire de cette dcision. La Section de premire instance de la Cour fdrale a accueilli la demande de l'employeur, a statu que le pouvoir discrtionnaire du prsident lui permettant de prolonger les mandats n'assurait pas une garantie suffisante d'inamovibilt aux membres du Tribunal et que le pouvoir restreint de la Commission d'mettre des ordonnances limitait indment le Tribunal. La Commission, les syndicats et l'association d'employs ont interjet appel. Le pourvoi a t accueilli. L'employeur a interjet appel. Arrt: Le pourvoi a t rejet. Le pouvoir de la Commission d'mettre des ordonnances, en vertu des art. 27(2) et 27(3) de la Loi, n'amnerait pas une personne bien renseigne qui tudierait la question en profondeur, de faon raliste et pratique, croire l'existence d'une une relle probabilit de partialit. L'argument selon lequel le pouvoir de la Commission d'mettre des ordonnances limitait indment le Tribunal ne tenait pas compte du fait que les ordonnances constituent une forme de mesure lgislative et confondait tort l'impartialit du Tribunal avec la libert complte de juger une affaire de n'importe quelle manire. L'impartialit consiste n'tre influenc que par des considrations pertinentes, telles la preuve faite devant le Tribunal et les rgles de droit applicables. Le fait que le Tribunal doive appliquer toutes les mesures lgislatives applicables, notamment les ordonnances formules par la Commission, n'engendrait pas en soi une crainte raisonnable de partialit. Il n'existait aucune preuve permettant d'appuyer l'argument voulant que le Tribunal tait plus susceptible de privilgier la Commission lors d'une audience parce que celle-ci avait le pouvoir d'mettre des ordonnances qui le liaient. Lorsque la Commission comparat devant le Tribunal, elle se retrouve dans la mme situation que tout reprsentant du gouvernement qui comparat devant un organisme ou tribunal administratif. Le public ne prsume pas, dans d'autres contextes, que le dcideur va privilgier les arguments des reprsentants du gouvernement pour la seule raison que le dcideur doit appliquer les lois dictes par le gouvernement. Il n'est pas inhabituel de retrouver au sein d'un mme organisme admistratif un cumul des fonctions de formuler des ordonnances, d'enquter sur des plaintes et d'agir comme poursuivant devant un tribunal; cela ne donne pas lieu, en soi, une crainte raisonnable de partialit. Aucune preuve n'existait du fait que la Commission avait tent d'utiliser son pouvoir de formuler des ordonnances afin d'influencer l'opinion du Tribunal. Les seules ordonnances qui taient applicables aux plaintes dposes contre l'employeur avaient t adoptes plusieurs annes avant le dpt des plaintes. Le pouvoir de la Commission de formuler des lignes directrices en vertu des art. 27(2) et 27(3) tait limit et assujetti au contrle judiciaire; de plus, aucune ordonnance ne peut s'appliquer rtroactivement. Toute partie devant le Tribunal peut contester une ordonnance au motif que la Commission a agi avec mauvaise foi en la formulant ou dans un but illicite, et aucune ordonnance ne peut primer sur les exigences de l'quit procdurale qui rgissent le Tribunal. Le Tribunal a le pouvoir de contester ou d'carter les ordonnances qui contreviennent la loi. Le fait que le prsident du Tribunal a le pouvoir de prolonger les mandats des membres dans les affaires dont ils
sont saisis n'a pas pour effet de priver ces derniers d'une inamovabilit suffisante et ne met pas en danger leur impartialit. Comme le pouvoir discrtionnaire du Juge en chef et du Conseil de la Magistrature des juges provinciaux de prolonger le mandat des juges ne compromet pas leur indpendance d'une manire qui contrevient aux exigences d'indpendance de la magistrature, le pouvoir discrtionnaire du prsident du Tribunal ne compromet alors pas non plus l'indpendance des membres du Tribunal d'une manire qui contrevient aux exigences de l'quit procdurale en common law. Une personne raisonnable n'arriverait pas la conclusion que les membres du Tribunal feraient probablement l'objet de pressions illgitimes visant leur faire adopter le point de vue du prsident. Cases considered by McLachlin C.J.C. and Bastarache J.: Baker v. Canada (Minister of Citizenship & Immigration), 174 D.L.R. (4th) 193, 1999 CarswellNat 1124, 1999 CarswellNat 1125, 243 N.R. 22, 1 Imm. L.R. (3d) 1, 14 Admin. L.R. (3d) 173, [1999] 2 S.C.R. 817 (S.C.C.) referred to Barry v. Alberta (Securities Commission), 35 Admin. L.R. 1, [1989] 1 S.C.R. 301, [1989] 3 W.W.R. 456, ( sub nom. Brosseau v. Alberta (Securities Comm.)) 57 D.L.R. (4th) 458, 93 N.R. 1, 65 Alta. L.R. (2d) 97, 96 A.R. 241, 1989 CarswellAlta 19, 1989 CarswellAlta 611 (S.C.C.) referred to Bell Canada v. C.E.P., 1998 CarswellNat 426, 143 F.T.R. 81, 98 C.L.L.C. 230-024, (sub nom. Bell Canada v. C.E.P.U. (No. 5)) 32 C.H.R.R. D/183 (Fed. T.D.) referred to Bell Canada v. C.E.P., (sub nom. Communications, Energy & Paperworkers Union of Canada v. Bell Canada) 98 C.L.L.C. 230-047, 1998 CarswellNat 2203, (sub nom. Bell Canada v. Communications, Energy & Paperworkers Union of Canada) 233 N.R. 87, (sub nom. Bell Canada v. Communications, Energy & Paperworkers Union of Canada) [1999] 1 F.C. 113, 167 D.L.R. (4th) 432, (sub nom. Bell Canada v. C.E.P.U. (No. 3)) 33 C.H.R.R. D/1, (sub nom. Bell Canada v. Communications, Energy & Paperworkers Union of Canada) 159 F.T.R. 160 (note), 13 Admin. L.R. (3d) 64, 1998 CarswellNat 2814 (Fed. C.A.) referred to Bell Canada v. C.E.P., [1999] S.C.C.A. No. 1, (sub nom. Bell Canada v. Communications, Energy and Paperworkers Union of Canada) 243 N.R. 397 (note), [1999] 2 S.C.R. v (S.C.C.) referred to Bell Canada v. C.T.E.A. (1997), 32 C.H.R.R. D/175 (Can. Human Rights Trib.) referred to Bell Canada v. C.T.E.A., 1998 CarswellNat 423, (sub nom. Bell Canada v. Canadian Telephone Employees Assn.) 143 F.T.R. 241, (sub nom. Bell Canada v. Canadian Telephone Employees Assn.) 98 C.L.L.C. 230-025, (sub nom. Bell Canada v. Canadian Telephone Employees Assn.) [1998] 3 F.C. 244, (sub nom. Bell Canada v. Canadian Telephone Employees Assn.) 53 C.R.R. (2d) 56, (sub nom. Bell Canada v. C.E.P.U. (No. 6)) 32 C.H.R.R. D/213, 10 Admin. L.R. (3d) 116, 1998 CarswellNat 2058 (Fed. T.D.) referred to Bell Canada v. C.T.E.A., 1999 CarswellNat 1052, (sub nom. Bell Canada v. Canadian Telephone Employees Assn.) 246 N.R. 368, (sub nom. Bell Canada v. C.E.P.U. (No. 4)) 36 C.H.R.R. D/162 (Fed. C.A.) referred to Canada (Attorney General) v. Central Cartage Co., 45 Admin. L.R. 1, 32 C.P.R. (3d) 308, 71 D.L.R. (4th) 253, [1990] 2 F.C. 641, (sub nom. Canada (Minister of Industry, Trade & Commerce) v. Central Cartage Co. (No. 1)) 109 N.R. 357, (sub nom. Canada (Minister of Industry, Trade & Commerce) v. Central Cart-
age Co. (No. 1)) 35 F.T.R. 160 (note), 1990 CarswellNat 610, 1990 CarswellNat 686 (Fed. C.A.) referred to Canada (Attorney General) v. P.S.A.C., 1999 CarswellNat 2001, (sub nom. Attorney General of Canada v. Public Service Alliance of Canada) 2000 C.L.L.C. 230-002, (sub nom. Canada (Attorney General) v. Public Service Alliance of Canada) 180 D.L.R. (4th) 95, 35 C.H.R.R. D/387, (sub nom. Canada (Attorney General) v. Public Service Alliance of Canada) [2000] 1 F.C. 146, 1999 CarswellNat 3057, (sub nom. Canada (Attorney General) v. Public Service Alliance of Canada) 176 F.T.R. 161 (Fed. T.D.) considered Canadian Pacific Ltd. v. Matsqui Indian Band, 26 Admin. L.R. (2d) 1, (sub nom. Matsqui Indian Band v. Canadian Pacific Ltd.) [1995] 2 C.N.L.R. 92, 122 D.L.R. (4th) 129, 85 F.T.R. 79 (note), [1995] 1 S.C.R. 3, 177 N.R. 325, 1995 CarswellNat 264, 1995 CarswellNat 700 (S.C.C.) referred to Committee for Justice & Liberty v. Canada (National Energy Board), [1978] 1 S.C.R. 369, 68 D.L.R. (3d) 716, 9 N.R. 115, 1976 CarswellNat 434, 1976 CarswellNat 434F (S.C.C.) considered Cooper v. Canada (Human Rights Commission), 40 C.R.R. (2d) 81, (sub nom. Bell v. Canada (Human Rights Commission)) 140 D.L.R. (4th) 193, [1996] 3 S.C.R. 854, 204 N.R. 1, 27 C.H.R.R. D/173, 43 Admin. L.R. (2d) 155, 26 C.C.E.L. (2d) 1, 1996 CarswellNat 1693, 1996 CarswellNat 1694 (S.C.C.) referred to I.W.A. Local 2-69 v. Consolidated Bathurst Packaging Ltd., 42 Admin. L.R. 1, 68 D.L.R. (4th) 524, 105 N.R. 161, 38 O.A.C. 321, 90 C.L.L.C. 14,007, [1990] O.L.R.B. Rep. 369, (sub nom. I.W.A. v. Consolidated-Bathurst Packaging Ltd.) [1990] 1 S.C.R. 282, 73 O.R. (2d) 676 (note), 1990 CarswellOnt 2515, 1990 CarswellOnt 821 (S.C.C.) considered Katz v. Vancouver Stock Exchange, [1996] 10 W.W.R. 305, 12 C.C.L.S. 1, 41 Admin. L.R. (2d) 1, 26 B.C.L.R. (3d) 1, [1996] 3 S.C.R. 405, 139 D.L.R. (4th) 575, 82 B.C.A.C. 29, 133 W.A.C. 29, 207 N.R. 72, 1996 CarswellBC 2165, 1996 CarswellBC 2166 (S.C.C.) referred to Lipp c. Charest, (sub nom. R. v. Lipp) 61 C.C.C. (3d) 127, (sub nom. R. c. Lipp) [1991] 2 S.C.R. 114, 5 M.P.L.R. (2d) 113, 5 C.R.R. (2d) 31, (sub nom. Lipp v. Qubec (Procureur gnral)) 128 N.R. 1, 1990 CarswellQue 98 (S.C.C.) considered Liteky v. United States (1994), 114 S.Ct. 1147, 510 U.S. 540 (U.S. Ga.) considered Newfoundland Telephone Co. v. Newfoundland (Board of Commissioners of Public Utilities), 134 N.R. 241, [1992] 1 S.C.R. 623, 89 D.L.R. (4th) 289, 4 Admin. L.R. (2d) 121, 95 Nfld. & P.E.I.R. 271, 301 A.P.R. 271, 1992 CarswellNfld 170, 1992 CarswellNfld 179 (S.C.C.) considered Ocean Port Hotel Ltd. v. British Columbia (General Manager, Liquor Control & Licensing Branch), 2001 SCC 52, 2001 CarswellBC 1877, 2001 CarswellBC 1878, 93 B.C.L.R. (3d) 1, 274 N.R. 116, [2001] 10 W.W.R. 1, 204 D.L.R. (4th) 33, (sub nom. Ocean Port Hotel Ltd. v. Liquor Control & Licensing Branch (B.C.)) 155 B.C.A.C. 193, (sub nom. Ocean Port Hotel Ltd. v. Liquor Control & Licensing Branch (B.C.)) 254 W.A.C. 193, 34 Admin. L.R. (3d) 1, [2001] 2 S.C.R. 781 (S.C.C.) considered R. v. Campbell, 11 C.P.C. (4th) 1, (sub nom. Reference re Public Sector Pay Reduction Act (P.E.I.), s. 10) 150 D.L.R. (4th) 577, 118 C.C.C. (3d) 193, (sub nom. Provincial Court Judges Assn. (Manitoba) v. Man-
itoba (Minister of Justice)) 46 C.R.R. (2d) 1, (sub nom. Reference re Remuneration of Judges of the Provincial Court (P.E.I.)) 206 A.R. 1, (sub nom. Reference re Remuneration of Judges of the Provincial Court (P.E.I.)) 156 W.A.C. 1, 217 N.R. 1, (sub nom. Reference re Remuneration of Judges of the Provincial Court (P.E.I.)) 156 Nfld. & P.E.I.R. 1, (sub nom. Reference re Remuneration of Judges of the Provincial Court (P.E.I.)) 121 Man. R. (2d) 1, 49 Admin. L.R. (2d) 1, (sub nom. Reference re Remuneration of Judges of the Provincial Court of Prince Edward Island) [1997] 3 S.C.R. 3, [1997] 10 W.W.R. 417, (sub nom. Reference re Remuneration of Judges of the Provincial Court (P.E.I.)) 483 A.P.R. 1, 1997 CarswellNat 3038, 1997 CarswellNat 3039 (S.C.C.) referred to R. v. Greenbaum, 14 M.P.L.R. (2d) 1, 79 C.C.C. (3d) 158, 100 D.L.R. (4th) 183, 149 N.R. 114, [1993] 1 S.C.R. 674, 19 C.R. (4th) 347, 61 O.A.C. 241, 10 Admin. L.R. (2d) 161, 1993 CarswellOnt 80, 1993 CarswellOnt 974 (S.C.C.) referred to R. v. S. (R.D.), 1997 CarswellNS 301, 1997 CarswellNS 302, 151 D.L.R. (4th) 193, 118 C.C.C. (3d) 353, 10 C.R. (5th) 1, 218 N.R. 1, 161 N.S.R. (2d) 241, 477 A.P.R. 241, [1997] 3 S.C.R. 484, 1 Admin. L.R. (3d) 74 (S.C.C.) considered R. v. Valente (No. 2), (sub nom. Valente v. R.) [1985] 2 S.C.R. 673, (sub nom. Valente v. R.) 37 M.V.R. 9, 64 N.R. 1, 14 O.A.C. 79, (sub nom. Valente v. R.) 23 C.C.C. (3d) 193, (sub nom. Valente v. R.) 19 C.R.R. 354, 52 O.R. (2d) 779, (sub nom. Valente c. R.) [1986] D.L.Q. 85, (sub nom. Valente v. R.) 24 D.L.R. (4th) 161, (sub nom. Valente v. R.) 49 C.R. (3d) 97, 1985 CarswellOnt 948, 1985 CarswellOnt 129 (S.C.C.) considered Russell v. Duke of Norfolk (1948), [1949] 1 All E.R. 109 (Eng. C.A.) referred to Singh v. Canada (Minister of Employment & Immigration), [1985] 1 S.C.R. 177, 17 D.L.R. (4th) 422, 58 N.R. 1, 12 Admin. L.R. 137, 14 C.R.R. 13, 1985 CarswellNat 152, 1985 CarswellNat 663 (S.C.C.) referred to 2747-3174 Qubec Inc. c. Qubec (Rgie des permis d'alcool), (sub nom. 2747-3174 Qubec Inc. v. Quebec (Rgie des permis d'alcool)) 140 D.L.R. (4th) 577, (sub nom. 2747-3174 Qubec Inc. v. Rgie des permis d'alcool du Qubec) 205 N.R. 1, 42 Admin. L.R. (2d) 1, [1996] 3 S.C.R. 919, 1996 CarswellQue 965, 1996 CarswellQue 966 (S.C.C.) referred to Statutes considered: Canada Evidence Act and the Criminal Code in respect of persons with disabilities, to amend the Canadian Human Rights Act in respect of persons with disabilities and other matters and to make consequential amendments to other Acts, Act to amend the, S.C. 1998, c. 9 Generally referred to Canadian Bill of Rights, S.C. 1960, c. 44, Pt. I, reprinted R.S.C. 1985, App. III Generally referred to s. 2(e) considered
Canadian Charter of Rights and Freedoms, Part I of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (U.K.), 1982, c. 11 Generally referred to Canadian Human Rights Act, R.S.C. 1985, c. H-6 Generally referred to s. 11 referred to s. 11(1) considered s. 11(4) considered s. 27(1) referred to s. 27(2) considered s. 27(3) [rep. & sub. 1998, c. 9, s. 20(2)] considered s. 48.1 [en. R.S.C. 1985, c. 31 (1st Supp.), s. 65] considered s. 48.1(3) [en. 1998, c. 9, s. 27] considered s. 48.2 [en. R.S.C. 1985, c. 31 (1st Supp.), s. 65] considered s. 48.2(1) [en. 1998, c. 9, s. 27] considered s. 48.2(2) [en. 1998, c. 9, s. 27] considered s. 48.3 [en. R.S.C. 1985, c. 31 (1st Supp.), s. 65] referred to s. 48.6(1) [en. 1998, c. 9, s. 27] referred to s. 50(2) considered Constitution Act, 1867 (U.K.), 30 & 31 Vict., c. 3, reprinted R.S.C. 1985, App. II, No. 5 s. 96 referred to Statutory Instruments Act, R.S.C. 1985, c. S-22 Generally referred to Regulations considered: Canadian Human Rights Act, R.S.C. 1985, c. H-6 1986, Equal Wages Guidelines, SOR/86-1082
Generally APPEAL by employer from judgment reported at 2001 CarswellNat 1055, 2001 CarswellNat 1056, [2001] F.C.J. No. 776, 2001 FCA 161, 199 D.L.R. (4th) 664, 9 C.C.E.L. (3d) 228, (sub nom. Canadian Human Rights Commission v. Canadian Telephone Employees Assn.) 2001 C.L.L.C. 230-024, 32 Admin. L.R. (3d) 1, (sub nom. Bell Canada v. Canadian Telephone Employees Assn.) 272 N.R. 50, (sub nom. Bell Canada v. Canada (Human Rights Commission)) [2001] 3 F.C. 481, (sub nom. Bell Canada v. Canadian Telephone Employees Assn.) 206 F.T.R. 160 (note), (sub nom. Bell Canada v. C.T.E.A. (No. 4)) 40 C.H.R.R. D/1 (Fed. C.A.), allowing appeal by Canadian Human Rights Commission, unions, and employee association from judgment reported at 2000 CarswellNat 2606, [2000] F.C.J. No. 1747, 2000 CarswellNat 3492, 2000 C.L.L.C. 230-043, 5 C.C.E.L. (3d) 123, 194 D.L.R. (4th) 499, 26 Admin. L.R. (3d) 253, 190 F.T.R. 42, [2001] 2 F.C. 392, 39 C.H.R.R. D/213 (Fed. T.D.), allowing employer's application for judicial review of decision of tribunal directing hearing of complaints of discrimination. POURVOI de l'employeur l'encontre de l'arrt publi 2001 CarswellNat 1055, 2001 CarswellNat 1056, [2001] F.C.J. No. 776, 2001 FCA 161, 199 D.L.R. (4th) 664, 9 C.C.E.L. (3d) 228, (sub nom. Canadian Human Rights Commission v. Canadian Telephone Employees Assn.) 2001 C.L.L.C. 230-024, 32 Admin. L.R. (3d) 1, (sub nom. Bell Canada v. Canadian Telephone Employees Assn.) 272 N.R. 50, (sub nom. Bell Canada v. Canada (Human Rights Commission)) [2001] 3 F.C. 481, (sub nom. Bell Canada v. Canadian Telephone Employees Assn.) 206 F.T.R. 160 (note), (sub nom. Bell Canada v. C.T.E.A. (No. 4)) 40 C.H.R.R. D/1 (C.A. Fd.), qui a accueilli le pourvoi de la commission des droits de la personne, des syndicats et de l'association d'employs l'encontre du jugement publi 2000 CarswellNat 2606, [2000] F.C.J. No. 1747, 2000 CarswellNat 3492, 2000 C.L.L.C. 230-043, 5 C.C.E.L. (3d) 123, 194 D.L.R. (4th) 499, 26 Admin. L.R. (3d) 253, 190 F.T.R. er 42, [2001] 2 F.C. 392, 39 C.H.R.R. D/213 (1 inst.), qui avait accueilli la demande de contrle judiciaire de l'employeur de la dcision du tribunal ordonnant la tenue d'audiences pour entendre des plaintes de discrimination. The judgment of the court was delivered by McLachlin C.J.C. and Bastarache J.: I. Introduction 1 This appeal raises the issue of whether the Canadian Human Rights Tribunal (the "Tribunal") lacks independence and impartiality because of the power of the Canadian Human Rights Commission (the "Commission") to issue guidelines binding on the Tribunal concerning "a class of cases," and the power of the Tribunal Chairperson to extend Tribunal members' terms in ongoing inquiries. 2 The appeal marks the latest proceeding in a lengthy dispute between Bell Canada ("Bell") and the respondents, dating back to the early 1990s, when two unions, Canadian Telephone Employees Association ("CTEA") and Communications, Energy and Paperworkers Union of Canada ("CEP"), and Femmes Action filed complaints against Bell alleging gender discrimination in the payment of wages, contrary to s. 11 of the Canadian Human Rights Act, R.S.C. 1985, c. H-6 (the "Act"). More than a decade later, the complaints have yet to be heard by the Tribunal. Instead, the parties have been engaged in litigating Bell's challenges to the Tribunal, a process that has taken them to the Federal Court Trial Division three times, to the Federal Court of Appeal twice, and now to this Court. 3 In our view, Bell's arguments are without merit. Neither of the two powers challenged by Bell compromises the procedural fairness of the Tribunal. Nor does either power contravene any applicable quasi-con-
stitutional or constitutional principle. We would dismiss the appeal and have the complaints, finally, proceed before the Tribunal. II. Background 4 Between 1990 and 1994, the CTEA, the CEP and Femmes Action, filed complaints with the Commission against Bell, alleging that Bell pays female employees in certain positions lower wages than male employees performing work of equal value, in violation of s. 11 of the Act. In May of 1996, the Commission asked the President of the Tribunal (now "Chairperson") to inquire into the complaints. 5 The matter quickly became complicated. Bell applied for judicial review of the Commission's decision to refer the complaints to the Tribunal. The Federal Court Trial Division granted Bell's application and quashed the Commission's decision: Bell Canada v. C.E.P. (1998), 143 F.T.R. 81 (Fed. T.D.). On appeal, the Federal Court of Appeal reversed this judgment and restored the Commission's decision: (1998), [1999] 1 F.C. 113 (Fed. C.A.). Leave to appeal to this Court was sought by Bell, but was denied: [1999] 2 S.C.R. v (S.C.C.). 6 While this was occurring, a panel of Tribunal members was appointed to inquire into the original complaints. Bell brought a motion before the panel urging that the Tribunal was institutionally incapable of providing a fair hearing in accordance with the principles of natural justice. The panel dismissed the motion: Bell Canada v. C.T.E.A., 32 C.H.R.R. D/175 (Can. Human Rights Trib.), June 4, 1997. 7 Bell then applied for judicial review of the panel's decision. The Federal Court Trial Division quashed the panel's decision: Bell Canada v. C.T.E.A., [1998] 3 F.C. 244 (Fed. T.D.), and ordered that there be no further proceedings in the matter until the Act had been satisfactorily amended by the legislature. At that time, the Act differed from the current legislation in two relevant respects. Firstly, it was the Minister of Justice and not the Tribunal Chairperson to whom the Act gave the discretionary power to extend Tribunal members' appointments beyond their expiry dates. McGillis J. held that, as a result, Tribunal members lacked sufficient security of tenure. Secondly, the Commission's guideline power was broader than it now is, permitting the Commission to make guidelines concerning the application of the Act in a particular case, and not only in a "class of cases." McGillis J. expressed reservations about this power, stating that it would be preferable if the guidelines were non-binding. 8 The judgment of McGillis J. was appealed to the Federal Court of Appeal, but the appeal was adjourned sine die on June 1, 1999, in light of amendments to the Act: (1999), 246 N.R. 368 (Fed. C.A.). The amendments transferred the power to extend appointments of Tribunal members to the Tribunal Chairperson, and limited the Commission's guideline power so that it became only a power to issue guidelines respecting the interpretation of the Act "in a class of cases": S.C. 1998, c. 9, s. 20(2). 9 At this time, the Commission, together with CTEA, CEP and Femmes Action, urged the Chairperson of the Tribunal to set formal hearing dates for the panel so that the original complaints could at last be heard. Bell resisted, and a case-planning meeting before the Tribunal's Vice-chairperson was arranged at which Bell and the respondents put forward their positions. Bell argued that the 1998 amendments did not eliminate the problems of procedural fairness that had been identified by McGillis J. The Vice-chairperson rejected Bell's position, and, in an interim decision of April 26, 1999, directed that the hearings should proceed: Can. H.R. Trib., Decision No. 1 in file T503/2098. 10 Bell then applied for judicial review of this decision. The Federal Court Trial Division, allowed the ap-
plication: Bell Canada v. C.T.E.A. (2000), [2001] 2 F.C. 392 (Fed. T.D.). Tremblay-Lamer J. held that even the narrowed guideline power of the Commission unduly fettered the Tribunal, and that the Chairperson's discretionary power to extend appointments did not leave Tribunal members with a sufficient guarantee of tenure. 11 The Commission, CTEA, CEP and Femmes Action appealed. Before the Federal Court of Appeal ( [2001] 3 F.C. 481, 2001 FCA 161 (Fed. C.A.), Bell argued that the Tribunal violated not only the requirements of procedural fairness, but also Bell's right to a fair hearing under s. 2(e) of the Canadian Bill of Rights, S.C. 1960, c. 44 (reproduced in R.S.C. 1985, App. III). The Federal Court of Appeal rejected Bell's view that the Tribunal violated the requirements of procedural fairness, and held it unnecessary to consider the arguments based on the Canadian Bill of Rights. 12 It is on appeal from this decision of the Federal Court of Appeal that the parties now appear before this Court - thirteen years after the filing of the respondents' original complaints, which still have yet to be heard. III. Relevant Statutory Provisions 13 Canadian Human Rights Act, R.S.C. 1985, c. H-6 11(1) It is a discriminatory practice for an employer to establish or maintain differences in wages between male and female employees employed in the same establishment who are performing work of equal value. ..... (4) Notwithstanding subsection (1), it is not a discriminatory practice to pay to male and female employees different wages if the difference is based on a factor prescribed by guidelines, issued by the Canadian Human Rights Commission pursuant to subsection 27(2), to be a reasonable factor that justifies the difference. ..... 27(2) The Commission may, on application or on its own initiative, by order, issue a guideline setting out the extent to which and the manner in which, in the opinion of the Commission, any provision of this Act applies in a class of cases described in the guideline. (3) A guideline issued under subsection (2) is, until it is revoked or modified, binding on the Commission and any member or panel assigned under subsection 49(2) with respect to the resolution of a complaint under Part III regarding a case falling within the description contained in the guideline. ..... 48.2(1) The Chairperson and Vice-chairperson are to be appointed to hold office during good behaviour for terms of not more than seven years, and the other members are to be appointed to hold office during good behaviour for terms of not more than five years, but the Chairperson may be removed from office by the Governor in Council for cause and the Vice-chairperson and the other members may be subject to remedial or disciplinary measures in accordance with section 48.3. (2) A member whose appointment expires may, with the approval of the Chairperson, conclude any inquiry that the member has begun, and a person performing duties under this subsection is deemed to be a parttime member for the purposes of sections 48.3, 48.6, 50 and 52 to 58.
..... 50(2) In the course of hearing and determining any matter under inquiry, the member or panel may decide all questions of law or fact necessary to determining the matter. Canadian Bill of Rights, S.C. 1960, c. 44 (reproduced in R.S.C. 1985, App. III) 2. Every law of Canada shall, unless it is expressly declared by an Act of the Parliament of Canada that it shall operate notwithstanding the Canadian Bill of Rights, be so construed and applied as not to abrogate, abridge or infringe or to authorize the abrogation, abridgment or infringement of any of the rights or freedoms herein recognized and declared, and in particular, no law of Canada shall be construed or applied so as to ..... (e) deprive a person of the right to a fair hearing in accordance with the principles of fundamental justice for the determination of his rights and obligations; . . . IV. Issues 14 By order of the Chief Justice dated July 10, 2002, the following constitutional questions were stated for the Court's consideration: (1) Are ss. 27(2) and (3) of the Canadian Human Rights Act, R.S.C. 1985, c. H-6, as amended, inconsistent with s. 2(3) of the Canadian Bill of Rights, S.C. 1960, c. 44, and the constitutional principle of adjudicative independence and therefore inoperable or inapplicable? (2) Are ss. 48.1 and 48.2 of the Canadian Human Rights Act, R.S.C. 1985, c. H-6, as amended, inconsistent with s. 2(e) of the Canadian Bill of Rights, S.C. 1960, c. 44, and the constitutional principle of adjudicative independence and therefore inoperable and inapplicable? V. Analysis 15 Bell argues that the power of the Commission to issue guidelines binding on the Tribunal, under s. 27(2) and 27(3), compromises the Tribunal's independence because it places limits upon how the Tribunal can interpret the Act and undermines the Tribunal's impartiality because the Commission is itself a party before the Tribunal. Similarly, Bell argues that the discretionary power of the Tribunal Chairperson to extend members' terms for ongoing inquiries, under s. 48.2(1) and 48.2(2), compromises the Tribunal's independence because it threatens their security of tenure and undermines the Tribunal's impartiality because the Chairperson may pressure such members to reach outcomes that he or she favours. 16 Since Bell's arguments draw upon both independence and impartiality, it will be useful to begin by discussing the distinction between these two requirements of procedural fairness. A. The Distinction between Independence and Impartiality
17 The requirements of independence and impartiality at common law are related. Both are components of the rule against bias, nemo debet esse judex in propria sua causa. Both seek to uphold public confidence in the fairness of administrative agencies and their decision-making procedures. It follows that the legal tests for independence and impartiality appeal to the perceptions of the reasonable, well-informed member of the public. Both tests require us to ask: What would an informed person, viewing the matter realistically and practically, and having thought the matter through, conclude? (See Committee for Justice & Liberty v. Canada (National Energy Board) (1976), [1978] 1 S.C.R. 369 (S.C.C.), at p. 394, per de Grandpr J., dissenting.) 18 The requirements of independence and impartiality are not, however, identical. As Le Dain J. wrote in R. v. Valente (No. 2), [1985] 2 S.C.R. 673 (S.C.C.), at p. 685 (cited by Gonthier J. in 2747-3174 Qubec Inc. c. Qubec (Rgie des permis d'alcool), [1996] 3 S.C.R. 919 (S.C.C.), at para. 41): Although there is obviously a close relationship between independence and impartiality, they are nevertheless separate and distinct values or requirements. Impartiality refers to a state of mind or attitude of the tribunal in relation to the issues and the parties in a particular case. The word "impartial" . . . connotes absence of bias, actual or perceived. The word "independent" in s. 11(d) reflects or embodies the traditional constitutional value of judicial independence. As such, it connotes not merely a state of mind or attitude in the actual exercise of judicial functions, but a status or relationship to others, particularly to the executive branch of government, that rests on objective conditions or guarantees. 19 As noted above, Bell challenges both the Tribunal's independence and its impartiality. However, the above discussion of the difference between the two requirements suggests that one of Bell's challenges involves a category mistake. Bell's claim that the guideline power undermines the Tribunal's independence is based upon the contention that it threatens members' independence of thought. But the requirement of independence pertains to the structure of tribunals and to the relationship between their members and others, including members of other branches of government, such as the executive. The test does not have to do with independence of thought. A tribunal must certainly exercise independence of thought in the sense that it must not be unduly influenced by improper considerations. But this is just another way of saying that it must be impartial. Bell's only real objection to the guideline power, then, is that it leaves the Tribunal insufficiently impartial. 20 We will look first at this objection to the guideline power and will then turn to Bell's two objections to the power of the Chairperson to extend appointments. Before doing so, however, we must determine the precise content of the requirements of impartiality and independence that apply to the Tribunal. How high a degree of independence is required? And what constitutes impartiality in this particular context? B. Content of the Requirements of Procedural Fairness Applicable to the Tribunal 21 The requirements of procedural fairness - which include requirements of independence and impartiality vary for different tribunals. As Gonthier J. wrote in I.W.A. Local 2-69 v. Consolidated Bathurst Packaging Ltd., [1990] 1 S.C.R. 282 (S.C.C.), at pp. 323-324: "the rules of natural justice do not have a fixed content irrespective of the nature of the tribunal and of the institutional constraints it faces." Rather, their content varies. As Cory J. explained in Newfoundland Telephone Co. v. Newfoundland (Board of Commissioners of Public Utilities), [1992] 1 S.C.R. 623 (S.C.C.), at p. 636, the procedural requirements that apply to a particular tribunal will "depend upon the nature and the function of the particular tribunal" (see also Canadian Pacific Ltd. v. Matsqui Indian Band, [1995] 1 S.C.R. 3 (S.C.C.), at p. 50, and Baker v. Canada (Minister of Citizenship & Immigration), [1999] 2 S.C.R. 817 (S.C.C.), at paras. 21-22, per L'Heureux-Dub J.). As this Court noted in Ocean Port Hotel
Ltd. v. British Columbia (General Manager, Liquor Control & Licensing Branch), [2001] 2 S.C.R. 781, 2001 SCC 52 (S.C.C.), administrative tribunals perform a variety of functions and "may be seen as spanning the constitutional divide between the executive and judicial branches of government" (para. 24). Some administrative tribunals are closer to the executive end of the spectrum: their primary purpose is to develop, or supervise the implementation of, particular government policies. Such tribunals may require little by way of procedural protections. Other tribunals, however, are closer to the judicial end of the spectrum: their primary purpose is to adjudicate disputes through some form of hearing. Tribunals at this end of the spectrum may possess court-like powers and procedures. These powers may bring with them stringent requirements of procedural fairness, including a higher requirement of independence (see Newfoundland Telephone, at p. 638, per Cory J., and Russell v. Duke of Norfolk (1948), [1949] 1 All E.R. 109 (Eng. C.A.)). 22 To say that tribunals span the divide between the executive and the judicial branches of government is not to imply that there are only two types of tribunals - those that are quasi-judicial and require the full panoply of procedural protections and those that are quasi-executive and require much less. A tribunal may have a number of different functions, one of which is to conduct fair and impartial hearings in a manner similar to that of the courts, and yet another of which is to see that certain government policies are furthered. In ascertaining the content of the requirements of procedural fairness that bind a particular tribunal, consideration must be given to all of the functions of that tribunal. It is not adequate to characterize a tribunal as "quasi-judicial" on the basis of one of its functions, while treating another aspect of the legislative scheme creating this tribunal - such as the requirement that the tribunal follow interpretive guidelines that are laid down by a specialized body with expertise in that area of law - as though this second aspect of the legislative scheme were external to the true purpose of the tribunal. All aspects of the tribunal's structure, as laid out in its enabling statute, must be examined, and an attempt must be made to determine precisely what combination of functions the legislature intended that tribunal to serve and what procedural protections are appropriate for a body that has these particular functions. 23 The main function of the Canadian Human Rights Tribunal is adjudicative. It conducts formal hearings into complaints that have been referred to it by the Commission. It has many of the powers of a court. It is empowered to find facts, to interpret and apply the law to the facts before it, and to award appropriate remedies. Moreover, its hearings have much the same structure as a formal trial before a court. The parties before the Tribunal lead evidence, call and cross-examine witnesses, and make submissions on how the law should be applied to the facts. The Tribunal is not involved in crafting policy, nor does it undertake its own independent investigations of complaints: the investigative and policy-making functions have deliberately been assigned by the legislature to a different body, the Commission. 24 The fact that the Tribunal functions in much the same way as a court suggests that it is appropriate for its members to have a high degree of independence from the executive branch. A high degree of independence is also appropriate given the interests that are affected by proceedings before the Tribunal - such as the dignity interests of the complainant, the interest of the public in eradicating discrimination, and the reputation of the party that is alleged to have engaged in discriminatory practices. There is no indication in the Act that the legislature intended anything less than a high degree of independence of Tribunal members. Members' remuneration is fixed by the Governor in Council, and is not subject to their performance on the Tribunal: s. 48.6(1). Members hold office for a fixed term of up to five years (or up to seven years, in the case of the Chairperson and Vicechairperson) (s. 48.2(1)), and their terms may only be extended to enable them to finish a hearing that they have already commenced. Further, the Chairperson is removable only for cause; and before a member is disciplined or removed, the Chairperson may request the Minister of Justice to look into the situation, who in turn may request the Governor in Council to appoint a judge to conduct a full inquiry (s. 48.3). All of these features of the
statutory scheme suggest that the legislature intended the Tribunal to exhibit a high degree of independence from the executive branch. 25 We turn now to impartiality. The same test applies to the issue of impartiality as applies to independence (Lipp c. Charest (1990), [1991] 2 S.C.R. 114 (S.C.C.), at p. 143, per Lamer C.J., citing Valente (No. 2), supra, at pp. 684 and 689). Whether the Tribunal is impartial depends upon whether it meets the test set out by de Grandpr J. in Committee for Justice & Liberty, supra, at p. 394: would a well-informed person, viewing the matter realistically and practically, have a reasonable apprehension of bias in a substantial number of cases? As Lamer C.J. stated in Charest, supra, allegations of institutional bias can be brought only where the impugned factor will give a fully informed person a reasonable apprehension of bias in a substantial number of cases (at p. 144). 26 In answering this question, we must attend not only to the adjudicative function of the Tribunal, but also to the larger context within which the Tribunal operates. The Tribunal is part of a legislative scheme for identifying and remedying discrimination. As such, the larger purpose behind its adjudication is to ensure that governmental policy on discrimination is implemented. It is crucial, for this larger purpose, that any ambiguities in the Act be interpreted by the Tribunal in a manner that furthers, rather than frustrates, the Act's objectives. For instance, as the intervener Canadian Labour Congress argued before this Court, it would be counterproductive if the Tribunal were, in pay equity disputes, to compare the value of different forms of work using a method that itself rests on discriminatory attitudes. This would perpetuate discrimination, rather than helping to eradicate it. In endowing the Commission with the power to issue interpretive guidelines, and in binding the Tribunal to observe these guidelines, the legislature has attempted to guard against this possibility. The Act therefore evinces a legislative intent, not simply to establish a Tribunal that functions by means of a quasi-judicial process, but also to limit the interpretive powers of the Tribunal in order to ensure that the legislation is interpreted in a nondiscriminatory way. The fact that the legislature regarded such limits as necessary for the fulfilment of the ultimate purpose of the Act must be borne in mind in determining precisely which sorts of fetters on the Tribunal's decision-making power adversely affect its impartiality, and which do not. 27 Our analysis has, thus far, looked to the statute and its overall purpose in determining the appropriate content for the requirements of independence and impartiality that apply to the Tribunal. However, the content of the requirements of procedural fairness applicable to a given tribunal depends not only upon the enabling statute but also upon applicable quasi-constitutional and constitutional principles. 28 Here, the Canadian Bill of Rights, quasi-constitutional legislation, applies. Section 2(e) of the Canadian Bill of Rights requires that parties be given a "fair hearing in accordance with the principles of fundamental justice." Canadian courts have held that the content of s. 2(e) is established by reference to common law principles of natural justice (Singh v. Canada (Minister of Employment & Immigration), [1985] 1 S.C.R. 177 (S.C.C.), at pp. 229-230; Canada (Attorney General) v. Central Cartage Co., [1990] 2 F.C. 641 (Fed. C.A.), at pp. 663-664). As the parties in the case at bar did not suggest that the guarantees of independence and impartiality under s. 2(e) would in this case differ from the common law requirements of procedural fairness, it is unnecessary for us here to devote separate discussion to the Canadian Bill of Rights. 29 Bell also argues that the Tribunal is bound by a constitutional principle - the "unwritten principle of judicial independence" - which confers on it the same degree of independence as a court established under s. 96 of the Constitution Act, 1867: R. v. Campbell, [1997] 3 S.C.R. 3 (S.C.C.). Bell presents no authority for this argument. As an administrative tribunal subject to the supervisory powers of s. 96 courts, the Tribunal does not have
to replicate all features of a court. As discussed above, the legislature has conferred a high degree of independence on the Tribunal, stopping short of constituting it as a court, but nevertheless supporting it by safeguards adequate to its function. 30 Bell suggests, in the alternative, that the constitutional principle applies and holds the Tribunal to the standard of common law procedural fairness. Since, as discussed below (at para. 53), the common law standard is met, this submission does not advance Bell's argument. 31 This discussion shows that the Tribunal, though not bound to the highest standard of independence by the unwritten constitutional principle of adjudicative independence, must act impartially and meet a relatively high standard of independence, both at common law and under s. 2(e) of the Canadian Bill of Rights. 32 We turn now to Bell's challenges to the Tribunal.
C. The Guideline Power 33 Bell alleges that the Commission's power to issue binding guidelines regarding the proper interpretation of the Act undermines the Tribunal's impartiality. In Bell's words, this provision "usurps the power of the Tribunal to make its own decisions concerning the interpretation and application of the Act." Moreover, Bell argues, it is problematic that the Commission, the body that directs the Tribunal in its interpretation of the Act, also appears before the Tribunal as a party. 34 It is unclear exactly what objection Bell is making here. On one reading, Bell's objection lies simply with the fact that the Tribunal is "fettered" - that is, that it does not have full freedom to interpret the Act in whatever manner that it wishes, unconstrained by any other body. On a second reading, the objection is rather that the fact that the Commission has the power to issue binding guidelines may make the Tribunal more likely to favour the Commission in the proceedings before it. On a third reading, the objection is simply to the fact that Parliament has placed in one and the same body the functions of investigating complaints, formulating guidelines, and acting as prosecutor in hearings before the Tribunal. The objection is that this overlap of functions itself gives rise to a reasonable apprehension of bias. Finally, on a fourth reading, Bell is objecting that the Commission may use its guideline power to manipulate the outcome of a particular case, to ensure that it succeeds as prosecutor. We shall consider each of these versions of the objection, in turn. 35 In oral argument, counsel for Bell stated repeatedly that the guideline power "fetters" the Tribunal in its application of the Act. This assumes that the sole mandate of the Tribunal is to apply the Act, and not also to apply any other forms of law that the legislature has deemed relevant - such as guidelines. This assumption is mistaken. If the guidelines issued by the Commission are a form of law, then the Tribunal is bound to apply them, and it is no more accurate to say that they "fetter" the Tribunal than it is to suggest that the common law "fetters" ordinary courts because it prevents them from deciding the cases before them in any way they please. 36 It might be contended that s. 27(2) and 27(3) of the Act do not adequately empower the Commission to issue valid subordinate legislation, and that consequently, the guidelines are not "law." In our view, this view is incorrect. The guidelines issued by the Commission under the Act are indistinguishable from regulations issued by other administrative bodies (see Canada (Attorney General) v. P.S.A.C. (1999), [2000] 1 F.C. 146 (Fed. T.D.), at paras. 136-141, per Evans J., as he then was). They are, like regulations, of general application: indeed, under the amended s. 27(2), they must pertain always to a "class of cases." Like regulations, the Commission's guidelines are subject to the Statutory Instruments Act, R.S.C. 1985, c. S-22, and must be published in the
Canada Gazette. Moreover, the process that is followed in formulating particular guidelines resembles the legislative process, involving formal consultations with interested parties and revision of the draft guidelines in light of these consultations. The Equal Wages Guidelines, SOR/86-1082, for instance, were the result of consultation with some 70 organizations, including Bell. The Commission met with all organizations who requested a meeting and, as a direct result of the consultation process, Commission staff made changes to the draft guidelines prior to their submission to the Commission for approval. 37 While it may have been more felicitous for Parliament to have called the Commission's power a power to make "regulations" rather than a power to make "guidelines," the legislative intent is clear. A functional and purposive approach to the nature of these guidelines reveals that they are a form of law, akin to regulations. It is also worth noting that the word used in the French version of the Act is "ordonnance" - which leaves no doubt that the guidelines are a form of law. 38 The objection that the guideline power unduly fetters the Tribunal overlooks the fact that guidelines are a form of law. It also mistakenly conflates impartiality with complete freedom to decide a case in any manner that one wishes. Being fettered by law does not render a tribunal partial, because impartiality does not consist in the absence of all constraints or influences. Rather, it consists in being influenced only by relevant considerations, such as the evidence before the Tribunal and the applicable laws. As Scalia J. pointed out in Liteky v. United States, 510 U.S. 540 (U.S. Ga. 1994), at p. 550, the words "bias" and "partiality" "connote a favorable or unfavorable disposition or opinion that is somehow wrongful or inappropriate, either because it is undeserved, or because it rests upon knowledge that the subject ought not to possess" (emphasis in the original). Similarly, as Cory J. emphasized in R. v. S. (R.D.), [1997] 3 S.C.R. 484 (S.C.C.), at para. 119, not all predispositions amount to "bias." Predispositions that simply reflect applicable law do not undermine impartiality. On the contrary, they help to preserve it. Hence, the fact that the Tribunal must apply all relevant law, including guidelines formulated by the Commission, does not on its own raise a reasonable apprehension of bias. 39 The second version of Bell's objection is that the Tribunal is more likely to favour the Commission during a hearing because the Commission has the power to issue guidelines that bind it. It is not evident to us why this would be so. When the Commission appears before the Tribunal, it is in no different a position from any representative of the government who appears before an administrative board or court. The public does not, in other contexts, assume that a decision-maker will favour submissions by government representatives simply because the decision-maker must apply laws that the government has made. The Tribunal seems no more likely to be biased in favour of the Commission because the Commission provides the Tribunal's guidelines than it is likely to be biased in favour of Bell because Bell provides the Tribunal's phone service. 40 On a third interpretation, Bell objects that Parliament has placed in one and the same body the function of formulating guidelines, investigating complaints, and acting as prosecutor before the Tribunal. Bell is correct in suggesting that the Commission shares these functions. However, this overlapping of different functions in a single administrative agency is not unusual and does not on its own give rise to a reasonable apprehension of bias (see Rgie des permis d'alcool, supra, at paras. 46-48, per Gonthier J.; Newfoundland Telephone, supra, at p. 635, per Cory J.; Barry v. Alberta (Securities Commission), [1989] 1 S.C.R. 301 (S.C.C.)). As McLachlin C.J. observed in Ocean Port, supra, at para. 41, "[t]he overlapping of investigative, prosecutorial and adjudicative functions in a single agency is frequently necessary for [an administrative agency] to effectively perform its intended role." 41 Indeed, it may be that the overlapping of functions in the Commission is the legislature's way of ensuring
that both the Commission and the Tribunal are able to perform their intended roles. In Public Service Alliance, supra, Evans J. noted that although it was unusual for Parliament to have conferred the power to make subordinate legislation on the Commission and not the Governor in Council, Parliament must have contemplated that "the expertise that the Commission will have acquired in the discharge of its statutory responsibilities for human rights research and public education, and for processing complaints up to the point of adjudication" (para. 140) was necessary in the formulation of the guidelines and was more important than certain other goals. In our view, Evan J.'s conjecture regarding Parliamentary intent is correct. The Commission is responsible, among other things, for maintaining close liaisons with similar bodies in the provinces, for considering recommendations from public interest groups and any other bodies, and for developing programs of public education (s. 27(1)). These collaborative and educational responsibilities afford it extensive awareness of the needs of the public, and extensive knowledge of developments in anti-discrimination law at the federal and provincial levels. Placing the guideline power in the hands of the Commission may therefore have been Parliament's way of ensuring that the Act would be interpreted in a manner that was sensitive to the needs of the public and to developments across the country, and hence, that it would be interpreted by the Tribunal in the manner that best furthered the aims of the Act as a whole. 42 This point is related to our earlier discussion of the importance of considering the aims of the Act as a whole, in assessing whether the requirement of impartiality has been met. We noted there that the Act's ultimate aim of identifying and rectifying instances of discrimination would only be furthered if ambiguities in the Act were interpreted in a manner that furthered, rather than frustrated, the identification of discriminatory practices. If, as the Act suggests, this can best be accomplished by giving the Commission the power to make interpretive guidelines that bind the Tribunal, then the overlapping of functions in the Commission plays an important role. It does not result in a lack of impartiality, but rather helps to ensure that the Tribunal applies the Act in the manner that is most likely to fulfil the Act's ultimate purpose. 43 We note in passing that, given the relatively small volume of s. 11 equal pay cases adjudicated by the Tribunal, the promulgation of guidelines by the Commission has likely provided parties with a sense of their rights and obligations under the Act in a more efficient and clearer way than would an incremental development of informal guidelines by the Tribunal itself, through its decisions in particular cases. 44 Bell's real objection may be that placing the guideline power and the prosecutorial function in a single agency allows the Commission to manipulate the outcome of a hearing in its favour. 45 This version of Bell's objection might have been stronger had Bell provided some evidence that, in practice, the Commission had attempted to use the guidelines to influence the Tribunal's views toward it (see Katz v. Vancouver Stock Exchange, [1996] 3 S.C.R. 405 (S.C.C.), and Matsqui Indian Band, supra, at paras. 117-124, per Sopinka J). No such evidence was provided in this case. Indeed, since the only guidelines that apply to the complaints brought against Bell are the Equal Wages Guidelines, which were introduced several years before the complaints against Bell were brought, it is difficult to see how these guidelines could have been formulated with the aim of unduly influencing the Tribunal against Bell. 46 In suggesting that the Commission could misuse its guideline power in this way, and that the misuse could remain undetected, Bell seems to be overestimating the breadth of the guideline power. Indeed, counsel for Bell suggested in oral argument that the guideline power would permit the Commission effectively to repeal provisions of the Act. Counsel also argued that the guideline power might be used to strip away any procedural protections guaranteed in the Act, and that the Tribunal has no power to "escape the fetters of any guidelines im-
posed on it by declaring them ultra vires the Commission." 47 As the Commission has readily acknowledged, the guideline power is constrained. The Commission, like other bodies to whom the power to make subordinate legislation has been delegated, cannot exceed the power that has been given to it and is subject to strict judicial review: R. v. Greenbaum, [1993] 1 S.C.R. 674 (S.C.C.). The Tribunal can, and indeed must, refuse to apply guidelines that it finds to be ultra vires the Commission as contrary to the Commission's enabling legislation, the Act, the Canadian Charter of Rights and Freedoms and the Canadian Bill of Rights. The Tribunal's power to "decide all questions of law or fact necessary to determining the matter" under s. 50(2) of the Act is clearly a general power to consider questions of law, including questions pertaining to the Charter and the Canadian Bill of Rights: see Cooper v. Canada (Human Rights Commission), [1996] 3 S.C.R. 854 (S.C.C.). No invalid law binds the Tribunal. Moreover, the Commission's guidelines, like all subordinate legislation, are subject to the presumption against retroactivity. Since the Act does not contain explicit language indicating an intent to dispense with this presumption, no guideline can apply retroactively. This is a significant bar to attempting to influence a case that is currently being prosecuted before the Tribunal by promulgating a new guideline. Finally, any party before the Tribunal could challenge a guideline on the basis that it was issued by the Commission in bad faith or for an improper purpose; and no guideline can purport to override the requirements of procedural fairness that govern the Tribunal. 48 In addition to these factors, there are specific indications in the Act that the legislature intended the scope of the guideline power to be limited. In determining the reach of this power, both language versions of s. 27(2) must be read harmoniously. The English version, which empowers the Commission to "issue a guideline setting out the extent to which and the manner in which, in the opinion of the Commission, any provision of this Act applies in a class of cases," must be read in such a way as to be coherent with the French version. The French version states that the Commission can, in a category of given cases, "dcider de prciser, par ordonnance, les limites et les modalits de l'application de la prsente loi." This power to "make precise the limits and the modes of application of the law" certainly falls short of the power to repeal portions of the Act which Bell fears. An apt example of what is involved in merely "making precise" the limits of the Act is provided by s. 11(4), which envisions that guidelines will be promulgated to list the factors ("facteur reconnu") which would justify what might otherwise amount to discrimination under s. 11(1). This provision clearly contemplates guidelines adding precision to the Act, without in any way trumping or overriding the Act itself. 49 It is of course true that by "making precise" various provisions of the Act, the guidelines will affect the outcome of cases. However, they will only risk undermining the impartiality of the Tribunal if they do so in a manner that is unjust or improper. Given the many constraints on the Commission's guideline power, and the many ways in which the Tribunal is empowered to question or set aside guidelines that are in violation of the law, it does not seem likely that the Commission's guidelines could improperly influence the Tribunal. 50 Parliament's choice was obviously that the Commission should exercise a delegated legislative function. Like all powers to make subordinate legislation, the Commission's guideline power under ss. 27(2) and 27(3) is strictly constrained. We fail to see, then, that the guideline power under the Act would lead an informed person, viewing the matter realistically and practically and having thought the matter through, to apprehend "a real likelihood of bias": S. (R.D.), supra, at para. 112, per Cory J.; Committee for Justice & Liberty, supra, at p. 395, per de Grandpr J. D. The Chairperson's Power To Extend Appointments
51 Bell challenges the Chairperson's power to extend appointments of Tribunal members in ongoing inquiries. Bell argues that this power robs members of the Tribunal of sufficient security of tenure. In addition, Bell contends that it threatens members' impartiality. 52 There is an obvious need for flexibility in allowing members of the Tribunal to continue beyond the expiry of their tenure, in light of the potential length of hearings and the difficulty of enlisting a new member of a panel in the middle of a lengthy hearing. It would not, for this reason, be practicable to suggest that members simply retire from a panel upon the expiry of their appointment, with no official having the power to extend their appointments. And of the officials who could exercise this power, the Tribunal Chairperson seems most likely both to be in a good position to know how urgent the need to extend an appointment is and also to be somewhat distant from the Commission. 53 In any case, the question of whether this power compromises the independence of Tribunal members is settled by Valente (No. 2), supra. That case concerned legislation that conferred a discretionary power upon the Chief Justice of the provincial court to permit judges who had attained retirement age to hold office until the age of 70, and that conferred a discretionary power upon the Judicial Council for Provincial Judges to further approve the extension of a judge's term of office from age 70 to 75. Prior to amendments in the legislation, these powers had rested with the executive. At p. 704, Le Dain J. wrote of the amendments that: This change in the law, while creating a post-retirement status that is by no means ideal from the point of view of security of tenure, may be said to have removed the principal objection to the provision . . . since it replaces the discretion of the Executive by the judgment and approval of the senior judicial officers who may be reasonably perceived as likely to act exclusively out of consideration for the interests of the Court and the administration of justice generally. In our view, this passage resolves the question. If the discretionary power of the Chief Justice and Judicial Council of the provincial courts to extend the tenure of judges does not compromise their independence in a manner that contravenes the requirements of judicial independence, then neither does the discretionary power of the Tribunal Chairperson compromise the independence of Tribunal members in a manner that contravenes common law procedural fairness. 54 It remains to consider Bell's claim that this power undermines the Tribunal's impartiality. Bell's argument here seems to be that members might feel pressure to adopt the views of the Chairperson in order to remain on a panel beyond the expiry of their appointment, and that because of this, a reasonable person might doubt whether members were guided only by legitimate considerations in the disposition of their final case. However, given that members whose appointments have expired will not sit on another panel again, it is difficult to see what power the Chairperson could ultimately have over them, once their appointments have been extended and it is time for them to decide the case. Moreover, there are ample provisions in the Act to suggest that the Tribunal Chairperson can reasonably be regarded as disinterested in the outcome of cases. The Chairperson must have been a member in good standing in the bar of a province for at least ten years (s. 48.1(3)). He or she can be removed from the position for cause (s. 48.2) by the Governor in Council. A reasonable person informed of these facts would not conclude that members were likely to be illegitimately pressured to adopt the Chairperson's views. VI. Conclusion 55 We would therefore uphold the conclusions of the Federal Court of Appeal, and dismiss the appeal with
costs. The constitutional questions should be answered as follows: (1) Are ss. 27(2) and (3) of the Canadian Human Rights Act, R.S.C. 1985, c. H-6, as amended, inconsistent with s. 2(e) of the Canadian Bill of Rights, S.C. 1960, c. 44, and the constitutional principle of adjudicative independence and therefore inoperable or inapplicable? Answer: No. (2) Are ss. 48.1 and 48.2 of the Canadian Human Rights Act, R.S.C. 1985, c. H-6, as amended, inconsistent with s. 2(e) of the Canadian Bill of Rights, S.C. 1960, c. 44, and the constitutional principle of adjudicative independence and therefore inoperable and inapplicable? Answer: No. Appeal dismissed. Pourvoi rejet. END OF DOCUMENT
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Page 1 1974 CarswellBC 191, [1974] 6 W.W.R. 72, 2 N.R. 305, [1975] 2 S.C.R. 47, 47 D.L.R. (3d) 57
1974 CarswellBC 191, [1974] 6 W.W.R. 72, 2 N.R. 305, [1975] 2 S.C.R. 47, 47 D.L.R. (3d) 57 British Columbia (Attorney General) v. Parklane Private Hospital Ltd. Attorney General for British Columbia v. Parklane Private Hospital Ltd. and Corporation of the City of Vancouver Corporation of the City of Vancouver v. Parklane Private Hospital Ltd. and Attorney General for British Columbia Supreme Court of Canada Martland, Judson, Spence, Pigeon and Dickson JJ. Judgment: May 27, 1974 Thomson Reuters Canada Limited or its Licensors (excluding individual court documents). All rights reserved. Counsel: R. C. Bray and R. G. Ward, for Attorney General for British Columbia. T. R. Bland and R. G. Harvey, for Corporation of the City of Vancouver. D. W. Shaw and I. G. Nathanson, for respondent. Subject: Restitution Restitution --- Benefits conferred in anticipation of reward Anticipated contracts Health and hospitals Private hospital providing services for social assistance patients Right to reasonable remuneration. Appeal from the judgment of the British Columbia Court of Appeal, [1973] 2 W.W.R. 289, 33 D.L.R. (3d) 169, allowing an appeal from the judgment of Berger J., 25 D.L.R. (3d) 731, and increasing the amount awarded. Held, for the reasons given in the Court of Appeal, the appeal should be dismissed. The judgment of the Court was delivered by Dickson J.: 1 Parklane Private Hospital Ltd. owns and operates a private hospital in the City of Vancouver in which social assistance patients and others receive hospital care. Parklane brought an action against the City of Vancouver for the difference between the amounts claimed by Parklane to be payable by the city, and the amounts actually paid, for provision by Parklane of hospital care for social assistance patients during the period 1st March 1968 to 31st January 1972. The action came on for trial before Berger J. who awarded Parklane
$57,524.95 [25 D.L.R. (3d) 731]. An appeal by Parklane was allowed (Branca J.A. dissenting) and the British Columbia Court of Appeal increased the judgment to $92,437.70 [[1973] 2 W.W.R. 289, 33 D.L.R. (3d) 169]. Cross-appeals by the city and the Attorney General for British Columbia, intervenor, were dismissed. The city and the Attorney General for British Columbia have now appealed to this Court. 2 On 21st December 1967 the Department of Social Welfare of British Columbia advised all municipalities in the province that effective 1st January 1968 the government of the province would share with municipalities on a 90 per cent - 10 per cent basis an adjustment in the cost of boarding home care and private hospital care, the maximum rate thenceforth for hospital care to be $245 per month or $8.05 per day. Prior to 1st March 1968 Parklane, pursuant to an agreement with the city, provided care and accommodation for social assistance patients at the rate of $245 per patient per month or $8.05 per patient per day, but the agreement was terminated by a letter dated 12th January 1968 in which Parklane gave the city notice that as of 1st March 1968 the rate which would be charged by Parklane in respect of social assistance patients would be the same as the minimum rate for other patients, $9.50 per day. By the same letter Parklane notified the city that if the new rates were not acceptable the city was to remove all the social assistance patients from the hospital on or before 29th February 1968, failing which Parklane would take action to collect from the city at the new rates. The city made no reply and continued payments to Parklane at the rate of $8.05 per day. A statutory duty is imposed upon the city by The Vancouver Charter, 1953 (B.C.), c. 55, s. 183, "to make suitable provision for its poor and destitute". Both the city and Parklane appreciated that in all humanity Parklane could not reasonably require the patients to leave the hospital; the city did not remove the patients then receiving care and has continued to send social welfare patients to the hospital. 3 On 27th January 1970 Vancouver city council passed a resolution stating that the city was not prepared to pay any amount in excess of the authorized provincial government per diem rate for welfare or social service cases in hospitals or nursing homes. In response Parklane, through its solicitors, advised the city it was not prepared to accept the government rate as full payment for services rendered. By a later letter to the city, Parklane noted that the city welfare department was continuing to refer patients to the hospital and cautioned that acceptance of patients should not be construed as acceptance of the rates set by the government. The city did not reply to either letter. On 4th March 1970 the Department of Rehabilitation and Social Improvement of British Columbia distributed a serial letter stating that effective 1st April 1970 the monthly maximum rate for nursing home care would be increased to $280 per month or $9.25 per day. Parklane gave the city notice that as of 1st June 1970 the rate for the care and accommodation of social welfare patients in the Parklane Hospital would be $11.50 per patient per day and if the city was not prepared to pay the new rate, all social welfare patients were to be removed by the end of June 1970, failing which the courts would be asked to enforce payment of a reasonable rate of $11.50 per patient per day. There was no reply by the city. On 2nd November 1971 the department advised municipalities that the social allowance rates for private hospital care would be increased to $310 per month or $10.35 per day. 4 Parklane continued to charge the city at the from time to time rates it advised it would charge. These are the same as, or less than, the rates charged private patients in the hospital. It is conceded by the city and by the Attorney General for British Columbia that the rates claimed from time to time by Parklane were reasonable for the services rendered. None the less the city has continued to pay Parklane at the lower rates. The difference has been substantial, amounting to $92,437.70 during the period 1st March 1968 to 31st January 1972. The case is much like that which came before this Court in King George Highway Hospital Ltd. v. Surrey, 3rd June 1971 (not yet reported). In that case the hospital's claim was made on two bases, an express contract to pay at the new rate demanded by the hospital or alternatively upon quantum meruit. Wilson C.J.S.C. found there was a contract
as alleged to pay at the rates claimed by the hospital and it became unnecessary for him to deal with the alternative claim upon a quantum meruit. The municipality appealed on the ground that on the evidence there was no consensus to support such a contract. After counsel had completed his submission in the Court of Appeal, counsel for King George Hospital rose to reply and stated that he had not argued an express contract before the learned Chief Justice but only quantum meruit and would not attempt to support the judgment upon the reasons given in the Court below. In the opinion of Davey C.J.B.C. the essential findings of fact on the hospital's alternative claim based on quantum meruit were not possible from the state of the record and he would have sent the case back for a new trial. Branca J.A., with whom Nemetz J.A., as he then was, agreed, held there was no implied promise on the part of the municipality to pay fair and reasonable remuneration and the hospital's action was dismissed. An appeal by the hospital to this Court was allowed. Martland J. said orally for the Court: We are all agreed that this appeal should succeed. Upon the evidence there was created an obligation on the respondent to pay the appellant at a per diem rate of $11 per patient from and after 1st April 1968. The appeal is allowed and the judgment at trial is restored. The appellant is entitled to its costs in this Court and in the Court of Appeal. 5 On the present appeal a question arose as to whether the obligation to pay which the Court recognized in the King George case arose out of contract or in quantum meruit. Reference to the factums filed will disclose that argument was solely on quantum meruit and I think it must be taken that the case was decided on that footing. The right of the hospital to recover, in that case and in this, is independent of the original contract between the parties. It is important in the present appeal that subsequent to 1st March 1968 the City of Vancouver continued to send to, and authorized the care and accommodation of further social assistance patients in, Parklane Hospital and the latter accepted and cared for such patients. Parklane has a quantum meruit action upon a quasicontract in respect of which there has been no agreement as to remuneration. In these circumstances the city must pay reasonable rates and the city concedes the rates claimed by Parklane are reasonable. Parklane is entitled to recover unless barred by one of the Orders in Council to which I will now refer. Order in Council 3103 6 In the submission of the city and the Attorney General for British Columbia, the Regulation passed under The Hospital Act, R.S.B.C. 1960, c. 178, by Order in Council 3103 extinguishes from the date of its passage on 18th September 1970 Parklane's claim for remuneration at its own rates. A statute encroaching on private rights or purporting to do so should be interpreted restrictively and the burden rests on those who seek to establish that the Legislature intended to take away the private rights of individuals. On 6th April 1968 s. 37(2) of The Hospital Act dealing with the power of the Lieutenant-Governor in Council to make Regulations under that Act was amended by The Statute Law Amendment Act, 1968 (B.C.), c. 53, s. 9(3), to read: (2) The power to make regulations under this section extends to prescribing, in respect of any hospital, as designed under any of the provisions of this Act, (a) the proportion of the accommodation therein which shall be used as public- or standard-ward accommodation; (b) the number or proportion of persons who, being persons in receipt of social assistance as defined in the Social Assistance Act, are to be provided with the necessary care and accommodation therein at the
rates payable for the time being under that Act, and, where such regulations are made, (i) each hospital to which the regulations are applicable shall observe the regulations; and (ii) the person having charge of admissions to a hospital to which any regulations made pursuant to clause (b) are applicable shall, if the number or proportion of such persons to whom that clause refers for the time being accommodated in that hospital is less than the number or proportion so prescribed, give preference of admission to such persons. 7 Pursuant to s. 37 of The Hospital Act, Reg. 10, of which paras. (a) and (d) are quoted below, was made by Order in Council 3103, approved 18th September 1970: 10. (a) Each private hospital which is licensed under Part II of the Act shall provide the necessary care and accommodation therein for not less than a number of persons who are in receipt of social assistance as defined in the Social Assistance Act, which number shall be equivalent to one-third of the maximum number of patients which the said hospital is permitted to accommodate under its private hospital licence ... (d) The payment to the operator of a private hospital for providing necessary care and accommodation to a person in receipt of social assistance as aforesaid shall be made at the rate for the time being established under the Social Assistance Act. Where payment has been made to the operator of a private hospital as provided therein, it shall be deemed to be payment in full for the provision of necessary care and accommodation, notwithstanding any agreement or contract to the contrary, and any person seeking to recover any additional payment shall be guilty of an offence under the Hospital Act. 8 The invocation of Order in Council 3103 can only operate to inhibit private hospitals in the rates they may charge if lower rates have been "established under the Social Assistance Act", R.S.B.C. 1960, c. 360, and the position in that respect is far from clear. The Social Assistance Act does not contain any express power to fix rates or amounts of social assistance and no Regulations have been made under the Act for that purpose. Section 3 [re-en. 1972, c. 57, s. 2] of the Act states that social assistance may be granted out of funds appropriated by the Legislature for the purpose to individuals or families who are unable to provide necessities essential to a reasonably normal and healthy existence but the Act is silent as to who decides the rate or amount of social assistance. Section 4 [am. 1972, c. 57, s. 3] provides that financial aid may be granted to any municipality to defray the costs of social assistance but the Act is silent on the determination of the amount of such grants. Section 11 [am. 1961, c. 59, s. 31(b); 1972, c. 57, s. 5] charges the Department of Social Welfare with the administration of the Act and states there shall be in that department an officer known as the "Director of Social Welfare" who, under the Minister of Social Welfare, shall administer the provisions of the Act. Subject to the approval of the Minister, the director is empowered by s. 13(d) [since repealed 1972, c. 57, s. 6(a)] to establish Regulations and formulate policies not inconsistent with the Act for the administration of social assistance throughout the province as a whole and for the local administration thereof. These are broad words, but I do not read them as giving the director rate-making powers affecting private hospitals. If the director can control charges for hospital services, can he control charges for groceries? I agree with Robertson J.A. when he said in the British Columbia Court of Appeal [p. 318]: Clause (d) is the only one that authorizes the establishment of Regulations, but those Regulations can only be established for the administration of social assistance throughout the province as a whole and for the local administration thereof. I cannot distil from this language a power to impose rates of the kind in question
here. The administration of social assistance is a matter internal to the department referred to in s. 11(1) and to municipal authorities of the kind referred to in cl. (b) of s. 13. To my mind, if it had been the inten tion of the Legislature to empower the director to legislate as to the rates to be charged by private hospitals for accommodation, light, heat, food, drink, linen, nursing services and so on a power the exercise of which could, as here, result in a loss to the hospital in the nature of a tax or confiscation very clear words would have been required. See Maxwell on Interpretation of Statutes, 12th ed., pp. 256-9 and cases there cited; and Abell v. York (1920), 61 S.C.R. 345 at 351, 57 D.L.R. 81. The making of Regulations of the kind in question is entirely outside the ambit of The Social Assistance Act. 9 Even conceding that the power to establish Regulations for the administration of social assistance comprehended the power to establish hospital rates for social assistance patients in private hospitals, there is no evidence that any Regulation for this purpose was established by the director. There was no direct communication between department and hospitals. Circulars setting forth maximum rates for nursing home care were forwarded by the department to municipalities under dates of 21st December 1967, 4th March 1970 and 2nd November 1971, but one does not establish statutory Regulations by circulars. The circulars were mere notifications to various municipalities of the assistance they could expect from the Government of British Columbia. The rates were stated for cost-sharing purposes and affected rights and obligations as between province and municipalities but not as between municipalities and suppliers. A request by counsel for Parklane for a copy of the minute or document or Regulation authorizing the rates was answered by the Deputy Minister in these words: There are no specific minutes respecting the setting of rates for nursing and boarding homes. This is purely a matter of government policy. When the rate change is authorized the Director of Social Welfare is advised to notify the persons concerned. 10 In the Court of Appeal Taggart J.A. made the following observations with which I am in full agreement [pp. 328-29]: It seems to me the circulars are no more than notification to the City that the Province of British Columbia, through the agency of the Director of Social Assistance, will pay only up to a fixed amount of the remuneration paid to the private hospitals for the services rendered to social assistance patients. The circulars are not directed to Parklane, the party primarily affected and one of the parties the Legislature must have had in mind in enacting the amendment to s. 37(2) of The Hospital Act; rather the circulars are directed to the City and it seems to me, advise the City of the extent to which the Director of Social Assistance is prepared to share in the cost incurred by the City in caring for the social assistance patients for whom the City has the primary responsibility. The City could, if it wished, pay the rates requested by Parklane and the other private hospitals, but if it did so, it could not look to the Director of Social Assistance for any greater remuneration than that set out in the circulars. While they are no doubt effective as notices by the Director of Social Assistance to the City, I cannot construe the circulars as 'establishing a rate' which prevents Parklane from recovering reasonable remuneration. 11 I am accordingly of the opinion that the right of Parklane to charge reasonable rates for its hospital services is not obstructed by Order in Council 3103. Order in Council 4399 and Order in Council 4400
12
Order in Council 4399 passed on 1st December 1971 reads as follows: THAT, pursuant to the Residence and Responsibility Act and all other powers thereunto enabling, the responsibilities of local authorities, under the Municipal Act [R.S.B.C. 1960, c. 255] or under any Act of the Legislature or the regulations made under any Act, to contribute towards the costs of social assistance that may be given to any persons (in the form of institutional care provided for any person in any institution that is a private hospital within the meaning of the Hospital Act or a community care facility within the meaning of the Community Care Facilities Licensing Act [1969 (B.C.), c. 4] wholly or partially at public expense) shall be defined and limited, in part, as follows: The responsibility aforesaid means and shall be limited to the contribution of an amount towards the costs of social assistance given to each such person which contribution shall not exceed an amount of Three Hundred and Ten Dollars ($310.00) per month or an amount or amounts equal to the rate or rates payable for the assistance prescribed pursuant to the Social Assistance Act from time to time, whichever is less.
13 If intra vires, the Order in Council would limit the liability of the city for the cost of social assistance given to indigent patients by Parklane after 1st December 1971 to the rates referred to in the provincial circulars. This Order in Council purports to be made under the authority of The Residence and Responsibility Act, R.S.B.C. 1960, c. 340, and it is argued that it was authorized by s. 3 of that Act which reads in part: 3. Where, under any Act of the Legislature or the regulations made under any Act, the authority of a local area is required to grant social assistance to any persons or to contribute towards the costs of social assistance that may be given to any persons, the persons in question shall be limited to those who are residents of that local area, and the responsibility of the local authority in respect of those persons under that Act shall be further defined and limited by the terms of this Act. Without limiting the generality of the foregoing, the provisions of this Act and of the regulations made under this Act shall define and limit the responsibilities of local authorities under any of the following Acts, notwithstanding any provision to the contrary contained in that Act or in any regulation made under that Act: ... 14 The aim of the Act is to determine as between municipalities who is responsible for whom, to delineate responsibilities of local authorities inter se and to limit the responsibility of local authorities to persons seeking social assistance. The Act has nothing to do with any commitments of local authorities to others, more particularly it is not intended to limit the liabilities of local authorities toward those providing services to those on social assistance. I am accordingly of the opinion that the enactment of Order in Council 4399 was not authorized by the provisions of The Residence and Responsibility Act. 15 Order in Council 4400 is in these words: B.C. Reg. 283/71 Residence and Responsibility Act Regulation Made by Order in Council 4400, Approved December 1, 1971 THAT, pursuant to the Residence and Responsibility Act and all other powers thereunto enabling, the responsibilities of local authorities, under the Municipal Act or under any Act, to contribute toward the costs of social assistance that have been given to any persons (in the form of institutional care provided for any
person in any institution that is a private hospital within the meaning of the Hospital Act or a community care facility within the meaning of the Community Care Facilities Licensing Act wholly or partially at public expense) shall be defined and limited, in part, as follows: The responsibility aforesaid, as of the date of approval of this order, means and shall be limited to the contribution of an amount toward the costs of social assistance given to each such person, which contribution shall not exceed an amount or amounts calculated at the rate or rates payable for the assistance as prescribed pursuant to the Social Assistance Act from time to time, less any amount or amounts already contributed in respect of such person. 16 If intra vires, Order in Council 4400 would serve to extinguish retrospectively the entire claim of Parklane, but in my view it fails to have that effect. The Lieutenant-Governor in Council is empowered to enact Regulations for the purposes of carrying into effect the provisions of the Act, but nothing expressly or by necessary implication contained in the Act authorizes the retrospective impairment by Regulation of existing rights and obligations. 17 The Attorney General for British Columbia sought to address an argument to the Court whether, assuming Parklane has a claim which is not barred by any of the Orders in Council, Parklane could recover for amounts claimed from and after the date of issuance of the writ, 28th February 1969. This point was raised for the first time in this Court and by an intervenor. The Court declined to hear argument on the point. 18 I would, accordingly, dismiss the appeals with costs.
END OF DOCUMENT
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Page 1 2011 CarswellNat 4918, 2011 FCA 329, 210 A.C.W.S. (3d) 224, 425 N.R. 279, 107 C.P.R. (4th) 155
2011 CarswellNat 4918, 2011 FCA 329, 210 A.C.W.S. (3d) 224, 425 N.R. 279, 107 C.P.R. (4th) 155 Apotex Inc. v. Merck & Co. Merck Frosst Canada & Co., Appellant and Apotex Inc., Respondent Federal Court of Appeal Edgar Sexton, Carolyn Layden-Stevenson, David Stratas JJ.A. Heard: February 15, 2011 Judgment: November 25, 2011 Docket: A-154-10 Thomson Reuters Canada Limited or its Licensors (excluding individual court documents). All rights reserved. Proceedings: allowed leave to appeal Apotex Inc. v. Merck & Co. (2012), 2012 CarswellNat 228 (S.C.C.); affirming Apotex Inc. v. Merck & Co. (2010), 363 F.T.R. 137 (Eng.), 82 C.P.R. (4th) 85, 2010 FC 287, 2010 CarswellNat 561, 2010 CF 287, 2010 CarswellNat 2627 (F.C.) Counsel: Patrick Kierans, Brian Daley, for Appellant Harry Radomski, Kenneth W. Crofoot, Jerry Topolski, for Respondent Subject: Intellectual Property; Public; Civil Practice and Procedure Intellectual property --- Patents Patent legislation General principles Defendant M Co. held rights to patented drug Plaintiff A Inc. tried to enter market with generic version of drug and applied to Minister of Health for Notice of Compliance ("NOC") M Co. filed successful application to prohibit minister from issuing NOC A Inc. unsuccessfully appealed to Court of Appeal A Inc.'s appeal to Supreme Court of Canada succeeded and prohibition order was set aside on July 9, 1998 Patented Medicines (Notice of Compliance) Regulations ("Regulations") were amended four months before Supreme Court of Canada decision Amendments provided that company that succeeded in obtaining prohibition order that was later reversed on appeal had to compensate company that was prevented from getting onto market for any loss suffered from date NOC would otherwise have been granted Transitional rule in Regulations stated that amended remedies applied to applications that were pending at time new regulations came into force A Inc. successfully brought action for compensation under transitional provisions of Regulations M Co. appealed Appeal dismissed Federal Court correctly determined that transitional provisions of 1998 Regulations applied in case and that Federal Court did not commit any reviewable error in determination of period of damages for which M Co. was liable The 1998 Regulations could not be said to be retroactive or retrospective or interfere with any vested rights of M Co. Accordingly, Federal Court judge was correct in concluding that 1998 Regu-
lations were authorized by s. 55.2(4) of Patent Act, were valid, and applied in case Moreover, there was sufficient evidence upon which Federal Court could have made factual findings it did, and those findings were not susceptible to review in court Federal Court correctly pointed out that it only needed to consider whether A Inc. could have entered market with material obtained from N Ltd. under its compulsory licence As N Ltd. held compulsory licence for drug, it was entitled to source what would generally be considered infringing supplies of drug, and to sell it in Canada, without infringing M Co.'s rights under patent. Statutes --- Retroactive and retrospective operation Pending actions Appeals Defendant M Co. held rights to patented drug Plaintiff A Inc. tried to enter market with generic version of drug and applied to Minister of Health for Notice of Compliance ("NOC") M Co. filed successful application to prohibit minister from issuing NOC A Inc. unsuccessfully appealed to Court of Appeal A Inc.'s appeal to Supreme Court of Canada succeeded and prohibition order was set aside on July 9, 1998 Patented Medicines (Notice of Compliance) Regulations ("Regulations") were amended four months before Supreme Court of Canada decision Amendments provided that company that succeeded in obtaining prohibition order that was later reversed on appeal had to compensate company that was prevented from getting onto market for any loss suffered from date NOC would otherwise have been granted Transitional rule in Regulations stated that amended remedies applied to applications that were pending at time new regulations came into force A Inc. successfully brought action for compensation under transitional provisions of Regulations M Co. appealed Appeal dismissed Federal Court correctly determined that transitional provisions of 1998 Regulations applied in case and that Federal Court did not commit any reviewable error in determination of period of damages for which M Co. was liable The 1998 Regulations could not be said to be retroactive or retrospective or interfere with any vested rights of M Co. Accordingly, Federal Court judge was correct in concluding that 1998 Regulations were authorized by s. 55.2(4) of Patent Act, were valid, and applied in case Moreover, there was sufficient evidence upon which Federal Court could have made factual findings it did, and those findings were not susceptible to review in court Federal Court correctly pointed out that it only needed to consider whether A Inc. could have entered market with material obtained from N Ltd. under its compulsory licence As N Ltd. held compulsory licence for drug, it was entitled to source what would generally be considered infringing supplies of drug, and to sell it in Canada, without infringing M Co.'s rights under patent. Cases considered by David Stratas J.A.: Apotex Inc. v. Canada (Attorney General) (1993), 1993 CarswellNat 820, 1993 CarswellNat 1357, (sub nom. Apotex Inc. v. Merck & Co.) 69 F.T.R. 152 (note), 51 C.P.R. (3d) 339, 162 N.R. 177, [1994] 1 F.C. 742, 18 Admin. L.R. (2d) 122 (Fed. C.A.) referred to Apotex Inc. v. Eli Lilly & Co. (2004), 2004 CarswellNat 5193, 2004 CAF 358, 2004 FCA 358, 2004 CarswellNat 3813, 36 C.P.R. (4th) 111, 328 N.R. 87, [2005] 2 F.C.R. 290 (F.C.A.) referred to Apotex Inc. v. Merck & Co. (2009), 2009 FCA 187, 2009 CarswellNat 1672, 76 C.P.R. (4th) 1, 2009 CAF 187, 2009 CarswellNat 5058, [2010] 2 F.C.R. 389, 391 N.R. 336 (F.C.A.) referred to Apotex Inc. v. Syntex Pharmaceuticals International Ltd. (2009), 2009 CarswellNat 5486, 352 F.T.R. 124 (Eng.), 2009 CarswellNat 2551, 2009 FC 494, 2009 CF 494, 76 C.P.R. (4th) 325 (F.C.) followed Apotex Inc. v. Syntex Pharmaceuticals International Ltd. (2010), 84 C.P.R. (4th) 409, 2010 CarswellNat 3038, 2010 CAF 155, 404 N.R. 371, 2010 FCA 155, 2010 CarswellNat 1623 (F.C.A.) referred to
Assoc. internationale des commis de dtail, local 486 c. Qubec (Commission des relations du travail) (1971), 1971 CarswellQue 43, [1971] S.C.R. 1043, 1971 CarswellQue 43F (S.C.C.) referred to Bristol-Myers Squibb Co. v. Canada (Attorney General) (2005), 2005 SCC 26, 2005 CarswellNat 1261, 2005 CarswellNat 1262, 253 D.L.R. (4th) 1, [2005] 1 S.C.R. 533, 39 C.P.R. (4th) 449, 334 N.R. 55 (S.C.C.) referred to British Columbia v. Imperial Tobacco Canada Ltd. (2005), 45 B.C.L.R. (4th) 1, [2005] 2 S.C.R. 473, 134 C.R.R. (2d) 46, 2005 SCC 49, 2005 CarswellBC 2207, 2005 CarswellBC 2208, 257 D.L.R. (4th) 193, [2006] 1 W.W.R. 201, 218 B.C.A.C. 1, 359 W.A.C. 1, 339 N.R. 129, 27 C.P.C. (6th) 13 (S.C.C.) considered Danyluk v. Ainsworth Technologies Inc. (2001), 54 O.R. (3d) 214 (headnote only), 201 D.L.R. (4th) 193, 10 C.C.E.L. (3d) 1, 2001 C.L.L.C. 210-033, 272 N.R. 1, 149 O.A.C. 1, 7 C.P.C. (5th) 199, 34 Admin. L.R. (3d) 163, 2001 CarswellOnt 2434, 2001 CarswellOnt 2435, 2001 SCC 44, [2001] 2 S.C.R. 460 (S.C.C.) referred to Eli Lilly & Co. v. Novopharm Ltd. (1998), 227 N.R. 201, 152 F.T.R. 160 (note), 1998 CarswellNat 1061, 1998 CarswellNat 1062, 161 D.L.R. (4th) 1, [1998] 2 S.C.R. 129, 80 C.P.R. (3d) 321 (S.C.C.) considered piciers unis Mtro-Richelieu inc., division "Econogros" c. Collin (2004), (sub nom. piciers Unis MtroRichelieu Inc. v. Collin) 326 N.R. 89 (Eng.), (sub nom. piciers Unis Mtro-Richelieu Inc. v. Collin) 326 N.R. 89 (Fr.), 2004 SCC 59, 2004 CarswellQue 2400, 2004 CarswellQue 2401, 244 D.L.R. (4th) 1, [2004] 3 S.C.R. 257 (S.C.C.) considered Gustavson Drilling (1964) Ltd. v. Minister of National Revenue (1975), 1975 CarswellNat 330, [1976] C.T.C. 1, 75 D.T.C. 5451, 66 D.L.R. (3d) 449, 7 N.R. 401, 1975 CarswellNat 376, [1977] 1 S.C.R. 271 (S.C.C.) referred to Landgraf v. USI Film Products (1994), 511 U.S. 244 (U.S.S.C.) considered Merck Frosst Canada Inc. v. Canada (Minister of National Health & Welfare) (1994), 55 C.P.R. (3d) 302, 1994 CarswellNat 1874, 169 N.R. 342 (Fed. C.A.) considered Merck Frosst Canada Inc. v. Canada (Minister of National Health & Welfare) (1996), 114 F.T.R. 240 (note), 197 N.R. 294, 67 C.P.R. (3d) 455, 1996 CarswellNat 573 (Fed. C.A.) referred to Merck Frosst Canada Inc. v. Canada (Minister of National Health & Welfare) (1998), 227 N.R. 299, 152 F.T.R. 111 (note), 1998 CarswellNat 1059, 1998 CarswellNat 1060, 161 D.L.R. (4th) 47, [1998] 2 S.C.R. 193, 80 C.P.R. (3d) 368 (S.C.C.) followed Parklane Private Hospital Ltd. v. Vancouver (City) (1974), [1974] 6 W.W.R. 72, 2 N.R. 305, [1975] 2 S.C.R. 47, 1974 CarswellBC 191, 47 D.L.R. (3d) 57, 1974 CarswellBC 350 (S.C.C.) referred to Reference re Canada Assistance Plan (Canada) (1991), (sub nom. Reference re Canada Assistance Plan (British Columbia)) 83 D.L.R. (4th) 297, 1991 CarswellBC 920, 1991 CarswellBC 168, 58 B.C.L.R. (2d) 1, 1 Admin. L.R. (2d) 1, (sub nom. Reference re Constitutional Question Act (British Columbia)) 1 B.C.A.C. 241, 1 W.A.C. 241, (sub nom. Reference re Constitutional Question Act (British Columbia)) 127 N.R. 161,
[1991] 6 W.W.R. 1, (sub nom. Reference re Canada Assistance Plan (British Columbia)) [1991] 2 S.C.R. 525 (S.C.C.) referred to Sanofi-Aventis Canada Inc. v. Novopharm Ltd. (2011), 94 C.P.R. (4th) 110, 2011 FCA 149, 2011 CarswellNat 1441, 2011 CAF 149, 2011 CarswellNat 2487, 420 N.R. 115 (F.C.A.) referred to Smith v. Callander (1901), [1901] A.C. 297 (Scotland H.L.) referred to Thiessen v. Manitoba Public Insurance Corp. (1990), 66 D.L.R. (4th) 366, [1990] I.L.R. 1-2584, 63 Man. R. (2d) 8, 1990 CarswellMan 191, [1990] 2 W.W.R. 538, 41 C.C.L.I. 292 (Man. C.A.) distinguished Waxman v. Waxman (2004), 2004 CarswellOnt 1715, 44 B.L.R. (3d) 165, 186 O.A.C. 201 (Ont. C.A.) followed Westminster City Council v. Haywood (No.2) (1999), [2000] 2 All E.R. 634, [2000] I.C.R. 827, [2000] O.P.L.R. 175, 2000 97 L.S.G. 34, [2000] Pens. L.R. 235, [2000] B.L.G.R. 526 (Eng. Ch.) considered Statutes considered: Federal Courts Act, R.S.C. 1985, c. F-7 s. 52(b)(i) referred to Patent Act, R.S.C. 1985, c. P-4 Generally referred to s. 55.2(4) [en. 1993, c. 2, s. 4] considered Supreme Court Act, R.S.C. 1985, c. S-26 s. 45 considered s. 48 considered Regulations considered: Patent Act, R.S.C. 1985, c. P-4 Patented Medicines (Notice of Compliance) Regulations, SOR/93-133 Generally referred to s. 8 considered s. 8 [rep. & sub. SOR/98-166] considered s. 8(2) considered Patented Medicines (Notice of Compliance) Regulations, Regulations Amending the, SOR/98-166
Generally referred to s. 9 referred to s. 9(6) considered s. 10 referred to Authorities considered: Fisch, Jill E., Retroactivity and Legal Change: An Equilibrium Approach (1996-1997), 110 Harv. L. Rev 1055. Le Sueur, Andrew et al., Principles of Public Law (London: Cavendish Publishing Ltd., 1999).Raz, Joseph, The Rule of Law and its Virtue (1977), 93 LQR 195. Sampford, Charles et al., Retrospectivity and the Rule of Law (Oxford: Oxford University Press, 2006).Sullivan, Ruth, Sullivan on the Construction of Statutes 5th ed. (Markham: LexisNexis Canada, 2008). APPEAL by defendant from judgment reported at Apotex Inc. v. Merck & Co. (2010), 363 F.T.R. 137 (Eng.), 82 C.P.R. (4th) 85, 2010 FC 287, 2010 CarswellNat 561, 2010 CF 287, 2010 CarswellNat 2627 (F.C.), in which plaintiff successfully brought action for compensation under transitional provisions of Patented Medicines (Notice of Compliance) Regulations. David Stratas J.A.: 1 Merck Frosst Canada & Co. appeals from the judgment of the Federal Court (per Justice O'Reilly): 2010 FC 287 (F.C.). 2 The Federal Court ruled in favour of Apotex Inc's action against Merck under section 8 of the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133, as amended. The quantum of damages to be awarded to Merck is to be determined at a later hearing. 3 In the course of its reasons, the Federal Court ruled that the 1998 version of section 8 of the Regulations (SOR/93-133 as amended by SOR/98-166, sections 8, 9) (the "1998 Regulations") applied to this case, and not the 1993 version of section 8 of the Regulations (SOR/93-133) (the "1993 Regulations"). Merck appeals from that ruling. Merck also submits that the Federal Court erred in fact and law in concluding that Apotex suffered a loss as a result of Merck's prohibition application. 4 For the reasons set out below, I would dismiss Merck's appeal, with costs.
A. Background 5 Merck listed its Canadian Patent No. 1,178,961 ("'961 Patent") concerning its norfloxacin tablets on the patent list under the 1993 Regulations. 6 In accordance with the Regulations, on April 19, 1993 Apotex served a Notice of Allegation asserting that it would not infringe the '961 Patent. Specifically, it asserted that its norfloxacin, known as Apo-Norfloxacin, would be acquired from Novopharm Ltd. under a compulsory licence. 7 In response to Apotex's Notice of Allegation, on May 31, 1993 Merck sought to prohibit the Minister from issuing a Notice of Compliance ("NOC") concerning Apo-Norflozacin until the expiry of the '961 Patent. Under
the Regulations, the Minister was prohibited from issuing a NOC at that time. 8 The Federal Court granted prohibition and this Court dismissed an appeal from the Federal Court. In all, prohibition lasted for approximately five years, until July 9, 1998. At that time, the Supreme Court of Canada allowed an appeal from this Court and dismissed Merck's application for prohibition: Merck Frosst Canada Inc. v. Canada (Minister of National Health & Welfare), [1998] 2 S.C.R. 193 (S.C.C.). 9 After the Supreme Court's decision, Apotex received its NOC and began to market Apo-Norfloxacin.
10 Merck's application for prohibition prevented Apotex from marketing Apo-Norfloxacin for over five years. Relying on section 8 of the Regulations, Apotex sued Merck for damages. The Federal Court awarded Apotex damages. Its reasons for doing so shall be explored below. 11 A key issue before the Federal Court was which version of section 8 applied to govern the action. The Regulations came into force in 1993. An amendment to the Regulations came into force on March 11, 1998. The Federal Court found that section 8 of the 1998 Regulations applied, and not section 8 of the 1993 Regulations. 12 Section 8 of the 1993 Regulations provides as follows: 8. (1) The first person is liable to the second person for all damage suffered by the second person where, because of the application of paragraph 7(1)(e), the Minister delays issuing a notice of compliance beyond the expiration of all patents that are the subject of an order pursuant to subsection 6(1). (2) The court may make such order for relief by way of damages or profits as the circumstances require in respect of any damage referred to in subsection (1). 8. (1) La premire personne est responsable envers la seconde personne du tout prjudice subi par cette dernire lorsque, en application de l'alina 7(1)e), le ministre reporte la dlivrance de l'avis de conformit au-del de la date d'expiration de tous les brevets viss par une ordonnance rendu aux termes du paragraphe 6(1). (2) Le tribunal peut rendre toute ordonnance de redressement par voie de dommages-intrts ou de profits que les circonstances exigent l'gard de tout prjudice subi du fait de l'application du paragraphe (1). 13 Section 8 of the 1998 Regulations provides as follows: 8. (1) If an application made under subsection 6(1) is withdrawn or discontinued by the first person or is dismissed by the court hearing the application or if an order preventing the Minister from issuing a notice of compliance, made pursuant to that subsection, is reversed on appeal, the first person is liable to the second person for any loss suffered during the period (a) beginning on the date, as certified by the Minister, on which a notice of compliance would have been issued in the absence of these Regulations, unless the court is satisfied on the evidence that another date is more appropriate, and (b) ending on the date of the withdrawal, the discontinuance, the dismissal or the reversal.
(2) A second person may, by action against a first person, apply to the court for an order requiring the first person to compensate the second person for the loss referred to in subsection (1). (3) The court may make an order under this section without regard to whether the first person has commenced an action for the infringement of a patent that is the subject matter of the application. (4) The court may make such order for relief by way of damages or profits as the circumstances require in respect of any loss referred to in subsection (1). (5) In assessing the amount of compensation the court shall take into account all matters that it considers relevant to the assessment of the amount, including any conduct of the first or second person which contributed to delay the disposition of the application under subsection 6(1). 8. (1) Si la demande prsente aux termes du paragraphe 6(1) est retire ou fait l'objet d'un dsistement par la premire personne ou est rejete par le tribunal qui en est saisi, ou si l'ordonnance interdisant au ministre de dlivrer un avis de conformit, rendue aux termes de ce paragraphe, est annule lors d'un appel, la premire personne est responsable envers la seconde personne de toute perte subie au cours de la priode: a) dbutant la date, atteste par le ministre, laquelle un avis de conformit aurait t dlivr en l'absence du prsent rglement, sauf si le tribunal estime d'aprs la preuve qu'une autre date est plus approprie; b) se terminant la date du retrait, du dsistement ou du rejet de la demande ou de l'annulation de l'ordonnance. (2) La seconde personne peut, par voie d'action contre la premire personne, demander au tribunal de rendre une ordonnance enjoignant cette dernire de lui verser une indemnit pour la perte vise au paragraphe (1). (3) Le tribunal peut rendre une ordonnance aux termes du prsent article sans tenir compte du fait que la premire personne a institu ou non une action pour contrefaon du brevet vis par la demande. (4) Le tribunal peut rendre l'ordonnance qu'il juge indique pour accorder rparation par recouvrement de dommages-intrts ou de profits l'gard de la perte vise au paragraphe (1). (5) Pour dterminer le montant de l'indemnit accorder, le tribunal tient compte des facteurs qu'il juge pertinents cette fin, y compris, le cas chant, la conduite de la premire personne ou de la seconde personne qui a contribu retarder le rglement de la demande vise au paragraphe 6(1). B. Which version of the Regulations applies in this case? 14 The Federal Court noted the existence of a transitional provision for the 1998 Regulations, namely subsection 9(6) of the Regulations amending the Patented Medicines (Notice of Compliance) Regulations, SOR/ 98-166 (the "transitional provision"). This transitional provision states that "section 8 of the [1998] Regulations...applies to an application pending on the coming into force of these [1998] Regulations." The 1998 Regulations came into force on March 11, 1998: Regulations amending the Patented Medicines (Notice of Compli-
ance) Regulations, section 10. 15 The Federal Court noted that Merck's prohibition application was "pending" on March 11, 1998. On March 11, 1998, the Supreme Court was considering the submissions that had been made to it. As mentioned above, four months later, on July 9, 1998, the Supreme Court released its decision. Only at that point was the matter no longer pending. 16 In the course of finding that Merck's prohibition application was still pending, the Federal Court relied upon a number of authorities, including Apotex Inc. v. Syntex Pharmaceuticals International Ltd., 2009 FC 494 (F.C.). In that case, Justice Hughes found that "a judgment is final once it has been determined and issued by the...Court" and, if an appeal is taken, is "not...final until all appeals have disposed of the matter" (at paragraph 39). 17 I agree with the result reached by the Federal Court. Merck's prohibition application was pending when the 1998 Regulations came into force. I also agree with the Federal Court that the correct test for determining whether an application is "pending" is whether the application remains alive either at first instance, or on appeal. 18 In this regard, I note that this Court dismissed an appeal from the main case that the Federal Court relied upon, Justice Hughes' decision in Apotex Inc. v. Syntex Pharmaceuticals International Ltd., supra, and this Court largely agreed with Justice Hughes' reasoning on this point: 2010 FCA 155 (F.C.A.). This Court held that "pending" means a "proceeding that is not yet finished" (at paragraph 28). It is evident that Merck's prohibition application was not yet finished as of March 11, 1998. It only finished on the date of the Supreme Court's judgment, on July 9, 1998. 19 Merck submits that all that was pending before the Supreme Court on March 11, 1998 was an "appeal," not an "application." It says that the transitional provision, read strictly, only refers to an "application" that is "pending." 20 I reject this submission. In a very real sense, the application was pending before the Supreme Court. The Supreme Court had the power not just to grant the appeal but also to dismiss Merck's application. 21 The Supreme Court Act, R.S.C. 1985, c. S-26 governs proceedings before the Supreme Court and sets out what it may or may not do in an appeal before it. Section 45 of that Act provides that, among other things, it "may...give the judgment...that the court whose decision is appealed against [i.e., this Court] should have given or awarded." This Court could have given "the judgment...that the Trial Division should have given or awarded": Federal Court Act, R.S.C. 1985, c. F-7, as amended, paragraph 52(b)(i) (as it existed as of March 11, 1998). Therefore, the Supreme Court also had the power to give "the judgment...that the Trial Division should have given or awarded." And it did just that: see its judgment, described at paragraph 37 of its reasons. It dismissed Merck's application. 22 The Supreme Court even had the power to amend Merck's Notice of Application for prohibition, had it found it necessary to do so: Supreme Court Act, section 48. That section allows the Supreme Court itself to amend the Notice of Application, or to amend it in response to an application made by any of the parties before it. From this, I would conclude that Merck's application was most definitely "pending" before the Supreme Court on March 11, 1998, even to the point where the originating document for that application, the Notice of Application, could have been amended by the Supreme Court.
23 In support of this conclusion, I also note, as did the Federal Court (at paragraph 27), that the transitional provision is broader in its phrasing than it might have been. The transitional provision merely refers to an "application pending" when the 1998 Regulations come into force. It does not refer to an "application pending before the Federal Court" or to an "application pending before the court hearing the application." 24 For the foregoing reasons, I conclude that Merck's application for prohibition was "pending" when the 1998 Regulations came into force. Therefore, by operation of the transitional provision in the 1998 Regulations, the 1998 Regulations apply in this case. C. Are the 1998 Regulations invalid because they cause retroactive or retrospective effects, or interfere with vested rights, without authorization in the Patent Act? 25 Despite the above, Merck nevertheless submits that the 1993 Regulations apply. It says that the 1998 Regulations are invalid and, thus, must be disregarded by this Court. 26 It urges this result upon us because the transitional provision, as interpreted above, means that the 1998 Regulations have retroactive or retrospective effects and interfere with vested rights. Merck notes that the Patent Act does not authorize the making of regulations that have any of those effects or interfere with vested rights. In support of its submission, Merck points to the enabling provision for the 1998 Regulations, subsection 55.2(4) of the Patent Act. 27 Subsection 55.2(4) of the Patent Act provides as follows: 55.2. (4) The Governor in Council may make such regulations as the Governor in Council considers necessary for preventing the infringement of a patent by any person who makes, constructs, uses or sells a patented invention in accordance with subsection (1) or (2) including, without limiting the generality of the foregoing, regulations (a) respecting the conditions that must be fulfilled before a notice, certificate, permit or other document concerning any product to which a patent may relate may be issued to a patentee or other person under any Act of Parliament that regulates the manufacture, construction, use or sale of that product, in addition to any conditions provided for by or under that Act; (b) respecting the earliest date on which a notice, certificate, permit or other document referred to in paragraph (a) that is issued or to be issued to a person other than the patentee may take effect and respecting the manner in which that date is to be determined; (c) governing the resolution of disputes between a patentee or former patentee and any person who applies for a notice, certificate, permit or other document referred to in paragraph (a) as to the date on which that notice, certificate, permit or other document may be issued or take effect; (d) conferring rights of action in any court of competent jurisdiction with respect to any disputes referred to in paragraph (c) and respecting the remedies that may be sought in the court, the procedure of the court in the matter and the decisions and orders it may make; and (e) generally governing the issue of a notice, certificate, permit or other document referred to in paragraph (a) in circumstances where the issue of that notice, certificate, permit or other document might result directly or indirectly in the infringement of a patent.
55.2. (4) Afin d'empcher la contrefaon d'un brevet d'invention par l'utilisateur, le fabricant, le constructeur ou le vendeur d'une invention brevete au sens du paragraphe (1) ou (2) le gouverneur en conseil peut prendre des rglements, notamment: a) fixant des conditions complmentaires ncessaires la dlivrance, en vertu de lois fdrales rgissant l'exploitation, la fabrication, la construction ou la vente de produits sur lesquels porte un brevet, d'avis, de certificats, de permis ou de tout autre titre quiconque n'est pas le brevet; b) concernant la premire date, et la manire de la fixer, laquelle un titre vis l'alina a) peut tre dlivr quelqu'un qui n'est pas le brevet et laquelle elle peut prendre effet; c) concernant le rglement des litiges entre le brevet, ou l'ancien titulaire du brevet, et le demandeur d'un titre vis l'alina a), quant la date laquelle le titre en question peut tre dlivr ou prendre effet; d) confrant des droits d'action devant tout tribunal comptent concernant les litiges viss l'alina c), les conclusions qui peuvent tre recherches, la procdure devant ce tribunal et les dcisions qui peuvent tre rendues; e) sur toute autre mesure concernant la dlivrance d'un titre vis l'alina a) lorsque celle-ci peut avoir pour effet la contrefaon de brevet. 28 Merck submits that subsection 55.2(4) of the Patent Act does not authorize regulations that operate retroactively or retrospectively or that interfere with vested rights. 29 In light of the above, Merck submits that, to the extent that the transitional provision purports to give the 1998 Regulations retroactive or retrospective effect or interfere with vested rights, the transitional provision is ultra vires and, therefore, is of no force or effect. 30 Merck is correct that the making of retroactive or retrospective regulations or regulations that interfere with vested rights on substantive matters must be authorized by the regulations' enabling provisions: R. Sullivan, Sullivan on the Construction of Statutes, 5th ed. (Markham, Ont.: LexisNexis, 2008) at pages 670 and 727; Parklane Private Hospital Ltd. v. Vancouver (City) (1974), [1975] 2 S.C.R. 47 (S.C.C.) at page 60; Assoc. internationale des commis de dtail, local 486 c. Qubec (Commission des relations du travail), [1971] S.C.R. 1043 (S.C.C.) at page 1048. 31 Merck is also correct that subsection 55.2(4) of the Patent Act does not authorize the making of such regulations. The wording of subsection 55.2(4) is silent on the creation of regulations that have retroactive or retrospective effects or an interference with vested rights. Given its silence, subsection 55.2(4) must be interpreted as not authorizing such effects: Smith v. Callander, [1901] A.C. 297 (Scotland H.L.) at page 305. 32 Further, there is no basis for implying a power to make such regulations in subsection 55.2(4). This Court so found in Apotex Inc. v. Canada (Attorney General) (1993), [1994] 1 F.C. 742 (Fed. C.A.) at page 798. 33 Therefore, in assessing the merits of Merck's submission, only one question remains to be considered: do the 1998 Regulations have retrospective or retroactive effects or interfere with vested rights? 34 To answer this question, it is necessary to have in mind what is meant by retroactive or retrospective ef-
fects or interference with vested rights. In piciers unis Mtro-Richelieu inc., division "Econogros" c. Collin, 2004 SCC 59, [2004] 3 S.C.R. 257 (S.C.C.) at paragraph 46, the Supreme Court approved the following passage in E. A. Driedger, "Statutes: Retroactive Retrospective Reflections" (1978) 56 Can. Bar Rev. 264, at pages 268-69: A retroactive statute is one that operates as of a time prior to its enactment. A retrospective statute is one that operates for the future only. It is prospective, but it imposes new results in respect of a past event. A retroactive statute operates backwards. A retrospective statute operates forwards, but it looks backwards in that it attaches new consequences for the future to an event that took place before the statute was enacted. A retrospective statute changes the law from what it was; a retrospective statute changes the law from what it otherwise would be with respect to a prior event. [emphasis in original] 35 Merck submits that applying section 8 of the 1998 Regulations to it in this case would create retroactive or retrospective effects or interfere with its vested rights. It says that on May 31, 1993 it applied for an order of prohibition and received an automatic stay, knowing that there was a risk that it would be liable to Apotex for any damage suffered by it by reason of the Minister delaying issuance of an NOC. But it says that risk was defined and framed by the rules set out in section 8 of the 1993 Regulations, the provision that was in force at the time it applied for prohibition. In effect, Merck submits that on May 31, 1993 it acquired a vested right to the benefit and burden of the rules set out in section 8 of the 1993 Regulations. 36 Putting the submission somewhat differently and colloquially, Merck says that applying section 8 of the 1998 Regulations to it in effect "pulls the rug out from under it." Section 8 of the 1998 Regulations imposes upon it, long after it made its decision to apply for prohibition, a set of rules that is fundamentally different from the rules around which it planned its affairs. Thus, in its view, section 8 of the 1998 Regulations has a retrospective effect upon it. 37 Merck then submits that since subsection 55.2(4) of the Patent Act does not authorize the making of retrospective regulations, the transitional provision that makes section 8 of the 1998 Regulations apply to it is invalid. Accordingly, in its view, section 8 of the 1993 Regulations applies to it, not section 8 of the 1998 Regulations. 38 -I39 First, some of Merck's oral and written submissions seem to suggest that it had a vested right to the continuance of the law as it stood at the time it decided to apply for an order for prohibition. As a general proposition, this is not the law of Canada: Gustavson Drilling (1964) Ltd. v. Minister of National Revenue (1975), [1977] 1 S.C.R. 271 (S.C.C.) at page 282. No one has a vested right or an enforceable claim to the continuance of the substantive standards in laws, even in situations where expectations to that effect have been encouraged: Reference re Canada Assistance Plan (Canada), [1991] 2 S.C.R. 525 (S.C.C.). -II40 There is a rebuttable presumption of validity that applies in cases where regulations are alleged to exceed I reject this submission for a number of reasons.
the scope of the law-making power set out in the parent statute: see Sullivan, supra at page 458. In this case, this means that the burden is on Merck to demonstrate that the application of the 1998 Regulations creates retroactive or retrospective effects, or interferes with a vested right. As is evident from this section of my reasons, I find that Merck has not discharged that burden. -III41 Merck submits that this case is similar to Thiessen v. Manitoba Public Insurance Corp. (1990), 66 D.L.R. (4th) 366 (Man. C.A.). In that case, a regulation contained an express limit on damages, but the regulation was later repealed. The Manitoba Court of Appeal held that the defendant had a vested right in the limit on damages under the old regulation. Therefore, in its view, the new regulation, which purported to remove that limit, was retrospective. 42 Thiessen is different from the case at bar. When Merck decided to apply for prohibition, it knew that it was potentially subject to an action for damages. When Merck made that decision, section 8 of the 1993 Regulations did not give Merck any rights, such as an affirmative defence or liability cap, that were repealed by the 1998 Regulations. Thiessen is a case where, unlike this case, such a right a liability cap was repealed by later legislation. -IV43 Merck submits that section 8 of the 1998 Regulations greatly expanded liability for damages and created new rights for "second persons" such as Apotex. 44 It is not necessary in this case to define fully the content of section 8 of the 1998 Regulations. Suffice to say, Merck's submission in this case overshoots the mark. 45 Accompanying the 1998 Regulations was a Regulatory Impact Analysis Statement: Canada Gazette Part II, vol. 132, no. 7 at page 1056. It is appropriate to take into account this Statement as an aid to determining the meaning of the 1998 Regulations: Bristol-Myers Squibb Co. v. Canada (Attorney General), 2005 SCC 26 (S.C.C.) at paragraph 46, [2005] 1 S.C.R. 533 (S.C.C.); Apotex Inc. v. Merck & Co., 2009 FCA 187 (F.C.A.)at paragraph 47; Sanofi-Aventis Canada Inc. v. Novopharm Ltd., 2011 FCA 149 (F.C.A.) at paragraph 13, per Sharlow J.A. (dissenting but not on this point). That Statement declared: Specifying circumstances in which damages or costs can be awarded. A clearer indication is given to the court as to the circumstances in which damages could be awarded to a generic manufacturer to compensate for loss suffered by reason of delayed market entry of its drug, and the factors that may be taken into account in calculating damages. The court may also award costs to either a generic manufacturer or a patentee, including solicitor and client costs, as appropriate, consistent with Federal Court Rules. 46 This passage in the Regulatory Impact Analysis Statement suggests that the 1998 Regulations did not work a revolution in the substantive content of section 8 of the 1993 Regulations. Instead, it was aimed at providing a "clearer indication" of the circumstances in which damages could be awarded. 47 In this way, the 1998 Regulations, for the most part, made aspects of the section 8 of the 1993 Regulations clearer by declaring, with greater specificity, the bases of liability for damages. Legislation that largely declares the state of an earlier, uncertain law is not retrospective.
48 This is well-illustrated by a relatively recent decision of the English Chancery Division: Westminster City Council v. Haywood (No.2) (1999), [2000] 2 All E.R. 634 (Eng. Ch.). Before the court in that case were certain regulations and an "explanatory note" issued alongside the Regulations. The court found the "explanatory note" admissible for the purpose of determining the mischief that the regulations before it were meant to address. Similar to the Regulatory Impact Analysis Statement in this case, the "explanatory note" before the court in Westminster suggested that the purpose of the regulations was to "clarify the extent of the jurisdiction" of a pensions ombudsman. 49 In the course of its reasons, the court in Westminster stated that if the regulations simply clarified matters, they would be merely "declaratory." In its view, legislation that is merely declaratory of rights existing before is not retrospective: see paragraph 19. It turned out that, as a matter of interpretation, the regulation before the court did much more than simply clarify the state of the former law. Nevertheless, the point established by Westminster is clear: section 8 of the 1998 Regulations, as a largely clarifying provision or a provision that largely attempts to declare what the law has been, is not retroactive or retrospective, nor does it interfere with earlier vested rights. 50 Declaratory or clarifying legislation, which corrects defects in the earlier legislation, does not implicate the concerns associated with retrospective or retroactive legislation and may even bolster the known purposes of the earlier legislation: see C.J.G. Sampford et al., Retrospectivity and the Rule of Law (Oxford: Oxford University Press, 2006) at pages 233 and 266, and see also Jill E. Fitch, "Retroactivity and Legal Change: An Equilibrium Approach" (1996-1997) 110 Harv. L. Rev. at page 1088. Such declaratory or clarifying legislation is not evidence of a change of approach by legislators, but rather a desire to ensure that earlier laws "reflect the principles [legislators] had in mind and communicated when the law was passed": Sampford, Retrospectivity and the Rule of Law, supra at page 273. 51 It follows then that I agree with the Federal Court judge's conclusion at paragraph 26 of his reasons: ...[A]s the 1998 [Regulatory Impact Analysis Statement] describes, the purpose of the revised remedies provision was to clarify the liability of patent holders and not, as Merck suggests, to create an entirely new basis for it. It would not be unfair in that context to apply the amended provision to all cases that were in the system at that point and no particular reason to treat cases in which a prohibition order was under appeal differently from those at an earlier stage of litigation. -V52 As mentioned above, the task before us is to consider whether the 1998 Regulations have retrospective or retroactive effects or interfere with vested rights. In carrying out that task, we must keep front of mind the reasons why courts decline to enforce regulations that cause retrospective or retroactive effects or interfere with vested rights and that are not authorized by statute to do those things. 53 The concern of courts about unauthorized regulations that cause retrospective or retroactive effects or interfere with vested rights is founded upon aspects of the rule of law. "Citizens choose how to act in the belief that the state will impose the legal consequences determined by the legal text discoverable at that time and not on other texts which were not in existence at the time of the relevant action": Sampford et al., Retrospectivity and the Rule of Law, supra at page 98. It is unfair to change the rules later and catch those who planned their affairs under the former law: British Columbia v. Imperial Tobacco Canada Ltd., 2005 SCC 49 (S.C.C.) at paragraph 71, [2005] 2 S.C.R. 473 (S.C.C.); E. Edinger, "Retrospectivity in Law" (1995) 29 U.B.C. L. Rev. 5, at
page 13; Joseph Raz, "The Rule of Law and its Virtue" (1977), 93 L.Q.R. 195 at page 198; Andrew P. LeSueur, et al., Principles of Public Law, 2nd ed. (London: Cavendish Publishing Limited, 1999) at page 425. 54 In Imperial Tobacco, the Supreme Court held that retrospective or retroactive laws are not unconstitutional by that reason alone. However, the unfairness of such laws underlies the "rules of statutory interpretation that require the legislature to indicate clearly any desired retroactive or retrospective effects": Imperial Tobacco, at paragraph 71. Such rules ensure that the legislature has turned its mind to such effects and "determined that the benefits of retroactivity [or retrospectivity] outweigh the potential for disruption or unfairness": Landgraf v. USI Film Products, 511 U.S. 244 (U.S.S.C. 1994) at page 268, cited in Imperial Tobacco at paragraph 71 by the Supreme Court. 55 From this, it would be unfair and would trigger the concern about retroactive or retrospective laws if Merck planned its affairs in reasonable reliance upon a definite, concrete set of rules set out in section 8 of the 1993 Regulations, and then the 1998 Regulations purported to change those rules. If that were the case, one might conclude that the 1998 Regulations unfairly "pulled the rug out" from under Merck. But is that what happened here? 56 In my view, no. When Merck applied for prohibition and made itself potentially subject to an action for damages, it acquired for itself a "black box" of potential liability. I offer three reasons for that conclusion. 57 First, under subsection 8(2) of the 1993 Regulations, the Court had a broad discretion to make "such order for relief by way of damages or profits as the circumstances require." Evidently, the rules and bases for the calculation of damage under section 8 remained to be worked out through judicial clarification. When it brought its prohibition application, Merck would have reasonably expected that there would be future clarifications in the law, at least by courts interpreting the provision. 58 Second, Merck applied for prohibition on May 31, 1993, at an early time in the history of the 1993 Regulations. At that time, no significant cases interpreting section 8 of the 1993 Regulations had been decided. It is fair to assume, given the complexity of the wording of section 8 of the 1993 Regulations and the 1993 Regulations themselves, that any decision by Merck to launch an application for prohibition and accept the potential of section 8 liability on May 31, 1993 was pregnant with risk. At that time, Merck should have reasonably expected that there would be clarification in the law later, at least by courts interpreting the provision, if not by the Governor in Council through amending regulations. 59 Third, it is fair to say that section 8 of the 1993 Regulations is notorious in judicial circles for its obscurity of meaning. There are many judicial statements to that effect. 60 For those statements, one can start with the Federal Court judge in the case at bar. The Federal Court judge candidly stated (at paragraph 13) that the meaning of section 8 of the 1993 Regulations "eludes me." He described the section as "murky." In saying this, he cited Justice Hugessen's observation in this Court that section 8 of the 1993 Regulations is "particularly obscure in its meaning": Merck Frosst Canada Inc. v. Canada (Minister of National Health & Welfare) (1994), 55 C.P.R. (3d) 302 (Fed. C.A.) at page 316. In that case, Justice Hugessen also expressed relief that he did not have to interpret the section (at page 316). 61 There are more such statements. Recently, this Court agreed with Justice Hugessen's observation that section 8 is "particularly obscure in its meaning": Apotex Inc. v. Syntex Pharmaceuticals International Ltd., supra at paragraph 34. This Court added (at paragraph 34) that "[i]t may well not be possible to find an inter-
pretation [of section 8 of the 1993 Regulations] that resolves all the contingencies." In Apotex Inc. v. Syntex Pharmaceuticals International Ltd., supra, the Federal Court (per Justice Hughes) stated (at paragraph 59) that "Courts in the past have been fortunate enough to be able to avoid interpreting that section." Somewhat earlier, this Court considered that section 8 raised "difficult questions" of interpretation: in Apotex Inc. v. Eli Lilly & Co. , 2004 FCA 358 (F.C.A.) at paragraph 16. 62 I wholeheartedly and emphatically agree with all of these statements. To say the least, the full meaning of section 8 of the 1993 Regulations is enigmatic and puzzling. 63 Before us, the parties presented us with two competing interpretations of section 8 of the 1993 Regulations, each plausible and each possessing strengths, but each having certain unsatisfactory, irresolvable anomalies and difficulties. 64 I have examined the competing interpretations and have given them much consideration over a long period of time. Following the accepted method of statutory interpretation examining the plain words, viewing the plain words in the content of other provisions of the Act and Regulations, and considering the purpose of the Act and Regulations I conclude that reaching a satisfactory conclusion on the definitive meaning of all aspects of section 8 of the 1993 Regulations is a formidable task. 65 It is true that some individual cases have reached conclusions about limited aspects of section 8 of the 1993 Regulations based on the specific facts before them. But having attempted to examine and consider in depth all aspects of section 8 of the 1993 Regulations, only one thing is clear to me. Anyone looking at this provision as Merck undoubtedly did before it applied for prohibition on May 31, 1993 would conclude that those applying for prohibition under the 1993 Regulations were acquiring for themselves a "black box" of potential liability under section 8. 66 In such an unusual circumstance, it cannot be said that the 1998 Regulations "pulled the rug out" from under Merck. Instead, when Merck brought its application for prohibition on May 31, 1993, the legal environment was fundamentally uncertain. Merck knew or should have known on May 31, 1993 that clarifications of section 8 of the 1993 Regulations, whether at the behest of the courts or by way of regulatory amendment, were entirely possible and perhaps even quite likely while its prohibition application was pending before the courts. 67 It follows that I disagree with Merck's submission, at paragraph 68 of its memorandum of fact and law, that when it "brought its application for a prohibition order under the 1993 Regulations, its legal situation became individualized, tangible and concrete" and that its legal situation became "sufficiently constituted to give rise to a vested right." Instead, when it brought its application, Merck's legal situation was fundamentally uncertain. When it brought its application, Merck acquired for itself a "black box" of potential liability. 68 Therefore, I conclude that the 1998 Regulations cannot be said to be retroactive or retrospective or interfere with any vested rights of Merck. Accordingly, I agree with the Federal Court judge that the 1998 Regulations are authorized by subsection 55.2(4) of the Patent Act, are valid, and apply in this case. D. Did the Federal Court err in fact and in law in concluding that Apotex suffered loss as a result of Merck's prohibition application? 69 The Federal Court found that Apotex suffered loss as a result of Merck's prohibition application. Apotex established, to the satisfaction of the Federal Court, that it was prevented from getting into the norfloxacin mar-
ket because of Merck's prohibition application. In establishing this, Apotex satisfied the Federal Court that, on the balance of probabilities, it would have had access to an available supply of non-infringing norfloxacin. 70 The Federal Court found (at paragraphs 38 and 39) that it only needed to examine whether Apotex could have entered the market with material obtained from Novopharm under Novopharm's compulsory licence with Merck and under a reciprocal agreement between Apotex and Novopharm to supply licensed material on request. 71 The Federal Court noted (at paragraph 39) that this Court concluded that this supply agreement amounted to an improper sublicense (see (1996), 67 C.P.R. (3d) 455 (Fed. C.A.)) but the Supreme Court reversed that finding in its July 9, 1998 decision in Merck Frosst Canada Inc., supra. Therefore, the Federal Court concluded (at paragraph 39) that "the supply agreement created a means by which Apotex could, at least in theory, enter the norfloxacin market without infringing Merck's patent rights." 72 The Federal Court also noted obstacles in the way of Apotex entering the norfloxacin market with norfloxacin supplied by Novopharm (at paragraphs 40-57). Examining all of the evidence, the Federal Court concluded that the obstacles "would have slowed, not stopped, Apotex from getting on the market." The Federal Court concluded (at paragraph 58): However, taking account of the problems with supply from Delmar, and with the supply agreement with Novopharm, I conclude that Apotex would not have been able to get on the market until one full year after it would have received its NOC, that is, as of June 10, 1994. 73 Merck submits that the Federal Court erred in two main respects.
74 First, Merck submits that the Federal Court had no evidentiary basis for finding (in paragraph 58 of its reasons) that Apotex would have been able to get Apo-Norfloxacin on the market by June 10, 1994. It adds that the trial judge committed a palpable and overriding error of fact in concluding that Apotex could have obtained norfloxacin from Novopharm at any time before July 9, 1998. 75 In assessing Merck's submission, it must be remembered that the Federal Court had to assess Apotex's damages on the basis of a hypothetical question: what would have happened had Merck not brought an application for prohibition? On this question, the Federal Court heard evidence from five witnesses on what would have happened under that hypothetical situation. In order to assess what would have happened under that hypothetical situation, the Federal Court had to consider the evidence in a holistic way. As both parties accept, the standard of review for such a factual determination is that of palpable and overriding error. 76 The requirement that factual determinations stand on appeal unless palpable and overriding error makes considerable sense, especially in a complex case such as this. As the Court of Appeal for Ontario stated in Waxman v. Waxman (2004), 186 O.A.C. 201 (Ont. C.A.) at paragraphs 294-295 and 336, in words apposite to this case: In a case as...factually complex as this case, appellate judges are very much like the blind men in the parable of the blind men and the elephant. Counsel invite the court to carefully examine isolated parts of the evidence, but the court cannot possibly see and comprehend the whole of the narrative. Like the inapt comparisons to the whole of the elephant made by the blind men who felt only one small part of the beast, appellate fact-finding is not likely to reflect an accurate appreciate of the entirety of the narrative. This case demon-
strates that the "palpable and overriding" standard of review is a realistic reflection of the limitations and pitfalls inherent in appellate fact-finding. Despite the benefit of detailed reasons for judgment, lengthy and effective argument by counsel, and many hours of study, we are entirely satisfied that we cannot possibly know and understand this trial record in the way that the trial judge came to know and understand it. [His] factual determinations are much more likely to be accurate than any that we might make. ..... Many of the "no evidence" submissions made by the appellants are, on closer examination, arguments that there was not enough evidence to support findings of fact made by the trial judge. The sufficiency of evidence is not open to review. 77 In my view, there was sufficient evidence upon which the Federal Court could have made the factual findings it did, and those findings are not susceptible to review in this Court. 78 Merck concentrates part of its attack on an alternative way in which Apotex said it could have obtained norfloxacin, namely from a company in which it was a minority shareholder, Delmar Chemicals Inc. Merck says that Delmar was unable to manufacture sufficiently pure norfloxacin using a non-infringing process, and that there was no evidence to suggest that the use of the patented process would have avoided impurity problems. Merck has not pointed this Court to any evidence of impurity problems in Delmar's manufacture of norfloxacin. Further, the Federal Court had evidence before it upon which it could conclude (at paragraph 43) that in the hypothetical world where Merck had not brought an application for prohibition, Delmar would have been ready in June 1993 to start providing Apotex with norfloxacin by way of Apotex's supply agreement with Novopharm. 79 In any event, the Federal Court correctly pointed out (at paragraph 37) that it only needed to consider whether Apotex could have entered the market with material obtained from Novopharm under its compulsory licence. As Novopharm held a compulsory licence for norfloxacin, it was entitled to source what would generally be considered "infringing" supplies of norfloxacin, and to sell it in Canada, without infringing Merck's rights under the '961 Patent. As summarized above, the Federal Court, based on the evidence before it regarding what would likely happen in what I have called the "hypothetical world," reached conclusions regarding how Novopharm would have behaved had Apotex asked it in 1993 to supply norfloxacin. I cannot say that the Federal Court's conclusions are unsupported by the evidence. 80 As for the Federal Court's selection of June 10, 1994 as the relevant date, I consider it to be supported by the Federal Court's holistic assessment of the evidence regarding what might have happened in the hypothetical world where Merck had not brought its application for prohibition. Similarly, I find that there was some evidence upon which the Federal Court could conclude that Apotex could have obtained norfloxacin from Novopharm at the relevant time. This evidence is well-summarized at paragraphs 65-96 of Apotex's memorandum of fact and law. 81 Merck offers a second submission to support its view that the Federal Court erred in concluding that Apotex suffered loss as a result of Merck's prohibition application. Merck says that Apotex could not have acquired norfloxacin from Novopharm under its supply agreement based on manufacture by Delmar or any other third party manufacturer. It says that would have constituted an illegal sublicence because the compulsory licence did not include "have-made" rights.
82 In my view, this submission is barred by the doctrines of res judicata and issue estoppel: Danyluk v. Ainsworth Technologies Inc., [2001] 2 S.C.R. 460 (S.C.C.). The Supreme Court disposed of this submission in Merck Frosst Canada Inc. v. Canada (Minister of National Health & Welfare), [1998] 2 S.C.R. 193 (S.C.C.) and the case argued with it, Eli Lilly & Co. v. Novopharm Ltd., [1998] 2 S.C.R. 129 (S.C.C.). As mentioned above, the Federal Court also so found (see paragraph 39 of its reasons). 83 It is evident that the Supreme Court determined that the supply agreement between Apotex and Novopharm was not an illegal sublicence and that Apotex could arrange for the drug to be manufactured by a supplier of its choice, direct Novopharm to acquire the drug from that supplier, and then require Novopharm to sell it the drug, for it to resell under its NOC. This is seen at paragraph 78 of the Eli Lilly decision: Pursuant to the terms of the contract as it stands, Apotex is simply permitted to direct Novopharm to the third party manufacturer which it favours and with whom it has negotiated terms, which would then oblige Novopharm to deal with that manufacturer and acquire the patented medicine on the terms negotiated. Despite this considerable degree of control by Apotex, it remains the case that separate entities are involved, that Apotex is in no way ultimately responsible for the supply of goods that Novopharm will eventually sell to it, and that a legitimate and de facto transfer of property must occur between Novopharm and the third party before any propriety rights can be acquired by Apotex. 84 The chain of contracting ultimately used by Apotex and Novopharm was expressly contemplated by the Supreme Court and expressly found not to be a breach of the compulsory licence or an illegal sublicence: see also Merck Frosst, supra at paragraph 20. 85 In paragraph 106 of its memorandum of fact and law, Merck suggests that Apotex's designated supplier would need "the power of representation and the power to affect the legal position of the principal [Novopharm]" in order to be Novopharm's agent for the purpose of manufacturing the norfloxacin that Novopharm was licensed to manufacture. There is no indication in Merck Frosst or Eli Lilly, both supra, that that is so. 86 I would add that in both Merck Frosst and Eli Lilly, Apotex argued these points in its written submissions and was rebutted by written submissions made by Eli Lilly. In Eli Lilly at paragraph 91, the Supreme Court sided with Apotex, deciding that Novopharm was entitled to "manufacture the medicine itself or through Canadian agents." The Supreme Court in Eli Lilly rejected the very submissions that Merck makes to this Court and has ruled that the chain of contracting in this case was permissible. E. Proposed Disposition 87 For the foregoing reasons, I conclude that the Federal Court correctly determined that section 8 of the 1998 Regulations applies in this case and that the Federal Court did not commit any reviewable error in its determination of the period of damages for which Merck is liable. 88 Therefore, I would dismiss the appeal, with costs.
J. Edgar Sexton J.A.: I agree
Carolyn Layden-Stevenson J.A.: I agree Appeal dismissed. END OF DOCUMENT
TAB 7
Page 1 1989 CarswellNat 586, 38 Admin. L.R. 1, 97 N.R. 15, 60 D.L.R. (4th) 682, [1989] 1 S.C.R. 1722, J.E. 89-994, EYB 1989-67230
1989 CarswellNat 586, 38 Admin. L.R. 1, 97 N.R. 15, 60 D.L.R. (4th) 682, [1989] 1 S.C.R. 1722, J.E. 89-994, EYB 1989-67230 Bell Canada v. Canadian Radio-Television & Telecommunications Commission CDN. RADIO-TELEVISION & TELECOMMUNICATIONS COMM. v. BELL CAN. et al. Supreme Court of Canada Lamer, Wilson, La Forest, L'Heureux-Dub, Sopinka, Gonthier, and Cory JJ. Heard: Febuary 21, 1989 Judgment: June 22, 1989 Docket: Doc. No. 20525 Thomson Reuters Canada Limited or its Licensors (excluding individual court documents). All rights reserved. Counsel: Raynold Langlois, Q.C. , Greg Van Koughnett and Luc Hupp , for appellant. Grald Tremblay, Q.C. , and Michel Racicot, for respondent. Graham Garton , for Attorney General of Canada. Janet Yale , for Consumers' Association of Canada. Kenneth Engelhart , for Canadian Business Telecommunications Alliance. Michel Ryan , for C.N.C.P. Telecommunications Andrew Roman and Robert Horwood, for National Anti-Poverty Organization. Subject: Public Communications Law --- Regulatory commissions C.R.T.C. (Canadian Radio-Television and Telecommunications Commission) Powers and duties Appeals Statutory appeal on questions of law and jurisdiction No scope for curial deference towards agency's decisions Specialization of duties requiring respect for decision on matters within expertise Power of C.R.T.C. to revisit interim rate orders being question of jurisdiction not within C.R.T.C.'s expertise Method of rectifying unjust or unreasonable rates within realm of C.R.T.C.'s expertise. Jurisdiction C.R.T.C. making order for one-time credit to rectify excessive revenues found to have been
earned by Bell Can. as result of interim orders C.R.T.C. having authority to revisit interim orders and to rectify adverse effects of such orders as part of final order Method of rectification for C.R.T.C. provided not unreasonable One-time credit for existing customers reasonable albeit not perfect compensation. In March 1984, BC applied to the C.R.T.C. for a general rate increase. Because of the time it was going to take to deal finally with that application resulting in allegedly severe prejudice to BC's fiscal situation, the C.R.T.C. responded favourably to its request for an interim rate increase. This was set at 2 per cent effective January 1, 1985. In the order allowing the interim rate increase, the C.R.T.C. indicated that it was subject to re-evaluation as part of any final order. Notwithstanding the concerns over profitability that had prompted the interim order, BC's financial situation improved dramatically thereafter. This prompted another interim order by the C.R.T.C. in 1985 which resulted in a roll back of BC's rates (also expressed to be interim) to those in place prior to the March 1984 application. Then, BC itself sought to withdraw its application for a general rate increase. In effect, the C.R.T.C. rejected this application in that it proceeded to a hearing into the financial situation of BC. The upshot of this was a finding that BC's revenues during 1985 and 1986 were $206 million more than were justified in terms of what was held to be an appropriate rate of return. As a result, the C.R.T.C. ordered that BC redistribute those excess revenues to certain classes of customer in the form of a one-time credit. Under the Railway Act , BC's tolls were subject to approval by the C.R.T.C. as well as revision from time to time. Section 340(1) required that such tolls be "just and reasonable". Subsection 5 of that section also conferred on the C.R.T.C. authority to make orders with respect to tolls "[i]n all other matters not expressly provided for" in the rest of the section. Under the National Transportation Act , s. 52 the C.R.T.C. was given authority to deal of its own motion with matters assigned to it under the Railway Act , while by s. 60(2) it was given power to make interim orders and reserve further directions for a subsequent hearing. Section 66 then clothed the C.R.T.C. with authority to review, rescind, change, alter or vary its orders and decisions. Finally, under s. 68(1), provision was made for an appeal with leave on law and jurisdiction from C.R.T.C. orders to the Federal Court of Appeal. BC appealed against the order and the Federal Court of Appeal (Hugesson J. dissenting) allowed the appeal and set aside the credit to customers ((1987), [1988] 1 F.C. 296 ). The C.R.T.C. then obtained leave to appeal to the Supreme Court of Canada. Held: The appeal was allowed. The order of the C.R.T.C. was reinstated. Where the relevant legislation created a right of appeal to a Court from the decision of an administrative tribunal, there was no place for curial deference to decisions of that tribunal associated with decisions of tribunals protected by privative or finality clauses. Moreover, while even here, the concept of specialization of duties indicated the need for some measure of deference to decisions of the C.R.T.C. within its area of expertise, that did not apply to issues of jurisdiction such as the scope of the authority of the C.R.T.C. to issue interim decisions. On such issues, the Court was entitled to simply disagree with the Tribunal. In contrast, however, on the issue of the choice of the most appropriate remedy from among those available to achieve just and reasonable rates, the C.R.T.C. was entitled to a measure of deference. This, rather than the interpretation of the Railway Act and the National Transportation Act , was what the C.R.T.C. had been established to do. The statutory scheme of the powers conferred on the C.R.T.C. indicated that its authority to make interim orders
was to be interpreted so as to facilitate its task of ensuring that telephone rates were always "just and reasonable". It was a necessary incident of the authority to regulate tolls and tariffs that the C.R.T.C. could regulate BC's level of revenues and its return on its equity. While the C.R.T.C.'s order of a one-time credit was not strictly retrospective in that it did not actually replace or substitute the rates that were charged during the interim period, nevertheless, it was retrospective in the sense that it was designed to remedy the excessive rates charged during that period. However, even accepting this characterization of the order, the C.R.T.C. had jurisdiction to make it. Indeed, the authority to review interim orders retrospectively was the key distinction between interim orders and final orders, given the authority of the C.R.T.C. to at any time review final orders prospectively. It was inherent in the nature of interim orders that they could, as here, be revised and modified in a retrospective manner by a final decision. This conclusion also followed from the fact that interim rate orders were not based on the same criteria as final orders. The intent of interim rate orders was not to afford a preliminary adjudication on the merits, but rather to relieve the applicant from the deleterious effects of lengthy proceedings. Such was the nature of the order made here. Moreover, throughout, the C.R.T.C. had indicated its intention as part of the final order to review the rates charged during the interim period. While, unlike other statutes, the power to review interim orders retrospectively was not set out expressly in the legislation, it clearly existed by virtue of necessary implication from the statutory scheme and purpose. To deny the C.R.T.C. this authority would be to sterilize its powers through an overly technical interpretation. More specifically, the whole thrust of the legislation was in the direction of ensuring that rates charged were at all times just and reasonable. To deny the C.R.T.C. the authority to undo unjust or unreasonable interim rate orders would defeat that purpose. In this respect, it mattered not that the regulatory scheme involved was one involving positive approval on application rather than negative disallowance after complaint. The addition of a power to make interim orders as part of a positive approval scheme conferred on the C.R.T.C. the flexibility to make such an order from the date of the application had been made but, as a corollary, also involved the authority to remedy as part of the final order any discrepancy between the rate of return yielded by the interim order and that allowed in the final decision. Given the C.R.T.C.'s authority to revisit the period during which the interim orders were in effect, this necessarily involved the authority to remedy any unjustness or unreasonableness in those interim rates. The statutory basis for such an order was to be found in the breadth of s. 340(5). In so doing, the C.R.T.C. was not confined to the extra revenues generated by the 2 per cent interim rate increase but rather had authority with respect to all of BC's revenues generated from the date of the commencement of the proceedings. While the order did not necessarily benefit the customers who were actually charged excessive rates, nevertheless, the nature and extent of such orders were within the C.R.T.C.'s jurisdiction and the particular order, while not effecting perfect compensation, was clearly reasonable given the difficulties associated with actually compensating all those who had paid excessive rates. Cases considered: A.U.P.E. v. Bd. of Governors of Olds College, [1982] 1 S.C.R. 923 referred to
B.C. Electric Railway Co. v. Public Utilities Comm. of B.C., [1960] S.C.R. 837, 33 W.W.R. 97, 82 C.R.T.C. 32, 25 D.L.R. (2d) 689 considered Canadian Pacific Ltd. v. Canadian Transport Commn. (1987), 79 N.R. 13 (Fed. C.A.) considered City of Calgary v. Madison Natural Gas Co. (1959), 19 D.L.R. (2d) 655 (Alta. C.A.) distinguished Coseka Resources Ltd. v. Saratoga Processing Co.; Petrogas Processing Ltd. v. Pub. Utilities Bd. (1981), 16 Alta. L.R. (2d) 60, 126 D.L.R. (3d) 705, 31 A.R. 541 (C.A.) applied Douglas Aircraft Co. of Can. v. McConnell, [1980] 1 S.C.R. 245, 29 N.R. 109, 23 L.A.C. (2d) 143n, 99 D.L.R. (3d) 385, (sub nom. Douglas Aircraft Co. v. U.A.W., Loc. 1967) 79 C.L.L.C. 14,221 referred to Eurocan Pulp & Paper Co. and B.C. Energy Commn., Re (1978), 87 D.L.R. (3d) 727 (B.C.C.A.) considered McCreary v. Greyhound Lines of Can. Ltd. (1987), 87 C.L.L.C. 17,018, 78 N.R. 192, 8 C.H.R.R. D/4184, 38 D.L.R. (4th) 724 (Fed. C.A.) referred to N.B. Liquor Corp. v. C.U.P.E., Loc. 963, [1979] 2 S.C.R. 227, 25 N.B.R. (2d) 237, 51 A.P.R. 237, 26 N.R. 341, 79 C.L.L.C. 14,209 distinguished Northwestern Utilities Ltd. v. Edmonton, [1929] S.C.R. 186, [1929] 2 D.L.R. 4 considered Nova v. Amoco Can. Petroleum Co., [1981] 2 S.C.R. 437, [1981] 6 W.W.R. 391, 38 N.R. 381, 128 D.L.R. (3d) 1, 32 A.R. 384 referred to O.P.S.E.U. v. Forer (1985), 52 O.R. (2d) 705, 15 Admin. L.R. 145, 12 O.A.C. 1, 23 D.L.R. (4th) 97 referred to Ottawa (City) v. Ottawa Professional Firefighters' Assn. (1987), 58 O.R. (2d) 685, 24 Admin. L.R. 213, 19 O.A.C. 197, 36 D.L.R. (4th) 609 referred to R. v. Bd. of Commrs. of Public Utilities (N.B.); Ex parte Moncton Utility Gas Ltd. (1966), 60 D.L.R. (2d) 703 (N.B. C.A.) distinguished Trans Alaska Pipeline Rate Cases, Re (1978), 436 U.S. 631 considered U.S. v. Fulton (1986), 475 U.S. 657 referred to Statutes considered: National Energy Board Act, R.S.C. 1985, c. N-7 s. 64 National Transportation Act, R.S.C. 1985, c. N-20 s. 47
s. 49 s. 52 s. 60(2) s. 61 s. 66 s. 68(1) Natural Gas Utilities Act, S.A. 1944, c. 4 s. 35a(3) Public Utilities Act, R.S.B.C. 1948, c. 277 s. 16(1)(b) Public Utilities Act, R.S.N.B. 1952, c. 186. Public Utilities Board Act, R.S.A. 1970, c. 302 [now R.S.A. 1980, c. P-37] s. 52(2) Railway Act, R.S.C. 1985, c. R-3 s. 334 s. 335 s. 336 s. 337 s. 338 s. 339 s. 340 Regulations considered: National Transportation Act, R.S.C. 1985, c. N-20 C.R.T.C. Telecommunications Rules of Procedure, SOR/ 795-554 Parts III, IV and VII APPEAL from Federal Court of Appeal, reported at (1987), [1988] 1 F.C. 296 , allowing an appeal from an order of the C.R.T.C.
The judgment of the Court was delivered by Gonthier J.: 1 The present case is an appeal against a decision of the Federal Court of Appeal [reported at (1987), [1988] 1 F.C. 296 ], which quashed one of the orders made by the appellant in Telecom Decision C.R.T.C. ["Decision"] 86-17. The impugned order compelled the respondent to distribute $206 million in excess revenues earned in the years 1985 and 1986 through a one-time credit to be granted to certain classes of customers. The respondent does not contest the factual findings on which Decision 86-17 is based, nor does it claim that this order would unduly prejudice its financial position. None of the other orders made in Decision 86-17 are challenged. 2 The appellant claims that the purpose of the challenged order was to provide telephone users with a remedy against interim rates, which turned out to be excessive, on the basis of the findings of fact made by the appellant following a final hearing, held in the summer of 1986, for the purpose of setting rates to be charged by the respondent in the years 1985 and following. These findings of fact are reported in Decision 86-17. Since this case turns on the proper characterization of the one-time credit order made in Decision 86-17, it is important to describe the procedural history of the administrative proceedings which led to the order now contested by the respondent. I The Facts 3 On March 28, 1984, the respondent applied for a general rate increase under Part VII of the C.R.T.C. Telecommunications Rules of Procedure, SOR/79-554 [under the National Transportation Act , R.S.C. 1985, c. N-20], which provides for a summary public process to deal with special applications. The respondent claimed that the Canadian Government's restraint program restricting rate increases of federally regulated utilities to 5 per cent and 6 per cent was sufficient justification to dispense with the normal procedure for general rate increase applications set out in Part III of the C.R.T.C. Telecommunications Rules of Procedure. In Decision 84-15, the appellant rejected this application on the ground that the respondent had failed to use the appropriate procedure as set out in Part III of these rules. However, the appellant indicated that if the respondent was to suffer financial prejudice as a result of the delays involved in preparing for the more complex procedure set out in part III, it could always apply for interim relief pending a hearing and a decision on the merits, at pp. 8-9: The Commission recognizes that, in 1985 and beyond, in the absence of rate relief, a deterioration in the Company's financial position could occur. In this regard, if the Company should find it necessary to file an application for a general rate increase under Part III of the Rules, the Commission would be prepared to schedule a public hearing on such an application in the fall of 1985. Should Bell consider it necessary to seek rate increases to come into effect earlier in 1985 than this schedule would allow, it may of course apply for interim relief . In the event Bell were to seek such interim relief, it would be open to the Company to suggest that the Commission's traditional test for determining interim rate applications is overly restrictive in light of the Commission hearing schedule and to put forward proposals for an alternative test for consideration. (Emphasis added.) On September 4, 1984, the respondent filed an application for a general rate increase based on 1985 financial data which would come into effect on January 1, 1986. At the same time, the respondent applied for an interim rate increase of 3.6 per cent. 4 In Decision 84-28, rendered on December 19, 1984, the appellant set out the following policy previously adopted in Decision 80-7 with respect to the granting of interim rate increases, at pp. 8-9:
The Commission's policy concerning interim rate increases, enunciated in Decision 80-7, is as follows: The Commission considers that, as a rule, general rate increases should only be granted following the full public process contemplated by Part III of its Telecommunications Rules of Procedure. In the absence of such a process, general rate increases should not in the Commission's view be granted, even on an interim basis, except where special circumstances can be demonstrated. Such circumstances would include lengthy delays in dealing with an application that could result in a serious deterioration in the financial condition of an applicant absent a general interim increase . (Emphasis added.) The respondent argued that its financial situation warranted an interim rate increase and did not question the reasonableness of this policy. The appellant agreed with the respondent's submission that, in the absence of interim rate increases, it might suffer from serious financial deterioration and awarded an interim rate increase of 2 per cent. In this decision, the appellant required the respondent to prepare for a hearing to be held in the fall of 1985 for the purpose of assessing the respondent's application for a final order increasing its rates on the basis of 2 test years, 1985 and 1986. Decision 84-28 also states the reasons why the interim rate increase was set at 2 per cent, at p. 10: In determining the amount of interim rate increases required under the circumstances, the Commission has taken into account the following factors: 1) While the company stated that an interest coverage ratio of 4.0 times is required, the Commission regards the maintenance of the coverage ratio of 3.8 times, projected by the Company for 1984, as sufficient for the purposes of this interim decision. 2) With regard to the level of ROE ['return on equity'], the Commission is of the view that, for 1985, and subject to review in the course of its consideration of the Company's general rate increase application in the fall of 1985 , 13.7% is appropriate for determining the amount of rate increases to be permitted pursuant to this interim increase application. 3) With regard to the Company's 1985 expense forecasts, the Commission notes that the inflation factor used by the Company is higher than the current consensus forecast of the inflation rate for 1985 and considers that Bell's forecast of its 1985 Operating Expenses could be overestimated by approximately $25 million. Taking the above factors into account, the Commission has decided that an interim rate increase of 2% for all services in respect of which rate increases were requested by the Company in the interim application is appropriate at this time. This increase is expected to generate additional revenues of $65 million from 1 January 1985 to 31 December 1985. To permit the review of the Company's 1985 revenue requirement by the Commission at the fall 1985 public hearing, Bell is directed to file its 4 June 1985 general rate increase application on the basis of two test years, 1985 and 1986 . (Emphasis added.) The reasons set out in the appellant's decision indicate that the interim rate increase was calculated on the basis of financial information provided by the respondent without placing this information under the scrutiny normally associated with hearings made under Part III of the C.R.T.C. Telecommunications Rules of Procedure. Furthermore, the appellant clearly expressed the intention to review this interim rate increase in its final decision on the respondent's application for a general rate increase, on the basis of financial information for the years 1985 and 1986. Given the content of the appellant's final decision, it is also important to note that the 2
per cent interim rate increase was calculated on the assumption that the respondent's return on equity for 1985 should be 13.7 per cent subject to review in the final decision. 5 The respondent's financial situation later improved thereby reducing the necessity to proceed with an early hearing for the purpose of obtaining a general and final rate increase. By a letter dated March 20, 1985, the respondent asked for this hearing to be postponed to February 10, 1986, suggesting however that the 2 per cent interim increase be given immediate final approval. In C.R.T.C. Telecom Public Notice 1985-30 dated April 16, 1985, the appellant granted the postponement but refused to grant the final approval requested by the respondent without further investigation into this matter. The Commission added that it would monitor the respondent's financial situation on a monthly basis and ordered the filing of monthly statements, at p. 4: In view of the improving trend in the Company's financial performance, the Commission further directs as follows: Bell Canada is to provide to the Commission for the balance of 1985, within 30 days after the end of each month, commencing with April 1985, a full year forecast of revenues and expenses on a regulated basis for the year 1985, together with the estimated financial ratios including the projected regulated return on common equity. The Commission will monitor the Company's financial performance during 1985, in order to determine whether any further rate action may be necessary . (Emphasis added.) Again, the appellant clearly expressed its intention to prevent abuse of interim rate increases. 6 After a review of the July financial information filing ordered in C.R.T.C. Telecom Public Notice 1985-30, the appellant asked the respondent to provide reasons why the interim rate increase of 2 per cent should remain in force given its improved financial situation. The respondent was unable to convince the appellant that this interim increase remained necessary to avoid financial deterioration and was accordingly ordered to file revised tariffs effective as of September 1, 1985, at pp. 4-5 of Decision 85-18: In view of the improving trend in Bell's financial performance, the Commission is satisfied that the company no longer needs the 2% interim increases which were awarded in Decision 84-28 in order to avoid serious financial deterioration in 1985 . Accordingly, Bell is directed to file revised tariffs forthwith, with an effective date of 1 September 1985, to suspend these increases. In arriving at its decision the Commission has estimated that, with interim rates in effect for the complete year , the company would earn an ROE ['return on equity'] of approximatively 14.5% in 1985, a return well in excess of the 13.7% considered appropriate for determining the 2% interim rate increases . The Commission also projected that interest coverage would be approximately 3.9 times. This would improve on the actual 1984 coverage of 3.8 times. These estimates are not significantly different from Bell's current expectation of its 1985 result. The Commission will make its final determination of Bell's revenue requirement for the year 1985 in the general rate proceeding currently scheduled to commence with an application to be filed on 10 February 1986 . (Emphasis added.) As a result of this decision, the respondent was forced to charge the rates effective before its
application for a rate increase, filed on March 28, 1984. However, even though the rates effective as of September 1, 1985 were numerically identical to the rates in force under the previous final decision prior to the interim increase, these new rates remained interim in nature. In fact, the appellant reiterated its intention to review the rates actually charged during 1985 and 1986. 7 On October 31, 1985, the respondent decided not to proceed with its application for a general rate increase and requested that its procedures be withdrawn. In C.R.T.C. Telecom Public Notice 1985-85, the appellant decided to review the respondent's financial situation and therefore the appropriateness of its rates, notwithstanding its request to withdraw its initial application for a general rate increase, at pp. 3-4: In light of these forecasts and the degree to which the company's rate structure is expected to be considered in separate proceedings, Bell stated that it wished to refrain from proceeding with the application schedule to be filed on 10 February 1986 . Accordingly, the company requested the withdrawal of the amended Directions on Procedure issued by the Commission in Public Notice 1985-30. ..... The Commission notes that the appropriate rate of return for Bell has not been reviewed in an oral hearing since the proceeding which culminated in Bell Canada General Increase in Rates , Telecom Decision CRTC 81-15, 20 September 1981 (Decision 81-15). The Commission considers that, given Bell's current forecasts, it would be appropriate to review the company's cost of equity for the years 1985, 1986 and 1987 in the proceeding scheduled for 1986 . Such a review would allow consideration of the changing financial and economic conditions since Decision 81-15 and the impact of Bell's corporate reorganization on its rate of return. The Commission notes that other issues arising from the reorganization would also be addressed in the 1986 proceeding. (Emphasis added.) This interim decision indicates that the appellant wished to continue the original rate review procedure initiated by the respondent in March 1984. Thus, the rates in force as of January 1, 1985 until the final decision now challenged by the respondent were interim rates subject to review. 8 The hearing which led to the final decision lasted from June 2 to July 16, 1986 and this final decision, Decision 86-17, was rendered on October 14, 1986. In this decision, the appellant first established appropriate levels of profitability for the respondent on the basis of its return on equity. The appellant then calculated the amount of excess revenues earned by the respondent in 1985 and 1986, along with the necessary reduction in forecasted revenues for 1987. It was found that the respondent had earned excess revenues of $63 million in 1985 and $143 million in 1986, for a total of $206 million, at p. 93: After making further adjustments for the compensation for temporarily transferred employees and including the regulatory treatment for non-integral subsidiary and associated companies, the Commission has determined that a revenue requirement reduction of $234 million would provide the company with a 12.75% ROE ['return on equity'] on a regulated basis in 1987. Similarly, the Commission has determined that $143 million is the required revenue reduction to achieve the upper end of the permissible ROE on a regulated basis in 1986, 13.25%. With respect to 1985, after making the adjustments set out in this decision, the Commission has determined that Bell earned excess revenues in the amount of $63 million, the deduction of which would provide 13.75%, the upper end of the permissible ROE on a regulated basis. It is important to note that the evidence and the arguments presented by the interested parties as well as inter-
veners were carefully scrutinized by the appellant, at pp. 77-92 of Decision 86-17. It is for all practical purposes impossible to engage in such a meticulous and painstaking analysis of all relevant facts when faced with an application for interim relief. Finally, it is also useful to note that the permissible return on equity of 13.7 per cent allowed by the appellant in its interim decision, Decision 84-28, was increased to 13.75 per cent in Decision 86-17. Thus, the appellant realized that the interim rates approved for 1985 yielded greater rates of return than initially anticipated, and that the rate of return actually recorded for that year even exceeded the greater allowable rate of return fixed in the final decision, Decision 86-17. Such differences between projected and actual rates of return are common and certainly call for a high level of flexibility in the exercise of the appellant's regulatory duties. 9 The Commission decided that the respondent could not retain excess revenues earned on the basis of interim rates and issued the order now challenged by the respondent in order to provide a remedy for this situation. This order reads as follows, at pp. 95-96: Concerning the excess revenues for the years 1985 and 1986, the Commission directs that the required adjustments be made by means of a one-time credit to subscribers of record, as of the date of this decision, of the following local services : residence and business individual, two-party and four-party line services; PBX trunk services; centrex lines; enhanced exchange-wide dial lines; exchange radio-telephone service; servicesystem service and information system access line service. The Commission directs that the credit to each subscriber be determined by pro-rating the sum of the excess revenues for 1985 and 1986 of $206 million in relation to the subscriber's monthly recurring billing for the specified local services provided as of the date of this decision . The Commission further directs that the work necessary to implement the above directives be commenced immediately and that the billing adjustments be completed by no later than 31 January 1987. Finally, the Commission directs the company to file a report detailing the implementation of the credit by no later than 16 February 1987. The Commission considers that 1987 excess revenues are best dealt with Gthrough rate reductions to be effective 1 January 1987 . (Emphasis added.) Although the respondent always charged rates approved by the appellant, the appellant found it necessary to make sure that its assessment of allowable revenues for 1985 and 1986 would be complied with. The appellant argues that the order now challenged by the respondent was the most efficient way of redistributing these excess revenues to the respondent's customers even though they would not necessarily be refunded to those who actually had to pay the rates in force during that period. 10 It is therefore obvious that the appellant only allowed interim rates to be charged after January 1, 1985 on the assumption that it would review these rates in a hearing to be held in order to deal with an application for a general rate increase. Every interim decision which led to Decision 86-17 confirmed the appellant's intention to review the interim rates at the final hearing. Finally, the interim rates were ordered for the purpose of preventing any serious deterioration in the respondent's financial situation while awaiting for a final decision on the merits. Of necessity, these interim rates were determined on the basis of incomplete evidence presented by the respondent. It cannot be said that the purpose of the interim rate increase ordered by the appellant was to serve as a temporary final decision. II The Issue and the Arguments Raised by the Parties 11 In this Court, as well as in the Federal Court of Appeal, the parties have agreed that the only issue arising
out of the facts of this case is whether the appellant had jurisdiction to order the respondent to grant a one-time credit to its customers. The appellant's findings of fact, its determination with respect to the respondent's revenue requirements for 1985 and 1986, and its computation of the amount of excess revenues earned during this period are not contested by the respondent. In my opinion, this issue can be divided in two subquestions: 1. Whether the appellant had the legislative authority to review the revenues made by the respondent during the period when interim rates were in force; 2. Whether the appellant had jurisdiction to make an order compelling the respondent to grant a one-time credit to its customers. 12 The main arguments raised by the appellant can be summarized as follows: 1. The Railway Act , R.S.C. 1985, c. R-3 and the National Transportation Act , R.S.C. 1985, c. N-20 grant the appellant the power to review the period during which a regulated entity was allowed to charge interim rates, for the purpose of comparing the revenues earned during this period to the appropriate level of revenues set in the final decision; 2. The power to make a one-time credit order is necessarily ancillary to the power to review the period during which interim rates were charged, and the appellant has jurisdiction to determine the most efficient method of providing a remedy in cases where excess revenues were made. 13 The main arguments raised by the respondent can be summarized as follows: 1. The power to set tolls and tariffs does not include the power to review and make orders with respect to the respondent's level of revenues; 2. The appellant has no power to make a one-time credit order with respect to revenues earned as a result of having charged rates which the respondent, by virtue of the Railway Act , was obliged to charge, whether these rates were set by an interim order or by a final order. 14 Counsel for the National Anti-Poverty organization ("N.A.P.O.") has also argued that the appellant's decisions concerning the interpretation of statutes which grant them jurisdiction to deal with certain matters are entitled to curial deference and cannot be reviewed unless they are patently unreasonable. This argument raises the issue of the scope of review allowed by s. 68(1) of the National Transportation Act and must be dealt with prior to any analysis of the relevant statutory provisions claimed to be the source of the appellant's jurisdiction to make the one-time credit order found in Decision 86-17. 15 The present case raises difficult questions of statutory interpretation and it will therefore be necessary to examine the relevant provisions of the wRailway Act and the National Transportation Act before moving to a detailed analysis of the decision of the Federal Court of Appeal and the arguments raised by the parties. III Relevant Legislative Provisions 16 The appellant derives its power to regulate the telephone industry from ss. 334 to 340 of the Railway Act ("Provisions Governing Telegraphs and Telephones") and from ss. 47 et seq. of the National Transportation Act ("General Jurisdiction and Powers in Respect of Railways"). The Railway Act sets out the general criteria concerning the setting of rates and tariffs to be charged by telephone utility companies, whereas the National Trans-
portation Act sets out the appellant's procedural powers in the context of decisions concerning, amongst other matters, telephone rates and tariffs. 17 Sections 335(1), 335(2) and 335(3) of the Railway Act (formerly ss. 320(2) and 320(3)) state the principle upon which the appellant's regulatory authority rests, namely, that telephone rates and tariffs are subject to approval by the appellant, cannot be changed without its prior authorization, and may be revised at any time by the appellant: 335. (1) Notwithstanding anything in any other Act, all telegraph and telephone tolls to be charged by a company, other than a toll for the transmission of a message intended for reception by the general public and charged by a company licensed under the Broadcasting Act, are subject to the approval of the Commission, and may be revised by the Commission from time to time . (2) The company shall file with the Commission tariffs of any telegraph or telephone tolls to be charged, and the tariffs shall be in such form, size and style, and give such information, particulars and details, as the Commission by regulation or in any particular case prescribes. (3) Except with the approval of the Commission, the company shall not charge and is not entitled to charge any telegraph or telephone toll in respect of which there is default in filing under subsection (2), or which is disallowed by the Commission ... (Emphasis added.) The most important requirement governing the appellant's power to set telephone rates is found in s. 340(1) of the Railway Act which provides that all such rates must be "just and reasonable": 340. (1) All tolls shall be just and reasonable and shall always, under substantially similar circumstances and conditions with respect to all traffic of the same description carried over the same route, be charged equally to all persons at the same rate. (Emphasis added.) Section 340 also prohibits discriminatory telephone rates and gives the appellant the power to suspend, postpone, or disallow a tariff of tolls which is contrary to ss. 335 to 340 and substitute a satisfactory tariff of tolls in lieu thereof. 18 Finally, s. 340(5) of the Railway Act gives the appellant the power to make orders with respect to traffic, tolls and tariffs in all matters not expressly covered by s. 340: 340.... (5) In all other matters not expressly provided for in this section, the Commission may make orders with respect to all matters relating to traffic, tolls and tariffs or any of them. Although the power granted by s. 340(5) could be construed restrictively by the application of the ejusdem generis rule, I do not think that such an interpretation is warranted. Section 340(5) is but one indication of the legislator's intention to give the appellant all the powers necessary to ensure that the principle set out in s. 340(1), namely that all rates should be just and reasonable, be observed at all times. 19 Sections 47 et seq. of the National Transportation Act set out, from a procedural point of view, the appellant's jurisdiction with respect to the powers granted by the Railway Act . Section 49(1) gives the appellant jurisdiction over all complaints concerning compliance with the Act, while s. 49(3) gives the appellant jurisdic-
tion over all matters of fact or law for the purposes of the Railway Act and of ss. 47 et seq. of the National Transportation Act . However, s. 68(1) provides an appeal to the Federal Court of Appeal, with leave, on any question of law or jurisdiction, and it is under this provision that the respondent has challenged Decision 86-17. 20 In many respects, ss. 47 et seq. of the National Transportation Act have been designed to further the policy objectives and the regulatory scheme set out in the Railway Act governing the approval of telephone rates and tariffs. Thus, s. 52 of the National Transportation Act gives the appellant the power to inquire into, hear or determine, of its own motion or upon request from the Minister, any matter which it has the right to inquire into, hear or determine under the Railway Act : 52. The Commission may, of its own motion, or shall, on the request of the Minister, inquire into, hear and determine any matter or thing that, under this part or the Railway Act , it may inquire into, hear and determine upon application or complaint, and with respect thereto has the same powers as, on any application or complaint, are vested in it by this Act. Section 52 is therefore the corollary of the appellant's power to "revise [tolls] ... from time to time" found in s. 335(1) of the Railway Act . Thus, the appellant has the power to review, from time to time, its own final decisions on a proprio motu basis. Similarly, s. 61 provides that the appellant is not bound by the wording of any complaint or application it hears and may make orders which would otherwise offend the ultra petita rule: 61. On any application made to the Commission, the Commission may make an order granting the whole or part only of the application, or may grant such further or other relief, in addition to or in substitution for that applied for, as to the Commission may seem just and proper, as fully in all respects as if the application had been for that partial, other or further relief. 21 By virtue of s. 60(2) of the National Transportation Act , the appellant also has the power to make interim orders: 60. ... (2) The Commission may, instead of making an order final in the first instance, make an interim order and reserve further directions either for an adjourned hearing of the matter or for further application. 22 Finally, by virtue of s. 66 of the National Transportation Act , the appellant has the power to review any of its past decisions, whether they are final or interim: 66. The Commission may review, rescind, change, alter or vary any order or decision made by it or may rehear any application before deciding it. 23 It is obvious from the legislative scheme set out in the Railway Act and the National Transportation Act that the appellant has been given broad powers for the purpose of ensuring that telephone rates and tariffs are, at all times, just and reasonable. The appellant may revise rates at any time, either of its own motion or in the context of an application made by an interested party. The appellant is not even bound by the relief sought by such applications, and may make any order related thereto provided that the parties have received adequate notice of the issues to be dealt with at the hearing. Were it not for the fact that the appellant has the power to make interim orders, one might say that the appellant's powers in this area are limited only by the time it takes to process applications, prepare for hearings and analyze all the evidence. However, the appellant does have the power to
make interim orders and this power must be interpreted in light of the legislator's intention to provide the appellant with flexible and versatile powers for the purpose of ensuring that telephone rates are always just and reasonable. 24 The question before this Court is whether the appellant has the statutory authority to make a one-time credit order for the purpose of remedying a situation where, after a final hearing dealing with the reasonableness of telephone rates charged during the years under review, it finds that interim rates in force during that period were not just and reasonable. Since there is no clear provision on this subject in the Railway Act or in the National Transportation Act , it will be necessary to determine whether this power is derived by necessary implication from the regulatory schemes set out in these statutes. IV The Decision of the Court Below 25 In the Federal Court of Appeal, the respondent in this Court argued that in order to find statutory authority for the power to make a one-time credit order, it was necessary to find that s. 66 (power to "review, rescind, change, alter or vary" previous decisions) or s. 60(2) (power to make interim orders) of the National Transportation Act provide powers to make retroactive orders. Of course, the respondent argued that these provisions did not grant such a power and the majority of the Federal Court of Appeal, composed of Marceau and Pratte JJ. agreed with this argument, Hugessen J. dissenting. 26 Marceau J. held that the appellant in this Court only had the power to fix telephone tolls and tariffs, and that it has no statutory authority to deal with excess revenues or deficiencies in revenues arising as a result of a discrepancy between the rate of return yielded from the interim rates in force prior to the final decision and the permissible rate of return fixed by this final decision. Marceau J. was of the opinion that the wording of s. 66 of the National Transportation Act is neutral with respect to retroactivity, and that the presumption against retroactivity should therefore operate. Marceau J. added that the power to make interim orders does not carry with it the power to remedy any discrepancy between interim and final orders because the respondent could not be forced to reimburse revenues earned by charging rates approved by the appellant. Thus, according to Marceau J., the regulatory scheme set out in the Railway Act and the National Transportation Act is prospective in nature and, in the context of such a scheme, the power to make interim orders only involves the power to make orders "for the time being". 27 Pratte J., who concurred in the result with Marceau J., rejected all arguments based on the retroactive nature of the powers granted by ss. 60(2) and 66 of the National Transportation Act . Pratte J. was of the opinion that the impugned order was not retroactive in nature since its effect was to force the respondent to grant a credit in the future rather than change the rates charged in the past in a retroactive manner. Pratte J. then stated that if legislative authority existed for Decision 86-17, it must be found in s. 60(2) of the National Transportation Act which provides for "further directions" to be made at a later date following an interim decision. However, Pratte J. was of the opinion that any "further direction" must be in the nature of an order which can be made under s. 60(2) in the first place. It follows from that reasoning that if no one-time credit order can be made by interim order, no "further direction" to that effect can be made under s. 60(2). Pratte J. then agreed with Marceau J. that the respondent could not be forced to reimburse revenues made by charging rates approved by the appellant whether by interim order or by a "further direction" made in a final order. 28 Hugessen J. dissented on the basis that, within the statutory framework set out in the Railway Act and the National Transportation Act , all orders whether final or interim can, by virtue of ss. 60(2) and 66 of the Nation-
al Transportation Act , be modified by a further prospective order; thus, the proposed rule that interim orders can only be modified by a further prospective order would, in Hugessen J.'s opinion, effectively eliminate any distinction between final and interim orders and defeat the legislator's intention to provide the appellant with a distinct and independent power to make interim orders. In order to differentiate interim orders from final orders, Hugessen J. was of the opinion that the appellant in this Court must have the power to fix just and reasonable rates as of the date at which interim rates came into effect. Thus, only interim rates can be modified in a retrospective manner by a final order. Hugessen J. then stated that the interim rates in force in 1985 and 1986 must not be divided into the previous rate and the interim rate increase of 2 per cent: the resulting rate must be viewed as interim in its entirety because all the rates charged after January 1, 1985 were authorized by interim orders. Finally, Hugessen J. stated that the one-time credit order was a valid exercise of the power to set just and reasonable rates as of January 1, 1985 and that the choice of the appropriate remedy was an "'administrative matter' properly left for the Commission's determination". Hugessen J. also noted that the appellant's order was in substance, though not in form, a "matter relating to tolls and tariffs" within the meaning of s. 340(5) of the Railway Act . V Analysis 29 a) Curial deference towards the decisions of the C.R.T.C. 30 N.A.P.O. argues that the appellant's decisions are entitled to "curial deference" because of their national importance, and that these decisions should not be overturned unless they are patently unreasonable. N.A.P.O. cites the following cases as authority for this proposition: N.B. Liquor Corp. v. C.U.P.E., Loc. 963, [1979] 2 S.C.R. 227, 25 N.B.R. (2d) 237, 51 A.P.R. 237, 24 N.R. 341, 79 C.L.L.C. 14,209 ("C.U.P.E."); Douglas Aircraft Co. of Can. Ltd. v. McConnell, [1980] 1 S.C.R. 245, 29 N.R. 109, 23 L.A.C. (2d) 143n, 99 D.L.R. (3d) 385, (sub nom. Douglas Aircraft Co. v. U.A.W., Loc. 1967) 79 C.L.L.C. 14,221 ; A.U.P.E. v. Bd. of Governors of Olds College, [1982] 1 S.C.R. 923 ; O.P.S.E.U. v. Forer (1985), 52 O.R. (2d) 705, 15 Admin. L.R. 145, 12 O.A.C. 1, 23 D.L.R. (4th) 97 ; Ottawa (City) v. Ottawa Professional Firefighters' Assn. (1987), 58 O.R. (2d) 685, 24 Admin. L.R. 213, 19 O.A.C. 197, 36 D.L.R. (4th) 609 ; McCreary v. Greyhound Lines of Can. Ltd. (1987), 87 C.L.L.C. 17,018, 78 N.R. 192, 8 C.H.R.R. D/4184, 38 D.L.R. (4th) 724 (Fed. C.A.) ; and Canadian Pacific Ltd. v. Canadian Transport Commn. (1987), 79 N.R. 13 (Fed. C.A.) ("Canadian Pacific"). 31 With the exception of the Canadian Pacific case, supra, all these cases involved judicial review of decisions which were either protected by a privative clause or by a provision stating that no appeal lies therefrom. Where the legislator has clearly stated that the decision of an administrative tribunal is final and binding, Courts of original jurisdiction cannot interfere with such decisions unless the tribunal has committed an error which goes to its jurisdiction. Thus, this Court has decided in the C.U.P.E. case, supra, that judicial review cannot be completely excluded by statute and that Courts of original jurisdiction can always quash a decision if it is "so patently unreasonable that its construction cannot be rationally supported by the relevant legislation and demands intervention by the court upon review" (p. 237, S.C.R.). Decisions which are so protected are, in that sense, entitled to a non-discretionary form of deference because the legislator intended them to be final and conclusive and, in turn, this intention arises out of the desire to leave the resolution of some issues in the hands of a specialized tribunal. In the C.U.P.E. case, Dickson J., as he then was, described the legislator's intention as follows, at pp. 235-36 (S.C.R.):
Section 101 constitutes a clear statutory direction on the part of the Legislature that public sector labour matters be promptly and finally decided by the Board. Privative clauses of this type are typically found in labour relations legislation. The rationale for protection of a labour board's decisions within jurisdiction is straightforward and compelling. The labour board is a specialized tribunal which administers a comprehensive statute regulating labour relations. In the administration of that regime, a board is called upon not only to find facts and decide questions of law, but also to exercise its understanding of the body of jurisprudence that has developed around the collective bargaining system, as understood in Canada, and its labour relations sense acquired from accumulated experience in the area. However, it is important to stress the fact that the decision of an administrative tribunal can only be entitled to such deference if the legislator has clearly expressed his intention to protect such decisions through the use of privative clauses or clauses which state that the decision is final and without appeal. As formulated, N.A.P.O.'s argument on curial deference must therefore be rejected because it fails to recognize the basic difference between appellate review and judicial review of decisions which do not fall within the jurisdiction of the lower tribunal. 32 Although s. 49(3) of the National Transportation Act provides that the appellant has full jurisdiction to hear and determine all matters whether of law or fact for the purposes of the Railway Act and of Part IV of the National Transportation Act , the appellant's decisions are subject to appeal, with leave, to the Federal Court of Appeal on questions of law or jurisdiction by virtue of s. 68(1), which reads as follows: 68. (1) An appeal lies from the Commission to the Federal Court of Appeal on a question of law or a question of jurisdiction on leave therefor being obtained from that Court on application made within one month after the making of the order, decision, rule or regulation sought to be appealed from or within such further time as a judge of that Court under special circumstances allows, and on notice to the parties and the Commission, and on hearing such of them as appear and desire to be heard. It is trite to say that the jurisdiction of a Court on appeal is much broader than the jurisdiction of a Court on judicial review. In principle, a Court is entitled, on appeal, to disagree with the reasoning of the lower tribunal. 33 However, within the context of a statutory appeal from an administrative tribunal, additional consideration must be given to the principle of specialization of duties. Although an appeal tribunal has the right to disagree with the lower tribunal on issues which fall within the scope of the statutory appeal, curial deference should be given to the opinion of the lower tribunal on issues which fall squarely within its area of expertise. The Canadian Pacific case is an example of a situation where curial deference towards a decision of the Canadian Transport Commission involving the interpretation of a tariff was appropriate. The decision of the Canadian Transport Commission was appealed to a review committee and then to the Federal Court of Appeal. Urie J. held that the decision of the review committee must not be reversed unless it is unreasonable or clearly wrong, at pp. 16-17: On the appeal from that decision to this court, the appellant advanced essentially the same grounds and arguments which it had submitted to the R.T.C. As to the first ground, I am of the opinion that the R.T.C. correctly interpreted the two items from the tariff and since its view was confirmed by the Review Committee, that Committee did not commit an error in construction. No useful purpose would be served by my restating the reasons of the R.T.C. for interpreting the items as they did and I respectfully adopt them as my own. This court should not interfere with an interpretation made by bodies having the expertise of the R.T.C. and
the Review Committee in an area within their jurisdiction, unless their interpretation is not reasonable or is clearly wrong . Neither situation prevails in this case. (Emphasis added.) Although the very purpose of the review committee is to interpret the tariff, and although such questions of interpretation fall within the Review Committee's area of special expertise, it does not follow that its decisions can only be reviewed if they are unreasonable. However, the principle of specialization of duties justifies curial deference in such circumstances. 34 In this case, the respondent is challenging the appellant's decision on a question of law and jurisdiction involving the nature of interim decisions and the extent of the powers conferred on the appellant when it makes interim decisions. This question cannot be solved without an analysis of the procedural scheme created by the Railway Act and the National Transportation Act . It is a question of law which is clearly subject to appeal under s. 68(1) of the National Transportation Act . It is also a question of jurisdiction because it involves an inquiry into whether the appellant had the power to make a one-time credit order. 35 Except as regards the choice, amongst remedies available to the appellant, of the most appropriate remedy to achieve the goal of just and reasonable rates throughout the interim period, the decision impugned by the respondent is not a decision which falls within the appellant's area of special expertise and is therefore pursuant to s. 68(1), subject to review in accordance with the principles governing appeals. Indeed, the appellant was not created for the purpose of interpreting the Railway Act or the National Transportation Act but rather to ensure, amongst other duties, that telephone rates are always just and reasonable. b) The power to regulate Bell Canada's revenues 36 The respondent argues that the appellant only has jurisdiction to regulate tolls and tariffs and that this power does not include the power to regulate its level of revenues or its return on equity. 37 The fixing of tolls and tariffs that are just and reasonable necessarily involves the regulation of the revenues of the regulated entity. This has been recognized by this Court interpreting provisions similar to s. 340(1) of the Railway Act which prescribe that "[a]ll tolls shall be just and reasonable". In B.C. Electric Railway Co. v. Public Utilities Comm. of B.C., [1960] S.C.R. 837, 33 W.W.R. 97, 82 C.R.T.C. 32, 25 D.L.R. (2d) 689 , Locke J. said the following about para. 16(1)(b) of the Public Utilities Act , R.S.B.C. 1948, c. 277, which provided that in fixing a rate the Public Utility Commission of British Columbia should take into consideration the "fair and reasonable return upon the appraised value of the property of the public utility used ... to enable the public utility to furnish the service", at p. 848 (S.C.R.): I do not think it is possible to define what constitutes a fair return upon the property of utilities in a manner applicable to all cases or that it is expedient to attempt to do so. It is a continuing obligation that rests upon such a utility to provide what the Commission regards as adequate service in supplying not only electricity but transportation and gas, to maintain its properties in a satisfactory state to render adequate service and to provide extensions to these services when, in the opinion of the Commission, such are necessary. In coming to its conclusion as to what constituted a fair return to be allowed to the appellant these matters as well as the undoubted fact that the earnings must be sufficient, if the company was to discharge these statutory duties, to enable it to pay reasonable dividends and attract capital, either by the sale of shares or securities, were of necessity considered . Once that decision was made it was, in my opinion, the duty of the Commission imposed by the statute to approve rates which would enable the company to earn such a return or such lesser return as it might decide to ask.
(Emphasis added.) In Northwestern Utilities Ltd. v. Edmonton, [1929] S.C.R. 186, [1929] 2 D.L.R. 4 , Lamont J. described the relevant factors in the determination of what are just and reasonable rates as follows, at p. 190 (S.C.R.): In order to fix just and reasonable rates, which it was the duty of the Board to fix, the Board had to consider certain elements which must always be taken into account in fixing a rate which is fair and reasonable to the consumer and to the company. One of these is the rate base, by which is meant the amount which the Board considers the owner of the utility has invested in the enterprise and on which he is entitled to a fair return. Another is the percentage to be allowed as a fair return. Such provisions require the administrative tribunal to balance the interests of the customers with the necessity of ensuring that the regulated entity is allowed to make sufficient revenues to finance the costs of the services it sells to the public. 38 Thus, it is trite to say that in fixing fair and reasonable tolls the appellant must take into consideration the level of revenues needed by the respondent. In fact, the respondent would be the first to complain if its financial situation was not taken into consideration when tolls are fixed. By so doing, the appellant regulates the respondent's revenues, albeit in a seemingly indirect manner. I would therefore dismiss this argument. c) The power to revisit the period during which interim rates were in force i) Introduction 39 As indicated above, the appellant has examined the period during which interim rates were in force, i.e. from January 1, 1985 to October 14, 1986, for the purpose of ascertaining whether these interim rates were in fact just and reasonable. Following a factual finding that these rates were not just and reasonable, the one-time credit order now contested before this Court was made in order to remedy this situation. Thus, the effect of Decision 86-17 was not retroactive in nature since it does not seek to establish rates to replace or be substituted to those which were charged during that period. The one-time credit order is, however, retrospective in the sense that its purpose is to remedy the imposition of rates approved in the past and found in the final analysis to be excessive. Thus, the question before this Court is whether the appellant has jurisdiction to make orders for the purpose of remedying the inappropriateness of rates which were approved by it in a previous interim decision. 40 This question involves a determination of whether rates approved by interim order are inherently contingent as well as provisional, or whether the statutory scheme established by the Railway Act and the National Transportation Act is so prospective in nature that it precluded such a retrospective review of interim rates approved by the appellant. Finally, it is also necessary to determine whether the appellant has jurisdiction to order the reimbursement of amounts which exceed the revenues actually collected as a direct result of the interim rates. ii) The distinction between interim and final orders 41 The respondent argues that the Railway Act and the National Transportation Act establish a regulatory regime which is exclusively prospective in nature because all rates, whether interim or final, must be just and reasonable. Thus, if interim rates have been approved on the basis that they are just and reasonable, no excessive revenues can be earned by charging such rates; interim rates, by reason only of their approval by the appellant, are presumed to be just and reasonable until they are modified by a subsequent order. According to the respond-
ent, interim orders are therefore orders made "for the time being" until a more permanent order is made. 42 In his dissenting reasons, Hugessen J. points out quite accurately that if interim orders are simply orders made "for the time being", it will be impossible to distinguish final orders from interim orders within the statutory scheme established by the Railway Act and the National Transportation Act since all final orders may be revised by the appellant of its own motion and at any time: s. 335(1) of the Railway Act and s. 52 of the National Transportation Act . It is therefore impossible to say that final orders made under these statutes are final in the sense that they may never be reconsidered. The on-going nature of the appellant's regulatory activities necessarily entails a continuous review of past decisions concerning tolls and tariffs. Thus, all orders, whether final or interim, would be orders "for the time being" within the statutory scheme established by the Railway Act and the National Transportation Act . 43 Both the appellant and Hugessen J. rely heavily on Coseka Resources Ltd. v. Saratoga Processing Co.; Petrogas Processing Ltd. v. Pub. Utilities Bd. (1981), 16 Alta. L.R. (2d) 60, 126 D.L.R. (3d) 705, 31 A.R. 541 (C.A.) ("Coseka ") for the proposition that interim decisions must be distinguished from final decisions in that they may be reviewed in a retrospective manner. This distinction is based on the fact that interim decisions are made subject to "further direction" as prescribed by s. 60(2) of the National Transportation Act which, for convenience, I cite again: 60. ... (2) The Commission may, instead of making an order final in the first instance, make an interim order and reserve further directions either for an adjourned hearing of the matter or for further application. (Emphasis added.) The statutory scheme analysed by the Alberta Court of Appeal in Coseka , supra, is substantially similar to though more clearly prospective than the statutory scheme established by the Railway Act and the National Transportation Act . Furthermore, s. 52(2) of the Public Utilities Board Act , R.S.A. 1970, c. 302, is identical in wording to s. 60(2) of the National Transportation Act . Laycraft J.A., as he then was, cited with approval by Hugessen J., wrote the following with respect to the possibility of revisiting the period during which interim rates were in force for the purpose of deciding whether those interim rates were in fact just and reasonable, at pp. 717-718 (D.L.R.): In my view, to say that an interim order may not be replaced by a final order is to attribute virtually no additional powers to the Board from s. 52 beyond those already contained in either the Gas Utilities Act or the Public Utilities Board Act to make final orders. The Board is by other provisions of the statute empowered by order to fix rates either on application or on its own motion. An interim order would be the same, and have the same effect, as a final order unless the 'further direction' which the statute contemplates includes the power to change the interim order. On that construction of the section the interim order would be a 'final' order in all but name . The Board would need no further legislative authority to issue a further 'final' order since it may fix rates under s. 27 on its own motion without a further application. The provision for an interim order was intended to permit rates to be fixed subject to correction to be made when the hearing is subsequently completed. It was urged during argument that s. 52(2) was merely intended to enable the Board to achieve 'rough justice' during the period of its operation until a final order is issued. However, the Board is required to fix 'just and reasonable rates' not 'roughly just and reasonable rates'. The words 'reserve for further direction', in my view, contemplate changes as soon as the Board is able to determine those just and reasonable rates.
(Emphasis added.) 44 I agree with Hugessen J. and with the reasons of Laycraft J.A. in Coseka where he made a careful review of previous cases. The statutory scheme established by the Railway Act and the National Transportation Act is such that one of the differences between interim and final orders must be that interim decisions may be reviewed and modified in a retrospective manner by a final decision. It is inherent in the nature of interim orders that their effect, as well as any discrepancy between the interim order and the final order, may be reviewed and remedied by the final order. I hasten to add that the words "further directions" do not have any magical, retrospective content. Under the Railway Act and the National Transportation Act , final orders are subject to "further [prospective] directions" as well. It is the interim nature of the order which makes it subject to further retrospective directions. 45 The importance of distinguishing final orders from interim orders is illustrated by the case of City of Calgary v. Madison Natural Gas Co. (1959), 19 D.L.R. (2d) 655 (Alta. C.A.) ("Madison "). In Madison , supra, the Public Utility Board (the "Board") was faced with an application by the City of Calgary for the reimbursement of amounts earned in excess of the rates of the rates of return allowed in orders 34 and 41 for the sale of natural gas. The Board had allowed a rate of return of 7 per cent but, due to its lack of useful information to predict the effect of rates on the actual financial performance of the regulated entity, the rates per volume fixed by the Board actually yielded greater profits than anticipated. The Board refused to grant the demands made in the application because it felt it had no jurisdiction to revisit periods during which rates approved in a final decision were in force. This decision was confirmed by the Court of Appeal on the basis that, contrary to arguments made by the City of Calgary, orders 34 and 41 were final orders not governed by s. 35a (3) of the Natural Gas Utilities Act , S.A. 1944, c. 4, which read as follows: 35a ... (3) The Board is hereby authorized, empowered and directed, on the final hearing, to give consideration to the effect of the operation of such interim or temporary order and in the final order to make, allow or provide for such adjustments, allowances or other factors, as to the Board may seem just and reasonable. Order 34 provided that the price was set at 9 cents per mcf and that "if it should turn out that there is a surplus, it can be dealt with when the time arrives" which led to the argument that this order was in fact an interim order. Johnson J.A. dismissed this argument in the following terms, at pp. 662-663: It is the submission of the appellants that O. 34 and O. 41 are interim or temporary orders and the Board can now deal with these surpluses in accordance with s-s (3). As I have mentioned, orders fixing interim prices were made while the Board was hearing the application and considering its report. These, of course, were superseded by the order now under consideration. Orders 34 and 41 are, of course, not final orders in the sense that judgments are final. The Act contemplates that subsequent applications will be made to change the price fixed by these orders. They are nonetheless final so far as each application is concerned. It is useful to note that the respondent relies heavily on the Madison case for the proposition that a regulated entity cannot be forced to disgorge profits legally earned by charging rates approved by the relevant regulatory authority on the basis that they are just and reasonable. Since the City of Calgary sought to obtain the reimbursement of profits earned by charging rates approved by final order, this case does not support the respondent's position.
46 A consideration of the nature of interim orders and the circumstances under which they are granted further explains and justifies their being, unlike final decisions, subject to retrospective review and remedial orders. The appellant may make a wide variety of interim orders dealing with hearings, notices and, in general, all matters concerning the administration of proceedings before the appellant. Such orders are obviously interim in nature. However, this is less obvious when an interim order deals with a matter which is to be dealt with in the final decision, as was the case with the interim rate increase ordered in Decision 84-28. If interim rate increases are awarded on the basis of the same criteria as those applied in the final decision, the interim decision would serve as a preliminary decision on the merits as far as the rate increase is concerned. This, however, is not the purpose of interim rate orders. 47 Traditionally, such interim rate orders dealing in an interlocutory manner with issues which remain to be decided in a final decision are granted for the purpose of relieving the applicant from the deleterious effects caused by the length of the proceedings. Such decisions are made in an expeditious manner on the basis of evidence which would often be insufficient for the purposes of the final decision. The fact that an order does not make any decision on the merits of an issue to be settled in a final decision, and the fact that its purpose is to provide temporary relief against the deleterious effects of the duration of the proceedings, are essential characteristics of an interim rate order. 48 In Decision 84-28, the appellant granted the respondent an interim rate increase on the basis of the following criteria which, for convenience, I cite again, at p. 9: The Commission considers that, as a rule, general rate increases should only be granted following the full public process contemplated by Part III of its Telecommunications Rules of Procedure. In the absence of such a process, general rate increases should not in the Commission's view be granted, even on an interim basis, except where special circumstances can be demonstrated. Such circumstances would include lengthy delays in dealing with an application that could result in a serious deterioration in the financial condition of an applicant absent a general interim increase. Decision 84-28 was truly an interim decision since it did not seek to decide in a preliminary manner an issue which would be dealt with in the final decision. Instead, the appellant granted the interim rate increase on the basis that such an increase was necessary in order to prevent the respondent from having serious financial difficulties. 49 Furthermore, the appellant consistently reiterated throughout the procedures which led to Decision 86-17 its intention to review the rates charged for the test year 1985 and up to the date of the final decision. Holding that the interim rates in force during that period cannot be reviewed would not only be contrary to the nature of interim orders, it would also frustrate and subvert the appellant's order approving interim rates. 50 It is true, as the respondent argues, that all telephone rates approved by the appellant must be just and reasonable whether these rates are approved by interim or final order; no other conclusion can be derived from s. 340(1) of the Railway Act . However, interim rates must be just and reasonable on the basis of the evidence filed by the applicant at the hearing or otherwise available for the interim decision. It would be useless to order a final hearing if the appellant was bound by the evidence filed at the interim hearing. Furthermore, the interim rate increase was granted on the basis that the length of the proceedings could cause a serious deterioration in the financial condition of the respondent. Only once such an emergency situation was found to exist did the appellant ask itself what rate increase would be just and reasonable on the basis of the available evidence and for the pur-
pose of preventing such a financial deterioration. The inherent differences between a decision made on an interim basis and a decision made on a final basis clearly justify the power to revisit the period during which interim rates were in force. 51 The respondent argues that the power to revisit the period during which interim rates were in force cannot exist within the statutory scheme established by the Railway Act and the National Transportation Act because these statutes do not grant such a power explicitly, unlike s. 64 of the National Energy Board Act , R.S.C. 1985, c. N-7. The powers of any administrative tribunal must of course be stated in its enabling statute, but they may also exist by necessary implication from the wording of the act, its structure and its purpose. Although Courts must refrain from unduly broadening the powers of such regulatory authorities through judicial lawmaking, they must also avoid sterilizing these powers through overly technical interpretations of enabling statutes. I have found that, within the statutory scheme established by the Railway Act and the National Transportation Act , the power to make interim orders necessarily implies the power to revisit the period during which interim rates were in force. The fact that this power is provided explicitly in other statutes cannot modify this conclusion based as it is on the interpretation of these two statutes as a whole. 52 I am bolstered in my opinion by the fact that the regulatory scheme established by the Railway Act and the National Transportation Act gives the appellant very broad procedural powers for the purpose of ensuring that telephone rates and tariffs are, at all times, just and reasonable. Within this regulatory framework, the power to make appropriate orders for the purpose of remedying interim rates which are not just and reasonable is a necessary adjunct to the power to make interim orders. 53 It is interesting to note that, in the context of statutory schemes which did not provide any power to set interim rates, the United States Supreme Court has held that regulatory agencies have both the power to impose interim rates and the power to make reimbursement orders where the interim rates are found to be excessive in the final order: see U.S. v. Fulton (1986), 475 U.S. 657 , at pp. 669-671; Re Trans Alaska Pipeline Rate Cases (1978), 436 U.S. 631, where Brennan J. wrote the following comments, at pp. 654-656: Finally, petitioners contend that the Commission has no power to subject them to an obligation to account for and refund amounts collected under the interim rates in effect during the suspension period and the initial rates which would become effective at the end of such a period ... In response, we note first that we have already recognized in Chessie that the Commission does have powers 'ancillary' to its suspension power which do not depend on an express statutory grant of authority. We had no occasion in Chessie to consider what the full range of such powers might be, but we did indicate that the touchstone of ancillary power was a 'direc(t) relat(ionship)' between the power asserted and the Commission's 'mandate to assess the reasonableness of ... rates and to suspend them pending investigation if there is a question as to their legality.' 426 U.S., at 514. Thus, here as in Chessie , the Commission's refund conditions are a 'legitimate, reasonable, and direct adjunct to the Commission's explicit statutory power to suspend rates pending investigation,' in that they allow the Commission, in exercising its suspension power, to pursue 'a more measured course' and to 'offe[r] an alternative tailored far more precisely to the particular circumstances' of these cases. Since, again as in Chessie , the measured course adopted here is necessary to strike a proper balance between the interests of carriers and the public, we think the Interstate Commerce Act should be construed to confer on the Commission the authority to enter on this course unless language in the Act plainly requires a contrary result.
This approach to the interpretation of statutes conferring regulatory authority over rates and tariffs is only the expression of the wider rule that the Court must not stifle the legislator's intention by reason only of the fact that a power has not been explicitly provided for. 54 The appellant has also argued that the power to "vary" a previous decision, whether interim or final, found in s. 66 of the National Transportation Act , includes the power to vary these decisions in a retroactive manner. Given my conclusion based on the inherent nature of interim orders, it is unnecessary for me to deal with this argument. iii) The relevance of the distinction between positive approval and negative disallowance schemes of rate regulation 55 Much was said in argument about the difference between positive approval schemes and negative disallowance schemes, with respect to the power to act retrospectively. The first category includes schemes which provide that the administrative agency is the only body having statutory authority to approve or fix tolls payable to utility companies; these schemes generally stipulate that tolls shall be "just and reasonable" and that the administrative agency has the power to review these tolls on a proprio motu basis, or upon application by an interested party. The second category includes schemes which grant utility companies the right to fix tolls as they wish, but also grant users the right to complain before an administrative agency which has the power to vary those tolls if it finds that they are not "just and reasonable". It has generally been found that negative disallowance schemes provide the power to make orders which are retroactive to the date of the application, by the ratepayer who claims that the rates are not "just and reasonable". On the other hand, positive approval schemes have been found to be exclusively prospective in nature and not to allow orders applicable to periods prior to the final decision itself. A full discussion of this issue was made by Estey J. in Nova v. Amoco Can. Petroleum Co., [1981] 2 S.C.R. 437 at 450-451, [1981] 6 W.W.R. 391, 38 N.R. 381, 128 D.L.R. (3d) 1, 32 A.R. 384 , and I do not propose to repeat or to criticize what was said in that case with respect to the power to review rates approved by a previous final order. I am of the opinion that the regulatory scheme established by the Railway Act and the National Transportation Act is a positive approval scheme inasmuch as the respondent's rates are subject to approval by the appellant. However, the Nova case, supra, only dealt with the power to review rates approved in a previous final decision and, as I have said before, entirely different considerations apply when interim rates are reviewed. 56 It has often been said that the power to review its own previous final decision on the fairness and the reasonableness of rates would threaten the stability of the regulated entity's financial situation. In R. v. Bd. of Commrs. of Public Utilities (N.B.); Ex parte Moncton Utility Gas Ltd. (1966), 60 D.L.R. (2d) 703 , Ritchie J.A., as he then was, wrote the following comments on this issue, at p. 729: The distributor contends that in the absence of any express limitation or restriction or an express provision as to the effective date of any order made by the board, the jurisdiction conferred on the board by the Legislature includes jurisdiction to make orders with retrospective effect. Reliance is placed on Bakery and Confectionery Workers International Union of America, Local 468 v. Salmi, White Lunch Ltd. v. Labour Relations Board of British Columbia, 56 D.L.R. (2d) 193, [1966] S.C.R. 282, 55 W.W.R. 129 which it is contended must be applied when interpreting s. 6(1) of the Act. The clear object of the Act is to ensure stability in the operation of public utilities and the maintenance of just, reasonable and non-discriminatory rates. That object would be defeated if the board having, on Novem-
ber 14, 1962, made an order fixing the rates to be paid by the distributor for natural gas purchased from the producer, reduced those rates on February 19, 1966, more than three years later, and directed that the reduced rates be effective as from January 1, 1962, or as from any other date prior to February 19, 1966. and further at p. 732: In no section of the Act do I find any wording indicating an intention on the part of the Legislature to confer on the board authority to make orders fixing rates with retrospective effect or any language requiring a construction that such authority has been bestowed on the board. To so interpret s. 6(1) would render insecure the position of not only every public utility carrying on business in the Province but also the position of every customer of such public utility. However, Ritchie J.A.'s comments deal with the Public Utilities Act , R.S.N.B. 1952, c. 186, which did not provide the Board with any power to make interim orders. I readily agree that Ritchie J.A.'s concerns about the financial stability of utility companies are valid when one is faced with the argument that a Board has the power to revisit its own previous final decisions. Since no time limit could be placed on the period which could be revisited, any power to revisit previous final decisions would have to be explicitly provided in the enabling statute. Furthermore, even if final orders are "for the time being", it does not necessarily follow that they must be stripped of all their finality through the judicial recognition of a power to revisit a period during which final rates were in force. 57 However, there should be no concern over the financial stability of regulated utility companies where one deals with the power to revisit interim rates. The very purpose of interim rates is to allay the prospect of financial instability which can be caused by the duration of proceedings before a regulatory tribunal. In fact, in this case, the respondent asked for and was granted interim rate increases on the basis of serious apprehended financial difficulties. The added flexibility provided by the power to make interim orders is meant to foster financial stability throughout the regulatory process. The power to revisit the period during which interim rates were in force is a necessary corollary of this power, without which interim orders made in emergency situations may cause irreparable harm and subvert the fundamental purpose of ensuring that rates are just and reasonable. 58 Even though Parliament has decided to adopt a positive approval regulatory scheme for the regulation of telephone rates, the added flexibility provided by the power to make interim orders indicates that the appellant is empowered to make orders as of the date at which the initial application was made or as of the date the appellant initiated the proceedings of its own motion. The underlying theory behind the rule that a positive approval scheme only gives jurisdiction to make prospective orders is that the rates are presumed to be just and reasonable until they are modified because they have been approved by the regulatory authority on the basis that they were indeed just and reasonable. However, the power to make interim orders necessarily implies the power to modify in its entirety the rate structure previously established by final order. As a result, it cannot be said that the rate review process begins at the date of the final hearing; instead, the rate review begins when the appellant sets interim rates pending a final decision on the merits. As was stated in obiter in Re Eurocan Pulp & Paper Co. and B.C. Energy Commn. (1978), 87 D.L.R. (3d) 727 (B.C.C.A.) , with respect to a similar though not identical legislative scheme, the power to make interim orders effectively implies the power to make orders effective from the date of the beginning of the proceedings. In turn, this power must comprise the power to make appropriate orders for the purpose of remedying any discrepancy between the rate of return yielded by the interim rates and the rate of return allowed in the final decision for the period during which they are in effect, so as to achieve just and reasonable rates throughout that period.
iv) The power to make a one-time credit order 59 Once it is decided, as I have, that the appellant does have the power to revisit the period during which interim rates were in force for the purpose of ascertaining whether they were just and reasonable, it would be absurd to hold that it has no power to make a remedial order where, in fact, these rates were not just and reasonable. I also agree with Hugessen J. that s. 340(5) of the Railway Act provides a sufficient statutory basis for the power to make remedial orders, including an order to give a one-time credit to certain classes of customers. 60 C.N.C.P. Telecommunications argues that the one-time credit order should be limited to the amount of revenues actually derived as a direct result of the 2 per cent interim rate increase and that these excess revenues should be refunded to the actual customers who paid them. The presumption behind this argument is that the portion of the interim rates corresponding to the final rates in force prior to the beginning of the proceedings cannot be held to be unjust or unreasonable until a final decision is rendered. As I have held that the appellant has jurisdiction to review the fairness and the reasonableness of these interim rates in their entirety because the rate-review process starts as of the date of the beginning of the proceedings, this argument must be dismissed. 61 Finally, it is true that the one-time credit ordered by the appellant will not necessarily benefit the customers who were actually billed excessive rates. However, once it is found that the appellant does have the power to make a remedial order, the nature and extent of this order remain within its jurisdiction in the absence of any specific statutory provision on this issue. The appellant admits that the use of a one-time credit is not the perfect way of reimbursing excess revenues. However, in view of the cost and the complexity of finding who actually paid excessive rates, where these persons reside, and of quantifying the amount of excessive payments made by each, and having regard to the appellant's broad jurisdiction in weighing the many factors involved in apportioning respondent's revenue requirement amongst its several classes of customers to determine just and reasonable rates, the appellant's decision was eminently reasonable and I agree with Hugessen J. that it should not be overturned. VI Conclusion 62 In my opinion, the appellant had jurisdiction to review the interim rates in force prior to Decision 86-17 for the purpose of ascertaining whether they were just and reasonable, had jurisdiction to order the respondent to grant the one-time credit described in Decision 86-17, and has committed no error in so doing. 63 I would allow the appeal and confirm the appellant's decision, with costs in all Courts. Appeal allowed. Decision of Canadian Radio-Television Telecommunications Commission affirmed. END OF DOCUMENT
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Page 1 2009 CarswellNat 2717, 2009 SCC 40, 2009 CSC 40, J.E. 2009-1708, 92 Admin. L.R. (4th) 157, 392 N.R. 323, 310 D.L.R. (4th) 608, [2009] 2 S.C.R. 764, 180 A.C.W.S. (2d) 843
2009 CarswellNat 2717, 2009 SCC 40, 2009 CSC 40, J.E. 2009-1708, 92 Admin. L.R. (4th) 157, 392 N.R. 323, 310 D.L.R. (4th) 608, [2009] 2 S.C.R. 764, 180 A.C.W.S. (2d) 843 Bell Canada v. Canadian Radio-Television & Telecommunications Commission Bell Canada, Appellant v. Bell Aliant Regional Communications, Limited Partnership, Consumers' Association of Canada, National Anti-Poverty Organization, Public Interest Advocacy Centre, MTS Allstream Inc., Socit en commandite Tlbec and TELUS Communications Inc., Respondents and Canadian Radio-television and Telecommunications Commission, Intervener TELUS Communications Inc., Appellant v. Bell Canada, Arch Disability Law Centre, Bell Aliant Regional Communications, Limited Partnership, Canadian Radio-television and Telecommunications Commission, Consumers' Association of Canada, National Anti-Poverty Organization, Public Interest Advocacy Centre, MTS Allstream Inc., Saskatchewan Telecommunications and Socit en commandite Tlbec, Respondents Consumers' Association of Canada and National Anti-Poverty Organization, Appellants v. Canadian Radiotelevision and Telecommunications Commission, Bell Aliant Regional Communications, Limited Partnership, Bell Canada, Arch Disability Law Centre, MTS Allstream Inc., TELUS Communications Inc. and TELUS Communications (Qubec) Inc., Respondents Supreme Court of Canada McLachlin C.J.C., Binnie, LeBel, Deschamps, Fish, Abella, Charron, Rothstein, Cromwell JJ. Heard: March 26, 2009 Judgment: September 18, 2009 Docket: 32607, 32611 Thomson Reuters Canada Limited or its Licensors (excluding individual court documents). All rights reserved. Proceedings: affirming Bell Canada v. Canadian Radio-Television & Telecommunications Commission (2008), 80 Admin. L.R. (4th) 159, 2008 CarswellNat 544, (sub nom. Consumers Association of Canada v. Canadian Radio-Television & Telecommunications Commission) 375 N.R. 124, 2008 FCA 91, 2008 CarswellNat 2390, 2008 CAF 91 (F.C.A.) Counsel: Neil Finkelstein, Catherine Beagan Flood, Rahat Godil, for Appellant / Respondent, Bell Canada Michael H. Ryan, John E. Lowe, Stephen R. Schmidt, Sonya A. Morgan, for Appellant / Respondent, TELUS Communications Inc., and Respondent, TELUS Communications (Qubec) Inc. Richard P. Stephenson, Danny Kastner, Michael Janigan, for Appellants / Respondents. Consumers' Association of Canada, National Anti-Poverty Organization and Respondent, Public Interest Advocacy Centre
Michael Koch, Dina F. Graser, for Respondent, MTS Allstream Inc. John B. Laskin, Afshan Ali, for Respondent / Intervener, Canadian Radio Television & Telecommunications Commission No one for Respondents, Socit en commandite Tlbec, Arch Disability Law Centre, Bell Aliant Regional Communications, Limited Partnership, Saskatchewan Telecommunications Subject: Public Communications law --- Regulatory commissions C.R.T.C. (Canadian Radio-television and Telecommunications Commission) Powers and duties In 2002, Canadian Radio-televison and Telecommunications Commission (CRTC) imposed price caps on Bell Canada and other incumbent local exchange carriers Rather than ordering reduction in rates for certain class of subscribers, CRTC directed carriers to add those amounts to deferral accounts In 2006, CRTC directed carriers to use funds in deferral accounts for certain specified initiatives and to rebate any balance remaining Consumer groups appealed part of decision directing initiatives Appeal was dismissed CRTC was not limited in setting rates to traditional economic considerations CRTC was required by s. 47 of Telecommunications Act to consider policy objectives in s. 7 Creation of deferral accounts and directing initiatives promoted listed policies Consumer groups appealed Appeal dismissed CRTC properly considered objectives set out in s. 7 when it ordered use of deferral accounts for expansion of broadband infrastructure and consumer credits Improving accessibility services and broadband expansion in rural and remote areas were exactly what CRTC was mandated to do by Act CRTC had statutory authority to set just and reasonable rates, to establish deferral accounts, and to direct disposition of funds in those accounts. Communications law --- Telecommunication Services Telephone companies Regulation of rates In 2002, Canadian Radio-televison and Telecommunications Commission (CRTC) imposed price caps on Bell Canada and other incumbent local exchange carriers Rather than ordering reduction in rates for certain class of subscribers, CRTC directed carriers to add those amounts to deferral accounts In 2003, CRTC approved rates for those subscribers on final basis In 2006, CRTC directed carriers to use funds in deferral accounts for certain specified initiatives and to rebate any balance remaining Bell appealed from part of decision directing rebate Appeal was dismissed Decision was not beyond CRTC's jurisdiction as it was not retrospective rate making 2002 decision entitled CRTC to make order crystallizing Bell's contingent obligation and directing particular expenditure Rebate was secondary alternative to proposed initiative but was possible use of funds Rebate did not reduce rates determined to be just and reasonable by 2003 decision Bell appealed Appeal dismissed CRTC's creation and use of deferral accounts for broadband expansion and consumer credits was authorized by Telecommunications Act Section 7 of Act set out broad telecommunications policy objectives and s. 47(a) directed CRTC to implement policy objectives when exercising its statutory authority Balancing interests of consumers, carriers and competitors, and pursuing those policy objectives by exercising its rate-setting power was what s. 47 required CRTC to do in setting rates CRTC acted reasonably and in accordance with Act when it ordered subscriber credits and approved use of funds for broadband expansion There was no inappropriate cross-subsidization between residential telephone services and broadband expansion Section 38 set out broad telecommunications policy objectives and directed CRTC to implement them in exer-
cise of its statutory authority. Droit des communications --- Organismes de rglementation CRTC (Conseil de la radiodiffusion et des tlcommunications canadiennes) Pouvoirs et obligations En 2002, le Conseil de la radiodiffusion et des tlcommunications canadiennes (CRTC) a impos un plafonnement Bell Canada et d'autres entreprises de services locaux titulaires CRTC a ordonn aux entreprises d'ajouter ces montants dans des comptes de report plutt que d'ordonner une rduction tarifaire pour une classe particulire d'abonns En 2006, le CRTC a ordonn aux entreprises d'utiliser les montants se trouvant dans les comptes de report pour financer certaines initiatives spcifiques et de remettre tout solde rsiduel sous forme de rabais Groupes de consommateurs ont interjet appel l'encontre de la partie de la dcision portant sur les initiatives Appel a t rejet CRTC n'tait pas contraint de fixer les tarifs selon des considrations conomiques traditionnelles CRTC avait l'obligation, en vertu de l'art. 47 de la Loi sur les tlcommunications, de prendre en considration les objectifs de politique noncs l'art. 7 Cration de comptes de report et l'ordonnance d'initiatives participaient la mise en oeuvre des politiques numres Groupes de consommateurs ont form un pourvoi Pourvoi rejet CRTC a correctement tenu compte des objectifs noncs l'art. 7 quand il a ordonn l'affectation des montants se trouvant dans les comptes de report l'expansion du service large bande et au versement de crdits aux consommateurs Amlioration des services d'accessibilit et l'expansion des services large bande dans les rgions rurales et loignes se trouvaient au coeur du mandat confi au CRTC par la Loi CRTC avait, en vertu de la loi, le pouvoir de fixer des tarifs justes et raisonnables, d'tablir des comptes de report et de prescrire de quelle manire devaient tre utiliss les fonds de ces comptes. Droit des communications --- Services de tlcommunication Compagnies de tlphone Rglementation des tarifs En 2002, le Conseil de la radiodiffusion et des tlcommunications canadiennes (CRTC) a impos un plafonnement Bell Canada et d'autres entreprises de services locaux titulaires CRTC a ordonn aux entreprises d'ajouter ces montants dans des comptes de report plutt que d'ordonner une rduction tarifaire pour une classe particulire d'abonns En 2003, le CRTC a approuv les tarifs pour ces abonns titre dfinitif En 2006, le CRTC a ordonn aux entreprises d'utiliser les montants se trouvant dans les comptes de report pour financer certaines initiatives spcifiques et de remettre tout solde rsiduel sous forme de rabais Bell a interjet appel l'encontre de la partie de la dcision portant sur le rabais Appel a t rejet CRTC n'a pas outrepass sa comptence en rendant une dcision portant sur une tarification qui n'tait rtrospective Dcision de 2002 permettait au CRTC de rendre une ordonnance actualisant l'obligation ventuelle de Bell et prescrivant des dpenses dtermines Rabais tait une formule de rechange aux initiatives proposes et tait un usage potentiel des fonds Rabais ne rduisait pas les taux jugs justes et raisonnables dans la dcision de 2003 Bell a form un pourvoi Pourvoi rejet Cration et l'utilisation des comptes de report par le CRTC aux fins d'expansion du service large bande et de versement de crdits aux consommateurs taient autorises par les dispositions de la Loi sur les tlcommunications Article 7 de la Loi nonait certains des grands objectifs de la politique canadienne de tlcommunication et l'art. 47a) enjoignait au CRTC de veiller leur ralisation dans l'exercice des pouvoirs qui lui sont confrs en vertu de la Loi Conciliation des intrts des consommateurs, des entreprises et de leurs concurrents, et la poursuite des objectifs de la politique, au moyen de l'exercice de son pouvoir de tarification, constituait prcisment ce que l'art. 47 demandait au CRTC de faire en fixant les tarifs CRTC a agi de faon raisonnable et en conformit avec la Loi lorsqu'il a ordonn l'attribution de crdits aux abonns et lorsqu'il a approuv l'utilisation des fonds pour l'expansion du service large bande Il n'y a pas eu
interfinancement inappropri entre les services tlphoniques rsidentiels et l'expansion du service large bande Article 38 nonait certains des grands objectifs de la politique canadienne de tlcommunication et enjoignait au CRTC de veiller leur ralisation dans l'exercice des pouvoirs qui lui sont confrs par la loi. The Canadian Radio-televison and Telecommunications Commission (CRTC) imposed price caps for certain services on Bell Canada and other incumbent local exchange carriers in 2002. The CRTC directed carriers to add those amounts to deferral accounts rather than ordering a reduction in rates for a certain class of subscribers. In 2003, the CRTC approved rates for those subscribers on a final basis. In 2006, the CRTC directed carriers to use the funds in the deferral accounts for certain specified initiatives and to rebate any balance remaining. Bell appealed from the part of the decision directing the rebate. The appeal was dismissed. The Federal Court of Appeal found that the decision was not beyond the CRTC's jurisdiction as it was not retrospective rate making. The 2002 decision entitled the CRTC to make the order crystallizing Bell's contingent obligation and directing a particular expenditure. The rebate was a secondary alternative to the proposed initiative, but was a possible use of the funds. The rebate did not reduce rates determined to be just and reasonable by the 2003 decision. Bell appealed. Held: The appeal was dismissed. The CRTC properly considered the objectives set out in s. 7 of the Telecommunications Act when it ordered the use of the deferral accounts for the expansion of broadband infrastructure and consumer credits. Improving accessibility services and broadband expansion in rural and remote areas through deferral accounts were exactly what the CRTC was mandated to do by the Act. The CRTC had the statutory authority to set just and reasonable rates, to establish the deferral accounts, and to direct the disposition of the funds in those accounts. The CRTC's creation and use of the deferral accounts for broadband expansion and consumer credits was authorized by the Act. Section 7 of the Act set out broad telecommunications policy objectives and s. 47(a) directed the CRTC to implement the policy objectives when exercising its statutory authority. Balancing the interests of consumers, carriers and competitors, and pursuing those policy objectives by exercising its rate-setting power was what s. 47 required the CRTC to do. The CRTC acted reasonably and in accordance with the Act when it ordered subscriber credits and approved the use of funds for broadband expansion. There was no inappropriate cross-subsidization between residential telephone services and broadband expansion. Section 38 set out broad telecommunications policy objectives and directed the CRTC to implement them in the exercise of its statutory authority. A wide range of methods were available to the CRTC in determining what is a just and reasonable rate under s. 27. The CRTC also had the power to force carriers to use any accounting method under s. 37. The encumbered revenues in the deferral accounts were not the variation of final rates. It was always known that the balances of those accounts were subject to the CRTC's direction. A deferral account would have no meaning if the CRTC did not also have the power to order its disposition. The CRTC had the authority to order the disposition of the accounts in the exercise of its rate-setting power as long as that exercise was reasonable. Le Conseil de la radiodiffusion et des tlcommunications canadiennes (CRTC) a impos un plafonnement des prix pour certains services offerts par Bell Canada et d'autres entreprises de services locaux titulaires en 2002. Le CRTC a ordonn aux entreprises d'ajouter ces montants dans des comptes de report plutt que d'ordonner une rduction tarifaire pour une classe particulire d'abonns. En 2003, le CRTC a approuv les tarifs pour ces abonns titre dfinitif. En 2006, le CRTC a ordonn aux entreprises d'utiliser les montants se trouvant dans les comptes de report pour financer certaines initiatives spcifiques et de remettre tout solde rsiduel sous forme de
rabais. Bell a interjet appel l'encontre de la partie de la dcision portant sur le rabais. L'appel a t rejet. La Cour d'appel fdrale a conclu que le CRTC n'avait pas outrepass sa comptence en rendant une dcision portant sur une tarification qui n'tait pas rtrospective. La dcision de 2002 permettait au CRTC de rendre une ordonnance actualisant l'obligation ventuelle de Bell et prescrivant des dpenses dtermines. Le rabais tait une formule de rechange aux initiatives proposes et tait un usage potentiel des fonds. Le rabais ne rduisait pas les taux jugs justes et raisonnables dans la dcision de 2003. Bell a form un pourvoi. Arrt: Le pourvoi a t rejet. Le CRTC a correctement tenu compte des objectifs noncs l'art. 7 de la Loi sur les tlcommunications quand il a ordonn l'affectation des montants se trouvant dans les comptes de report l'expansion du service large bande et au versement de crdits aux consommateurs. L'utilisation des comptes de report pour l'amlioration des services d'accessibilit et pour l'expansion des services large bande dans les rgions rurales et loignes se trouvait au coeur du mandat confi au CRTC par la Loi. Le CRTC avait, en vertu de la loi, le pouvoir de fixer des tarifs justes et raisonnables, d'tablir des comptes de report, et de prescrire de quelle manire devaient tre utiliss les fonds de ces comptes. La cration et l'utilisation des comptes de report par le CRTC aux fins d'expansion du service large bande et de versement de crdits aux consommateurs taient autorises par les dispositions de la Loi. L'article 7 de la Loi nonait certains des grands objectifs de la politique canadienne de tlcommunication et l'art. 47a) enjoignait au CRTC de veiller leur ralisation dans l'exercice des pouvoirs qui lui sont confrs en vertu de la loi. La conciliation des intrts des consommateurs, des entreprises et de leurs concurrents, et la poursuite des objectifs de la politique, au moyen de l'exercice de son pouvoir de tarification, constituait prcisment ce que l'art. 47 demandait au CRTC de faire. Le CRTC a agi de faon raisonnable et en conformit avec la Loi lorsqu'il a ordonn l'attribution de crdits aux abonns et lorsqu'il a approuv l'utilisation des fonds pour l'expansion du service large bande. Il n'y a pas eu interfinancement inappropri entre les services tlphoniques rsidentiels et l'expansion du service large bande. L'article 38 nonait certains des grands objectifs de la politique canadienne de tlcommunication et enjoignait au CRTC de veiller leur ralisation dans l'exercice des pouvoirs qui lui sont confrs par la loi. Le CRTC disposait de toute une gamme de mthodes afin de dterminer ce qui constituait un tarif juste et raisonnable en vertu de l'art. 27. Le CRTC avait galement le pouvoir de forcer les entreprises utiliser des mthodes ou systmes comptables en vertu de l'art. 37. Les revenus mis en rserve dans les comptes de report ne constituaient pas la modification de tarifs dfinitifs. On a toujours su que les soldes de ces comptes taient sujets une ordonnance du CRTC. Un compte de report n'aurait aucune utilit si le CRTC n'avait pas le pouvoir d'ordonner la faon d'en disposer. Le CRTC pouvait, dans l'exercice de son pouvoir de tarification, ordonner l'utilisation de ces comptes, dans la mesure o il exerait ce pouvoir de manire raisonnable. Cases considered by Abella J.: ATCO Gas & Pipelines Ltd. v. Alberta (Energy & Utilities Board) (2006), 263 D.L.R. (4th) 193, 344 N.R. 293, 39 Admin. L.R. (4th) 159, 380 A.R. 1, 363 W.A.C. 1, 2006 CarswellAlta 139, 2006 CarswellAlta 140, 2006 SCC 4, 54 Alta. L.R. (4th) 1, [2006] 5 W.W.R. 1, [2006] 1 S.C.R. 140 (S.C.C.) referred to Barrie Public Utilities v. Canadian Cable Television Assn. (2003), 2003 CarswellNat 1268, 2003 SCC 28, 2003 CarswellNat 1226, [2003] 1 S.C.R. 476, 304 N.R. 1, 49 Admin. L.R. (3d) 161, 225 D.L.R. (4th) 206 (S.C.C.) distinguished
Bell Canada v. Canadian Radio-Television & Telecommunications Commission (1989), 38 Admin. L.R. 1, [1989] 1 S.C.R. 1722, 60 D.L.R. (4th) 682, 97 N.R. 15, 1989 CarswellNat 586, 1989 CarswellNat 697 (S.C.C.) distinguished Canadian National Railway v. Bell Telephone Co. (1939), [1939] S.C.R. 308, 50 C.R.C. 10, [1939] 3 D.L.R. 8, 50 C.R.T.C. 10, 1939 CarswellNat 51 (S.C.C.) considered Edmonton (City) v. Northwestern Utilities Ltd. (1929), [1929] 2 D.L.R. 4, [1929] S.C.R. 186, 1929 CarswellAlta 114 (S.C.C.) referred to Edmonton (City) v. 360Networks Canada Ltd./London Connect Inc. (2007), 2007 CarswellNat 1838, 2007 CAF 106, [2007] 4 F.C.R. 747, 361 N.R. 124, 2007 CarswellNat 574, 2007 FCA 106 (F.C.A.) considered Edmonton (City) v. 360Networks Canada Ltd./London Connect Inc. (2007), 2007 CarswellNat 3564, 2007 CarswellNat 3565, 380 N.R. 394 (note), [2007] 3 S.C.R. vii (note) (S.C.C.) referred to Epcor Generation Inc. v. Alberta (Energy & Utilities Board) (2003), 346 A.R. 281, 320 W.A.C. 281, 2003 CarswellAlta 1813, 2003 ABCA 374 (Alta. C.A.) referred to General Increase in Freight Rates, Re (1954), 76 C.R.T.C. 12, 1954 CarswellNat 306 (S.C.C.) considered Khosa v. Canada (Minister of Citizenship & Immigration) (2009), 82 Admin. L.R. (4th) 1, 2009 SCC 12, 2009 CarswellNat 434, 2009 CarswellNat 435, 304 D.L.R. (4th) 1, 77 Imm. L.R. (3d) 1, 385 N.R. 206 (S.C.C.) referred to New Brunswick (Board of Management) v. Dunsmuir (2008), 372 N.R. 1, 69 Admin. L.R. (4th) 1, 69 Imm. L.R. (3d) 1, (sub nom. Dunsmuir v. New Brunswick) [2008] 1 S.C.R. 190, 844 A.P.R. 1, (sub nom. Dunsmuir v. New Brunswick) 2008 C.L.L.C. 220-020, D.T.E. 2008T-223, 329 N.B.R. (2d) 1, (sub nom. Dunsmuir v. New Brunswick) 170 L.A.C. (4th) 1, (sub nom. Dunsmuir v. New Brunswick) 291 D.L.R. (4th) 577, 2008 CarswellNB 124, 2008 CarswellNB 125, 2008 SCC 9, 64 C.C.E.L. (3d) 1, (sub nom. Dunsmuir v. New Brunswick) 95 L.C.R. 65 (S.C.C.) referred to Newfoundland (Board of Commissioners of Public Utilities), Re (1998), 1998 CarswellNfld 150, (sub nom. Reference re s. 101 of the Public Utilities Act (Nfld.)) 164 Nfld. & P.E.I.R. 60, (sub nom. Reference re s. 101 of the Public Utilities Act (Nfld.)) 507 A.P.R. 60 (Nfld. C.A.) referred to Telecom, Re (2002), 2002 CarswellNat 5491, 2002 CarswellNat 5492 (C.R.T.C.) referred to Telecom, Re (2003), 2003 CarswellNat 6055, 2003 CarswellNat 6056 (C.R.T.C.) referred to Telecom, Re (2005), 2005 CarswellNat 6973, 2005 CarswellNat 6974 (C.R.T.C.) referred to Telecom, Re (2006), 2006 CarswellNat 6317, 2006 CarswellNat 6318 (C.R.T.C.) referred to Telecom, Re (2008), 2008 CarswellNat 1061, 2008 CarswellNat 1062 (C.R.T.C.) referred to Telecom Decision CRTC 93-9 (July 23, 1993), Doc. 93-9 (C.R.T.C.) considered
Telecom Decision CRTC 94-19 (1994), 1994 CarswellNat 3191, 1994 CarswellNat 3192 (C.R.T.C.) considered Telecom Decision CRTC 97-9 (1997), 1997 CarswellNat 3411, 1997 CarswellNat 3412 (C.R.T.C.) referred to Telecom Decision CRTC 2003-18 (2003), 2003 CarswellNat 6094, 2003 CarswellNat 6095 (C.R.T.C.) referred to VIA Rail Canada Inc. v. Canadian Transportation Agency (2007), 2007 SCC 15, 2007 CarswellNat 608, 2007 CarswellNat 609, 360 N.R. 1, 279 D.L.R. (4th) 1, (sub nom. Council of Canadians with Disabilities v. Via Rail Canada Inc.) 59 C.H.R.R. D/276, 59 Admin. L.R. (4th) 1, (sub nom. Council of Canadians with Disabilities v. VIA Rail Canada Inc.) [2007] 1 S.C.R. 650 (S.C.C.) considered Statutes considered: Railway Act, R.S.C. 1985, c. R-3 Generally referred to s. 340(1) referred to Telecommunications Act, S.C. 1993, c. 38 Generally referred to s. 7 considered s. 7(a) considered s. 7(b) considered s. 7(c) considered s. 7(f) considered s. 7(g) considered s. 7(h) considered s. 24 considered s. 25(1) considered s. 27 considered s. 27(1) considered s. 27(3) considered
s. 27(5) considered s. 32(g) considered s. 35(1) referred to s. 37 referred to s. 37(1) considered s. 37(1)(a) considered s. 42(1) referred to s. 46.5(1) [en. 1998, c. 8, s. 6] referred to s. 47 considered s. 47(a) considered s. 52(1) considered APPEAL of judgment reported at Bell Canada v. Canadian Radio-Television & Telecommunications Commission (2008), 80 Admin. L.R. (4th) 159, 2008 CarswellNat 544, (sub nom. Consumers Association of Canada v. Canadian Radio-Television & Telecommunications Commission) 375 N.R. 124, 2008 FCA 91, 2008 CarswellNat 2390, 2008 CAF 91 (F.C.A.). POURVOI l'encontre d'un jugement publi Bell Canada v. Canadian Radio-Television & Telecommunications Commission (2008), 80 Admin. L.R. (4th) 159, 2008 CarswellNat 544, (sub nom. Consumers Association of Canada v. Canadian Radio-Television & Telecommunications Commission) 375 N.R. 124, 2008 FCA 91, 2008 CarswellNat 2390, 2008 CAF 91 (F.C.A.). Abella J.: 1 The Telecommunications Act, S.C. 1993, c. 38, sets out certain broad telecommunications policy objectives. It directs the Canadian Radio-television and Telecommunications Commission ("CRTC") to implement them in the exercise of its statutory authority, balancing the interests of consumers, carriers and competitors in the context of the Canadian telecommunications industry. The issue in these appeals is whether this authority was properly exercised. 2 While distinct questions arise in each of the appeals before us, the common problem is whether the CRTC, in the exercise of its rate-setting authority, appropriately directed the allocation of funds to various purposes. In the Bell Canada and TELUS Communications Inc. appeal, the challenged purpose is the distribution of funds to customers, while in the Consumers' Association of Canada and National Anti-Poverty Organization appeal, the impugned allocation was directed at the expansion of broadband infrastructure. For the reasons that follow, in my view the CRTC's allocations were reasonable based on the Canadian telecommunications policy objectives that it is obliged to consider in the exercise of all of its powers, including its authority to approve just and reasonable rates.
Background 3 The CRTC issued its landmark "Price Caps Decision"[FN1] in May 2002. Exercising its rate-setting authority, the CRTC established a formula to regulate the maximum prices charged for certain services offered by incumbent local exchange carriers ("ILECs"), who are primarily well-established telecommunications carriers. 4 As part of its decision, the CRTC ordered the affected carriers to create separate accounting entries in their ledgers. These were called "deferral accounts". The funds contained in these deferral accounts were derived from residential telephone service revenues in non-high cost serving areas ("non-HCSAs"), which are mainly urban. Under the formula established by the Price Caps Decision, any increase in the price charged for these services in a given year was limited to an inflationary cap, less a productivity offset to reflect the low degree of competition in that particular market. 5 More specifically, the effect of the inflationary cap was to bar carriers from increasing their prices at a rate greater than inflation. The productivity offset, on the other hand, put downward pressure on the rates to be charged. While market forces would normally serve to encourage carriers to reduce both their costs and their prices, the low level of competition in the non-HCSA market led the CRTC to conclude that an offsetting factor was necessary as a proxy for the effect of competition. 6 Given the countervailing factors at work in the Price Caps Decision formula, there was the potential for a decrease in the price of residential services in these areas if inflation fell below a certain level. Rather than mandating such a decrease, however, the CRTC concluded that lower prices, and therefore the prospect of lower revenues, would constitute a barrier to the entry of new carriers into this particular telecommunications market. It therefore ordered that amounts representing the difference between the rates actually charged, not including the decrease mandated by the Price Caps Decision formula, and the rates as otherwise determined through the formula, were to be collected from subscribers and recorded in deferral accounts held by each carrier. These accounts were to be reviewed annually by the CRTC. The intent of the Price Caps Decision was, therefore, that prices for these services would remain at a level sufficient to encourage market entry, while at the same time maintaining the pressure on the incumbent carriers to reduce their costs. 7 The principal objectives the CRTC intended the Price Caps Decision to achieve were the following: a) to render reliable and affordable services of high quality, accessible to both urban and rural area customers; b) to balance the interests of the three main stakeholders in telecommunications markets, i.e., customers, competitors and incumbent telephone companies; c) to foster facilities-based competition in Canadian telecommunications markets; d) to provide incumbents with incentives to increase efficiencies and to be more innovative; and e) to adopt regulatory approaches that impose the minimum regulatory burden compatible with the achievement of the previous four objectives. [para. 99] 8 The CRTC discussed the future use of the deferral account funds as follows: The Commission anticipates that an adjustment to the deferral account would be made whenever the Com-
mission approves rate reductions for residential local services that are proposed by the ILECs as a result of competitive pressures. The Commission also anticipates that the deferral account would be drawn down to mitigate rate increases for residential service that could result from the approval of exogenous factors or when inflation exceeds productivity. Other draw downs could occur, for example, through subscriber rebates or the funding of initiatives that would benefit residential customers in other ways. [Emphasis added; para. 412.] At the time, it did not specifically direct how the deferral account funds were to be used, leaving the issue subject to further submissions. While some participants objected to the creation of the deferral accounts, no one appealed the Price Caps Decision (Bell Canada v. Canadian Radio-Television & Telecommunications Commission, 2008 FCA 91, 375 N.R. 124 (F.C.A.), at para. 14). 9 The Price Caps Decision was to apply to services offered by Bell Canada, TELUS, and other affected carriers for the four-year period from June 1, 2002 to May 31, 2006. In a decision in 2005, the CRTC extended this price regulation regime for another year to May 31, 2007[FN2]. The CRTC allowed some draw-downs of the deferral accounts following the Price Caps Decision that are not at issue in these appeals. 10 In March 2003, in two separate decisions, the CRTC approved the rates for Bell Canada and TELUS [FN3]. In the Bell Canada decision, the CRTC appeared to contemplate the continued operation of the deferral accounts established in the Price Caps Decision. It ordered, for example, that certain tax savings be allocated to the deferral accounts: The Commission, in Decision 2002-34, established a deferral account in conjunction with the application of a basket constraint equal to the rate of inflation less a productivity offset to all revenues from residential services in non-HCSAs. The Commission considers that AT&T Canada's proposal to allocate the Ontario GRT and the Quebec TGE tax savings associated with all capped services to the price cap deferral account is inconsistent with that determination. The Commission finds that Bell Canada's proposal to include the Ontario GRT and Quebec TGE tax savings associated with the residential local services in non-HCSAs basket in the price cap deferral account is consistent with that determination. [Emphasis added; para. 32.] 11 On December 2, 2003, Bell Canada sought the approval of the CRTC to use the balance in its deferral account to expand high-speed broadband internet service to remote and rural communities. In response, on March 24, 2004, the CRTC issued a public notice requesting submissions on the appropriate disposition of the deferral accounts[FN4]. Pursuant to this notice, the CRTC conducted a public process whereby proposals were invited for the disposition of the affected carriers' deferral accounts. The review was extensive and proposals were received from numerous parties. 12 This led to the release of the "Deferral Accounts Decision" on February 16, 2006[FN5]. In this decision, the CRTC directed how the funds in the deferral accounts were to be used. These directions form the foundation of these appeals. 13 After considering the various policy objectives outlined in the applicable statute, the Telecommunications Act, and the purposes set out in the Price Caps Decision, the CRTC concluded that all funds in the deferral accounts should be targeted for disposal by a designated date in 2006:
The attachment to this Decision provides preliminary estimates of the deferral account balances as of the end of the fourth year of the current price cap period in 2006. The Commission notes that the deferral account balances are expected to be very large for some ILECs. It also notes the concern that allowing funds to continue to accumulate in the accounts would create inefficiencies and uncertainties. ..... Accordingly, the Commission considers it appropriate not only to provide directions on the disposition of all the funds that will have accumulated in the ILECs' deferral accounts by the end of the fourth year of the price cap period in 2006, but also to provide directions to address amounts recurring beyond this period in order to prevent further accumulation of funds in the deferral accounts. The Commission will provide directions and guidelines for disposing of these amounts later in this Decision. [Emphasis added; paras. 58 and 60.] 14 The CRTC further decided that the deferral accounts should be disbursed primarily for two purposes. As a priority, at least 5 percent of the accounts was to be used for improving accessibility to telecommunications services for individuals with disabilities. The other 95 percent was to be used for broadband expansion in rural and remote communities. Proposals were invited on how the deferral account funds should be applied. If the proposal as approved was for less than the balance of its deferral account, an affected carrier was to distribute the remaining amount to consumers. 15 In summary, therefore, the CRTC decided that the affected carriers should focus on broadband expansion and accessibility improvement. It also decided that if these two objectives could be fulfilled for an amount less than the full deferral account balances, credits to subscribers would be ordered out of the remainder. It should be noted that customers were not to be compensated in proportion to what they had paid through these credits because of the potential administrative complexity of identifying these individuals and quantifying their respective shares. Instead, the credits were to be provided to certain current subscribers. Prospective rate reductions could also be used to eliminate recurring amounts in the accounts. 16 At the time, the balance in the deferral accounts established under the Price Caps Decision was considerable. Bell Canada's account was estimated to contain approximately $480.5 million, while the TELUS account was estimated at about $170 million. 17 It is helpful to set out how the CRTC explained its decision on the allocation of the deferral account funds. Referencing the importance of telecommunications in connecting Canada's "vast geography and relatively dispersed population", it stressed that Canada had fallen behind in the adoption of broadband services (at paras. 73-74). It contrasted the wide availability of broadband service in urban areas with the less developed network in rural and remote communities. Further, it noted that the objectives outlined in the Price Caps Decision and in the Telecommunications Act at s. 7(b) provided for improving the quality of telecommunications services in those communities, and that their social and economic development would be favoured by an expansion of the national broadband network. In its view, this initiative would also provide a helpful complement to the efforts of both levels of government to expand broadband coverage. It therefore concluded that broadband expansion was an appropriate use of a part of the deferral account funds (at paras. 73-80). 18 The CRTC also explained that while customer credits would be consistent with the objectives set out in s. 7 of the Telecommunications Act and with the Price Caps Decision, these disbursements should not be given
priority because broadband expansion and accessibility services provided greater long-term benefits. Nevertheless, credits effectively balanced the interests of the "three main stakeholders in the telecommunications markets" (at para. 115), namely customers, competitors and carriers. It concluded that credits did not contradict the purpose of the deferral accounts, and contrasted one-time credits with a reduction of rates. In its view, credits, unlike rate reductions, did not have a sustained negative impact on competition in these markets, which was the concern the deferral accounts were set up to address (at paras. 112-16). 19 A dissenting Commissioner expressed concerns over the disposition of the deferral account funds. In her view, the CRTC had no mandate to direct the expansion of broadband networks across the country. The CRTC's policy had generally been to ensure the provision of a basic level of service, not services like broadband, and she therefore considered the CRTC's reliance on the objectives of the Telecommunications Act to be inappropriate. 20 On January 17, 2008, the CRTC issued another decision dealing with the carriers' proposals to use their deferral account balances for the purposes set out in the Deferral Accounts Decision[FN6]. Some carriers' plans were approved in part, with the result that only a portion of their deferral account balances was allocated to those projects. Consequently, the CRTC required them to submit, by March 25, 2008, a plan for crediting the balance in their deferral accounts to residential subscribers in non-HCSAs. 21 Bell Canada, as well as the Consumers' Association of Canada and the National Anti-Poverty Organization, appealed the CRTC's Deferral Accounts Decision to the Federal Court of Appeal. The Deferral Accounts Decision was stayed by Richard C.J. in the Federal Court of Appeal on January 25, 2008. The decision requiring further submissions on plans to distribute the deferral account balances was also stayed by Sharlow J.A. pending the filing of an application for leave to appeal to this Court on April 23, 2008. Both stay orders were extended by this Court on September 25, 2008. The stay orders do not apply to the funds allocated for the improvement of accessibility for individuals with disabilities. 22 In a careful judgment by Sharlow J.A., the court unanimously dismissed the appeals, concluding that the Price Caps Decision regime always contemplated the future disposition of the deferral account funds as the CRTC would direct, and that the CRTC acted within its broad mandate to pursue its regulatory objectives. For the reasons that follow, I agree with the conclusions reached by Sharlow J.A. Analysis 23 The parties have staked out diametrically opposite positions on how the balance of the deferral account funds should be allocated. 24 Bell Canada argued that the CRTC had no statutory authority to order what it claimed amounted to retrospective "rebates" to consumers. In its view, the distributions ordered by the CRTC were in substance a variation of rates that had been declared final. TELUS joined Bell Canada in this Court, and argued that the CRTC's order for "rebates" constituted an unjust confiscation of property. 25 In response, the CRTC contended that its broad mandate to set rates under the Telecommunications Act includes establishing and ordering the disposal of funds from deferral accounts. Because the deferral account funds had always been subject to the possibility of disbursement to customers, there was therefore no variation of a final rate or any impermissible confiscation. 26 The Consumers' Association of Canada was the only party to oppose the allocation of 5 percent of the
deferral account balances to improving accessibility, but abandoned this argument during the hearing before the Federal Court of Appeal. Together with the National Anti-Poverty Organization, it argued before this Court that the rest of the deferral account balances should be distributed to customers in full, and that the CRTC had no authority to allow the use of the funds for broadband expansion. 27 These arguments bring us directly to the statutory scheme at issue.
28 The Telecommunications Act lays out the basic legislative framework of the Canadian telecommunications industry. In addition to setting out numerous specific powers, the statute's guiding objectives are set out in s. 7. Pursuant to s. 47(a), the CRTC must consider these objectives in the exercise of all of its powers. These provisions state: 7. It is hereby affirmed that telecommunications performs an essential role in the maintenance of Canada's identity and sovereignty and that the Canadian telecommunications policy has as its objectives (a) to facilitate the orderly development throughout Canada of a telecommunications system that serves to safeguard, enrich and strengthen the social and economic fabric of Canada and its regions; (b) to render reliable and affordable telecommunications services of high quality accessible to Canadians in both urban and rural areas in all regions of Canada; (c) to enhance the efficiency and competitiveness, at the national and international levels, of Canadian telecommunications; (d) to promote the ownership and control of Canadian carriers by Canadians; (e) to promote the use of Canadian transmission facilities for telecommunications within Canada and between Canada and points outside Canada; (f) to foster increased reliance on market forces for the provision of telecommunications services and to ensure that regulation, where required, is efficient and effective; (g) to stimulate research and development in Canada in the field of telecommunications and to encourage innovation in the provision of telecommunications services; (h) to respond to the economic and social requirements of users of telecommunications services; and (i) to contribute to the protection of the privacy of persons. ..... 47. The Commission shall exercise its powers and perform its duties under this Act and any special Act (a) with a view to implementing the Canadian telecommunications policy objectives and ensuring that Canadian carriers provide telecommunications services and charge rates in accordance with section 27; The CRTC relied on these two provisions in arguing that it was required to take into account a broad spectrum of considerations in the exercise of its rate-setting powers, and that the Deferral Accounts Decision was simply an extension of this approach.
29 The Telecommunications Act grants the CRTC the general power to set and regulate rates for telecommunications services in Canada. All tariffs imposed by carriers, including rates for services, must be submitted to it for approval, and it may decide any matter with respect to rates in the telecommunications services industry, as the following provisions show: 24. The offering and provision of any telecommunications service by a Canadian carrier are subject to any conditions imposed by the Commission or included in a tariff approved by the Commission. 25. (1) No Canadian carrier shall provide a telecommunications service except in accordance with a tariff filed with and approved by the Commission that specifies the rate or the maximum or minimum rate, or both, to be charged for the service. ..... 32. The Commission may, for the purposes of this Part, ..... (g) in the absence of any applicable provision in this Part, determine any matter and make any order relating to the rates, tariffs or telecommunications services of Canadian carriers. 30 The guiding rule of rate-setting under the Telecommunications Act is that the rates be "just and reasonable", a longstanding regulatory principle. To determine whether rates meet this standard, the CRTC has a wide discretion which is protected by a privative clause: 27. (1) Every rate charged by a Canadian carrier for a telecommunications service shall be just and reasonable. ..... (3) The Commission may determine in any case, as a question of fact, whether a Canadian carrier has complied with section 25, this section or section 29, or with any decision made under section 24, 25, 29, 34 or 40. ..... (5) In determining whether a rate is just and reasonable, the Commission may adopt any method or technique that it considers appropriate, whether based on a carrier's return on its rate base or otherwise. ..... 52. (1) The Commission may, in exercising its powers and performing its duties under this Act or any special Act, determine any question of law or of fact, and its determination on a question of fact is binding and conclusive. 31 In addition to the power under s. 27(5) to adopt "any method or technique that it considers appropriate" for determining whether a rate is just and reasonable, the CRTC also has the authority under s. 37(1) to order a carrier to adopt "any accounting method or system of accounts" in view of the proper administration of the Telecommunications Act. Section 37(1) states:
37. (1) The Commission may require a Canadian carrier (a) to adopt any method of identifying the costs of providing telecommunications services and to adopt any accounting method or system of accounts for the purposes of the administration of this Act; 32 The CRTC has other broad powers which, while not at issue in this case, nevertheless further demonstrate the comprehensive regulatory powers Parliament intended to grant. These include the ability to order a Canadian carrier to provide any service in certain circumstances (s. 35(1)); to require communications facilities to be provided or constructed (s. 42(1)); and to establish any sort of fund for the purpose of supporting access to basic telecommunications services (s. 46.5(1)). 33 This statutory overview assists in dealing with the preliminary issue of the applicable standard of review. Although the Federal Court of Appeal accepted the parties' position that the applicable standard of review was correctness, Sharlow J.A. acknowledged that the standard of review could be more deferential in light of this Court's decision in VIA Rail Canada Inc. v. Canadian Transportation Agency, 2007 SCC 15, [2007] 1 S.C.R. 650 (S.C.C.), at paras. 98-100. This was an invitation, it seems to me, to clarify what the appropriate standard is. 34 Bell Canada and TELUS concede that the CRTC had the authority to approve disbursements from the deferral accounts for initiatives to improve broadband expansion and accessibility to telecommunications services for persons with disabilities, and that they actually sought such approval. In their view, however, this authority did not extend to what they characterized as retrospective "rebates". Similarly, in the Consumers' appeal the crux of the complaint is with whether the CRTC could direct that the funds be disbursed in certain ways, not with whether it had the authority to direct how the funds ought to be spent generally. 35 This means that for Bell Canada and TELUS appeal, the dispute is over the CRTC's authority and discretion under the Telecommunications Act in connection with ordering credits to customers from the deferral accounts. In the Consumers' appeal, it is over its authority and discretion in ordering that funds from the deferral accounts be used for the expansion of broadband services. 36 A central responsibility of the CRTC is to determine and approve just and reasonable rates to be charged for telecommunications services. Together with its rate-setting power, the CRTC has the ability to impose any condition on the provision of a service, adopt any method to determine whether a rate is just and reasonable and require a carrier to adopt any accounting method. It is obliged to exercise all of its powers and duties with a view to implementing the Canadian telecommunications policy objectives set out in s. 7. 37 The CRTC's authority to establish the deferral accounts is found through a combined reading of ss. 27 and 37(1). The authority to establish these accounts necessarily includes the disposition of the funds they contain, a disposition which represents the final step in a process set in motion by the Price Caps Decision. It is selfevident that the CRTC has considerable expertise with respect to this type of question. This observation is reflected in its extensive statutory powers in this regard and in the strong privative clause in s. 52(1) protecting its determinations on questions of fact from appeal, including whether a carrier has adopted a just and reasonable rate. 38 In my view, therefore, the issues raised in these appeals go to the very heart of the CRTC's specialized expertise. In the appeals before us, the core of the quarrel in effect is with the methodology for setting rates and the allocation of certain proceeds derived from those rates, a polycentric exercise with which the CRTC is statutorily charged and which it is uniquely qualified to undertake. This argues for a more deferential standard of re-
view, which leads us to consider whether the CRTC was reasonable in directing how the funds from the deferral accounts were to be used. (See New Brunswick (Board of Management) v. Dunsmuir, 2008 SCC 9, [2008] 1 S.C.R. 190 (S.C.C.), at para. 54; Khosa v. Canada (Minister of Citizenship & Immigration), 2009 SCC 12, [2009] 1 S.C.R. 339 (S.C.C.), at para. 25; and VIA Rail Canada Inc., at paras. 88-100.) 39 This brings us to the nature of the CRTC's rate-setting power in the context of this case. The predecessor statute for telecommunications rate-setting, the Railway Act, R.S.C. 1985, c. R-3, also stipulated that rates be "just and reasonable" (s. 340(1)). Traditionally, those rates were based on a balancing between a fair rate for the consumer and a fair return on the carrier's investment. (See, e.g., Edmonton (City) v. Northwestern Utilities Ltd., [1929] S.C.R. 186 (S.C.C.), at pp. 192-93 and ATCO Gas & Pipelines Ltd. v. Alberta (Energy & Utilities Board) , 2006 SCC 4, [2006] 1 S.C.R. 140 (S.C.C.), at para. 65.) 40 Even before the expansive language now found in the Telecommunications Act, regulatory agencies had enjoyed considerable discretion in determining the factors to be considered and the methodology that could be adopted for assessing whether rates were just and reasonable. For instance, in dismissing a leave application in General Increase in Freight Rates, Re (1954), 76 C.R.T.C. 12 (S.C.C.), Taschereau J. wrote: [I]f the Board is bound to grant a relief which is just to the public and secures to the railways a fair return, it is not bound to accept for the determination of the rates to be charged, the sole method proposed by the applicant. The obligation to act is a question of law, but the choice of the method to be adopted is a question of discretion with which, under the statute, no Court of law may interfere. [Emphasis added; p. 13.] In making this determination, he relied on Duff C.J.'s judgment in Canadian National Railway v. Bell Telephone Co., [1939] S.C.R. 308 (S.C.C.), for the following proposition in the particular statutory context of that case: The law dictates neither the order to be made in a given case nor the considerations by which the Board is to be guided in arriving at the conclusion that an order, or what order, is necessary or proper in a given case. True, it is the duty of all public bodies and others invested with statutory powers to act reasonably in the execution of them, but the policy of the statue [sic] is that, subject to the appeal to the Governor in Council under s. 52, in exercising an administrative discretion entrusted to it, the Board itself is to be the final arbiter as to the order to be made. [p. 315] (See also Michael H. Ryan, Canadian Telecommunications Law and Regulation (loose-leaf ed.), at 612.) 41 The CRTC's already broad discretion in determining whether rates are just and reasonable has been further enhanced by the inclusion of s. 27(5) in the Telecommunications Act permitting the CRTC to adopt "any method", language which was absent from the Railway Act. 42 Even more significantly, the Railway Act contained nothing analogous to the statutory direction under s. 47 that the CRTC must exercise its rate-setting powers with a view to implementing the Canadian telecommunications objectives set out in s. 7. These statutory additions are significant. Coupled with its rate-setting power, and its ability to use any method for arriving at a just and reasonable rate, these provisions contradict the restrictive interpretation of the CRTC's authority proposed by various parties in these appeals. 43 This was highlighted by Sharlow J.A. when she stated:
Because of the combined operation of section 47 and section 7 of the Telecommunications Act ..., the CRTC's rating jurisdiction is not limited to considerations that have traditionally been considered relevant to ensuring a fair price for consumers and a fair rate of return to the provider of telecommunication services. Section 47 of the Telecommunications Act expressly requires the CRTC to consider, as well, the policy objectives listed in section 7 of the Telecommunications Act. What that means, in my view, is that in rating decisions under the Telecommunications Act, the CRTC is entitled to consider any or all of the policy objectives listed in section 7. [para. 35] 44 It is true that the CRTC had previously used a "rate base rate of return" method, based on a combination of a rate of return for investors in telecommunications carriers and a rate base calculated using the carriers' assets. This resulted in rates charged for the carrier's services that would, on the one hand, provide a fair return for the capital invested in the carrier, and, on the other, be fair to the customers of the carrier. 45 However, these expansive provisions mean that the rate base rate of return approach is not necessarily the only basis for setting a just and reasonable rate. Furthermore, based on ss. 7, 27(5) and 47, the CRTC is not required to confine itself to balancing only the interests of subscribers and carriers with respect to a particular service. In the Price Caps Decision, for example, the CRTC chose to focus on maximum prices for services, rather than on the rate base rate of return approach. It did so, in part, to foster competition in certain markets, a goal untethered to the direct relationship between the carrier and subscriber in the traditional rate base rate of return approach. A similar pricing approach was adopted by the CRTC in a decision preceding the Price Caps Decision[FN7]. 46 The CRTC has interpreted these provisions broadly and identified them as responsive to the evolved industry context in which it operates. In its "Review of Regulatory Framework" decision[FN8], it wrote: The Act ... provides the tools necessary to allow the Commission to alter the traditional manner in which it regulates (i.e., to depart from rate base rate of return regulation). ..... In brief, telecommunications today transcends traditional boundaries and simple definition. It is an industry, a market and a means of doing business that encompasses a constantly evolving range of voice, data and video products and services. ..... In this context, the Commission notes that the Act contemplates the evolution of basic service by setting out as an objective the provision of reliable and affordable telecommunications, rather than merely affordable telephone service. [Emphasis added; pp. 6 and 10.] 47 In Edmonton (City) v. 360Networks Canada Ltd./London Connect Inc., 2007 FCA 106, [2007] 4 F.C.R. 747 (F.C.A.), leave to appeal refused, [2007] 3 S.C.R. vii (note) (S.C.C.), the Federal Court of Appeal drew similar conclusions, observing that the Telecommunications Act should be interpreted by reference to the policy objectives, and that s. 7 justified in part the view that the "Act should be interpreted as creating a comprehensive regulatory scheme" (at para. 46). A duty to take a more comprehensive approach was also noted by Ryan, who
observed: Because of the importance of the telecommunications industry to the country as a whole, rate-making issues may sometimes assume a dimension that gives them a significance that extends beyond the immediate interests of the carrier, its shareholders and its customers, and engages the interests of the public at large. It is also part of the duty of the regulator to take these more far-reaching interests into account. [604] 48 This leads inevitably, it seems to me, to the conclusion that the CRTC may set rates that are just and reasonable for the purposes of the Telecommunications Act through a diverse range of methods, taking into account a variety of different constituencies and interests referred to in s. 7, not simply those it had previously considered when it was operating under the more restrictive provisions of the Railway Act. This observation will also be apposite later in these reasons when the question of "final rates" is discussed in connection with the Bell Canada appeal. 49 I see nothing in this conclusion which contradicts the ratio in Barrie Public Utilities v. Canadian Cable Television Assn., 2003 SCC 28, [2003] 1 S.C.R. 476 (S.C.C.). In that case, the issue was whether the CRTC could make an order granting cable companies access to certain utilities' power poles. In that decision, the CRTC had relied on the Canadian telecommunications policy objectives to inform its interpretation of the relevant provisions. In deciding that the language of the Telecommunications Act did not give the CRTC the power to grant access to the power poles, Gonthier J. for the majority concluded that the CRTC had inappropriately interpreted the Canadian telecommunications policy objectives in s. 7 as power-conferring (at para. 42). 50 The circumstances of Barrie Public Utilities are entirely distinct from those at issue before us. Here, we are dealing with the CRTC setting rates that were required to be just and reasonable, an authority fully supported by unambiguous statutory language. In so doing, the CRTC was exercising a broad authority, which, according to s. 47, it was required to do "with a view to implementing the Canadian telecommunications policy objectives ...". The policy considerations in s. 7 were factors that the CRTC was required to, and did, take into account. 51 Nor does this Court's decision in ATCO preclude the pursuit of public interest objectives through ratesetting. In that case, Bastarache J. for the majority, took a strict approach to the Alberta Energy and Utilities Board's powers under the applicable statute. The issue was whether the Board had the authority to order the distribution of proceeds by a regulated company to its subscribers from an asset sale it had approved. It was argued that because the Board had the authority to make "further orders" and impose conditions "in the public interest" on any order, it therefore had the ability to order the disposition of the sale proceeds. 52 In holding that the Board had no such authority, Bastarache J. relied in part on the conclusion that the Board's statutory power to make orders or impose conditions in the public interest was insufficiently precise to grant the ability to distribute sale proceeds to ratepayers (at para. 46). The ability of the Board to approve an asset sale, and its authority to make any order it wished in the public interest, were necessarily limited by the context of the relevant provisions (at paras. 46-48 and 50). It was obliged too to adopt a rate base rate of return method to determine rates, pursuant to its governing statute (at paras. 65-66). 53 Unlike ATCO, in the case before us the CRTC's rate-setting authority, and its ability to establish deferral accounts for this purpose, are at the very core of its competence. The CRTC is statutorily authorized to adopt any method of determining just and reasonable rates. Furthermore, it is required to consider the statutory objectives in the exercise of its authority, in contrast to the permissive, free-floating direction to consider the public interest that existed in ATCO. The Telecommunications Act displaces many of the traditional restrictions on rate-
setting described in ATCO, thereby granting the CRTC the ability to balance the interests of carriers, consumers and competitors in the broader context of the Canadian telecommunications industry (Review of Regulatory Framework Decision, at pp. 6 and 10). 54 The fact that deferral accounts are at issue does nothing to change this framework. No party objected to the CRTC's authority to establish the deferral accounts themselves. These accounts are accepted regulatory tools, available as a part of the Commission's rate-setting powers. As the CRTC has noted, deferral accounts "enabl[e] a regulator to defer consideration of a particular item of expense or revenue that is incapable of being forecast with certainty for the test year"[FN9]. They have traditionally protected against future eventualities, particularly the difference between forecasted and actual costs and revenues, allowing a regulator to shift costs and expenses from one regulatory period to another. While the CRTC's creation and use of the deferral accounts for broadband expansion and consumer credits may have been innovative, it was fully supported by the provisions of the Telecommunications Act. 55 In my view, it follows from the CRTC's broad discretion to determine just and reasonable rates under s. 27, its power to order a carrier to adopt any accounting method under s. 37, and its statutory mandate under s. 47 to implement the wide-ranging Canadian telecommunications policy objectives set out in s. 7, that the Telecommunications Act provides the CRTC with considerable scope in establishing and approving the use to be made of deferral accounts. They were created in accordance both with the CRTC's rate-setting authority and with the goal that all rates charged by carriers were and would remain just and reasonable. 56 A deferral account would not serve its purpose if the CRTC did not also have the power to order the disposition of the funds contained in it. In my view, the CRTC had the authority to order the disposition of the accounts in the exercise of its rate-setting power, provided that this exercise was reasonable. 57 I therefore agree with the following observation by Sharlow J.A.: The Price Caps Decision required Bell Canada to credit a portion of its final rates to a deferral account, which the CRTC had clearly indicated would be disposed of in due course as the CRTC would direct. There is no dispute that the CRTC is entitled to use the device of a mandatory deferral account to impose a contingent obligation on a telecommunication service provider to make expenditures that the CRTC may direct in the future. It necessarily follows that the CRTC is entitled to make an order crystallizing that obligation and directing a particular expenditure, provided the expenditure can reasonably be justified by one or more of the policy objectives listed in section 7 of the Telecommunications Act. [Emphasis added; para. 52.] 58 This general analytical framework brings us to the more specific questions in these appeals. In the first appeal, Bell Canada relied on Gonthier J.'s decision Bell Canada v. Canadian Radio-Television & Telecommunications Commission, [1989] 1 S.C.R. 1722 (S.C.C.) ("Bell Canada (1989)"), to argue that "final" rates cannot be changed and that the funds in the deferral accounts could not, therefore, be distributed as "rebates" to customers. 59 In Bell Canada (1989), the CRTC approved a series of interim rates. It subsequently reviewed them in light of Bell Canada's changed financial situation, and ordered the carrier to credit what it considered to be excess revenues to its current subscribers. Arguing against the CRTC's authority to do so, Bell Canada contended that the CRTC could not order a one-time credit with respect to revenues earned from rates approved by the
CRTC, whether the rate order was an interim one or not. Gonthier J. observed that while the Railway Act contemplated a positive approval scheme that only allowed for prospective, not retroactive or retrospective ratesetting, the one-time credit at issue was nevertheless permissible because the original rates were interim and therefore inherently subject to change. 60 In the current case, Bell Canada argued that the rates had been made final, and that the disposition of the deferral accounts for one-time credits was therefore impermissible. More specifically, it argued that the CRTC's order of one-time credits from the deferral accounts amounted to retrospective rate-setting as the term was used in Bell Canada (1989), at p. 1749, namely, that their "purpose is to remedy the imposition of rates approved in the past and found in the final analysis to be excessive" (at p. 1749). 61 In my view, because this case concerns encumbered revenues in deferral accounts (referred to by Sharlow J.A. as contingent obligations or liabilities), we are not dealing with the variation of final rates. As Sharlow J.A. pointed out, Bell Canada (1989) is inapplicable because it was known from the outset in the case before us that Bell Canada would be obliged to use the balance of its deferral account in accordance with the CRTC's subsequent direction (at para. 53). 62 It would, with respect, be an oversimplification to consider that Bell Canada (1989) applies to bar the provision of credits to consumers in this case. Bell Canada (1989) was decided under the Railway Act, a statutory scheme that, significantly, did not include any of the considerations or mandates set out in ss. 7, 27(5) and 47 of the Telecommunications Act. Nor did it involve the disposition of funds contained in deferral accounts. 63 In my view, the credits ordered out of the deferral accounts in the case before us are neither retroactive nor retrospective. They do not vary the original rate as approved, which included the deferral accounts, nor do they seek to remedy a deficiency in the rate order through later measures, since these credits or reductions were contemplated as a possible disposition of the deferral account balances from the beginning. These funds can properly be characterized as encumbered revenues, because the rates always remained subject to the deferral accounts mechanism established in the Price Caps Decision. The use of deferral accounts therefore precludes a finding of retroactivity or retrospectivity. Furthermore, using deferral accounts to account for the difference between forecast and actual costs and revenues has traditionally been held not to constitute retroactive ratesetting (Epcor Generation Inc. v. Alberta (Energy & Utilities Board), 2003 ABCA 374, 346 A.R. 281 (Alta. C.A.), at para. 12, and Newfoundland (Board of Commissioners of Public Utilities), Re (1998), 164 Nfld. & P.E.I.R. 60 (Nfld. C.A.), at paras. 97-98 and 175). 64 The Deferral Accounts Decision was the culmination of a process undertaken in the Price Caps Decision. In the Price Caps Decision, the CRTC indicated that the amounts in the deferral accounts were to be used in a manner contributing to achieving the CRTC's objectives (at paras. 409 and 412). In the Deferral Accounts Decision, the CRTC summarized its earlier findings that draw-downs could occur for various purposes, including through subscriber credits (at para. 6). When the CRTC approved the rates derived from the Price Caps Decision, the portion of the revenues that went into the deferral accounts remained encumbered. The deferral accounts, and the encumbrance to which the funds recorded in them were subject, were therefore an integral part of the rate-setting exercise ensuring that the rates approved were just and reasonable. It follows that nothing in the Deferral Accounts Decision changed either the Price Caps Decision or any other prior CRTC decision on this point. The CRTC's later allocation of deferral account balances for various purposes, therefore, including customer credits, was not a variation of a final rate order.
65 The allocation of deferral account funds to consumers was not, strictly speaking, a "rebate" in any event. Instead, as in Bell Canada (1989), these allocations were one-time disbursements or rate reductions the carriers were required to make out of the deferral accounts to their current subscribers. The possibility of one-time credits was present from the inception of the rate-setting exercise. From the Price Caps Decision onwards, it was understood that the disposition of the deferral account funds might include an eventual credit to subscribers once the CRTC determined the appropriate allocation. It was precisely because the rate-setting mechanism approved by the CRTC included accumulation in and disposition from the deferral accounts pursuant to further CRTC orders, that the rates were and continued to be just and reasonable. 66 Therefore, rather than viewing Bell Canada (1989) as setting a strict rule that subscriber credits can never be ordered out of revenues derived from final rates, it is important to remember Gonthier J.'s concern that the financial stability of regulated utilities could be undermined if rates were open to indiscriminate variation (at p. 1760). Nothing in the Deferral Accounts Decision undermined the financial stability of the affected carriers. The amounts at issue were always treated differently for accounting purposes, and the regulated carriers were aware of the fact that the portion of their revenues going into the deferral accounts remained encumbered. In fact, the Price Caps Decision formula would have allowed for lower rates than the ones ultimately set, were it not for the creation of the deferral accounts. Those lower rates could conceivably have been considered sufficient to maintain the financial stability of the carriers and were increased only in an effort to encourage market entry by new competitors. 67 TELUS argued additionally that the Deferral Accounts Decision constituted a confiscation of its property. This is an argument I have difficulty accepting. The funds in the accounts never belonged unequivocally to the carriers, and always consisted of encumbered revenues. Had the CRTC intended that these revenues be used for any purposes the affected carriers wanted, it could simply have approved the rates as just and reasonable and ordered the balance of the deferral accounts turned over to them. It chose not to do so. 68 It is also worth noting that in approving Bell Canada's rates, the CRTC ordered it to allocate certain tax savings to the deferral accounts[FN10]. Neither the CRTC, nor Bell Canada, could possibly have expected that the company would be able to keep that portion of its rate revenue representing a past liability for taxes that it was in fact not currently liable to pay or defer. 69 For the above reasons, I would dismiss the Bell Canada and TELUS appeal.
70 The premise underlying the Consumers' Association of Canada appeal is that the disposition of some deferral account funds for broadband expansion highlighted the fact that the rates charged by carriers were, in a certain sense, not just and reasonable. Consumers can only succeed if it can demonstrate that the CRTC's decision was unreasonable. 71 At its core, Consumers' primary argument was that the Deferral Accounts Decision effectively forced users of a certain service (residential subscribers in certain areas) to subsidize users of another service (the future users of broadband services) once the expansion of broadband infrastructure was completed. In its view, this was an indication that the rates charged to residential users were not in fact just and reasonable, and that therefore the balance in the deferral accounts, excluding the disbursements for accessibility services, should be distributed to customers. 72 As previously noted, the deferral accounts were created and disbursed pursuant to the CRTC's power to approve just and reasonable rates, and were an integral part of such rates. Far from rendering these rates inap-
propriate, the deferral accounts ensured that the rates were just and reasonable. And the policy objectives in s. 7, which the CRTC is always obliged to consider, demonstrate that the CRTC need not limit itself to considering solely the service at issue in determining whether rates are just and reasonable. The statute contemplates a comprehensive national telecommunications framework. It does not require the CRTC to atomize individual services. It is for the CRTC to determine a tolerable level of cross-subsidization. 73 Nor does the traditional approach to telecommunications regulation support Consumers' argument. Longdistance telephone users have long subsidized local telephone users (Price Caps Decision, at para. 2). Therefore, while rates for individual services covered by the Telecommunications Act may be evaluated on a just and reasonable basis, rates are not necessarily rendered unreasonable or unjust simply because there is some crosssubsidization between services. (See Ryan, at 604, for the proposition that the CRTC can determine the appropriate extent of cross-subsidization for a given telecommunications carrier.) 74 In my view, the CRTC properly considered the objectives set out in s. 7 when it ordered expenditures for the expansion of broadband infrastructure and consumer credits. In doing so, it treated the statutory objectives as guiding principles in the exercise of its rate-setting authority. Pursuing policy objectives through the exercise of its rate-setting power is precisely what s. 47 requires the CRTC to do in setting just and reasonable rates. 75 In deciding to allocate the deferral account funds to improving accessibility services and broadband expansion in rural and remote areas, the CRTC had in mind its statutorily mandated objectives of facilitating "the orderly development throughout Canada of a telecommunications system that serves to ... strengthen the social and economic fabric of Canada" under s. 7(a); rendering "reliable and affordable telecommunications services ... to Canadians in both urban and rural areas" under s. 7(b); and responding "to the economic and social requirements of users of telecommunications services" pursuant to s. 7(h). 76 The CRTC heard from several parties, considered its statutorily mandated objectives in exercising its powers, and decided on an appropriate course of action. Under the circumstances, I have no hesitation in holding that the CRTC made a reasonable decision in ordering broadband expansion. 77 I would therefore conclude that the CRTC did exactly what it was mandated to do under the Telecommunications Act. It had the statutory authority to set just and reasonable rates, to establish the deferral accounts, and to direct the disposition of the funds in those accounts. It was obliged to do so in accordance with the telecommunications policy objectives set out in the legislation and, as a result, to balance and consider a wide variety of objectives and interests. It did so in these appeals in a reasonable way, both in ordering subscriber credits and in approving the use of the funds for broadband expansion. 78 I would dismiss the appeals. At the request of all parties, there will be no order for costs. Appeal dismissed. Pourvoi rejet. FN1 Telecom, Re CRTC 2002-34 [2002 CarswellNat 5491 (C.R.T.C.)]. FN2 Telecom, Re CRTC 2005-69 [2005 CarswellNat 6973 (C.R.T.C.)]. FN3 Telecom, Re CRTC 2003-15 [2003 CarswellNat 6055 (C.R.T.C.)], and Telecom Decision CRTC 2003-18 [
2003 CarswellNat 6094 (C.R.T.C.)] FN4 Telecom Public Notice CRTC 2004-1 FN5 Telecom, Re CRTC 2006-9 [2006 CarswellNat 6317 (C.R.T.C.)]. FN6 Telecom, Re CRTC 2008-1 [2008 CarswellNat 1061 (C.R.T.C.)]. FN7 Telecom Decision CRTC 97-9 [1997 CarswellNat 3411 (C.R.T.C.)]. FN8 Telecom Decision CRTC 94-19 [1994 CarswellNat 3191 (C.R.T.C.)]. FN9 Telecom Decision CRTC 93-9 (July 23, 1993), Doc. 93-9 (C.R.T.C.). FN10 Telecom Decision CRTC 2003-15, at para. 32. END OF DOCUMENT
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Page 1 1990 CarswellOnt 97, 77 C.R. (3d) 273, 57 C.C.C. (3d) 115, 110 N.R. 321, [1990] 2 S.C.R. 254, 49 C.R.R. 79, 41 O.A.C. 81, J.E. 90-1018, EYB 1990-67551
1990 CarswellOnt 97, 77 C.R. (3d) 273, 57 C.C.C. (3d) 115, 110 N.R. 321, [1990] 2 S.C.R. 254, 49 C.R.R. 79, 41 O.A.C. 81, J.E. 90-1018, EYB 1990-67551 R. v. S. (S.) R. v. S.S. et al. Supreme Court of Canada Dickson C.J.C., Lamer, Wilson, Le Forest, Sopinka, Gonthier and Cory JJ. Heard: March 23, 1989 Judgment: June 28, 1990 Docket: No. 20845 Thomson Reuters Canada Limited or its Licensors (excluding individual court documents). All rights reserved. Counsel: B. Gover, for the Crown. B. Weagant and M.A. MacDonald, for respondent. D.J.A. Rutherford, Q.C., and D.J. Avison, for Attorney General of Canada. Y. De Montigny and J. Turmel, for Attorney General of Quebec. R.G. Richards and R. Macnab, for Attorney General of Saskatchewan. Subject: Criminal; Constitutional Criminal Law --- Constitutional issues in criminal law Constitutional responsibility for criminal law Provincial legislation in quasi-criminal matters Young offenders Provincial alternative measures programmes Young offenders Alternative measures Section 4(1) of Young Offenders Act not imposing legal obligation on provinces to implement alternative measures programs, but leaving such measures to discretion of each province. Constitutional law Constitution Act, 1867 Distribution of legislative powers Criminal law Section 4(1) of Young Offenders Act, authorizing alternative to traditional punitive approach of criminal law, being within federal criminal power Not being unconstitutional delegation of powers. Civil liberties Equality rights Equal protection and benefit of law Decision of Attorney General of Ontario not to exercise discretion under s. 4(1) of Young Offenders Act to implement alternative measures pro-
gram not being subject to challenge under s. 15 of Charter of Rights and Freedoms Section 4(1) not violating Charter equality guarantee Non-implementation of alternative measures in Ontario not being discriminatory Unequal treatment stemming from exercise of valid provincial jurisdiction not being subject to s. 15 challenge solely on basis of distinction based on province of residence Division of powers mandating and encouraging geographical distinctions in criminal law. A youth was charged with possession of stolen shirts and sweaters exceeding $200 in value. Before plea, his counsel brought a motion alleging that Ontario's failure to designate "alternative measures programs" for the purposes of s. 4 of the Young Offenders Act had violated the youth's right to equality before the law guaranteed by s. 15(1) of the Canadian Charter of Rights and Freedoms. Section 4 provides that "alternative measures may be used to deal with a young person alleged to have committed an offence instead of judicial proceedings under this Act only if" a number of conditions are met. The trial judge found that the Ontario government, unlike the governments of other provinces, had not implemented an alternative measures program and that this was the only reason that the accused had not been considered for such a program. The Ontario Attorney General had had a philosophical conflict with the federal government with respect to the dispositions and procedures of the Young Offenders Act and was reluctant to extend public funds or to cope with the administrative difficulties in establishing alternative measures. The trial judge held that the Attorney General of Ontario was under a positive duty to authorize alternative measures programs in the province, in view of s. 3(1)(d) and (f) of the Act, and the failure to implement the programs, which were available to young offenders in other provinces, infringed the accused's s. 15(1) right. The infringement could not be justified under s. 1 of the Charter, and the charge was dismissed. On appeal before the Ontario Court of Appeal, the accused argued that s. 4 was, in pith and substance, legislation in relation to child welfare, a matter falling within the sphere of provincial legislative competence under s. 92(13) of the Constitution Act, 1867. The court rejected this argument, but a majority upheld the trial judge's decision that there had been a violation of s. 15(1), and dismissed the appeal. The majority held that the absence of the benefit of alternative measures in Ontario was a disadvantage that was so unfair as to be discriminatory. The Crown appealed. Held: Appeal allowed; new trial ordered. Section 4(1) of the Young Offenders Act does not impose a legal obligation on provinces to implement alternative measures programs, but rather leaves the decision to the discretion of each province. The use of the word "may" in s. 4(1) and the absence of an obligation expressed in unequivocally mandatory language led to that conclusion. The word "should" in s. 3(1)(d) of the Act, which states that "taking measures other than judicial proceedings under this Act should be considered for dealing with young offenders who have committed offences", did not provide evidence of a mandatory duty. In the context of s. 3(1)(d), the word "should" denoted simply a "desire or request", not a legal obligation. Section 4(1) gave to the provincial Attorneys General a power but not a duty to develop and implement alternative measures programs. It must have been within the contemplation of Parliament that there would be diversity among provinces in the content of alternative measures programs and as to whether they were instituted at all. The fact that the Attorney General of Ontario had chosen not to implement an alternative measures program should not be construed as a failure to comply with a statutorily-imposed duty. Rather, it was a legitimate decision not to exercise a power granted by Parliament.
Section 4 of the Act is intra vires Parliament. The Young Offenders Act as a whole is valid criminal law. It addresses the commission of offences contrary to the Criminal Code and other federal criminal law statutes. While s. 4(1) differs from most criminal law remedial statutes, in that the focus is on alternatives to more traditional criminal sanctions, the federal legislative power over criminal law is sufficiently flexible to recognize new developments in methods of dealing with offenders. Indeed, Parliament's jurisdiction under s. 91(27) of the Constitution Act, 1867, extends beyond the confines of creating offences and establishing penalties. Section 4 demonstrated a concern with a curative approach rather than the traditional punitive approach of the criminal law. There was a concern with preventing recidivism and with balancing the interests of the offending young person with those of society. Section 4, therefore, was a valid exercise of Parliament's legislative authority under s. 91(27). Section 4 of the Act is not an unconstitutional delegation of Parliament's authority over criminal law and procedure. There is no limitation imposed by the Constitution Act, 1867, on Parliament's ability to leave the implementation of alternative measures programs to the discretion of the provincial Attorneys General. Authority over the prosecution of young offenders has been delegated through the definition of "Attorney General" in s. 2 of the Criminal Code, made applicable to the Young Offenders Act by s. 2(4) [now s. 2(2)]. Provinces had accepted a delegation of responsibility respecting the prosecution of young offenders. The discretion to establish alternative measures programs was clearly incidental to that legitimate delegation. Since s. 4 of the Act does not impose a mandatory duty on the province to establish alternative measures programs, the Attorney General of Ontario's decision not to authorize such programs could not contravene the accused's equality rights under s. 15(1) of the Charter. His decision was made in accordance with the permissive terms of s. 4. That section, and not the discretionary determination made by the Attorney General pursuant to its provisions, constituted "the law" for the purpose of a s. 15 challenge. Section 4 had not itself been challenged. Further, once it had been determined that there was no duty on the Attorney General of Ontario to implement alternative measures programs, the non-exercise of discretion could not be constitutionally attacked simply because it created differences among provinces. To find otherwise would potentially open to Charter scrutiny every jurisdictionally permissible exercise of power by a province, solely on the basis that it created a distinction in how individuals are treated in different provinces. Had s. 4 been challenged, there would have been no violation of s. 15. As a result of the discretion granted by Parliament to the provincial Attorneys General, alternative measures programs were available to young offenders in all the provinces of Canada except Ontario. The absence of this benefit in Ontario had to be considered a legal disadvantage imposed upon young offenders resident in that province. However, while the accused had established that he was not receiving equal treatment before and under the law or that the law had a differential impact on him in the protection or benefit accorded by law, he had not established that s. 4 was discriminatory. In a federal system of government, the values underlying s. 15(1) cannot be given unlimited scope. The division of power not only permits differential treatment based upon province of residence, it mandates and encourages geographical distinction. Unequal treatment which stems solely from the exercise by provincial legislators of their legitimate jurisdictional powers cannot be the subject of a s. 15(1) challenge on the basis only that it creates distinctions based upon province of residence. A case-by-case approach is appropriate to determine whether province-based distinctions which arise from the application of federal law contravene s. 15(1) of the Charter. Here, the legislation did not amount to a distinction based upon a "personal characteristic" for the purposes of s. 15(1). Differential application of federal law can be a legitimate means of forwarding the values of a federal system. In the context of the administration of the criminal law, differential application is constitutionally fostered by ss. 91(27) and 92(14) of the Constitution Act, 1867. The area of criminal law and its application is one in which the balancing of national interests and local
concerns has been accomplished by a constitutional structure that both permits and encourages federal-provincial co-operation. The question of how young people found to have committed criminal offences should be dealt with was one upon which it was legitimate for Parliament to allow for province-based distinctions as a reflection of distinct and rationally-based political values and sensitivities. Alternative measures programs could be adapted to the needs of different regions and communities. Cases considered: Andrews v. Law Soc. of B.C., [1989] 1 S.C.R. 143, [1989] 2 W.W.R. 289, 34 B.C.L.R. (2d) 273, 25 C.C.E.L. 255, 10 C.H.R.R. D/5719, 56 D.L.R. (4th) 1, 36 C.R.R. 193, 91 N.R. 255 applied B.C. (A.G.) v. Smith, [1967] S.C.R. 702, 2 C.R.N.S. 277, 61 W.W.R. 236, [1969] 1 C.C.C. 244, 65 D.L.R. (2d) 82 [B.C.] referred to Fredericton (City) v. R. (1880), 3 S.C.R. 505, 2 Cart. 27 [N.B.] considered Goodyear Tire & Rubber Co. of Can. v. R., [1956] S.C.R. 303, 114 C.C.C. 380, 2 D.L.R. (2d) 11, 26 C.P.R. 1 [Ont.] applied Julius v. Oxford (Lord Bishop) (1880), 5 App. Cas. 214 (H.L.) applied Ont. (A.G.) v. Hamilton Street Ry. Co., [1903] A.C. 524, 2 O.W.R. 672, 7 C.C.C. 326 (P.C.) applied Peel (Reg. Mun.) v. MacKenzie, [1982] 2 S.C.R. 9, 68 C.C.C. (2d) 289, 139 D.L.R. (3d) 14, 42 N.R. 572 [Ont.] referred to Proprietary Articles Trade Assn. v. Can. (A.G.), [1931] A.C. 310, [1931] 1 W.W.R. 552, 55 C.C.C. 241, [1931] 2 D.L.R. 1 applied R. v. Burnshine, [1975] 1 S.C.R. 693, 25 C.R.N.S. 270, [1974] 4 W.W.R. 49, 15 C.C.C. (2d) 505, 44 D.L.R. (3d) 584, 2 N.R. 53 [B.C.] considered R. v. Cornell, [1988] 1 S.C.R. 461, 63 C.R. (3d) 50, 4 M.V.R. (2d) 153, 40 C.C.C. (3d) 385, 33 C.R.R. 193, 27 O.A.C. 360, 83 N.R. 384referred to R. v. M. (S.H.), [1989] 2 S.C.R. 446, 71 C.R. (3d) 257, [1989] 6 W.W.R. 385, 69 Alta. L.R. (2d) 209, 50 C.C.C. (3d) 503, 100 A.R. 321, 100 N.R. 1 considered R. v. Oakes, [1986] 1 S.C.R. 103, 50 C.R. (3d) 1, 24 C.C.C. (3d) 321, 26 D.L.R. (4th) 200, 19 C.R.R. 308, 14 O.A.C. 335, 65 N.R. 87 referred to R. v. Turpin, [1989] 1 S.C.R. 1296, 69 C.R. (3d) 97, 48 C.C.C. (3d) 8, 39 C.R.R. 306, 34 O.A.C. 115, 96 N.R. 115 applied R. v. Zelensky, [1978] 2 S.C.R. 940, 2 C.R. (3d) 107, [1978] 3 W.W.R. 693, 41 C.C.C. (2d) 97, 86 D.L.R. (3d) 179, 21 N.R. 372 [Man.] applied Ref. re Bill 30, [1987] 1 S.C.R. 1148, (sub nom. Ref. re Act to Amend Educ. Act) 40 D.L.R. (4th) 18, 36 C.R.R. 305, 22 O.A.C. 321, (sub nom. Ref. re R.C. Sep. High Sch. Funding) 77 N.R. 241 applied
Statutes considered: Canadian Bill of Rights, R.S.C. 1970, App. III [now R.S.C. 1980, App. III] s. 1(b) Canadian Charter of Rights and Freedoms s. 1 s. 11(b) s. 15 s. 24(1) Church Discipline Act, 1840 (3 & 4 Vict., c. 86) s. 3 Combines Investigation Act, R.S.C. 1927, c. 26 Constitution Act, 1867 s. 91(27) s. 92(13), (14) Criminal Code, R.S.C. 1927, c. 36 Criminal Code, R.S.C. 1970, c. C-34 [now R.S.C. 1985, c. C-46] s. 2 "Attorney General" [re-en. R.S.C. 1985, c. 27 (1st Supp.), s. 2(1)] Criminal Code, R.S.C. 1985, c. C-46 Interpretation Act, R.S.C. 1970, c. I-23 [now R.S.C. 1985, c. I-21] s. 28 [am. R.S.C. 1970, c. 10 (2nd Supp.), s. 65; 1972, c. 17, s. 2; 1974-75-76, c. 16, s. 4; c. 19, s. 2; 1978-79, c. 11, s. 10; 1984, c. 41, s. 2; now ss. 11, 35 [am. R.S.C. 1985, c. 11 (1st Supp.), s. 2; c. 27 (2nd Supp.), s. 10], 37(1)] Juvenile Delinquents Act, R.S.C. 1952, c. 160 Juvenile Delinquents Act, R.S.C. 1970, c. J-3 [repealed 1980-81-82-83, c. 110, s. 80] s. 20 Young Offenders Act, S.C. 1980-81-82-83, c. 110 [now R.S.C. 1985, c. Y-1]
s. 2(1) "alternative measures", (4) [now s. 2(2)] s. 3 s. 4 Authorities considered: Bala and Lilles, The Young Offenders Act Annotated (1984), pp. 17-18, 22-23, 25.Ct, The Interpretation of Legislation in Canada (1984), p. 235.Driedger, Construction of Statutes, 2nd ed. (1983), p. 87.Hansard, House of Commons Debates, 15th April 1981, p. 9309.Hudson, Hornick and Burrows, Justice and the Young Offender in Canada (1988), pp. 4-5.Oxford English Dictionary, 2nd ed. (1989), vol. 9, "may".Swinton, "Competing Visions of Constitutionalism: Of Federalism and Rights", in Swinton and Rogerson (eds.), Competing Constitutional Visions: The Meech Lake Accord (1988), p. 291.Swinton and Rogerson, Competing Constitutional Visions: The Meech Lake Accord (1988), p. 291.Words and phrases considered: may should Appeal by Crown from judgment of Ontario Court of Appeal, 62 C.R. (3d) 64, 42 C.C.C. (3d) 41, 35 C.R.R. 247, 26 O.A.C. 285, which affirmed judgment of Provincial Court, [1986] W.D.F.L. 2598, acquitting youth of possession of stolen property. The judgment of the court was delivered by Dickson C.J.C.: 1 This appeal [from 63 C.R. (3d) 64, 42 C.C.C. (3d) 41, 35 C.R.R. 247, 26 O.A.C. 285, affirming [1986] W.D.F.L. 2598] concerns the failure of the Attorney General of Ontario to implement a program of "alternative measures" within that province pursuant to s. 4 of the Young Offenders Act, S.C. 1980-81-82-83, c. 110 (now R.S.C. 1985, c. Y-1). The Legislation Young Offenders Act 2 The provisions of the Young Offenders Act relevant to this appeal, as they stood at the time of the events in issue, are as follows: Interpretation ... 2. (1) In this Act ... "alternative measures" means measures other than judicial proceedings under this Act used to deal with a young person alleged to have committed an offence ... (4) Unless otherwise provided, words and expressions used in this Act have the same meaning as in the Criminal Code. Declaration of Principle...
3. (1) It is hereby recognized and declared that (a) while young persons should not in all instances be held accountable in the same manner or suffer the same consequences for their behaviour as adults, young persons who commit offences should nonetheless bear responsibility for their contraventions; (b) society must, although it has the responsibility to take reasonable measures to prevent criminal conduct by young persons, be afforded the necessary protection from illegal behaviour; (c) young persons who commit offences require supervision, discipline and control, but, because of their state of dependency and level of development and maturity, they also have special needs and require guidance and assistance; (d) where it is not inconsistent with the protection of society, taking no measures or taking measures other than judicial proceedings under this Act should be considered for dealing with young persons who have committed offences; (e) young persons have rights and freedoms in their own rights, including those stated in the Canadian Charter of Rights and Freedoms or in the Canadian Bill of Rights, and in particular a right to be heard in the course of, and to participate in, the processes that lead to decisions that affect them, and young persons should have special guarantees of their rights and freedoms; (f) in the application of this Act, the rights and freedoms of young persons include a right to the least possible interference with freedom that is consistent with the protection of society, having regard to the needs of young persons and the interests of their families; (g) young persons have the right, in every instance where they have rights of freedoms that may be affected by this Act, to be informed as to what those rights and freedoms are; and (h) parents have responsibility for the care and supervision of their children, and, for that reason, young persons should be removed from parental supervision either partly or entirely only when measures that provide for continuing parental supervision are inappropriate. (2) This Act shall be liberally construed to the end that young persons will be dealt with in accordance with the principles set out in subsection (1). Alternative Measures ... 4. (1) Alternative measures may be used to deal with a young person alleged to have committed an offence instead of judicial proceedings under this Act only if (a) the measures are part of a program of alternative measures authorized by the Attorney General or his delegate or authorized by a person, or a person within a class of persons, designated by the Lieutenant Governor in Council of a province; (b) the person who is considering whether to use such measures is satisfied that they would be appropriate, having regard to the needs of the young person and the interests of society;
(c) the young person, having been informed of the alternative measures, fully and freely consents to participate therein; (d) the young person has, before consenting to participate in the alternative measures, been advised of his right to be represented by counsel and been given a reasonable opportunity to consult with counsel; (e) the young person accepts responsibility for the act or omission that forms the basis of the offence that he is alleged to have committed; (f) there is, in the opinion of the Attorney General or his agent, sufficient evidence to proceed with the prosecution of the offence; and (g) the prosecution of the offence is not in any way barred at law. Constitution Act, 1867 3 The provisions of the Constitution Act, 1867, relevant to this appeal are as follows: 91. It shall be lawful for the Queen, by and with the Advice and Consent of the Senate and House of Commons, to make Laws for the Peace, Order, and good Government of Canada, in relation to all Matters not coming within the Classes of Subjects by this Act assigned exclusively to the Legislatures of the Provinces; and for greater Certainty, but not so as to restrict the Generality of the foregoing Terms of this Section, it is hereby declared that (notwithstanding anything in this Act) the exclusive Legislative Authority of the Parliament of Canada extends to all Matters coming within the Classes of Subjects next herein-after enumerated; that is to say, ... 27. The Criminal Law, except the Constitution of Courts of Criminal Jurisdiction, but including the Procedure in Criminal Matters ... 92. In each Province the Legislature may exclusively make Laws in relation to Matters coming within the Classes of Subjects next herein-after enumerated; that is to say, ... 13. Property and Civil Rights in the Province. 14. The Administration of Justice in the Province, including the Constitution, Maintenance, and Organization of Provincial Courts, both of Civil and of Criminal Jurisdiction, and including Procedure in Civil Matters in those Courts. Canadian Charter of Rights and Freedoms 4 The provisions of the Canadian Charter of Rights and Freedoms relevant to this appeal are as follows: 15. (1) Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability. (2) Subsection (1) does not preclude any law, program or activity that has as its object the amelioration of conditions of disadvantaged individuals or groups including those that are disadvantaged because of race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.
The Facts 5 On 24th February 1986 the respondent, Sheldon S., who was then 14 years of age, appeared before Judge D.A. Bean of the Ontario Provincial Court (Family Division) at Toronto and was arraigned on a charge which alleged that he: ... on or about the 23rd day of September in the year 1985 at the Municipality of Metropolitan Toronto in the Judicial District of York unlawfully did have in his possession property to wit: four shirts and two sweaters, of a value exceeding two hundred dollars, knowing that all of the property was obtained by the commission in Canada of an offence punishable by indictment, contrary to the Criminal Code. 6 Before a plea was entered, counsel for the respondent indicated that he wished to bring a motion alleging that the failure of the Lieutenant-Governor in Council for the province of Ontario to designate "alternative measures programs" for the purposes of s. 4 of the Young Offenders Act resulted in a violation of the respondent's equality rights as guaranteed by s. 15 of the Charter. Counsel for the respondent indicated that the remedy sought was an order pursuant to s. 24(1) of the Charter staying the proceedings or dismissing the charge. The Judgments Below 7 The judgment at first instance 8 The motion was heard on 18th April 1986. It was agreed that the respondent had not been considered for an alternative measures program. On 11th August 1986 Judge Bean delivered his reasons and ordered that the charge be dismissed. He defined the issue in this manner: ... are the young person's rights in accordance with s. 15 infringed or denied because the Attorney General for Ontario or Lieutenant-Governor in Council for Ontario has not authorized alternative measures pursuant to s. 4(1)(a) of the Young Offenders Act, and therefore this young person cannot be considered for alternative measures under s. 3(1)(d) of the Young Offenders Act? The judge held that no programs of alternative measures were in operation for which the respondent could be considered. Had the Attorney General of Ontario or the Lieutenant-Governor in Council authorized such a program, the judge found on the evidence that the respondent could have been considered for alternative measures. Furthermore, it was found that the failure to implement an alternative measures program could be traced to two factors: ... I further find on the evidence before me that the reasons why the Attorney General has not authorized programs in Ontario are: first, that the philosophy of the Attorney General and his ministry with regard to the dispositions and procedures of the Young Offenders Act is in conflict with that of the federal government, and in particular the federal Ministry of Justice; and secondly, that the Attorney General does not wish to either expend the public funds for or cope with the administrative difficulties inherent in setting up alternative measures in the province of Ontario. 9 Judge Bean held that s. 3(1)(d) of the Young Offenders Act gave to the young person a positive right to be considered for alternative measures; the denial of that right when such alternative measures are available in provinces other than Ontario denied the young person the equal protection and equal benefit of the Young Of-
fenders Act based on place of residence, and this constituted discrimination under s. 15 of the Charter. Furthermore, the judge held that the Attorney General of Ontario was under a positive duty to authorize a program of alternative measures in Ontario by virtue of s. 3(1)(d) and (f) of the Act. He found, from the context of the Act as a whole, and in particular from the wording of s. 4(1)(a), that: ... the intention of Parliament was to give the Attorney General the right to authorize parts of a program, and by inference not to authorize other parts of a program. I think, on the wording of s. 4(1)(a), that the Attorney General was not given a right by law to not authorize all parts, or to not authorize a program at all. 10 Because the judge found that the failure of the Attorney General of Ontario to implement alternative measures pursuant to his duty under the statute violated the respondent's right under s. 15(1) of the Charter, it was then necessary to determine whether the infringement could be justified under s. 1 of the Charter. First, Judge Bean determined that the limitation on the respondent's rights was not "prescribed by law" within the meaning of s. 1: The non-authorization is not prescribed by law; the authorization is prescribed by law. And I quite frankly do not see how one can, taking the Act as a whole, and s. 4(1)(a) in particular, come to the conclusion that, by the mere empowering of the Attorney General to authorize measures which are a part of a program of alternative measures, Parliament has given the Attorney General the right, by law, to also not authorize any program. In the alternative, the judge held that, even if the limitation was prescribed by law, it did not meet the reasonableness test of s. 1. This determination was based on a number of factors: In my view, on the evidence before me, it is simply not reasonable. The Attorney General of Ontario has disregarded: first, the will of Parliament as clearly expressed in the legislation; secondly, the experience of eight other provinces with regard to alternative measures under this Act; thirdly, the experience of the province of Ontario with regard to alternative measures prior to the introduction of the Young Offenders Act; and fourthly, the opinion of the Ministry of Community and Social Services of the province. 11 The issue of the power of Parliament to enact s. 4 of the Young Offenders Act was not raised at trial.
The Court of Appeal 12 The Attorney General of Ontario appealed the decision of Judge Bean to the Ontario Court of Appeal. The Attorney General of Canada intervened in support of the respondent. Before the Ontario Court of Appeal, the Attorney General of Ontario submitted that s. 4 of the Young Offenders Act was, in pith and substance, legislation in relation to child welfare, a matter falling within the sphere of provincial legislative competence under s. 92(13) of the Constitution Act, 1867. The Majority 13 The reasons of the majority of the Ontario Court of Appeal were delivered by Tarnopolsky J.A., Krever J.A. concurring, leave to appeal to this court granted 30th September 1988 [[1988] 2 S.C.R. ix, 64 C.R. (3d) xxx, 35 C.R.R. 247n, 30 O.A.C. 357, 91 N.R. 254]. Tarnopolsky J.A. referred extensively to the reasons of Fauteux J., writing for a unanimous Supreme Court of Canada, in B.C. (A.G.) v. Smith, [1967] S.C.R. 702, 2 C.R.N.S. 277, 61 W.W.R. 236, [1969] 1 C.C.C. 244, 65 D.L.R. (2d) 82 [B.C.]. He found the reasons in Smith to be applic-
able to the Young Offenders Act and rejected the argument of the appellant that the court's decision in Peel (Reg. Mun.) v. MacKenzie, [1982] 2 S.C.R. 9, 68 C.C.C. (2d) 289, 139 D.L.R. (3d) 14, 42 N.R. 572 [Ont.], governed the facts of the instant case. Tarnopolsky J.A. saw no merit in the argument that s. 4 of the Young Offenders Act was in pith and substance in relation to child welfare. Instead, he held that s. 4 of the Young Offenders Act is valid criminal law, and therefore intra vires the Parliament of Canada. 14 On the Charter issue raised by the respondent and accepted by the trial judge, Tarnopolsky J.A. applied a three-step analysis to determine whether there had been a contravention of s. 15(1) of the Charter, at p. 271: (1) an identification of the class of individuals who are alleged to be treated differently; (2) a consideration of whether the class purported to be treated differently from another class is similarly situated to that other class in relation to the purpose of the law; and (3) a determination as to whether the difference in treatment is "discriminatory" in the sense of a pejorative or invidious or disadvantageous purpose or effect of the law or action impugned. 15 In applying the first step, Tarnopolsky J.A. had little difficulty in finding a class of individuals alleged to have been treated differently, since (at p. 271) "the class of individuals at issue are the young persons defined in s. 2 of the Act". With respect to the second, he found the classes of individuals identically situated but for their province of residence. With respect to the third step, Tarnopolsky J.A. analyzed the disadvantage to the class of individuals identified in order to determine whether it was "so unfair as to be discriminatory having regard to the purpose and effect of the legislation" [p. 272]. He found the fact that the legislation was federal to be decisive in his determination that the treatment was discriminatory in nature (at p. 275): This is ... a case arising out of what the federal government clearly thought was a reform in favour of young offenders. Considerable time was spent trying to convince provincial Governments that diversion by way of alternative measures was desirable both from the point of view of young persons and of society generally. In the final analysis, we are concerned with federal legislation and the federal Attorney-General has submitted a long list of arguments which lead one to conclude that non-implementation by any province of the scheme set out in the Act, according to the principles declared, would be invidious or pejorative to the extent of being discriminatory. 16 Tarnopolsky J.A. next dealt with the question of whether the reference to designation in s. 4 of the Young Offenders Act was mandatory or permissive. This analysis was undertaken in the context of the issue of what the "law" is that results in a denial of equal benefit to young persons in Ontario. After examining the relevant statutory provisions, he found that the discretion granted in the opening paragraph of s. 4(1) was in respect of each individual young person and that s. 4 "is not the basis of either a mandatory or a permissive delegation of power" (p. 278). However, upon examining the Act as a whole, and in particular ss. 3(1)(d), 3(1)(f) and 3(2), Tarnopolsky J.A. found that without provincial designation of alternative measures the purpose of the Act would be undermined, at p. 279: There is no way that young persons can be dealt with "in accordance with the principles set out in (sub-s. 3(1))", which is the "Policy for Canada with respect to young offenders", unless there are alternative measures programs designated under para. 4(1)(a), for which a young person can be considered. The learned trial judge was correct in holding that s. 3 imposes a positive duty to authorize such programs. A failure to implement a legislative mandate, which results in the kind of discriminatory or invidious inequality discussed
earlier herein, constitutes a contravention of Charter s. 15(1). Consequently, Tarnopolsky J.A. held that the failure of the Attorney General of Ontario to designate alternative measures programs resulted in the respondent being denied the equal benefit of the law as protected by s. 15(1). 17 The final step in the Charter analysis engaged in by Tarnopolsky J.A. was a determination of whether the denial of the equal benefit of the law amounted to a reasonable limit under s. 1 of the Charter. Applying the test set out by this court in R. v. Oakes, [1986] 1 S.C.R. 103, 50 C.R. (3d) 1, 24 C.C.C. (3d) 321, 26 D.L.R. (4th) 200, 19 C.R.R. 308, 14 O.A.C. 335, 65 N.R. 87, Tarnopolsky J.A. found that the first requirement, that the objective of the limit must be of sufficient importance to justify overriding a constitutionally-protected right, had not been met. Alternatively, he held that, even if the objectives provided by the Attorney General of Ontario were accepted as sufficient to justify overriding the s. 15(1) right, the appellant failed to meet the proportionality requirement in Oakes. 18 On the basis of the s. 15(1) infringement, the majority of the Ontario Court of Appeal held that the appropriate remedy was a declaration that, until programs of alternative measures within ss. 3 and 4 of the Act were instituted in Ontario, action against any young person who might have qualified and so claims may have to be stayed. In the instant case, the majority of the court upheld the disposition of the trial judge that the charges against the respondent be dismissed. The alternative remedy of a stay of proceedings until alternative measures were introduced in the province would violate the respondent's right under s. 11(b) of the Charter. The Minority 19 Robins J.A., in dissent, defined the issue, at p. 250, as being: ... whether or not a young offender residing in Ontario is denied the right to the equal protection and benefit of the law, as guaranteed by s. 15 of the Canadian Charter of Rights and Freedoms, because the AttorneyGeneral for Ontario, unlike eight of his provincial counterparts, has not authorized a program of alternative measures within Ontario pursuant to s. 4 of the Young Offenders Act ... 20 He held, first, that the Young Offenders Act does not obligate the Attorney General of Ontario to authorize alternative measures, but rather the legislation leaves the decision to the discretion of each province. He reached this conclusion on the basis of the wording of s. 4 of the Act, at p. 255: The wording used in s. 4(1)(a) of the Act indicates that alternative measures may be used in Ontario to deal with a young person alleged to have committed an offence only if they are part of a provincially authorized program. The section does not impose or purport to impose a positive obligation on the provinces to authorize such a program. Read in its grammatical or ordinary sense, s. 4(1)(a) is a permissive enabling enactment granting powers whose exercise is optional. He referred to s. 28 [now ss. 11, 35 and 37(1)] of the Interpretation Act, R.S.C. 1970, c. I-23 [now R.S.C. 1985, c. I-21], which stated that the word "may"is to be construed as permissive, and he concluded that the words "only if" signify that provincial authorization is a precondition to the use of alternative measures. In the opinion of Robins J.A., s. 3(1) and (2) provided no aid in interpreting s. 4(1), at p. 256: The words of s. 4 in question are, however, plain and unambiguous; they empower the provinces of Canada to implement alternative measures programs within federally stipulated safeguards only if they so desire;
they do not create any obligation on the provinces to establish such programs. If, as stated earlier, Parliament had intended that alternative measures be made available across Canada, it can be assumed that s. 4 would have been framed in mandatory and not permissive terms. Robins J.A. also examined the purpose of the Act, and found no indication that the legislation was predicated on the universality of alternative measures programs, at pp. 256-57: In not forcing the provinces to implement programs and in not establishing criteria (other than minimum safeguards) as to their nature, content and scope, Parliament recognized that diverse conditions exist from province to province and within the provinces themselves, and that legislation of this nature cannot be universal in its application across Canada but must be tailored to take regional differences into account. The approach Parliament has adopted to this area of the new juvenile justice system, in my opinion, is intended to accommodate both federal and provincial interests and values as they relate to the use of measures alternative to court proceedings in dealing with young offenders. 21 Robins J.A. drew support for his interpretation of s. 4 from extrinsic evidence introduced by the parties. He found the comments of the then Solicitor General of Canada, the Honourable Robert Kaplan, in the House of Commons debates on second reading of the Young Offenders Act, 15th April 1981, at p. 9309, to be of particular relevance, at p. 258: One of the criticisms of the new law has been to the effect that the federal government should have made diversion mandatory and more explicit. But the proponents of such arguments fail to recognize the importance to the young person of having the right to plead not guilty and the role of the provinces in the exercise of prosecutorial discretion. The use of alternative measures, in my opinion, is better left to the discretion of provinces which can develop programs to suit their particular circumstances. [emphasis added] He also relied at p. 257 upon the following passage from Nicholas Bala and Heino Lilles, The Young Offenders Act Annotated (1984), p. 25: Alternative measures must be part of an authorized program. The Act does not set out guidelines for establishing the programs; it merely provides legislative authority for them and legislates minimum standards to safeguard the young person's rights. The Act permits each province to determine whether it wishes to implement alternative measures programs, and provides flexibility for the development of different types of programs in response to local needs, interests and resources. [emphasis added] He referred at p. 257 to a similar observation made by Paul Rabinovitch in his paper "Diversion Under Section 4: Is There a Future for It in Ontario?", published in the Young Offenders Service (1984), pp. 7533-34: With the proclamation of the Young Offenders Act in April of 1984 and the official recognition of diversion under the Alternative Measures Provision, s. 4, it was hoped that diversion would finally become a permanent part of the juvenile justice system for all of Canada. The result would be that the obstacles in the way of the growth of diversion in provinces such as Ontario would be permanently removed. The Young Offenders Act appeared to do just that, as it formally recognized diversion and gave it official status. The key to s. 4, however, was that it was up to the individual provinces to take the initiative and respond to the legislation. The Y.O.A. itself did not officially establish diversion programs but merely gave the provinces the ability to do so. The Act encouraged the provinces to review their policies on diversion, and it gave them the incentive to formulate long range plans. As an added impetus to the provinces, a cost-sharing scheme was put into
the Y.O.A. in s. 70. This provision allowed individual provinces to enter into a cost-sharing agreement with the federal Ministry of the Solicitor-General. [emphasis added] 22 Having concluded that s. 4 did not impose a mandatory duty on the Attorney General of Ontario, Robins J.A. did not feel obliged to pursue the s. 15(1) Charter analysis. In his determination of the case, once it is found that s. 4 is permissive with respect to the provinces, then the provincial Attorneys General cannot be faulted for failing to implement an alternative measures program. Section 4 constitutes "the law" for the purposes of a s. 15 challenge, but the legislation itself was not in issue with respect to its compatibility with s. 15 of the Charter. 23 Robins J.A. would allow the appeal, set aside the acquittal and order a new trial.
Constitutional Questions 24 The following constitutional questions were stated: 1. Is s. 4 of the Young Offenders Act ultra vires the Parliament of Canada because it is, in pith and substance, legislation dealing with a matter outside Parliament's jurisdiction over criminal law and procedure as conferred by s. 91(27) of the Constitution Act, namely, child welfare? 2. Does the decision of the Attorney General of Ontario not to authorize diversion programs as alternative measures under s. 4 of the Young Offenders Act violate the equality rights of the young persons accused of committing offences within Ontario, as guaranteed by s. 15 of the Canadian Charter of Rights and Freedoms? 3. If the answer to Q. 2 is "Yes", is the decision of the Attorney General of Ontario not to authorize diversion programs as alternative measures justified under s. 1 of the Canadian Charter of Rights and Freedoms? The Issues 25 This appeal involves three issues: (i) whether s. 4(1)(a) of the Young Offenders Act imposes a legal obligation on the provinces to authorize programs of alternative measures; (ii) whether s. 4 is intra vires the Parliament of Canada pursuant to its jurisdiction over criminal law in s. 91(27) of the Constitution Act, 1867; and (iii) whether, if the legislation is intra vires, the failure of the Attorney General of Ontario to implement a program of alternative measures is a denial of the respondent's right to equality before and under the law pursuant to s. 15(1) of the Charter. I propose to deal with each issue in turn. Analysis 1. Does s. 4(1)(a) of the Young Offenders Act impose a legal obligation on the provinces to authorize alternative measures? 26 The appellant argued before this court that s. 4(1) of the Young Offenders Act does not oblige the province of Ontario to designate programs of alternative measures. The respondent submitted that the pres ence of programs of alternative measures is obligatory throughout Canada under federal criminal legislation and that the integrity of the legislative scheme would be jeopardized if the spectrum of sanctions was not universally available. 27 In the judgment below, a majority of the Ontario Court of Appeal agreed with the respondent and upheld
the trial judge's ruling that s. 4(1) of the Young Offenders Act imposes a mandatory duty on the provincial governments to establish programs of alternative measures. With respect, I must disagree with this finding. In my opinion, the meaning of s. 4(1) is unambiguous and can be gleaned from the plain meaning of the provision. The section requires that "Alternative measures may be used to deal with a young person alleged to have committed an offence instead of judicial proceedings under this Act only if" a number of conditions are met (emphasis added). Based upon the wording of the section, Robins J.A. in his dissenting reasons in the Court of Appeal below concluded, at p. 255, that: ... Parliament chose to employ the words "may" and "only if" in conjunction with a province's use of alternative measures under the Y.O.A. These words can in no sense be taken as indicating a federal intention to place the provinces under a duty to authorize alternative measures. 28 I agree with this conclusion. However, I wish to add that my reasons should not be taken as an indication that the use of the term "may" alone is determinative of the question whether an obligation is imposed. The Oxford English Dictionary, 2nd ed. (1989), vol. 9, p. 501, includes the following two alternative definitions of the word "may", both of which are relevant to this issue: Expressing permission or sanction: To be allowed (to do something) by authority, law, rule, morality, reason, etc. ... In the interpretation of statutes, it has often been ruled that may is to be understood as equivalent to shall or must. Obviously, either interpretation of s. 4(1) might be supported by the dictionary meaning of the word "may". The absence of an obligation expressed in unequivocally mandatory language is, however, one factor which leads me to conclude that the Young Offenders Act does not oblige the provinces to initiate a program of alternative measures. 29 Furthermore, I do not find support for the respondent's argument in the "Declaration of Principle" set out in s. 3 of the Act. Tarnopolsky J.A., for the majority of the Ontario Court of Appeal, made reference to s. 3(2), which states that the Young Offenders Act "shall be liberally con strued to the end that young persons will be dealt with in accordance with the principles set out in subsection (1)". In order to construe the statutory purpose, then, it is necessary to refer to those principles. Of particular relevance to this appeal is s. 3(1)(d): (d) where it is not inconsistent with the protection of society, taking no measures or taking measures other than judicial proceedings under this Act should be considered for dealing with young persons who have committed offences ... [emphasis added] I agree with Robins J.A. that the use of the term "should" in s. 3(1)(d) does not provide evidence of a mandatory duty. While I agree that s. 3(2) dictates that a liberal interpretation be given to the legislation, in my opinion that does not require the abandonment of the principles of statutory interpretation, nor does it preclude resort to the ordinary meaning of words in interpreting a statute. In the context of s. 3(1)(d), I find that the word "should" denotes simply a "desire or request" (to use Robins J.A.'s definition) and not a legal obligation. 30 In interpreting this section I have found the approach taken in the English case of Julius v. Oxford (Lord Bishop) (1880), 5 App. Cas. 214 (H.L.), to be of some assistance. That case was concerned with the phrase "it shall be lawful" in the Church Discipline Act, 1840 (3 & 4 Vict., c. 86), s. 3. The House of Lords held that the
phrase was permissive and not compulsory, in the sense that the bishop had the discretion not to institute proceedings against an individual accused of ecclesiastical offences. The dictum of Lord Selborne remains relevant to this appeal, at p. 235: I agree with my noble and learned friends who have preceded me, that the meaning of such words is the same, whether there is or is not a duty or obligation to use the power which they confer. They are potential, and never (in themselves) significant of any obligation. The question whether a Judge or a public officer, to whom a power is given by such words, is bound to use it upon any particular occasion, or in any particular manner, must be solved aliunde, and, in general, it is to be solved from the context, from the particular provisions, or from the general scope and objects, of the enactment conferring the power. To the same effect are the comments of Elmer A. Driedger in his treatise Construction of Statutes, 2nd ed. (1983), at p. 87: Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament. Equally instructive is the interpretive approach adopted by Professor Pierre-Andr Ct in his book The Interpretation of Legislation in Canada (1984), at p. 235: It is reasonable to believe that this rationality [that of the legislator] first manifests itself within a particular enactment: the statute is to be read as a whole, and each of its components should fit logically into its scheme. 31 From the point of view of the context, provisions and scope and objects of the legislation, I find that the Young Offenders Act gives to the provincial Attorneys General a power, but not a duty, to develop and implement programs of alternative measures. The federal Parliament has left it to the provinces to deal with a matter which it has determined is best resolved at the provincial level. In my opinion, it must have been within the contemplation of Parliament that the result of s. 4(1) would be diversity among provinces in the content of alternative measures programs and moreover diversity in terms of whether alternative measures programs were instituted at all. In fact, the legislation was intended to foster diversity as a means of "tailoring" programs of alternative measures to the facilities and needs of territorially-based communities. In their book The Young Offenders Act Annotated, Professors Bala and Lilles elaborate on the types of programs of alternative measures which could be developed by the provinces, and they emphasize the discretionary nature of the decision to implement a program (at pp. 22-23): Under the Y.O.A., each province is free to set up and administer alternative measures programs. If the provincial programs follow the most common model of present diversion programs, a decision will be made prior to the first court appearance to determine whether the young person will be offered an opportunity to participate in the program. If the young person agrees, a meeting will be held to discuss the alleged offence and the choice of alternative measures available. The young person must acknowledge responsibility for the act, as a minimum prerequisite to participation. If he is not prepared to accept responsibility, the young person should be dealt with in youth court. If alternative measures are felt suitable, the legislation does not specify the conditions which may be imposed. Normally, they might include measures such as writing an essay, restitution, community service work, participation in a recreation program, involvement with Big Brothers/ Big Sisters, or some form of counselling.
32 The fact that the Attorney General of Ontario chose not to implement an alternative measures program, then, should not be construed as a failure to comply with a statutorily-imposed duty. Rather, it is a legitimate decision not to exercise a power granted by Parliament. 2. Is s. 4 of the Young Offenders Act intra vires the Parliament of Canada? 33 The appellant, supported by the intervenor Attorney General of Quebec, argued that s. 4 of the Young Offenders Act was not constitutionally supportable pursuant to Parliament's jurisdiction over criminal law in s. 91(27) of the Constitution Act, 1867. Instead, the appellant submitted that s. 4 is in pith and substance in relation to child welfare, a matter falling within the exclusive jurisdiction of the provinces over "Property and Civil Rights" pursuant to s. 92(13). The respondent and the intervenor Attorney General of Canada argued that s. 4 is merely an extension of the scope of sanctions available to address the criminal activity of young persons and is a valid exercise of Parliament's legislative authority. 34 The federal jurisdiction over the criminal law has been the subject of much judicial comment, and the principle which has been followed consistently in interpreting s. 91(27) is that stated by the Lord Chancellor, writing for the Judicial Committee of the Privy Council in Ont. (A.G.) v. Hamilton Street Ry. Co., [1903] A.C. 524 at 529, 2 O.W.R. 672, 7 C.C.C. 326: "the criminal law, in its widest sense is reserved for the exclusive authority of the Dominion Parliament". This principle was reiterated and expanded upon by the privy Council in the often-cited case involving the constitutionality of combines legislation, Proprietary Articles Trade Assn. v. Can. (A.G.), [1931] A.C. 310, [1931] 1 W.W.R. 552, 55 C.C.C. 241, [1931] 2 D.L.R. 1. In that case Lord Atkin held that in determining whether legislation has been validly enacted pursuant to the criminal law power, consideration must be given to the dynamic nature of the criminal law, at p. 324: It certainly is not confined to what was criminal by the law of England or of any Province of 1867. The power must extend to legislation to make new crimes. Criminal law connotes only the quality of such acts or omissions as are prohibited under appropriate penal provisions by authority of the State. 35 These general principles have been applied by this court in judicial review of the predecessor legislation to the Young Offenders Act, namely, the Juvenile Delinquents Act. In my opinion the judicial treatment of that statute is useful in an examination of s. 4 of the current Act, although the differences between the two statutes must be borne in mind. The scope of the Juvenile Delinquents Act was all-encompassing. In the introduction to their book Justice and the Young Offender in Canada (1988), Joe Hudson, Joseph P. Hornick and Barbara Burrows describe the underlying rationale of the Juvenile Delinquents Act as based upon the welfare of the child (at pp. 4-5): The juvenile court was to serve, in whatever manner deemed necessary, the best interests of the children who came before it. The court was to act as a kind of clinic, concerned with assessing and fulfilling the needs of its clients, as opposed to a criminal court concerned with due process and the protection of society. Delinquency was viewed as a product of the social environment and susceptible to treatment. The court's role under the JDA was to act on behalf of parents when the best interests of children were not being met. Thus the court took on the role of a "... stern but understanding parent." The protective ideology was integral to the JDA. Indeed, the JDA is widely described as paternalistic. The parens patriae doctrine of the JDA "... emphasized treatment and minimized accountability (on the part of the young person)". Children were to be saved, not punished for their misdeeds. The parens patriae doctrine drew no distinction between criminal and noncriminal youth conduct, which supported the view that juven-
ile court proceedings were civil rather than criminal in nature. There was seen to be no need to differentiate between delinquent and neglected children. Rather, they were perceived by one of the original drafters of the JDA to be of the "same class"; the principal concern was to be on treatment (i.e. helping the child), with "minimal attention paid to accountability, or the justification for intervention". In contrast, the Young Offenders Act has a narrower focus and a more modest child welfare component. The Act addresses the commission of offences contrary to the Criminal Code and other federal criminal law statutes. Its purpose was described by McLachlin J. in R. v. M. (S.H.), [1989] 2 S.C.R. 446 at 454, 71 C.R. (3d) 257, [1989] 6 W.W.R. 385, 69 Alta. L.R. (2d) 209, 50 C.C.C. (3d) 503, 100 A.R. 321, 100 N.R. 1: The Young Offenders Act specifies that a young person charged with a criminal offence is to be tried in Youth Court, rather than in ordinary court in accordance with the law applicable to an adult offender. The procedures in Youth Court differ from those in ordinary court in a number of respects. They are less formal, and are before a judge alone rather than before judge and jury. Moreover, the consequences of conviction in Youth Court are also much less severe than in ordinary court ... I refer to this passage because it is indicative of the focus of the Young Offenders Act, which is primarily on the criminal law as applied to young persons, and not on the welfare of the young persons per se. 36 In my opinion, there is no question that the Young Offenders Act as a whole is valid criminal law. This court addressed the question of the constitutionality of the [1952] Juvenile Delinquents Act in B.C. (A.G.) v. Smith, supra, and Fauteux J. held that the Act did not encroach upon provincial jurisdiction over child welfare, at p. 708: The primary legal effect of the Juvenile Delinquents Act ... is the effective substitution, in the case of juveniles, of the provisions of the Act to the enforcement provisions of the Criminal Code or of any other Dominion statute, or of a provincial statute validly adopted, under head 15 of s. 92 ... this substitution of the provisions of the Act to the enforcement provisions of other laws, federally or provincially enacted, is a means adopted by Parliament, in the proper exercise of its plenary power in criminal matters, for the attainment of an end, a purpose or object which, in its true nature and character, identifies this Act as being genuine legislation in relation to criminal law. Given that the focus of the Young Offenders Act is more closely tailored to our traditional conception of the criminal law than was the Juvenile Delinquents Act, I think it is a logical conclusion that this court's reasoning in Smith remains applicable to the current legislation. 37 That, however, does not in itself resolve the issue before this court. Although the Act as a whole is constitutionally valid, the appellant argues that s. 4 is ultra vires and severable from the Act. In support of this argument the appellant relies upon this court's decision in Peel (Reg. Mun.) v. MacKenzie, supra. In that case the court's attention was focussed upon s. 20 of the [1970] Juvenile Delinquents Act: 20. (1) In the case of a child adjudged to be a juvenile delinquent the court may, in its discretion, take either one or more of the several courses of action hereinafter in this section set out, as it may in its judgment deem proper in the circumstances of the case: (a) suspend final disposition;
(b) adjourn the hearing or disposition of the case from time to time for any definite or indefinite period; (c) impose a fine not exceeding twenty-five dollars, which may be paid in periodical amounts or otherwise; (d) commit the child to the care or custody or a probation officer or of any other suitable person; (e) allow the child to remain in its home, subject to the visitation of a probation officer, such child to report to the court or to the probation officer as often as may be required; (f) cause the child to be placed in a suitable family home as a foster home, subject to the friendly supervision of a probation officer and the further order of the court; (g) impose upon the delinquent such further or other conditions as may be deemed advisable; (h) commit the child to the charge of any children's aid society, duly organized under an Act of the legislature of the province and approved by the lieutenant governor in council, or, in any municipality in which there is no children's aid society, to the charge of the superintendent, if there is one; or (i) commit the child to an industrial school duly approved by the lieutenant governor in council. (2) In every such case it is within the power of the court to make an order upon the parent or parents of the child, or upon the municipality to which the child belongs, to contribute to the child's support such sum as the court may determine, and where such order is made upon the municipality, the municipality may from time to time recover from the parent or parents any sum or sums paid by it pursuant to such order. Martland J., writing for the court, held that, while s. 20(1) unquestionably was a valid exercise of Parliament's criminal law jurisdiction, s. 20(2) was outside of the scope of s. 91(27), at pp. 16-17: Unless it were held to be necessarily incidental to the exercise of Parliament's legislative authority in the field of criminal law, in the enactment of the Juvenile Delinquents Act, it would not be possible to support the constitutional validity of the subsection. It is designed to come into operation only after the trial has occurred, the accused has been found to be a juvenile delinquent and the Court has decided as to the disposition of the delinquent child. It is not a part of the definition of the offence, of the procedures to be followed or of the penalties which may be imposed. What it seeks to do is to impose upon municipalities the financial burden of contributing toward the support of a delinquent child who has already been tried, convicted and made subject to the disposition prescribed in the Court order. In my opinion this is not, per se, legislation in relation to criminal law. 38 In my opinion, this dicta provides no assistance to the appellant. Section 4(1) of the Young Offenders Act more closely resembles s. 20(1) of the Juvenile Delinquents Act, in that both deal with the "punishment" of young persons found to have contravened the law. Section 20(2), on the contrary, dealt with the financing of that disposition, which is well beyond the scope of the criminal law power as it was defined in the Proprietary Articles Trade Assn. case, supra. 39 Although I agree with the argument of the appellant that s. 4(1) differs from most criminal law remedial statutes in that the focus is on alternatives to more traditional criminal sanctions, I do not find this factor to be dispositive. While resort to non-judicial alternatives in the correction of young offenders may not resemble the criminal law model envisioned by Lord Atkin, this court has held repeatedly that the legislative power over
criminal law must be sufficiently flexible to recognize new developments in methods of dealing with offenders. This principle was applied by Laskin C.J.C. in dealing with a restitutionary remedy for a criminal offence: R. v. Zelensky, [1978] 2 S.C.R. 940, 2 C.R. (3d) 107, [1978] 3 W.W.R. 693, 41 C.C.C. (2d) 97, 86 D.L.R. (3d) 179, 21 N.R. 372 [Man.]. The principle is equally relevant here. 40 Further support for this interpretation of s. 4(1) can be drawn from the principle that Parliament's jurisdiction over criminal law in s. 91(27) extends beyond the confines of creating offences and establishing penalties. In Goodyear Tire & Rubber Co. of Can. v. R., [1956] S.C.R. 303, 114 C.C.C. 380, 2 D.L.R. (2d) 11, 26 C.P.R. 1 [Ont.], this court upheld a prohibition order provided for by the [1927] Criminal Code and the [1927] Combines Investigation Act. Locke J., writing for a majority of the court, found that the validity of the order was sustainable not only on the basis that it defined a new offence but also on the basis that it was a means for the prevention of further crime, at p. 308: The power to legislate in relation to criminal law is not restricted, in my opinion, to defining offences and providing penalties for their commission. The power of Parliament extends to legislation designed for the prevention of crime as well as to punishing crime. In my opinion, the discretion to create an alternative measures program pursuant to s. 4 represents a legitimate attempt to deter young offenders from continued criminal activity. In this regard, I agree with Tarnopolsky J.A.'s characterization of s. 4 as demonstrating (p. 270): ... a ... concern with a curative approach, rather than the traditionally punitive approach of the criminal law. There is a concern with preventing recidivism and with balancing the interests of the offending "young person" with those of society. Although I do not intend to define the limits of the "prevention of crime" doctrine, s. 4 of the Young Offenders Act is well within its scope. 41 Thus I find that s. 4 of the Young Offenders Act has been validly enacted pursuant to Parliament's power over criminal law in s. 91(27) of the Constitution Act, 1867. In view of my disposition of this question, I need not consider the alternative argument that s. 4 is "necessarily incidental" to the criminal law power. 42 As a related issue, the respondent also raised the question whether s. 4 of the Young Offenders Act is an unconstitutional delegation of Parliament's authority over criminal law and procedure. This matter can be dealt with summarily, as, in my opinion, there is no limitation imposed by the Constitution Act, 1867, on the ability of Parliament to leave this issue to the discretion of the provincial Attorneys General. Tarnopolsky J.A. has summarized accurately the effect of the decisions of this court regarding the intersection of ss. 91(27) and 92(14) of the Constitution Act, 1867, at p. 278: There is no doubt, since the decisions of the Supreme Court of Canada in Canada (A.G.) v. Cdn. National Transportation Ltd.; Canada (A.G.) v. Cdn. Pacific Transport Co., [1983] 2 S.C.R. 206, and R. v. Wetmore, [1983] 2 S.C.R. 284, that the federal Parliament has jurisdiction to confer powers on provincial officials to supervise the conduct of criminal prosecutions. Authority over the prosecution of young offenders has been delegated through the definition of "Attorney General" in s. 2 of the Criminal Code, R.S.C. 1970, c. C-34 (now R.S.C. 1985, c. C-46). This is made applicable to the Young Offenders Act by virtue of s. 2(4) (now s. 2(2)) of the Act. With respect to the Young Offenders Act,
the provinces have accepted a delegation of responsibility from the federal Parliament in respect of prosecutions. In my view, the discretion to establish programs of alternative measures clearly is incidental to that legitimate delegation. 43 The only remaining issue, then, is whether the diversity which flows from the conferral of a discretion on provincial officials over the conduct of a criminal prosecution pursuant to s. 92(14) of the Constitution Act, 1867, is unconstitutional by reason of the equality provisions of s. 15(1) of the Charter. 3. Does Ontario's failure to authorize alternative measures violate s. 15 of the Charter? 44 The appellant argued that the Ontario Court of Appeal erred in law when it held that the decision of the Attorney General of Ontario not to authorize a program of alternative measures pursuant to s. 4 of the Young Offenders Act violated the right of the respondent to equality before and under the law and to the equal benefit of the law as guaranteed by s. 15(1) of the Charter. The respondent has not attacked the constitutionality of s. 4 itself in this appeal; rather, the issue is whether the exercise of discretion by the Attorney General of Ontario in choosing not to implement a program of alternative measures itself violated the respondent's equality rights. The respondent also raised s. 7 of the Charter; however, no constitutional question in relation to s. 7 was framed in this case. In any event, the extent to which the principles of fundamental justice encompass the values which underpin the equality guarantee in s. 15(1) of the Charter is premised upon an initial determination that s. 15(1) itself has been violated. The Attorneys General of Quebec and Saskatchewan intervened on behalf of the appellant, and the Attorney General of Canada made submissions in support of the position of the respondent on this issue. 45 The rights protected by s. 15(1) are all framed in terms of "the law" equality before and under the law, and equal protection and equal benefit of the law. Therefore, it is first necessary to determine whether the failure of the Attorney General of Ontario to implement a program of alternative measures can be considered "the law" for the purposes of a s. 15 challenge. This issue is made more difficult by my determination that this legislation does not impose a mandatory obligation on the Attorney General of Ontario. Robins J.A. in his dissenting reasons in the Court of Appeal found this fact to be conclusive, at pp. 259-60: In my opinion, once it is accepted that s. 4 of the Act does not impose a mandatory duty on the province to establish alternative measures, the Attorney-General for Ontario's decision not to authorize such programs under s. 4 cannot contravene the respondent's equality rights under s. 15(1) of the Charter. His decision was made in accordance with the permissive terms of s. 4. That section, and not the discretionary determination made by the Attorney-General pursuant to its provisions, constitutes "the law" for the purposes of a s. 15 challenge. If equality is denied alleged young offenders in Ontario, that denial results, not from the Attorney-General's decision or, as the intervenant argues and the trial judge held, from the Attorney-General's failure "to give effect to the will of Parliament", but from the law enacted by Parliament in the exercise of its governmental power over criminal law which authorizes the Attorney-General to proceed precisely as he has. In short, the Attorney-General for Ontario's decision is not "the law" and that decision cannot in itself violate s. 15. I agree. Once it is determined that there is no duty on the Attorney General of Ontario to implement a program of alternative measures, the non-exercise of discretion cannot be constitutionally attacked simply because it creates differences between provinces. To find otherwise would potentially open to Charter scrutiny every jurisdictionally-permissible exercise of power by a province solely on the basis that it creates a distinction in how indi-
viduals are treated in different provinces. The Attorney General of Ontario was under no legal obligation to implement a program and, in my opinion, the decision is unimpeachable because, for the purposes of a constitutional challenge on the basis of s. 15(1) of the Charter, "the law" is s. 4, which grants the discretion. The respondent did not risk invalidating the entire scheme of alternative measures programs brought into being by federal statute. As a consequence, the constitutionality of s. 4, in terms of compliance with the Charter, was not in issue in this appeal. 46 I would add, however, that in my opinion the result of this appeal would be no different had s. 4 of the Young Offenders Act been challenged directly. This court's approach to s. 15(1) was outlined by McIntyre J. in Andrews v. Law Soc. of B.C., [1989] 1 S.C.R. 143 at 182, [1989] 2 W.W.R. 289, 34 B.C.L.R. (2d) 273, 25 C.C.E.L. 255, 10 C.H.R.R. D/5719, 56 D.L.R. (4th) 1, 36 C.R.R. 193, 91 N.R. 255 . First, the complainant must establish that "he or she is not receiving equal treatment before and under the law or that the law has a differential impact on him or her in the protection or benefit accorded by law". On this point there can be no dispute. As a result of the discretion granted by Parliament to the provincial Attorneys General, there existed, in all but one province, programs of alternative measures available to young persons found to have violated a federal law in that province. I note that both Robins J.A. and Tarnopolsky J.A. in the Court of Appeal below mistakenly stated that Prince Edward Island had not instituted a program of alternative measures. In a statement issued on 28th March 1988, the Honourable Wayne D. Cheverie, Q.B., Minister of Justice and Attorney General for Prince Edward Island, noted that alternative measures were authorized in that province on 2nd April 1984. Therefore, a distinction based on the situs of an offence is created. Moreover, it is reasonable to assume that, but for the exceptional case, a young person who commits an offence will do so in the province in which he or she lives. Thus I find the substantive distinction to be geographic and based upon the province of residence of young offenders. I agree with Tarnopolsky J.A. that the absence of this benefit in the province of Ontario must be considered to be a legal disadvantage imposed upon young offenders resident in that province (p. 272). As a consequence, the respondent has met the first stage of the s. 15(1) test. 47 Having reached that conclusion, it becomes necessary to deal with the second aspect of the test for the determination of whether a s. 15(1) violation exists. McIntyre J. described the inquiry that courts must undertake in Andrews at pp. 174-75: I would say then that discrimination may be described as a distinction, whether intentional or not but based on grounds relating to personal characteristics of the individual or group, which has the effect of imposing burdens, obligations, or disadvantages on such individual or group not imposed upon others, or which withholds or limits access to opportunities, benefits, and advantages available to other members of society. Distinctions based on personal characteristics attributed to an individual solely on the basis of association with a group will rarely escape the charge of discrimination, while those based on an individual's merits and capacities will rarely be so classed. In the context of a distinction based upon province of residence, the inquiry turns to whether the distinction is based upon a personal characteristic. In my view, the approach to s. 15(1) established by this court in Andrews takes on an extra dimension when the distinction is province-based. It is trite law that the Canadian Constitution not only creates a boundary between the individual and the state but also creates boundaries between the federal and provincial levels of government. The intersection of these two constitutionally-mandated boundaries inherently raises a problem because it represents the conflict of two competing values uniformity and diversity. This is particularly true when the Charter section raised is s. 15(1), which enshrines the principle of equality before and under the law. As Professor Katherine Swinton has observed in "Competing Visions of Constitutional-
ism: Of Federalism and Rights", in Katherine E. Swinton and Carol J. Rogerson (eds.), Competing Constitutional Visions: The Meech Lake Accord (1988), at p. 291: In Canada, the concerns about the permissible limits on rights and the scope of the equality guarantee will inevitably raise questions about diversity among and within communities in Canada and the degree to which governments can respond to that diversity without violating the Charter. 48 Obviously, the federal system of government itself demands that the values underlying s. 15(1) cannot be given unlimited scope. The division of powers not only permits differential treatment based upon province of residence, it mandates and encourages geographical distinction. There can be no question, then, that unequal treatment which stems solely from the exercise, by provincial legislators, of their legitimate jurisdictional powers cannot be the subject of a s. 15(1) challenge on the basis only that it creates distinctions based upon province of residence. As Wilson J. states in Ref. re Bill 30, [1987] 1 S.C.R. 1148 at 1197, (sub nom. Ref. re Act to Amend Educ. Act) 40 D.L.R. (4th) 18, 36 C.R.R. 305, 22 O.A.C. 321, (sub nom. Ref. re R.C. Sep. High Sch. Funding) 77 N.R. 241, "It was never intended, in my opinion, that the Charter could be used to invalidate other provisions of the Constitution". To find otherwise would be to completely undermine the value of diversity which is at the foundation of the division of powers. 49 However, the matter does not end there. This appeal raises the issue of the impact of s. 15(1) on distinctions based upon province of residence in the application of a valid federal law. Thus the question is whether, in that circumstance, province of residence can be considered a "personal characteristic". This court recently dealt with this question in R. v. Turpin, [1989] 1 S.C.R. 1296, 69 C.R. (3d) 97, 48 C.C.C. (3d) 8, 39 C.R.R. 306, 34 O.A.C. 115, 96 N.R. 115. That case concerned the ability of an accused to waive the right to trial by judge and jury. Wilson J., writing for the court, concluded that the fact that only in the province of Alberta could an accused charged with murder choose to be tried by judge alone did not give rise to a violation of the s. 15(1) Charter right to equality before the law. Wilson J. determined that, while the Criminal Code section denied the appellants equality before the law because it "denied an opportunity which is available to others" (p. 1329), the distinction was not based upon a personal characteristic for the purposes of the second stage of the Andrews inquiry (at pp. 1332-33): The appellants claim that because they are accused of one of the indictable offences listed in s. 427 of the Criminal Code but do not have an opportunity, as do persons charged with the same offence in Alberta, to be tried by a judge alone, they are victims of discrimination. I disagree. In my respectful view, it would be stretching the imagination to characterize persons accused of one of the crimes listed in s. 427 of the Criminal Code in all the provinces except Alberta as members of a "discrete and insular minority" ... Differentiating for mode of trial purposes between those accused of s. 427 offences in Alberta and those accused of the same offences elsewhere in Canada would not, in my view, advance the purposes of s. 15 in remedying or preventing discrimination against groups suffering social, political and legal disadvantage in our society. A search for indicia of discrimination such as stereotyping, historical disadvantage or vulnerability to political and social prejudice would be fruitless in this case because what we are comparing is the position of those accused of the offences listed in s. 427 in the rest of Canada to the position of those accused of the offences listed in s. 427 in Alberta. To recognize the claims of the appellants under s. 15 of the Charter would, in my respectful view, "overshoot the actual purpose of the right or freedom in question": see R. v. Big M Drug Mart Ltd., at p. 344. I would not wish to suggest that a person's province of residence or place of trial could not in some circum-
stances be a personal characteristic of the individual or group capable of constituting a ground of discrimination. I simply say that it is not so here. [emphasis added] I agree with Wilson J. that, in determining whether province-based distinctions which arise from the application of federal law contravene s. 15(1) of the Charter, a case-by-case approach is appropriate. However, in my view, in order to engage in that analysis it is useful to formulate a principled approach for dealing with such distinctions. 50 It is necessary to bear in mind that differential application of federal law can be a legitimate means of forwarding the values of a federal system. In fact, in the context of the administration of the criminal law, differential application is constitutionally fostered by ss. 91(27) and 92(14) of the Constitution Act, 1867. The area of criminal law and its application is one in which the balancing of national interests and local concerns has been accomplished by a constitutional structure that both permits and encourages federal-provincial co-operation. A brief review of Canadian constitutional history clearly demonstrates that diversity in the criminal law, in terms of provincial application, has been recognized consistently as a means of furthering the values of federalism. Differen tial application arises from a recognition that different approaches to the administration of the criminal law are appropriate in different territorially-based communities. In a line of cases beginning with Fredericton (City) v. R. (1880), 3 S.C.R. 505, 2 Cart. 27 [N.B.], this court consistently has upheld federal statutes with differential geographic application. As Laskin J. conceded in his dissenting reasons in R. v. Burnshine, [1975] 1 S.C.R. 693, 25 C.R.N.S. 270, [1974] 4 W.W.R. 49, 15 C.C.C. (2d) 505, 44 D.L.R. (3d) 584, 2 N.R. 53 [B.C.], a case which dealt with the differential application of a provision of the Criminal Code in the context of s. 1(b) of the Canadian Bill of Rights, at p. 715: As a matter of legislative power only, there can be no doubt about Parliament's right to give its criminal or other enactments special applications, whether in terms of locality of operation or otherwise. That principle was reaffirmed by Le Dain J., in the context of s. 1(b) of the Canadian Bill of Rights, writing for the court in R. v. Cornell, [1988] 1 S.C.R. 461, 63 C.R. (3d) 50, 4 M.V.R. (2d) 153, 40 C.C.C. (3d) 385, 33 C.R.R. 193, 27 O.A.C. 360, 83 N.R. 384. Finally, it was recognized in the context of s. 15 of the Charter by Wilson J. in Turpin, supra, at p. 1334: In concluding that s. 15 is not violated in this case, I realize that I am rejecting the proposition accepted by several Courts of Appeal in Canada that it is a fundamental principle under s. 15 of the Charter that the criminal law apply equally throughout the country. I agree with that conclusion and find it equally applicable to the facts of this appeal. 51 In my opinion, the question of how young people found to have committed criminal offences should be dealt with is one upon which it is legitimate for Parliament to allow for province-based distinctions as a reflection of distinct and rationally based political values and sensitivities. Professors Bala and Lilles emphasize the benefits that derive from the adaptability of a program of alternative measures to the needs of different regions and communities, at pp. 17-18: The benefits of alternative measures range from reducing delays in handling young persons to the increased scope for flexibility, especially in procedures and in the manner of dealing with young persons. The use of alternative measures frees court facilities, allowing the youth court to be reserved for the more serious cases. The range of dispositional options that may be used in alternative measures programs includes special
education and counselling for behavioural problems or drug or alcohol related problems. Alternative measures programs can be adaptable to the particular needs of the communities in which they are set up, whether the community is rural, urban, native, etc. One aim of such programs is to involve the community in dealing with the problems of the illegal behaviour of young persons; this is often achieved through the use of community participants at all levels of the alternative measures program, through the involvement of the victim and the employment of innovative forms of disposition. [emphasis added] 52 In recognizing the benefit of geographical diversity in the context of programs of alternative measures, I am mindful of the fact that, although I have found this legislation to be valid federal law, it is not wholly unconnected to child welfare a matter of provincial jurisdiction. Differential application of the law through federalprovincial co-operation is a legitimate means whereby governments can overcome the rigidity of the "watertight compartments" of the distribution of powers with respect to matters that are not easily categorized or dealt with by one level of government alone. Consequently, I find that in this case the legislation does not amount to a distinction which is based upon a "personal characteristic" for the purposes of s. 15(1) of the Charter. Disposition 53 54 This appeal is allowed, the judgment of the Court of Appeal is set aside, and a new trial is ordered. I would answer the constitutional questions as follows: 1. Is s. 4 of the Young Offenders Act ultra vires the Parliament of Canada because it is, in pith and substance, legislation dealing with a matter outside Parliament's jurisdiction over criminal law and procedure as conferred by s. 91(27) of the Constitution Act, namely, child welfare? Answer: No. 2. Does the decision of the Attorney General of Ontario not to authorize diversion programs as alternative measures under s. 4 of the Young Offenders Act violate the equality rights of the young persons accused of committing offences within Ontario, as guaranteed by s. 15 of the Canadian Charter of Rights and Freedoms? Answer: No. 3. If the answer to Q. 2 is "Yes", is the decision of the Attorney General of Ontario not to authorize diversion programs as alternative measures justified under s. 1 of the Canadian Charter of Rights and Freedoms? Answer: The question need not be answered. Appeal allowed; new trial ordered. END OF DOCUMENT
TAB 10
Page 1 1998 CarswellNat 1167, 228 N.R. 355, 81 C.P.R. (3d) 443
1998 CarswellNat 1167, 228 N.R. 355, 81 C.P.R. (3d) 443 Apotex Inc. v. Wellcome Foundation Ltd. Apotex Inc., Appellant (Plaintiff) and The Wellcome Foundation Limited, Respondent (Defendant) and Novopharm Ltd., Respondent (Plaintiff) Apotex Inc., Appellant (Defendant) and The Wellcome Foundation Limited and Glaxo Wellcome Inc., Respondents (Plaintiffs) and Interpharm Inc. and Allen Barry Shechtman, Respondents (Defendants) Federal Court of Appeal Robertson J.A. Heard: June 12, 1998 Oral reasons: June 12, 1998 Docket: A-294-98, A-295-98 Thomson Reuters Canada Limited or its Licensors (excluding individual court documents). All rights reserved. Counsel: Mr. Harry B. Radomski and Mr. David M. Scrimger, for the Appellant. Mr. Peter J. Stanford and Mr. Patrick E. Kierans, for The Wellcome Foundation Ltd. & Glaxo Wellcome Inc. No one for Novopharm Ltd. Subject: Intellectual Property; Property; Civil Practice and Procedure Practice --- Practice on appeal Powers and duties of appellate court Cases considered by Robertson J.A.: Clattenburg v. Canada (Minister of Fisheries & Oceans) (1986), 65 N.R. 315 (Fed. C.A.) considered Kyorin Pharmaceutical Co. v. Novopharm Ltd. (1996), 67 C.P.R. (3d) 374, 112 F.T.R. 24 (Fed. T.D.) distinguished RJR-MacDonald Inc. v. Canada (Attorney General), 54 C.P.R. (3d) 114, (sub nom. RJR-MacDonald Inc. c. Canada (Procureur gnral)) 164 N.R. 1, (sub nom. RJR-MacDonald Inc. c. Canada (Procureur gnral)) 60 Q.A.C. 241, 111 D.L.R. (4th) 385, [1994] 1 S.C.R. 311 (S.C.C.) applied Unilever Plc. v. Chefaro Proprietaries Ltd., [1995] 1 W.L.R. 243 (Eng. C.A.) distinguished
Rules considered: Federal Court Rules, C.R.C. 1978, c. 663 Generally referred to MOTION by appellant company for order for expedited appeal from decision of Campbell J., dated April 24, 1998, which refused to grant interim stay pending disposition of appeals from another decision. Robertson J.A.: 1 The appellant, Apotex Inc., seeks an order for an expedited appeal from a decision of Campbell J., dated April 24, 1998, refusing to grant an interim stay pending disposition of certain appeals from a decision of Wetston J., dated March 25, 1998. In the latter case it was found that some of the claims in the "277" patent held by the respondent, Glaxo Wellcome Inc., were valid and had been infringed by Apotex. The formal judgment ordered Apotex to deliver up for destruction infringing drugs in its possession and, inter alia, granted an injunction enjoining the manufacture of the drug in question. In seeking the interim stay of the judgment of Wetston J., Apotex argued that it would suffer irreparable harm. While that argument did not succeed before Campbell J., Apotex now seeks an expedited hearing of the appeal from that decision. By order of Stone J.A., dated June 3, 1998, the matter was set down for oral hearing. 2 That there is a serious issue focusing on irreparable harm raised by Apotex cannot be doubted. Moreover, it does not seek to have its appeal heard to the detriment of others whose appeals have already been scheduled for hearing. In short, it does not seek to "jump the queue". This renders cases such as Unilever Plc. v. Chefaro Proprietaries Ltd., [1995] 1 W.L.R. 243 (Eng. C.A.) irrelevant to the issue at hand. In that case the English Court of Appeal made reference to its backlog of unheard appeals and to the fact that an expedited hearing of an appeal in that court has one of two effects: cancellation of a scheduled hearing or the deferral of an unscheduled appeal. At the present time, the Federal Court of Appeal is not plagued by such administrative exigencies. 3 In the circumstances of this case, Glaxo has not established that it will be prejudiced by a truncation of the time limits prescribed by the Rules of Court if the order sought is granted. Apotex is prepared to file and serve the appeal book and its written memorandum within 5 days of this hearing. It is able to do so because the issues pursued before Campbell J. are the very ones to be pursued before this Court on appeal. Apotex is also prepared to give the respondent what I consider ample time to file and serve its memorandum. These facts should be contrasted with those outlined in the decision of McGillis J. in Kyorin Pharmaceutical Co. v. Novopharm Ltd. (1996), 67 C.P.R. (3d) 374 (Fed. T.D.), wherein the motion to expedite a "trial" was dismissed. 4 For these reasons, I am prepared to grant the order for an expedited appeal on the terms outlined below. In reaching this conclusion I am cognizant of the test articulated in Clattenburg v. Canada (Minister of Fisheries & Oceans) (1986), 65 N.R. 315 (Fed. C.A.), for granting expedited appeals. In my respectful view, that decision has been eclipsed by the Supreme Court's decision in RJR-MacDonald Inc. v. Canada (Attorney General) (1994), 54 C.P.R. (3d) 114 (S.C.C.), and fails to reflect the reality that this Court is frequently requested to make a panel of judges available for the hearing of an appeal in cases where the legal issue involves an allegation of irreparable harm if interim relief is not granted. Provided a timetable can be agreed to which is convenient to both the Court and counsel for the litigants, an order for an expedited appeal is usually granted. 5 The motion for an expedited hearing of the appeal will be granted on the following terms:
(1) The appeal will be heard in Ottawa on Wednesday, July 22, 1998 commencing at 9:30 a.m. (scheduled for 1 day), (2) The appellant shall file the appeal book and its memorandum of fact and law on or before Wednesday, June 17, 1998, and (3) The respondent shall file and serve its memorandum on or before Wednesday, July 15, 1998. Appeal allowed. END OF DOCUMENT
TAB 11
Page 1 2000 CarswellNat 754, 2000 D.T.C. 6314, [2000] 3 C.T.C. 1, 257 N.R. 56
2000 CarswellNat 754, 2000 D.T.C. 6314, [2000] 3 C.T.C. 1, 257 N.R. 56 Del Zotto v. Minister of National Revenue Herbert Noble, Appellant and The Minister of National Revenue and John Edward Thompson, Respondents Angelo Del Zotto, Appellant and The Minister of National Revenue and John Edward Thompson, Respondents Federal Court of Appeal Stone J.A. Judgment: May 2, 2000 Docket: A-106-00, A-823-99 Thomson Reuters Canada Limited or its Licensors (excluding individual court documents). All rights reserved. Counsel: Mr. Alan D. Gold and Ms Maureen McGuire, for Appellant, Noble. Mr. William C. McDowell, for Appellant, Del Zotto. Mr. Steven Albin and Mr. Ivan S. Bloom, for Respondents. Subject: Income Tax (Federal) Income tax --- Administration and enforcement Practice and procedure on appeals Miscellaneous issues Minister appointed hearing officer to conduct inquiry into financial affairs of taxpayers Hearing officer rendered decision on aspects of procedure to be followed by him in conducting inquiry Taxpayers brought applications for judicial review of hearing officer's decision, which were heard together Applications were dismissed by motions judge Taxpayers brought appeals from decision dismissing applications Taxpayers brought unsuccessful motions to set aside order dismissing applications on basis of apprehension of bias on part of motions judge Motions were dismissed on basis that points in controversy were pending in both appeals and were to be adjudicated at that level Taxpayers brought motions to expedite hearing of appeals Motions granted Prime issue raised in appeals was serious and important issue as it touched on alleged breach of natural justice and procedural fairness It was in interest of justice that issue be heard and disposed of by court of appeal before major witnesses were required to testify at inquiry Appeals were to be heard and disposed of before taxpayer and other major witnesses were required to testify. Statutes considered: Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.)
s. 231.4 referred to Rules considered: Federal Court Rules, 1998, SOR/98-106 R. 399 pursuant to MOTIONS by taxpayers for order expediting hearing of appeals from decision dismissing applications for judicial review. Stone J.A.: 1 The attached copy of the reasons for order in Court file number A-823-99 shall constitute the reasons for order in this matter. Stone J.A.: 2 This is a motion by the appellant to expedite the hearing of the appeal in this matter from an order of Lemieux J. in the Trial Division of December 3, 1999. An identical motion by the appellant in Court file number A-106-00 to expedite the appeal therein from the same order, was heard at the same time as the motion in this matter. 3 In September 1999, a Hearing Officer acting under section 231.4 of the Income Tax Act, rendered a decision on various aspects of the procedure to be followed by him in conducting the Inquiry under that section into the financial affairs of the appellant for the taxation years 1979 to 1985. One aspect of the Hearing Officer's decision pertained to the appellant's assertion that in the interest of fairness the respondents be required to disclose documents and information that they intend to make use of in examining witnesses at the Inquiry some time prior to the witnesses beginning to testify. The appellant in Court file A-106-00, who is considered a "major witness", has been subpoenaed to testify at the Inquiry beginning on May 29, 2000. A second such witness is scheduled to testify beginning in early June, 2000. 4 The appellant in both appeals launched applications for judicial review of the Hearing Officer's decision, which applications were, on October 28, 1999, ordered to be heard together. In November of the same year, an attempt by both appellants to have the Inquiry stayed until the application for judicial review could be heard and disposed of, was dismissed by Campbell J. Shortly afterwards, after appeals from that disposition were instituted, a Justice of the Court of Appeal rejected motions by both appellants to stay the Inquiry. 5 In the meantime, Lemieux J. heard the applications for judicial review and dismissed them on December 3, 1999. The appeals by both appellants were soon afterwards commenced and are the ones that are sought to be expedited. Both appellants then brought motions pursuant to Rule 399 with a view to setting aside the order of December 3, 1999. The basis for those motions is set forth in paragraph 5 of the Rule 399 notice of motion in this appeal, which reads in part: A matter was discovered subsequent to the making of the Order that, in all the circumstances, leads to the conclusion that the Order amounts to a breach of the rules of natural justice and procedural fairness. In particular, it has been discovered that:
(a) he [sic] learned judge was, at the time of his appointment to the Federal Court of Canada, a partner of the firm of Osler, Hoskin, Harcourt ("Oslers"). Oslers were solicitors of record for the Applicant in action number T-2022-1933 in the Federal Court Trial Division, which was commenced on August 3, 1993, and reported at [1997] 2 F.C. 428. Oslers also acted for the Applicant in his appeal to this Honourable Court from the Judgment of Rothstein J. (as he then was), as reported at [1997] 3 F.C. 40 and before the Supreme Court of Canada in the appeal from the Judgement of this Honourable Court, heard on January 20, 1999. These proceedings concerned the constitutionality of the Inquiry and of the Applicant's role in it. Oslers continues to act on the Applicant's behalf on other matters; (b) the learned judge was appointed to the Federal Court Trial Division on January 22, 1999; (c) on April 27, 1993, while a partner at Oslers, the learned judge provided advice and was otherwise actively involved in this matter; (d) the learned judge's connection with Oslers and active involvement on the file was not disclosed at the hearing and the parties were not aware of these facts until after the hearing; (e) by failing to recuse himself from hearing the Application or, in the alternative, by failing to advise counsel his prior involvement on the file and invite submissions as to whether he should hear the case, the learned judge acted contrary to the rules of natural justice and procedural fairness. Both motions were dismissed by Hugessen J. on March 22, 2000 on the basis that the points in controversy were pending in both appeals and that they should be adjudicated upon at that level. 6 The dismissal of the Rule 399 motions has given new life to the appeals, which both appellants were prepared to abandon had they been successful on their Rule 399 motions. They contend that they will suffer prejudice if the Inquiry hears the testimony of the appellant in Court file number A-106-00 and the other major witness prior to the disposition of the appeals from the order of Lemieux J. of December 3, 1999. 7 The respondents say, on the other hand, that the issue of possible prejudice was considered and rejected in the Trial Division and in this Court when the motions to stay the Inquiry were dismissed and that no new evidence of possible prejudice has been put forward by either of the appellants. The respondents maintain, moreover, that the Supreme Court of Canada has already decided that an investigation of this sort is purely administrative and could neither decide nor adjudicate on anything. See e.g. Guay v. Lafleur, [1965] S.C.R. 12. See also Irvine v. Canada (Restrictive Trade Practices Commission), [1987] 1 S.C.R. 181. The respondents further contend that I should consider the prejudice that they have had to incur and which they continue to incur by reason of the delay in proceeding with the Inquiry and not bringing it to a conclusion. They fear that the passage of time may well impair the memories of witnesses and that this can only become more acute as the delay continues. The respondents accepted, however, that most of the delay to date is accounted for by the various court proceedings including the challenge to the constitutional validity of section 234.1 which was disposed of by the Supreme Court of Canada on January 21, 1999. 8 While fully recognizing the respondents sense of frustration with the slow pace of the Inquiry to date, in my view the motions before me should not be dismissed for that reason. To my mind, one of the prime issue raised in the appeal is a serious and important one touching as it does on the alleged breach of natural justice and procedural fairness based on some prior involvement of the Motions Judge on behalf of the appellant and of his former law firm in litigation arising out of the Inquiry process. Surely it is in the interest of justice that this issue
be heard and disposed of by the Court of Appeal before the major witnesses referred to above are required to testify at the Inquiry. The remaining issues in the appeal should also be heard. 9 I therefore conclude that the appeal in this matter and the appeal in Court file number A-106-00 ought to be heard and disposed of before the appellant in Court file number A-106-00 and the other major witness is required to testify. I appreciate that the appeals are not now ready to be heard and that some considerable work must be done in order to perfect them. After hearing the submissions of counsel, I am satisfied that the following directions should govern the conduct of the appeals from this date forward until they are heard on May 26, 2000: 1. The appellant in each appeal shall prepare and file the Appeal Book in compliance with Rules 343 - 344 and shall serve the same not later than May 9, 2000. 2. Any party wishing to have added to the Appeal Book fresh evidence by way of affidavit with respect to the issue of alleged conflict of interest in the Motions Judge whose order is the subject of each appeal shall move the Court of Appeal for that purpose not later than May 9, 2000. 3. Any cross-examination on affidavit evidence filed pursuant to a motion under paragraph 2 hereof shall be completed not later than May 17, 2000, and the transcript thereof shall forthwith be added to the Appeal Book. 4. All questions as to relevance and admissibility of fresh evidence added to the Appeal Book pursuant to paragraphs 2 and 3 hereof is reserved to the panel hearing the appeals. 5. Any party wishing to have added to the Appeal Book in each appeal the whole or any part of the transcript of the Inquiry shall move the Court of Appeal for that purpose not later than May 9, 2000; any issue as to the relevance and admissibility of the transcript or any part thereof so added to the Appeal Book shall be reserved to the panel hearing the appeal. 6. The appellant in each appeal shall file and serve his Memorandum of Fact and Law not later than 2:00 p.m. Friday, May 19, 2000. 7. The respondents in each appeal shall file their Memorandum of Fact and Law or, as they may elect, a joint Memorandum of Fact and Law, not later than May 24, 2000. 8. The appeal in this matter and in Court file number A-106-00 shall be heard together at Ottawa, on Friday, May 26, 2000, commencing at 10:00 a.m. 10 These reasons shall apply equally to the motion in Court file number A-106-00 and upon the filing of a copy of the same in that Court file shall become the reasons for order therein. 11 The costs of this motion shall be in the cause. Motions granted. END OF DOCUMENT
TAB 12
Page 1 2005 CarswellNat 2414, 2005 FC 1179, 42 C.P.R. (4th) 202
2005 CarswellNat 2414, 2005 FC 1179, 42 C.P.R. (4th) 202 Telewizja Polsat S.A. v. Radiopol Inc. Telewizja Polsat S.A. and Telewizja Polska Canada, Inc., Plaintiffs and Radiopol Inc. and Jaroslaw Bucholc, Defendants Federal Court Kelen J. Heard: August 22, 2005 Judgment: August 29, 2005 Docket: T-1402-05 Thomson Reuters Canada Limited or its Licensors (excluding individual court documents). All rights reserved. Counsel: Julie Thorburn, Emily Larose, for Plaintiffs Subject: Civil Practice and Procedure; Intellectual Property Civil practice and procedure --- Service of originating process Statement of claim Manner of service Substituted service General principles Plaintiffs believed that defendant R Inc. was decoding television signal without authorization, editing it, and making individual program episodes available to public, for fee, via website Plaintiffs attempted to serve defendant personally with statement of claim and motion materials In particular, plaintiffs arranged to have materials delivered by bailiff to address in Montreal on August 16, 2005 Address was one listed for R Inc. on corporate records, which was address that R Inc.'s representative provided to plaintiffs over telephone Owner of building reported to plaintiff and RCMP officer that address was vacated in May 2005 Plaintiffs also sent materials by courier to post office box in Alberta on August 16, 2005 Alberta address was one that RCMP was able to obtain for B, administrator of R Inc. Status report confirmed that package had been delivered to post office box but had yet to be picked up On August 16 and 17, 2005, plaintiffs delivered statement of claim and motion materials via e-mail addresses thought to be those of defendants Plaintiffs moved under R. 136(1) of Federal Court Rules, 1998, for substituted service by e-mail address Motion granted Service has been effected on defendants by e-mail and this was valid service pursuant to Rules. Injunctions --- Availability of injunctions Injunctions in specific contexts Intangible property rights General Decoding television signals without authorization Plaintiff P Co. was Polish producer of television programs
and owner of POLSAT 2 INTERNATIONAL television signal ("Polsat Signal") P Co. transmitted its television programming through Polsat Signal which was broadcast in encrypted form via satellite Plaintiff P Canada Inc. had exclusive right to distribute Polsat Signal in Canada P Canada Inc. also distributed Polsat Signal via internet directly to subscribers in Canada Defendant R Inc. was Quebec company which operated internet website Plaintiffs believed that defendant was decoding Polsat Signal without authorization, editing it, and making individual program episodes available to public, for fee, via their website Plaintiffs moved for interim, interlocutory or permanent injunction restraining defendant from decoding plaintiffs' encrypted television programming signals and reproducing programs on internet Motion granted Possible infringement by defendant of Radiocommunication Act, Copyright Act and Trade-marks Act raised serious question to be tried Plaintiffs would suffer irreparable harm if defendant was permitted to continue its activities as loss of actual and potential customers has been recognized as irreparable harm not compensable by damages Plaintiffs established strong prima facie case of infringement. Cases considered by Kelen J.: Centre Ice Ltd. v. National Hockey League (1994), 53 C.P.R. (3d) 34, 166 N.R. 44, 75 F.T.R. 240 (note), 1994 CarswellNat 1332 (Fed. C.A.) referred to Church & Dwight Ltd./Lte v. Sifto Canada Inc. (1994), 20 O.R. (3d) 483, 22 C.C.L.T. (2d) 304, 17 B.L.R. (2d) 92, (sub nom. Church & Dwight Ltd. v. Sifto Canada Inc.) 58 C.P.R. (3d) 316, 1994 CarswellOnt 1033 (Ont. Gen. Div.) referred to Clipper Ship Supply Inc. v. Samatour Shipping Co. (1984), (sub nom. Clipper Ship Supply Inc. v. "Salem S" (The)) 19 F.T.R. 15, 1984 CarswellNat 136 (Fed. T.D.) considered RJR-MacDonald Inc. v. Canada (Attorney General) (1994), 54 C.P.R. (3d) 114, (sub nom. RJR-MacDonald Inc. c. Canada (Procureur gnral)) 164 N.R. 1, (sub nom. RJR-MacDonald Inc. c. Canada (Procureur gnral)) 60 Q.A.C. 241, 111 D.L.R. (4th) 385, 1994 CarswellQue 120F, [1994] 1 S.C.R. 311, 1994 CarswellQue 120 (S.C.C.) followed Universal City Studios Inc. v. Zellers Inc. (1983), 73 C.P.R. (2d) 1, [1984] 1 F.C. 49, 1983 CarswellNat 47F, 1983 CarswellNat 47 (Fed. T.D.) considered Statutes considered: Copyright Act, R.S.C. 1985, c. C-42 Generally referred to s. 21 considered s. 27 referred to Radiocommunication Act, R.S.C. 1985, c. R-2 Generally referred to s. 9(1)(c) considered
s. 18 referred to Trade-marks Act, R.S.C. 1985, c. T-13 Generally referred to s. 7 referred to Rules considered: Federal Court Rules, 1998, SOR/98-106 Generally referred to R. 136(1) considered R. 147 considered MOTIONS for substituted service of statement of claim and for interim injunction enjoining defendant from decoding plaintiffs' television signals. Kelen J.: 1 This is a motion by the plaintiffs for an interim, interlocutory or permanent injunction restraining the defendants from decoding the plaintiffs' encrypted television programming signals and reproducing the programs on the internet. Specifically, the plaintiffs seek the following relief from the Court: (i) an order enjoining Jaroslaw Bucholc and Radipol Inc. by itself and by its officers, directors, employees and agents, from: (a) decoding the plaintiffs' encrypted subscription programming signals without authorization; and (b) further infringing the plaintiffs' copyright and trademarks; (ii) an order compelling the defendants to deliver up to the plaintiffs all of the plaintiffs' copyrighted works in their possession, control or custody, or in the alternative, an order that all such materials be destroyed under oath and under the supervision of this Honourable Court; (iii) an order validating service upon the defendants; (iv) an order dispensing with service or allowing substituted service, if necessary; and (v) costs for this motion on a substantial indemnity basis. Facts 2 The plaintiff, Telewizja POLSAT S.A., (Polsat) is a Polish producer of television programs and the owner of the POLSAT 2 INTERNATIONAL television signal (Polsat Signal). Polsat transmits its television programming through the Polsat Signal which is broadcast in an encrypted form via satellite. The plaintiff, Telewizja Polska Canada Inc., (Polska Canada) has the exclusive right to distribute the Polsat Signal in Canada. It seeks
out Canadian distributors interested in broadcasting the television programming and enters into distribution agreements with those distributors to permit the Polsat Signal to be received legally in Canada. Polska Canada also distributes the Polsat Signal via the internet directly to subscribers in Canada. 3 The defendants are Radiopol Inc. (Radiopol), a Quebec company, and Jarolslaw Bucholc, its administrator. They operate an internet website, www.tvpol.com. The plaintiffs claim that the defendants are decoding the Polsat Signal without authorization, editing it, and making the individual program episodes available to the public, for a fee, via their website. The plaintiffs state that the programs clearly originate from their signal because the Polsat Signal logo appears on the top right-hand corner of the screen while the programs are playing. 4 Polsat states that it has copyright ownership in the Polsat Signal as well as in several of the individual programs broadcast via the signal. For the programs in which copyright is owned by independent producers, Polsat is the exclusive broadcast licensee, with the sole right to broadcast the programming outside of Poland. The plaintiffs also state that they have common law trademark rights in respect of the Polsat and Polsat Signal logos. 5 The plaintiffs have made numerous written demands that the defendants cease decoding the Polsat Signal without authorization and reproducing the programs on their website. To date, the defendants have not complied with those demands. Issues 6 The following issues are raised in this motion: 1. Whether the service of the Statement of Claim and Motion Record should be validated and an order for substituted service or dispensing with service be granted? 2. Whether an interim, interlocutory and permanent injunction should be granted? Analysis Issue No. 1 Whether the service of the Statement of Claim and Motion Record should be validated and an order for substituted service or dispensing with service be granted? 7 The plaintiffs state that they have attempted to serve the defendants personally with their Statement of Claim and motion materials, but have been unsuccessful. In particular, the plaintiffs arranged to have the materials delivered by bailiff to 2221 Walkley Avenue in Montreal, Quebec on August 16, 2005. This is the address listed for Radiopol and Mr. Bucholc on corporate records and is the address that a Radiopol representative provided to the plaintiffs over the telephone. The owner of the building reported to the plaintiff and an RCMP Officer that this apartment was vacated in May 2005. 8 The plaintiffs also sent the materials by courier to a post office box in Alberta on August 16, 2005. This is an address that the RCMP was able to obtain for Mr. Bucholc. A status report confirmed that the package had been delivered to the post office box, but has yet to be picked up. 9 The plaintiffs submit that they have made diligent and reasonable efforts to effect personal service on the defendants and request, in the circumstances, that substituted service via e-mail be allowed. Copies of the State-
ment of Claim and motion materials have already been sent to the following two e-mail addresses: (i) jarek@radiopol.com on August 16, 2005. This e-mail address was confirmed by Radiopol to be Mr. Bucholc's address and the e-mail was confirmed by a trace to have been read at 1:58 pm on August 16, 2005; and (ii) radio@radiopol.com on August 17, 2005. This e-mail address is listed as the contact e-mail for Radiopol on its website. This e-mail was confirmed by a trace to have been delivered. 10 reads: Substituted service is governed by Rule 136(1) of the Federal Court Rules, 1998 (the Rules), which
136.(1) Where service of a document that is required to be served personally cannot practicably be effected, the Court may order substitutional service or dispense with service. 136. (1) Si la signification personne d'un document est en pratique impossible, la Cour peut rendre une ordonnance autorisant la significtion substitutive ou dispensant de las signification. 11 In Clipper Ship Supply Inc. v. Samatour Shipping Co., [1984] F.C.J. No. 949 (Fed. T.D.), Mr. Justice Dub discussed when an order for substituted service would be appropriate: 7 The provision in Rule 310(1) [predecessor to Rule 136] for substitutional service is an exception to the general requirement for personal service. There is no automatic right to substitutional service whenever there is some difficulty in effecting personal service. The applicant must show to the Court that he has taken reasonable steps to effect personal service and that he has not been successful. He must also show that the substitution is an acceptable and reasonable one, bearing in mind that the object of the order for substititional service is to bring notice of the proceedings to the attention of the defendant. 12 ner: Pursuant to Rule 147, the Court may also validate service that has not been effected in the normal man-
147. Where a document has been served in a manner not authorized by these Rules or by an order of the Court, the Court may consider the document to have been validly served if it is satisfied that the document came to the notice of the person to be served or that it would have come to that person's notice except for the person's avoidance of service. 147. Lorsqu'un document a t signifi d'une manire non autorise par les prsentes rgles ou une ordonnance de la Cour, celle-ci peut considrer la signification comme valide si elle est convaincue que le destinataire en a pris connaissance ou qu'il en aurait pris connaissance s'il ne s'tait pas sous-trait la signification. 13 In this case, the Court concludes that service has been effected on the defendants by e-mail, and that this is valid service pursuant to the Rules. Issue No. 2
Whether an interim, interlocutory and permanent injunction should be granted? 14 The tripartite test for interim and interlocutory injunctions was set out by the Supreme Court of Canada in RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311 (S.C.C.) at page 334 as follows: Metorpolitan Stores adopted a three-stage test for courts to apply when considering an application for either a stay or an interlocutory injunction. First, a preliminary assessment must be made of the merits of the case to ensure that there is a serious question to be tried. Secondly, it must be determined whether the applicant would suffer irreparable harm if the application were refused. Finally, an assessment must be made as to which of the parties would suffer greater harm from the granting or refusal of the remedy pending a decision on the merits. (i) Serious Issue 15 The plaintiffs submit that they meet the low threshold for serious issue in that they have demonstrated a clear breach of their rights under the Radiocommunication Act, R.S.C. c. R-2, the Copyright Act, R.S.C. 1985 c. C-42 and the Trade-marks Act, R.S.C. c. T-13. 16 Paragraph 9(1)(c) of the Radiocommunication Act states that it is an offence to "decode an encrypted subscription programming signal ... otherwise than under and in accordance with an authorization from the lawful distributor of the signal...". Any person who holds an interest in a subscription programming signal is entitled to seek damages or other remedies (including an injunction) pursuant to section 18 of the Radiocommunication Act. The plaintiffs submit that the defendants are in contravention of paragraph 9(1)(c) by decoding the Polsat Signal and that the plaintiffs, as copyright owner and exclusive licensee, are entitled to seek relief under section 18 of the Act. 17 Section 21 of the Copyright Act provides a "broadcaster" with copyright in the signals that they broadcast. The plaintiffs claim that the defendants are infringing their broadcasting rights (contrary to section 27 of the Act) by: (i) reproducing, adapting and communicating the Polsat Signal and programs; (ii) creating derivative works based on the Polsat Signal and programs; and (iii) authorizing retransmission of the Polsat Signal and programs to subscribers of the defendants' website. 18 The plaintiffs state that the defendants are also guilty of passing off (contrary to section 7of the Trademarks Act) by displaying the Polsat Signal logo on the homepage of their website, by displaying the Polsat Signal logo on the corner of the screen while the programs are playing and by using the confusingly similar mark "tvpol" in their domain name. 19 The Court agrees with the plaintiffs that the possible infringement by the defendants of the Radiocommunication Act, the Copyright Act and the Trade-marks Act raises a serious question to be tried. Accordingly, the first element of the tripartite test is satisfied. (ii) Irreparable Harm 20 In order to meet the second element of the tripartite test, the plaintiffs must adduce "clear and non specu-
lative" evidence that irreparable harm will follow if the defendants' activities are permitted to continue. See Centre Ice Ltd. v. National Hockey League (1994), 166 N.R. 44 (Fed. C.A.). 21 The plaintiffs submit that the defendants' activities are interfering with Polska Canada's ability to enter into distribution agreements with Canadian distributors. Mr. Boguslaw Pisarek, affiant for the plaintiffs, deposes that although negotiations have commenced, it will be extremely difficult to reach any agreement with Canadian distributors while the defendants are unlawfully making the most popular programs from the Polsat Signal available to the public in a manner that is beyond the plaintiffs' control and cannot be governed by the distribution agreements. In other words, the inability to contract with Canadian distributors is causing the plaintiffs to lose potential customers as well as credibility in the market place. The plaintiffs submit that this "loss of industry opportunity" cannot be quantified and that an injunction is the most appropriate remedy. 22 I am satisfied, based on the evidence before me, that the plaintiffs will suffer irreparable harm if the defendant is permitted to continue its activities. Loss of actual and potential customers has been recognized as irreparable harm not compensable by damages. See Church & Dwight Ltd./Lte v. Sifto Canada Inc. (1994), 20 O.R. (3d) 483 (Ont. Gen. Div.). Accordingly, the second element of the tripartite test is satisfied. (iii) Balance of Convenience 23 The plaintiffs submit that the balance of convenience weighs strongly in their favour given the defendants' infringing conduct. Further, the plaintiffs undertake to pay damages if it is determined at trial that the defendants should succeed on the merits of the claim. 24 The Court is prepared to accept that the balance of convenience favours the plaintiffs. The plaintiffs have established a strong prima facie case of infringement and have demonstrated that they will suffer irreparable harm if the defendants are permitted to continue their infringing activities. As discussed by Mr. Justice Walsh in Universal City Studios Inc. v. Zellers Inc. (1983), 73 C.P.R. (2d) 1 (Fed. T.D.) at 7: [I]t is not in my view acceptable for an alleged infringer (and there is a strong prima facie case of this in these proceedings) to contend that it should be allowed to continue to do so, as it will suffer financial loss if it is prevented from continuing allegedly infringing sales, or that it may be doing Plaintiffs a favour by providing additional advertising for their product. 25 Moreover, I am inclined to agree with the plaintiffs that, given the difficulties that they have experienced in attempting to contact the defendants, there are serious grounds to believe that the plaintiffs would have difficulties collecting damages from the defendants should the Court so order at trial. 26 As the plaintiffs have satisfied all three elements of the tripartite test, the plaintiffs' motion for an interim injunction will be granted until one or both of the defendants come before this Court seeking to set aside or vary this interim injunction. Order THIS COURT ORDERS THAT: 1. Service of the Statement of Claim, Notice of Motion, and the Affidavits of Boguslaw T. Pisarek and Tomasz Gladkowski was validly effected as of August 16, 2005.
2. An interim injunction is granted enjoining Jaroslaw Bucholc and Radiopol Inc. from decoding the plaintiffs' encrypted subscription programming signals without authorization, and from further infringing the plaintiffs' copyright and trademarks. 3. Jaroslaw Bucholc and Radiopol Inc. are to deliver up to the plaintiffs all of the works in which the plaintiffs have copyright or trademark rights that are in their possession, control or custody, or in the alternative, destroy all such material under oath and under the supervision of this Court. 4. This Order shall remain in effect until one or both of the defendants appears before this Court and obtains an order setting aside or varying the injunction. 5. The plaintiffs shall provide notice of this Order to the defendants by: (a) mailing a copy of this Order to 2221 Walkley Avenue, Montreal, Quebec; (b) e-mailing a copy of this Order to radio@radiopol.com and jarek@radiopol.com; and (c) publishing a notice in the following form in the Polish language newspaper, Wiadomosci: The Federal Court has granted an interim injunction against Radiopol Inc. and Jaroslaw Bucholc ordering that these parties cease decoding and distributing encrypted subscription programming signals from Telewizja Polsat S.A. and Telewizja Polska Canada Inc. and ordering Radiopol and Jaroslaw Bucholc to deliver up all of the plaintiffs' works in their possession, control or custody, or in the alternative, destroy all such material under oath and under the supervision of this Court. This Order will be in effect until either or both of Radiopol Inc. and Jaroslaw Bucholc come before th the Federal Court at 330 University Avenue, 7 Floor, Toronto, Ontario, M5G 1R7, telephone (416) 973-9181 seeking to set aside or vary the Order. 6. The costs of this motion shall be in the cause. Motions granted. END OF DOCUMENT
TAB 13
Sullivan on the Construction of Statutes

Fifth Edition by Ruth Sullivan Professor of Law
University of Ottawa
LexisNexis
80
Sullivan on the Construction of Statutes
Section 231.3(3) provides that a judge "shall" issue the warrant once satisfied that the three statutory conditions set out therein have been satisfied. The word "shall" is normally to be construed as imperative unless such an interpretation would be utterly inconsistent with the context in which it has been used and would render the section irrational or meaningless. Nothing in the context of s. 231.3 renders an imperative interpretation of the word "shall" in s. 231.3(3) inconsistent with the balance of the section or makes it irrational or meaningless.'" It followed that the judge had no discretion to refuse to issue a warrant once the statutory criteria were met. It further followed that s. 231.3(3) violated s. 8 of the
Charter.
When breach of obligation is an offence. Many statutes contain a provision that says any person who contravenes a provision of this Act or the regulations made under this Act commits an offence and is liable to specified penal consequences. In recent years, it has become common for legislatures, using "must" or "shall", to impose obligations on judges and Ministers and occasionally even the Governor General or Lieutenant Governor in Council. Although a judge or Minister who failed to perform a duty imposed on him or her would contravene the Act, it is obvious that the legislature did not intend to attach penal consequences to the contravention. Obligations of this sort would be enforced through declaration or mandamus."' It is also common, particularly in regulations, to find requirements for benefits formulated as obligations. A person who fails to fulfill such a requirement could be said to contravene the Act. The consequences of such a contravention could range from loss of benefit to penal sanction depending on the circumstances. Analysis of the sort associated with the Normandin case is required in this type of case."' "should". The modal "should" is sometimes used in legislation, usually to introduce principles or considerations that are intended to guide but not exclude the exercise of discretion. When used in this way, "should" effectively imposes a duty to consider: the decision-maker is to take the listed factors into account but is not bound by them. Some courts have held that "should" imposes a legal obligation.'20 However, this holding is hard to accept because it is inconsistent with the ordinary meaning of "should". In ordinary usage, "should'? indicates a preferred course of action but it does not make that preference binding. The holding also ignores the well established convention of using "shall" (or "must") to impose legally binding obligations or requirements.
Ibid., at para. 30. Some obligations of this nature might be non-justiciable. See supra, at note 98. See, for example, Re Morrison-Pelletier v. Pelletier, [19931 0.1. No. 4185, 108 D.L.R. (4th) 358. at para. 30 (Ont. Div. Ct.): "In my view the use of the word 'should' is imperative."
Ch. 3: Technical and Legal Meaning
81
In R. v. S. (S.),'2' the Supreme Court of Canada concluded that "should" as used in s. 3 of the Young Offenders Act did not impose any obligation; it expressed mere preference a desire or request. Section 3 set out a series of principles according to which young persons were to be dealt with under the Act. Paragraph 3(1)(d) provided:
... where it is not inconsistent with the protection of society, taking no measures or taking measures other than judicial proceedings under this Act should be considered for dealing with young persons who have committed offences.
Dickson C.J. wrote:

... the use of the term "should" in s. 3(1)(d) does not provide evidence of a mandatory duty. While I agree that s. 3(2) dictates that a liberal interpretation be given to the legislation, in my opinion that does not require the abandonment of the principles of statutory interpretation nor does it preclude resort to the ordinary meaning of words in interpreting a statute. In the context of s. 3(1)(d), I find that the word "should" denotes simply a "desire or request" ... and not a legal
obligation.'" "and" / "or". Courts often declare that "and" is conjunctive and "or" is disjunctive, but to avoid absurdity they must sometimes read "and" as if it said "or" or vice versa.'" In International Woodworkers of America, Local 2-306 v. Miramichi Forest Products Ltd.,'" for example, the issue was whether the Labour Relations Board could both hold a hearing and take a vote under s. 10(2) of New Brunswick's Labour Relations Act. This section was drafted in the following terms:
10(2) The Board ... may make ... such ... inquiries as it deems necessary, including the holding of such hearings or the taking of such votes as it deems expedient.
The union argued that since "or" is disjunctive the Board could hold a hearing or take a vote, but it could not do both. Hughes J.A. wrote:
While the natural meaning of "or" ... is to mark an alternative or present a choice, thereby implying an election is to be made to do one of two things, the word will not be so construed where it would result in an absurdity or which the clear intent of the section in which it is found would be defeated....126
" Supra note 84. Ibid., at 274. See also R. v. Larche, 12006) S.C.J. No. 56,120061 2 S.C.R. 762, at paras. 32-34 (S.C.C.). See, for example, P. St. J. Langan, Maxwell on the Interpretation of Statutes, 12th ed. (London: Sweet & Maxwell, 1969), at pp. 232-33. 119711 N.B.J. No. 35, 21 D.L.R. (3d) 239 (N.B.C.A.). r Relations Act, R.S.N.B. 1952, c. 124. For a similarly misleading analysis of "and", see Menzies v. Manitoba Public Insurance Corp., 120051 M.J. No. 313, at paras. 24, 34 (Man. C.A.).

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Court File No. FEDERAL COURT OF APPEAL B E T W E E N: BELL CANADA, BELL MOBILITY INC., MTS INC.

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works

2013 Thomson Reuters. No Claim to Orig. Govt. Works