T-2669-74
The Attorney General of Manitoba, The Alberta
Gas Ethylene Company Ltd., The Alberta Gas
Trunk Line Company Limited, Government of
the Province of Saskatchewan, Alberta and
Southern Gas Co. Ltd., Greater Winnipeg Gas
Company, and The Attorney General of British
Columbia (Applicants)
v.
The National Energy Board, Dow Chemical of
Canada Ltd., Dome Petroleum Ltd. and Cochin
Pipe Lines Ltd. (Respondents)
Trial Division, Cattanach J.—Ottawa, July 18,
19, 22-26, August 9, 1974.
Extraordinary remedies—Administrative law—Application
to National Energy Board for licence—Applicants alone
heard orally—Interveners restricted to written submissions—
Board prohibited from rendering decision—National Energy
Board Act, R.S.C. 1970, c. N-6, ss. 7, 10, 15, 20, 83—Part
VI Regs. 16, 16.1, 24(2)—Rules 3, 6, 7, 15-19—Federal
Court Act, ss. 18, 28.
Dow Chemical of Canada, Ltd., a respondent to the
present application, had filed an application with the Nation
al Energy Board, May 30, 1974, for a licence to export
ethylene from Canada, to import ethylene into Canada and
to re-export ethylene from Canada. The Board decided, with
notice to interested parties, to hear the Dow application in
public and to receive only written submissions from other
parties. The latter complained of this form of proceeding, at
the outset of the hearing, but the Board adhered to its
decision. The present applicants then sought orders of cer-
tiorari, to quash the decision; prohibition, to forbid resump
tion of the hearing of the Dow application on the same
basis; and mandamus, directing the Board to fix a date for a
full 'public hearing. At the opening of the hearing, on June
25, Dow moved that its application for the issue of a licence
for the export of ethylene should be considered as an
application for an order authorizing Dow to export ethylene
pursuant to the Part VI Regulations, as amended June 20
and effective June 24, 1974, enacting Regulation 16.1, by
virtue of which any person could import ethylene without a
licence and the Board could, by order, authorize any person
to export ethylene in terms prescribed by the Board.
Held, the Board, having failed to decide in favour of
proceeding under the Regulations, as amended, must be
taken to have dealt with the Dow application under the
National Energy Board Act and Regulations as they stood
before the amendments. The provision in section 20 of the
Act for public hearings must mean that every member of the
public with a demonstrable interest in the matter before the
Board, over and above that of the public generally, should
have the right to take part in the hearings. Because sections
10 and 15 of the Act bestowed upon the Board the attributes
of a court, and because the Act, read with the Rules respect
ing hearings (made by the Board under section 7 of the Act),
contemplated the panoply of a full adversary hearing, it
followed that the word "hearing" in section 20, must have
attributed to it the meaning as it had in a court of law. The
applicants for and the opponents of a licence must be
treated on an equal footing. In allowing the applicant Dow to
adduce oral evidence and argument, while restricting the
interveners to written representations, the Board treated the
applicant and the interveners differently and in a manner not
in conformity with the hearing contemplated in section 20 of
the Act; it should be prohibited from rendering any decision
on Dow's application consequent upon the hearing on June
25, 1974, and days following. Prohibition, granted in this
form, was a more appropriate remedy then certiorari. Man-
damus directing the Board to hold a full public hearing, was
denied, in view of the amendments to the National Energy
Board Regulations, supra.
Local Government Board v. Arlidge [1915] A.C. 120,
applied.
APPLICATION.
COUNSEL:
J. F. Sherwood for Attorney General of
Manitoba.
John Hopwood for Alberta Gas Ethylene
Co. Ltd. and Alberta Gas Trunk Line Com
pany Limited.
J. A. Griffin, Q.C., for Government of the
Province of Saskatchewan.
F. G. Homer for Alberta and Southern Gas
Co. Ltd.
A. L. Campbell, Q.C., for Greater Winnipeg
Gas Company.
J. E. Smith for Attorney General of British
Columbia.
F. H. Lamar, Q.C., and I. Blue for the
National Energy Board.
W. B. Williston, Q.C., R. J. Rolls, Q.C., D.
A. McDermott and R. W. Cosman for Dow
Chemical of Canada Ltd., Dome Petroleum
Ltd. and Cochin Pipe Lines Ltd.
SOLICITORS:
Gordon E. Piley, Q.C., Deputy Attorney
General, for Attorney General of Manitoba.
Howard, Dixon, Mackie and Forsyth, Cal-
gary, for Alberta Gas Ethylene Co. Ltd. &
Alberta Gas Trunk Line Company Limited.
Griffin, Beke, Gilbert and Olive, Regina, for
Government of the Province of Saskatche-
wan.
Alberta and Southern Gas Co. Ltd., Cal-
gary, for itself.
Aikins, MacAulay and Thorvaldson, Win-
nipeg, for Greater Winnipeg Gas Company.
Burke-Robertson, Chadwick and Ritchie,
Ottawa, for Attorney General of British
Columbia.
Fasken and Calvin, Toronto, for Dow
Chemical of Canada Ltd. and Dome
Petroleum Ltd.
Fenerty, McGillivray, Robertson, Brennan,
Prowse, Fraser, Bell and Hatch, Calgary,
for Cochin Pipe Lines Ltd.
Legal Department, National Energy Board,
for the Board.
The following are the reasons for judgment
delivered in English by
CATTANACH J.: This matter was begun by a
notice of motion filed by the Attorney General
of Manitoba as applicant naming the National
Energy Board (hereinafter for convenience
referred to as the Board) as respondent.
Subsequently the six additional parties named
in the above style of cause moved to be joined
with the Attorney General of Manitoba as appli
cants to which I assented and similarly the three
additional parties named in the style of cause as
respondents sought to be so added to which
requests I also assented.
The notice of motion, as originally filed,
requested,
(a) an Order of Certiorari to quash the decision of the
National Energy Board ("the Board") pronounced and deliv
ered on the 26th day of June, 1974, whereby the Board
decided not to alter its decision to hold an ex parte hearing
to deal with the application of Dow Chemical of Canada
Limited ("the Dow application") for licences to export some
10 billion pounds of ethylene during a 10-year period com
mencing on or about July, 1977;
(b) an Order of Prohibition forbidding the Board to resume
the hearing of the Dow application on an ex parte basis; and
(c) an Order of Mandamus directing the Board to fix a date
for a full public hearing so that there will be provided an
opportunity to prepare adequately, to give appropriate
notice thereof to known interested parties and to the public
at large, and to allow all interveners to make such represen
tations, conduct cross-examinations, introduce evidence,
present argument and otherwise to participate fully in such
hearing as they deem fit.
Because it became evident during the hearing
of this motion that the hearing referred to in
paragraph (a) above had been completed, the
order sought in paragraph (b) would be nugato-
ry, I permitted the Attorney General of Manito-
ba to amend paragraph (b) by its deletion and
the substitution of the following therefor:
(b) an Order of Prohibition forbidding the Board from con
cluding the hearing of the Dow application on an ex parte
basis, by forbidding the Board from rendering any decision
or from making any order or from issuing any licence in
respect thereto without first having a public hearing.
Similarly during the course of the argument it
became apparent that paragraph (a) of the
motion as originally drafted was not directed
explicitly to the issue between the parties which
evolved and to which argument was directed.
The real and vital issue was whether the ulti
mate decision of the Board in adopting the
procedure that it did would be vitiated in that
the procedure offended against the tenets of
natural justice so as to preclude a fair hearing.
Accordingly on motion by the applicants I
permitted paragraph (a) to be amended by its
deletion and the substitution of the following:
(a) an order of Certiorari to quash the following decisions of
the National Energy Board namely:
(i) the decision given on or about June 11, 1974 to hold
an ex parte hearing to deal with the application of Dow
Chemical of Canada Limited for licences to export some
10 billion pounds of ethylene during a 10 year period
commencing on or about July, 1977;
(ii) the decision pronounced and delivered on the 26th
day of June, 1974, whereby the Board decided not to alter
its decision to hold an ex parte hearing to deal with the
application of Dow Chemical of Canada Limited for
licences to export some 10 billion pounds of ethylene
during a 10 year period commencing on or about July,
1977;
To fully appreciate the issue and the ques
tions which evolve for determination it is
expedient to review the background.
Basically, the National Energy Board was
created by the National Energy Board Act, S.C.
1959, c. 46 as amended, to exercise a regulatory
licensing and advisory supervision on matters
relating to the manufacturing, processing, trans
mission, transportation, distribution, sale, pur
chase, exchange and disposal of energy and
sources of energy within and outside Canada
over which the Parliament of Canada has juris
diction. The paramount consideration of the
Board in exercising its jurisdiction is the public
interest particularly that the export of energy or
its sources will not deplete the supply before the
requirements for domestic consumption is guar
anteed and that the price to be charged therefor
is just and reasonable. (See section 83 of the
National Energy Board Act).
In 1971 Dome Petroleum Limited (hereinafter
referred to as "Dome") entered into a contract
with a company in Ohio, U.S.A. for the sale of
ethane, propane and condensates which Dome
considered would make the supplying of ethane
originating in Alberta by pipeline an economi
cally feasible project. Accordingly, Dome
applied to the Board for amendment to existing
licences to increase the volume it might export
over a ten year term and Cochin Pipe Lines
Limited (hereinafter referred to as "Cochin")
concurrently applied for a certificate of public
convenience and necessity for the construction
of a pipeline. The Board, due to the rapidly
changing energy situation in Canada in 1971 and
1972, limited its decision to propane. This
matter was heard in January, 1972.
By its decision given in May 1973, conse
quent upon the hearing in January 1972, the
Board allowed the export of an additional
volume of propane but restricted the term to 5
years rather than the requested term of 10
years.
At that time, i.e. May 1973, the Board direct
ed that Dome and other parties who had taken
part in the hearing in January 1972 should file
additional and more current evidence. This fur
ther hearing took place in July, August and
September 1973.
From the additional evidence it was readily
apparent to the Board that the nature of the
overall project had changed.
Dow Chemical of Canada, Limited (herein-
after referred to as "Dow") had undertaken and
committed itself to the construction of a large
ethylene manufacturing plant at Fort Saskatche-
wan, Alberta. It had become the co-shareholder
with Dome in equal proportions in Cochin.
Cochin now sought authorization from the
Board to construct twin pipelines, one as origi
nally contemplated to carry light hydrocarbons
to Sarnia, Ontario and the other to carry
ethylene.
The Board issued its decision in January
1974. It approved the export of ethane as
requested but restricted the term of the licence
to six years to coincide with the amendments to
Dome's licences to export propane and the
Board approved the construction of the twin
pipeline system.
At the time of the hearings in July, August
and September 1973 the question arose and was
argued before the Board whether ethylene fell
under the jurisdiction of the Board as being gas
or oil within the meaning of Part VI of the
National Energy Board Act.
However the evidence before the Board
established that ethylene would not be trans
ported by the pipeline system until 1977 and
accordingly the Board found it unnecessary to
decide that issue at that time.
While the Board made no express finding on
this issue it was aware of the importance of the
issue. This is demonstrated in its report of Janu-
ary 1974 in which it took into account the
amount of ethane which would be required to
produce ethylene in determining if there would
be a surplus of natural gas and ethylene to the
domestic needs.
In April 1974 the Board concluded that it had
jurisdiction over the export of ethylene under
Part VI of the Act and its conclusion in this
respect was made known to the interested
parties.
Dow thereupon made application to the Board
for a licence to export ten billion pounds of
ethylene over a ten year period beginning on or
about July 1977; that is one billion pounds
annually.
The parties before me appear to accept the
Board's conclusion that it has jurisdiction under
Part VI of the Act to entertain an application for
the export of ethylene. In any event it was not
an issue before me that the Board had found
facts contrary to the reality thereof thereby
conferring jurisdiction upon itself and I am not
obliged, therefore, to express any opinion on
this particular matter.
From the Board's decision given in January
1974 on the matters of Dome's application to
export propane and Cochin's application to con
struct twin pipelines, one for light hydrocarbons
and the other for ethylene, which pursuant to
the direction of the Board when it issued its
decision in May 1973 on the application of
Dome to export propane should be heard on
additional information on all aspects of the
overall project which was done in July, August
and September 1973, it is apparent that the
Board was particularly conscious of the public
interest as is its duty to be.
This is clear from the reasons for decision
given by the Board in January, 1974 when it
said at page 7-1:
The Dome application for licences to export ethane and
propane, and the Cochin application for a certificate of
public convenience and necessity for a pipeline to carry light
hydrocarbons and a pipeline to carry ethylene can only be
considered, in the Board's opinion, from the viewpoint of
the project as a whole. In this sense, the applications have to
be related to an even broader context, that is the extent to
which they are key factors in the creation of an ethylene
complex in Alberta with the expectation of upgrading the
ethylene into higher valued products in both Alberta and
Ontario.
It is equally clear from the foregoing passage
that the Board considered the two separate
applications as part of a single overall project. It
is logical to conclude that the Board considered
the whole project to consist of three stages, (1)
Dome's application to export propane in Janu-
ary 1972 the decision on which was given by
the Board in May 1973, (2) the concurrent and
respective applications of Dome and Cochin to
export ethane and to construct twin pipelines,
one to carry light hydrocarbons and the other to
carry ethylene, the decision on which was given
in January 1974, and (3) the present Dow
application to export ethylene. It would be naive
to think that the Board was not aware that the
ultimate application by Dow to export ethylene
was part and parcel of the project in its entirety.
There was ample evidence before the Board
to this effect. An agreement between Dow and
Cochin respecting ethylene was an exhibit
before the Board in its 1973 hearings. Officers
of Dow testified at length on all aspects of the
Dow ethylene project and were cross-examined
by counsel for each of the intervenants who
chose to do so. The evidence was clear that the
ethylene pipeline and the Dow ethylene project
were interdependent and that one was essential
to the other and that if both ethane and ethylene
pipelines were not authorized the one pipeline
would not be built. It was a case of all or
nothing.
This being so I have no doubt that the Board
regarded each individual and separate applica
tion as an integral part of a whole mammoth
project (1) the manufacture of ethylene by Dow
in Alberta, (2) providing for its transportation to
supply the needs of the Canadian market and (3)
the export of surplus ethylene and other hydro
carbons. The Board deferred its consideration
of the export of ethylene (1) until it concluded
that it had jurisdiction to do so and (2) because
it was not necessary to do so since ethylene
would not be exported until 1977.
As was argued I think that the manner in
which the Board considered the three applica
tions piecemeal, that is by first restricting
Dome's application to export ethane, propane
and condensates to the export of propane, then
approving Dome's application to export ethane
and approving Cochin's application to construct
twin pipelines and finally considering Dow's
application to export ethylene, is susceptible of
the interpretation that there was but one con
tinuing application before the Board which was
considered in three stages.
In my view this interpretation was adopted by
the Board and was the underlying factor which
prompted the Board to proceed as it did but in
so saying I do not overlook the fact that the
Board held three distinct and separate hearings.
In April 1974, as indicated above, the Board
concluded that it had jurisdiction over the
export of ethylene and made its conclusion
known.
Dow then made application for a licence to
export ethylene.
The Secretary of the Board thereupon dis
patched a telex message dated June 11, 1974 to
the parties indicated in the body of the message
which reads:
As a party of record at the National Energy Board hear
ings of the applications of Dome Petroleum Limited, Cochin
Pipe Lines Limited, et al, in 1972 and 1973, please be
advised as follows:
On Tuesday, the 25th day of June, 1974 at 2:00 p.m., the
Board will hear publicly the application of Dow Chemical of
Canada, Limited, ex parte, for licences to
1. Export from Elmore, Saskatchewan, 15 billion pounds of
ethylene during a 10-year term commencing upon startup of
the plant at Fort Saskatchewan or the 1st day of July, 1977,
whichever is the earlier:
2. Import at Windsor, Ontario, the said" 15 billion pounds of
ethylene during the said 10-year term:
3. Export from Sarnia, Ontario, 10 billion pounds of ethy-
lene during the said 10-year term, and
4. Drop off a portion of the ethylene at Joliet, Illinois, as an
alternate point of delivery to Marysville, Michigan.
And take notice that prior to its decision', upon the said
application, the Board will consider only written representa
tions in respect of the said application subject to the follow
ing conditions:
(I) That the representations shall contain sufficient facts
to establish that the representor is directly interested in or
affected by the said application:
(II) That the said representations shall be served on the
applicant and be received by the Board on or before the
21st day of June, 1974.
And further take notice that copies of the said application
and written representations may be examined at the office
of the Secretary of the Board at:
National Energy Board,
Trebla Building,
473 Albert Street,
Ottawa, Ontario.
or at the office of the applicant at:
Dow Chemical of Canada, Limited,
Modeland Road,
Sarnia, Ontario.
The significant content of that message was
that the Board would hear "publicly" the Dow
application ex parte and that the Board would
"consider only written representations" subject
to the conditions that the representations estab
lished that the representer was "directly inter
ested in" or "affected by" the application and
should be served on the applicant and received
by the Board on or before June 21, 1974.
It was moved before the Board, when it con
vened on June 25, 1974, that the Board should
alter its decision "to hold an ex parte public
hearing" in the format set out in the telex notice
and instead to hold a public hearing by which
was meant that all interested parties should be
afforded the opportunity of cross-examining the
witnesses called by the applicant in support of
its application and to introduce oral evidence in
contradiction thereof at the conclusion of which
the applicant would be permitted to make oral
argument as would counsel for the interested
parties who opposed the application.
The Board had announced that it would hear
oral evidence on behalf of the applicant and that
the applicant might make an oral submission in
support of the application but that the parties
opposing the application would be restricted to
written submission and would not be permitted
to cross-examine witnesses called by the
applicant.
After having heard argument on the request
to so vary the format of the hearing of the
application, the Board announced its decision,
on June 26, 1974, not to vary its prior decision
to hold an "ex parte public hearing".
In short, the Board denied the motion made
before it on the grounds that "the procedure it
has selected in disposing of the Dow application
is consistent with the requirements of the Na
tional Energy Board Act and with the require
ments of the rules of natural justice".
However, in view of the expressed concern of
a number of the interested parties with respect
to the time allowed to make written representa
tions, the Board announced that it would afford
the persons involved in the hearing the opportu
nity to make further representations with a com
parable opportunity to the applicant to make a
written reply thereto.
The Board also announced that it would
review the application on "an ex parte basis"
within the framework of the surplus calculations
contained in the Board's decision of January
1974 relating to the Cochin and Dome applica
tions, that the Board's natural gas surplus calcu
lations made provision for a 1.2 billion pound
ethylene plant of Dow using ethane as a feed-
stock and that the Board's report recognized
that Dow's intent to expand the plant using
propane and butane as a feedstock which latter
two hydrocarbons do not have to meet the
Board's surplus test for natural gas.
The Board still further announced that quanti
ties of ethylene in excess of the quantities deter
mined earlier by the Board would not be dealt
with until what was termed "full public hear
ings" on inquiry into the demand, supply, deliv-
erability and surplus of natural gas with respect
to which notices had been sent to all interested
parties inviting submissions by September 3,
1974 with the opportunity to those parties to be
heard and take an active part in the hearing
which I believe is to take place in September
1974.
What has happened in fact with respect to the
Dow application, when the hearing began, was
that Dow called three witnesses each of whom
had been called and had given evidence at the
Dome and Cochin applications. Each witness
was shown a transcript of the testimony given
by him in the earlier proceedings, which was an
exhibit in the current proceedings, with which
each acknowledged his familiarity. Each of the
three witnesses was asked if he adopted the
evidence given by him at the prior proceedings
and in response each stated that he did. The oral
examination in chief consisted of two questions
to each of the three witnesses and was no more
than the adoption by each witness of the evi
dence that had been given earlier. It was an
incorporation in the Dow proceeding of evi
dence given in the Dome and Cochin applica
tions by reference thereto.
Counsel for the Board and the members of
the Board questioned the witnesses on signifi
cant matters raised in the written representa
tions made by Alberta Gas Trunk Line, Dupont
of Canada, Esso Chemical of Canada, the Prov
ince of Ontario and Polymer and did so general
ly for the purpose of testing the evidence and
putting to the witnesses issues raised by the
interveners.
In argument before me, it was pointed out as
being significant that counsel for the applicants
on the present motion who had been present at
the hearing before the Board did not indicate
that they wished to cross-examine the wit
nesses, that they suggested to counsel for the
Board or members of the Board any questions
which they thought should be put in cross-
examination of these witnesses, that they might
call witnesses in contradiction, that their posi
tions were not fully understood and that they
had not objected to the reception of written
argument rather than oral representations.
Generally speaking, when the question of fair
ness is involved, if the procedure adopted is
acquiesced in by a party with that party's full
knowledge, then that party is in a disadvanta
geous position to complain of the procedure so
adopted.
The simple answer in the present matter is
that the parties in opposition to the application
did complain of the procedure at the very outset
of the hearing and moved to vary that proce
dure. The Board denied that request. In view of
the Board's ruling that only the applicant may
present oral evidence and make an oral argu
ment (which was later changed to written argu
ment and that was done), that the opponents
were to be limited to written representations
and would not be afforded the right to cross-
examine, counsel would be entitled to assume
that, if they had made the suggestions or
requests that had been suggested that they
ought to have made, the suggestions or requests
would not be entertained by. the Board and that
it would have been abortive to make them.
The frequent and repeated use of the words
ex parte in conjunction with the words "public-
ly" and sometimes "in public" was a most
unfortunate choice. The Latin words ex parte,
translated literally mean from one side or party
only and in a legal sense mean a proceeding that
is taken or granted at the instance of and for the
benefit of one party only without notice to or
contestation by any person adversely interested.
What the Board did was nothing of the sort. It
gave notice to interested persons and invited
written representations from these persons. The
application was not intended to be, nor was it
heard ex parte. The use of those words in the
context was a contradiction and therefore
meaningless .
Immediately following the Board's conclusion
in April 1974 that ethylene was gas within the
meaning of Part VI of the National Energy
Board Act, Dow made application for a licence
to export ethylene.
On June 20, 1974, the Governor in Council
approved an amendment of the National Energy
Board Part VI Regulations by adding thereto,
immediately after section 16 thereof, the follow
ing heading and section:
Ethylene
16.1 (1) Notwithstanding anything in these Regulations,
any person may import ethylene without a licence.
(2) The Board may, by order, authorize any person, upon
such terms and conditions as the Board may prescribe, to
export ethylene.
(3) Every person who exports or imports ethylene shall,
when requested by the Board, furnish the Board with such
information as the Board may require respecting the expor
tation or importation.
(4) When a person named in an order made under subsec
tion (2) exports ethylene, he shall do so in accordance with
the terms and conditions prescribed by the Board in the
order.
2. Subsection 24(2) of the said Regulations is amended by
striking out the word "and" at the end of paragraph (g)
thereof, by adding the word "and" at the end of paragraph
(h) thereof and by adding thereto the following paragraph:
(i) ethylene.
This amendment became effective on June
24, 1974. The canon of interpretation is that
when the effect of an enactment (which canon
is applicable to a regulation authorized under a
statute) is to take away a right, prima facie it
does not apply to existing rights, but when it
deals with procedure only, prima facie it applies
to all matters pending, as well as future.
Assuming the enactment is procedural only,
as it appears to be, but which question it is not
incumbent upon me to decide for reasons I shall
outline, then the Board could by order authorize
an applicant to export ethylene and it is clear
from the language of the amendment, that the
Board can make that order ex parte within the
correct meaning of those words.
At the outset of the hearing, counsel for Dow
moved to the Board that the application for the
issue of a licence for the exportation of ethylene
should be considered by the Board as an
application for an order to authorize Dow to
export ethylene pursuant to the amendment to
the Part VI Regulations.
This the Board did not decide. In my opinion
it was obligatory upon the Board to decide the
fundamental character of the application before
embarking upon the hearing. The application
had to be one thing or the other and not a hybrid
of both because different procedures and conse
quences would follow depending upon which of
the two categories into which the application
fell.
Because the Board did not decide or make its
decision publicly known, I am of the opinion
that I am left with no alternative other than to
deal with the motion before me on the basis that
the application stands as it was originally made
to the Board, that is an application by Dow for
the issue of a licence for the exportation of
ethylene.
Counsel for the Board sought to introduce
before me a press release issued by the Board
prior to the hearing of the Dow application, and
certified copies of the decision and reasons
therefor given by the Board on the prior
applications of Dome and Cochin. Counsel for
the applicants objected to the admission of the
material on the ground that the present motion
was limited to the Dow application and the
material had no relevance thereto. I admitted
the material subject to reserve of the objection
for the reason that the prior decisions would
have a bearing on the question whether the
procedure adopted by the Board accorded a fair
hearing which I might well be called upon to
decide and because there had been no prior
motion for direction as to what would constitute
the record on certiorari. Having so admitted that
material counsel for the applicants requested
that the transcript of the evidence at these prior
hearings should also be produced. I acceded to
that request on the same basis.
Upon more mature reflection, I am satisfied
that all material above is properly admitted to
ensure that the matter in dispute may be effec
tually determined and adjudicated upon.
In the National Energy Board Act, there are
procedural provisions and, pursuant to the au
thority in section 7 thereof, Rules relating to
practice and procedure in proceedings before
the Board were made.
If the Board complies with the express proce
dural provisions, it is the master of its own
procedure, but, where there is a complaint, as is
here the case, then the Court must decide
whether there has been a failure to observe the
principles of natural justice by being unjust or
unfair in some material way to the persons who
complain.
Thus the question to be first determined is
whether the Board had authority to proceed in
the way it did.
If that question is determined in the negative
that, in my opinion, concludes the matter and
the applicants are entitled to relief.
On the contrary, if the question is answered
in the affirmative, then a second question arises
for determination and that is whether the proce
dure that was adopted by the Board was just
and fair to the applicants.
I have been referred to a multitude of cases
by counsel. A review of those cases would seem
to establish that there is almost no rule with
reference to a particular problem that is univer
sally applicable to every type of case in all
circumstances. In each of the decisions what
was decided was that what was done in that
case was, or was not, a compliance with the
requirements of natural justice in the circum
stances of the case and not that some particular
thing must be done, or not done, in all
circumstances.
Regardless of how the Board may be charac
terized, that is as exercising administrative or
executive functions as opposed to judicial or
quasi-judicial functions, Parliament did impose
procedural duties on the Board.
Section 20 of the National Energy Board Act
provides:
20. (1) Subject to subsection (2), hearings before the
Board with regard to the issue, revocation or suspension of
certificates or of licences for the exportation of gas or
power or the importation of gas, or for leave to abandon the
operation of a pipeline or international power line, shall be
public.
(2) Where the Board revokes or suspends a certificate or
licence upon the application or with the consent of the
holder thereof, a public hearing need not be held if the
pipeline or international power line to which the certificate
or licence relates had not been brought into commercial
operation under that certificate or licence.
(3) The Board may hold a public hearing in respect of any
other matter if it considers it advisable to do so.
In subsection (3) the expression used is "pub-
lic hearing". The exception in subsection (1) to
subsection (2) is not applicable in the present
circumstances. However, the expression "public
hearing" is used in subsection (2). Subsection
(1) provides that "hearings" before the Board
with regard to the issue of a licence for the
exportation of gas (which for the reasons
expressed above I have concluded the Dow
application to be) shall be "public". The margin
al note to section 20 is "Public hearings". The
marginal note does not form part of the statute
but is merely temporanea expositio. While the
marginal note ought not to be relied on in inter
preting the statute, it is helpful. Despite the fact
that the words "hearings" and "public" are not
in juxtaposition in subsection (1), nevertheless
the language of subsection (1), when the section
as a whole is considered, must be construed as
synonymous to "public hearings".
It was contended that the word "public" as an
adjective modifying the word "hearing" means
that the proceedings of the Board shall be con
ducted "in public" as contrasted with the pro
ceedings being held in camera.
I do not agree with that contention. The word
"public" in the context, in my opinion, means
that every member of the public, subject to the
qualification that such person has a demon
strable interest in the subject matter before the
Board over and above the public generally, shall
have the right to participate in the hearing.
I find support for this conclusion in the lan
guage of Lord Moulton in Local Government
Board v. Arlidge'. Lord Moulton considered the
meaning of the word "public" in the term "pub=
lic local inquiry". He said at pages 147 and 148:
The effect of the insertion of the word "public" appears to
me to be that every member of the public would have a
locus standi to bring before the inquiry any matters relevant
thereto so as to ensure that everything bearing on the rights
of the owner or occupier of the house affected, or the
interests of the public in general, or of the public living in
the neighbourhood in particular, would be brought to the
knowledge of the Local Government Board for the purpose
of enabling it to discharge its duties in connection with the
appeal.
Section 7 of the National Energy Board Act
provides:
7. The Board may make rules respecting
(a) the sittings of the Board;
(b) the procedure for making applications, representations
and complaints to the Board and the conduct of hearings
before the Board, and generally the manner of conducting
any business before the Board;
(I have omitted paragraphs (c) and (d) as they have no
bearing on the matter in issue.)
Pursuant to that authority, the Board has
made Rules relating to practice and procedure
before the Board.
Section 6 of those Rules provides:
6. (1) Except where the Board directs that an application
may be heard and determined ex parte or makes an expedit
ed proceedings order, the Board shall, as soon as possible
after the filing of an application, set the application down
for hearing.
(2) Where an application has been set down for hearing,
the Secretary shall forthwith notify the applicant of the time
and place fixed for the hearing thereof and shall, by such
notification, indicate
(a) the persons to whom and the time within which notice
of the application shall be given by the applicant,
(b) the manner, whether by public advertisement, person
al service or otherwise, in which notice of the application
shall be given by the applicant, and
(c) the form and contents of the notice to be given by the
applicant and the information to be included therein,
including the time and place fixed for the hearing of the
application and the time within which any reply or sub
mission shall be filed with the Secretary.
(3) Upon receipt of the notification referred to in subsec
tion (2) the applicant shall give notice of the application in
accordance with such notification.
' [1915] A.C. 120.
Section 7 provides for a reply or submission
by an intervener who intends to oppose or inter
vene in any application and the content thereof.
Provisions respecting hearings are contained
in sections 15 to 19, which are reproduced:
15. Hearings before the Board shall ordinarily be held in
Ottawa, but may be held in such other places in Canada as
the Board deems necessary or desirable for the proper
conduct of its business.
16. Where the hearing of any application has commenced,
the hearing shall proceed from day to day but may be
adjourned from time to time by order of or with the author
ity of the Board.
17. (1) The witnesses at the hearing of any application
shall be examined viva voce, but the Board may at any time
order that any particular facts may be proved by affidavit or
that the affidavit of any witness may be read at the hearing
on such terms and conditions as the Board considers reason
able, or that a witness whose attendance ought for good and
sufficient cause to be dispensed with be examined before a
commissioner or other person authorized to administer
oaths, before whom the parties or their solicitors shall
attend.
(2) Notice of the time and place fixed for the taking of
evidence before a commissioner or other person authorized
to administer oaths shall be given in the manner prescribed
by the order made by the Board under subsection (1).
(3) Evidence taken before a commissioner or other
person authorized to administer oaths shall be confined to
the subject of the application, and any objections to the
admission of evidence shall be noted by such commissioner
or other person and dealt with by the Board at the hearing; a
copy of all evidence so taken shall be certified under the
hand of the person by whom the evidence was taken and
shall forthwith be returned to the Secretary.
(4) A copy of any evidence purporting to be certified
under the hand of a commissioner or other person author
ized to administer oaths may be received in evidence with
out proof of the signature of such person or of the fact that
the evidence was taken at the time and place and in the
manner stated in the certificate.
18. Evidence taken,
(a) at another hearing before the Board, or
(6) in the case of an application for a certificate in respect
of a gas pipe line or for a licence to export gas, at a
hearing before any board, commission or other competent
tribunal of a province for authority to take or remove gas
from that province,
or any report, finding or order made in respect thereof may,
by leave of the Board obtained before or after the com-
mencement of the hearing of an application, be received in
evidence at the hearing.
19. The Board may wherever it deems it advisable to do
so require a written brief to be submitted by the parties in
the proceeding.
Section 3 of the Rules provides:
3. (1) Subject to the Act and the regulations and except
as otherwise provided in these Rules, these Rules apply to
every proceeding before the Board upon an application.
(2) The Board may, in any proceeding before the Board
upon an application, direct either orally or in writing that the
provisions of these Rules or any of them shall not apply, or
shall apply in part only, and without restricting the general
ity of the foregoing the Board may, for the purpose of
ensuring the expeditious conduct of the business of the
Board and the hearing and determination of any such
proceeding,
(a) extend or abridge the time fixed by these Rules for the
doing of any act or thing,
(b) dispense with compliance with any provision of these
Rules requiring the doing of any act or thing, or
(c) substitute other rules for the provisions of these Rules
or any of them.
(3) In any case not expressly provided for by the Act, the
regulations or these Rules, the general rules of practice in
the Federal Court of Canada may, in the discretion of the
Board, be adopted and made applicable to any proceeding
before the Board upon an application.
There was no material before me that any
application was made to the Board to depart
from the Rules nor was my attention directed to
any material that the Board so directed either
orally or in writing.
While the Board no doubt felt that consider
ation by it of the Dow application was urgent,
the Board did not expressly so state as a condi
tion for the Board initiating on its own motion a
substitution of other Rules for those existing for
the purpose of the expeditious conduct of the
hearing of the Dow application.
Possibly, the telex message of June 11, 1974
might be so construed but, in my opinion, that
message should have been predicated upon an
express statement that a degree of emergency
prevailed which would justify the Board in
departing from the Rules ordinarily applicable
to a hearing in the absence of which the recipi
ents of the message were entitled to assume that
the usual Rules are applicable. This, I think, is
inherent in section 3(1).
Further section 3 is "subject to the Act". The
crucial question, therefore, is whether the mean
ing to be ascribed to the word "hearing" as used
in section 20 of the Act is that of a normal "oral
hearing" by which I mean a hearing at which the
Board would be prepared to hear both sides, to
make available to and allow both sides to com
ment upon or contradict any information that
the Board has obtained, to permit the parties to
adduce oral evidence, to be represented by
counsel, to permit cross-examination of wit
nesses adverse to their position and for the
Board to act only on information of probative
value.
I fully appreciate that in many instances a
hearing need not be an oral one but may be on
written representations. If a tribunal is left by
the legislation creating it with unfettered discre
tion as to how to proceed, then the tribunal can
work out an acceptable procedure that does not
include an oral hearing, but even then there may
be cases where fairness may dictate an oral
hearing. That is why I consider that what is
contemplated by the use of the word "hearing"
in section 20 of the National Energy Board Act
is of such crucial importance.
The word "hearing" is defined in the Shorter
Oxford English Dictionary as
3. The listening to evidence and pleadings in a court of law;
the trial of a cause; spec. a trial before a judge without a
jury 1576.
However, the etymological meaning of a word is
not necessarily the meaning which the context
requires and dictionaries are only to be resorted
to for the purpose of ascertaining the use of a
word in popular language.
I take it as a cardinal rule that the meaning of
a word in a statute is to read not according to
the mere ordinary general meaning of the word
but according to the meaning of the word as
applied to the subject matter - unless in the con
text that word is used in common parlance.
I think the word "hearing" in the context of
section 20 of the National Energy Board Act is
used in a technical sense.
In endeavouring to discover the meaning of
the word "hearing" I must first look to section
20 itself and I may also look to other sections in
the Act and the Act as a whole, as well as
regulations thereunder.
When the word "hearing" is used in legisla
tion, it almost always denotes a hearing at which
oral evidence and argument is made but while
that is generally so, there may be exceptions
when written representations may suffice.
Section 10 of the National Energy Board Act
reads:
10. (1) The Board is a court of record.
(2) The Board shall have an official seal, which shall be
judicially noticed.
(3) The Board has, with respect to the attendance, swear
ing and examination of witnesses, the production and
inspection of documents, the enforcement of its orders, the
entry upon and inspection of property and other matters
necessary or proper for the due exercise of its jurisdiction,
all such powers, rights and privileges as are vested in a
superior court of record.
Section 15 of the Act provides:
15. (1) Any decision or order made by the Board may, for
the purpose of enforcement thereof, be made a rule, order
or decree of the Federal Court of Canada or of any superior
court of any province of Canada and shall be enforced in
like manner as any rule, order or decree of such court.
(2) To make a decision or order of the Board a rule, order
or decree of the Federal Court of Canada or a superior
court, the usual practice and procedure of the court in such
matters may be followed, or in lieu thereof the Secretary
may file with the Registrar of the court a certified copy of
the decision or order under the seal of the Board and
thereupon the decision or order becomes a rule, order or
decree of the court.
Section 17(1) of the Rules of practice and
procedure, which has been quoted above, con
templates generally that witnesses shall be
called at a "hearing" of any application and
shall be examined viva voce and it seems to me
that the words "shall be examined viva voce"of
necessity includes viva voce cross-examination
by opponents to the application or their counsel
and is not restricted to examination and cross-
examination by members of the Board and
counsel to the Board. The converse is also the
right of the applicant or its counsel with respect
to witnesses called by opponents.
Under section 10 of the National Energy
Board Act the Board is constituted as "a court
of record".
In Wharton's Law Lexicon, 14th edition at
page 846 "courts of record" are defined as'
... those whose judicial acts and proceedings are enrolled
on parchment, for a perpetual memorial and testimony,
which rolls are called the Records of the Court, and are of
such high and supereminent authority that their truth is not
to be called in question.
The fact that the statute designates the Board
"a court of record" does not constitute the
Board a court of law or justice in the legal sense
of that term.
The authorities are clear to show that there
are tribunals with many of the trappings of a
court which, nevertheless, are not courts in the
strict sense.
Under section 10 of the Act, the Board is
vested with the powers of a superior court of
record, that is a court strictly so-called. Under
its Rules of practice and procedure, it sits and
holds hearings. It has all the power to summon
and compel the attendance of witnesses, to
administer an oath to witnesses, to compel the
production and inspection of documents, to
enter upon and inspect property, to enforce its
decisions and orders, to conduct the examina
tion of witnesses and all the rights and privi
leges that are vested in a superior court.
In many instances, its decisions are final and
conclusive subject only to review under section
28 of the Federal Court Act and to the extraor
dinary remedies under section 18 of that Act.
In other instances its decisions are not effec
tive until approved by the Governor in Council.
In view of the express statutory provisions in
the National Energy Board Act, I do not think it
is necessary, at this point, to embark upon a
discussion of the principles to determine if the
function of the Board is purely administrative or
executive.
The Board is called upon to decide questions
of great public interest. The protection of that
interest is the paramount duty of the Board in
deciding whether an application for a licence to
export natural gas should be granted. In doing
so, however, it is confronted with a contest
between the applicant for the licence on the one
hand and those interested persons who oppose
that application on the other.
While there may not be a lis inter partes in the
true sense of that term, because there is a third
party not present, which is the public interest,
nevertheless there is a contest between the
applicant and the objectors. In some cases the
objector may be said to represent the public
interests and in others the objector may be a
competitor of the applicant.
In the present matter, there was a combina
tion of both.
Such situation has been described and estab
lished by authority as a quasi -lis between
quasi-parties.
Because the National Energy Board Act has
bestowed upon the Board the attributes of a
court and because the statute and the regula
tions contemplate the panoply of a full adver
sary hearing it follows that the word "hearing"
in section 20 of the Act must have attributed to
it the same meaning as it has in a court of law.
In that sense, a "hearing" before the Board is
analogous to and imports a "trial" before a
court of law.
That being so the applicant for a licence and
the opponents thereto must be treated on an
equal footing with no discriminatory advantage
being bestowed on one side or the other.
Accordingly, if one side is permitted to give
oral evidence the same facility must be afforded
to the opponen with the right by both sides to
cross-examine tie witnesses giving the oral tes
timony adverse to their respective positions.
That is what is done in a court of law, and
because I have concluded for the reasons given
above that the word "hearing" in section 20 of
the National Energy Board Act is to be con
strued as analogous to and importing a "trial"
before a court of law, it follows that the Board
must do the same thing in such a hearing.
This the Board failed to do. It afforded Dow,
the applicant, the right to adduce oral evidence
and make oral argument while it restricted the
interveners to making written representations,
which I assume to mean evidence and argument
in writing.
No doubt there were cogent reasons present
to the Board which influenced it to proceed as it
did but this does not detract from the fact that
the applicant and the interveners were treated
differently.
At the hearing before the Board, Dow did
present oral testimony. In other respects, the
proceedings were changed. Dow did not make
oral argument. The interveners were given the
opportunity to make further written representa
tions in addition to those originally made, by a
specified date, July 8, 1974. Two did and others
did not. Dow made written reply to these fur
ther representations but the interveners were
not permitted to adduce oral evidence nor did
they cross-examine the witnesses called by Dow
even though the members of the Board and
counsel to the Board questioned these witnesses
at length.
The oral testimony of the witnesses on behalf
of Dow was minimal. It consisted merely of
them affirming and adopting for the purpose of
this hearing their testimony given at a previous
hearing.
If that was the sole purpose in permitting
Dow to lead oral testimony I fail to see how this
purpose could not have been accomplished
simply by receiving that evidence in the current
hearing in accordance with section 18 of the
Board's Rules of practice and procedure. How
ever, that could not have been the sole purpose
because the Board and its counsel subjected
these witnesses to lengthy questioning. No
doubt the purpose of that questioning was to
test and satisfy the Board as to the adequacy of
that prior testimony. This is understandable and
proper. No doubt a second purpose was to
obtain the views of these witnesses in respect of
the matters raised in the written representations
by the intervener. This too is understandable
and proper but it does amount to usurping the
privilege and function of the opponents to the
application and their counsel if that similar right
is not afforded to them.
For the reasons expressed above I have con
cluded that the manner of conducting this par
ticular hearing before the Board does not con
form to the hearing contemplated in section 20
of the National Energy Board Act.
Therefore it is not necessary to consider
whether the hearing so conducted was fair and
just within the principles of natural justice.
It follows that the applicants herein are en
titled to relief.
The relief sought is by way of the prerogative
writs of certiorari, prohibition and mandamus.
These writs are extraordinary remedies and at
common law there is a discretion to grant or
refuse them which discretion is to be exercised
on well defined principles established at
common law.
The appropriate remedy, in my opinion, is by
way of an order for prohibition such as is
sought in paragraph (b) of the amended notice
of motion but not in the express terms of para
graph (b).
Accordingly, there shall be an order prohibit
ing the Board from rendering any decision on
the application by Dow Chemical of Canada
Limited, dated May 30, 1974, for licences to
export ethylene from Canada, to import ethy-
lene into Canada and to re-export ethylene from
Canada consequent upon the hearing of that
application held in Ottawa, Ontario, on June 25,
26 and 27, 1974.
I deliberately refrain from granting an order
in the nature of certiorari as sought in paragraph
(a) of the amended notice of motion because the
relief granted is more appropriate and adequate.
I also refrain from granting an order for
prohibition in the express terms sought in para
graph (b) of the amended notice of motion and
the order for mandamus sought in paragraph (c)
thereof.
I do so because the hearing referred to in
paragraph (b) having been concluded a prohibi
tion to that effect would be abortive and
because the hearing was not conducted ex parte.
I consider the hearing as separate and distinct
from rendering a decision consequent there
upon.
I decline to grant an order for mandamus
directing the Board to hold a full public hearing
as sought in paragraph (c) of the amended
notice of motion and from including in the order
of prohibition any direction or reference to a
full public hearing and the incidences thereof
and prohibiting the Board from making an
order.
This I decline to do because of the amend
ment to the National Energy Board Part VI
Regulations by Order in Council P.C. 1974-
5457, dated June 20, 1974, by virtue of which
any person may import ethylene without a
licence and the Board may, by order, authorize
any person to export ethylene subject to terms
and conditions as are prescribed by the Board.
As indicated above and for the reasons also
indicated above, I have considered this motion
exclusively on the basis that the application by
Dow was for a licence to import and export
ethylene and not a request to the Board for an
order to export ethylene.
The validity of the Order in Council and the
authority of the Board, pursuant thereto, to
authorize the export of ethylene by order, with
out a public hearing, was not in issue before me
and accordingly was not fully and completely
argued and adjudicated upon.
There shall be no order as to the costs.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.