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A-136-78
Inuit Tapirisat of Canada and The National Anti- Poverty Organization (Appellants)
v.
His Excellency the Right Honourable Jules Léger, the Right Honourable P. E. Trudeau, the Honour able A. Abbott, W. Allmand, R. Andras, S. R. Basford, M. Bégin, J. J. Biais, J. J. Buchanan, I. Campagnolo, J. Chrétien, F. Fox, A. Gillespie, J. P. Goyer, J. Guay, J. H. Homer, D. Jamieson, M. Lalonde, O. E. Lang, R. Leblanc, M. Lessard, D. J. Macdonald, D. S. Macdonald, A. J. Mac- Eachen, J. Munro, L. S. Marchand, A. Ouellet, R. Perrault, J. Roberts, J. Sauvé, E. F. Whelan (collectively referred to as the Governor in Coun cil), Attorney General of Canada and Bell Canada (Respondents)
Court of Appeal, Pratte, Heald and Le Dain JJ.— Ottawa, September 5 and November 17, 1978.
Practice Appeal from order to strike out Action attacking two decisions of Governor in Council Appellants' actual submission not considered by Cabinet, but rather, departmental synopsis, and submissions by CRTC and Minis ter that not available to appellants Whether Trial Division erred in law in deciding Governor in Council not bound by procedural requirements of natural justice National Trans portation Act, R.S.C. 1970, c. N-17, s. 64(1) Federal Court Rule 419(1 )(a).
This is an appeal from an order of the Trial Division striking out a statement of claim. Appellants' action attacks two deci sions of the Governor in Council by which the Governor in Council declined to vary or rescind a decision of the CRTC. The Governor in Council conducted the "hearing" in writing but the actual written submissions of the parties were not presented to the members of the Governor in Council who took the decisions. What was submitted was a statement prepared by officials of the Department of Communications indicating what the officials considered were the positions of the parties and what the views of the Department were in relation to the facts and issues in appeal. The CRTC, through the Minister of Communications, made submissions at the request of the Gov ernor in Council, and the Minister, too, made submissions. None of these, including evidence, was disclosed to the appel lants. The question is whether the Trial Division erred in law in concluding that the Governor in Council, when exercising the authority conferred by section 64(1), is not bound by any procedural requirements, whether they be characterized as the principles of natural justice or a duty to act fairly.
Held, the appeal is dismissed. In view of the well-established character of the proceedings in Cabinet and the Privy Council, it would not be reasonable to ascribe to Parliament an intention
that the duty to act fairly should impose on the Governor in Council any particular manner of considering a petition or appeal, any particular limits to the right to consult, or any particular duty of disclosure with respect to intra-governmental submissions. The alleged submissions by the CRTC, whether made directly or through the Minister of Communications, must be seen as falling into that category of submissions. The appellants' complaints do not give rise in law to the relief sought.
Nicholson v. Haldimand-Norfolk Regional Board of Commissioners of Police [1979] 1 S.C.R. 311, considered.
APPEAL. COUNSEL:
B. A. Crane, Q.C. and A. J. Roman for appellants.
G. W. Ainslie, Q.C. and E. A. Bowie for respondents other than Bell Canada.
E. E. Saunders, Q.C. for respondent Bell Canada.
SOLICITORS:
The Public Interest Advocacy Centre,
Ottawa, for appellants.
Deputy Attorney General of Canada for
respondents other than Bell Canada.
Bell Canada on its own behalf.
The following are the reasons for judgment rendered in English by
LE DAIN J.: This is an appeal from an order of the Trial Division [[1979] 1 F.C. 213] striking out a statement of claim under Rule 419(1)(a) on the ground that it does not disclose a reasonable cause of action.
The appellants' action attacks two decisions of the Governor in Council, embodied in Orders in Council P.C. 1977-2026 and 1977-2027, by which the Governor in Council declined to vary or rescind, pursuant to section 64(1) of the National Transportation Act, R.S.C. 1970, c. N-17, a deci sion of the Canadian Radio-television and Tele communications Commission (CRTC) respecting an increase in the rates of Bell Canada.
The allegations of the statement of claim may be summarized as follows. In November 1976, Bell
Canada applied to the CRTC to have its rates increased. The appellants intervened to oppose cer tain aspects of the application and participated fully in the rate hearing. In June 1977, the CRTC rendered a decision which denied the appellants some of the relief sought. On June 9 and 10, 1977, the appellants appealed the decision of the CRTC to the Governor in Council pursuant to section 64(1), requesting the Governor in Council to set aside part of the decision and to substitute its own order therefor. On June 29, 1977, Bell Canada submitted replies to the appellants' petitions to the Governor in Council. In accordance with the cus tomary practice the Governor in Council conduct ed the "hearing" in writing, but the actual written submissions of the parties were not presented to the members of the Governor in Council who took the decisions. What was submitted to them was a statement prepared by officials of the Department of Communications indicating what the officials considered were the positions of the parties and what the views of the Department were in relation to the facts and issues in the appeal. The depart mental submissions, which included evidence as well as opinions, were not disclosed to the appel lants. At the request of the Governor in Council the CRTC made submissions through the Minister of Communications, and the Minister herself made submissions, but none of these submissions, includ ing evidence, was disclosed to the appellants. The Governor in Council decided not to vary or rescind the decisions of the CRTC and issued Orders in Council P.C. 1977-2026 and 1977-2027 on July 14, 1977 without waiting for the appellants' replies to the submissions of Bell Canada.
The appellants complain in their statement of claim that in proceeding in this manner the Gover nor in Council denied them a fair hearing. They conclude for the issue of a writ of certiorari and alternatively for a declaration that they were denied a fair hearing.
The Trial Division held that even if the allega tions of the appellants' action were well founded certiorari would not lie against the Governor in Council. The appellants do not attack this conclusion.
With respect to the claim for a declaration, the Trial Division held that in the exercise of the
authority conferred by section 64(1) of the Na tional Transportation Act the Governor in Council was performing a "political" rather than a judicial or quasi-judicial function and was, therefore, not bound by the principles of natural justice. The Trial Division further held that the Governor in Council was not under a "duty to act fairly" in exercising the power conferred by section 64(1). Accordingly, the Trial Division struck out the statement of claim and dismissed the action.
The question on appeal is whether the Trial Division erred in law in concluding, in effect, that the Governor in Council, when exercising the au thority conferred by section 64(1), is not bound by any procedural requirements, whether they be characterized as the principles of natural justice or a duty to act fairly.
The appellants seek a declaration that they were denied "a full and fair hearing, in accordance with the principles of natural justice". Viewed as a whole, the statement of claim does not in my opinion assert a right to an oral hearing' before the Governor in Council, and I do not think the learned Trial Judge disposed of the application to strike on the assumption that it did. The Trial Judge treated it as a claim to whatever natural justice might require of the Governor in Council in the circumstances, and held, in effect, that none of the procedural requirements which might be called for by natural justice apply to any extent and under any circumstances to the power conferred by section 64(1). He expressed the opinion [page 221] that there was no essential difference between the requirements of natural justice and a "duty to act fairly", the latter being merely "a duty to adopt a fair procedure to give due effect to the audi alteram partem maxim". The learned Trial Judge made the question whether the Governor in Coun cil was required to observe the principles of natu ral justice or to act fairly depend on whether he was exercising a judicial or quasi-judicial power.
' The word "hearing" is often used in its strict sense to mean an oral hearing. See Komo Construction Inc. v. Commission des relations de travail du Québec [1968] S.C.R. 172 and (Continued on next page)
At the time the Trial Division made its order I would have thought, with respect, that this approach would have found strong support in the decisions of the Supreme Court of Canada con cerning the application of the rules of natural justice 2 . Since the order was made and since this appeal was argued, however, the Supreme Court has rendered a judgment in the case of Nicholson v. Haldimand-Norfolk Regional Board of Com missioners of Police 3 in which the majority of the Court has held that there may be in certain cir cumstances a procedural duty to act fairly that is
(Continued from previous page)
Commission des relations de travail du Québec v. Canadian Ingersoll-Rand Co. Ltd. [1968] S.C.R. 695, and compare Hoffman-La Roche Limited v. Delmar Chemical Limited [1965] S.C.R. 575. But it is also used in a more general sense in administrative law to mean an opportunity to present one's case, at least in writing. See de Smith, Judicial Review of Administrative Action, 3rd ed., p. 177. This would also appear to be the sense in which the word "hearing" is used in s. 2(e) of the Canadian Bill of Rights—"the right to a fair hearing in accordance with the principles of fundamental justice for the determination of his rights and obligations". Cf. Tarnapolsky, The Canadian Bill of Rights, 2nd ed., p. 264. Viewed as a whole, the statement of claim appears to use the word "hear- ing" in this broad sense.
2 In recent years certain of the important cases in this area, such as Howarth v. National Parole Board [1976] 1 S.C.R. 453, Martineau and Butters v. The Matsqui Institution Inmate Disciplinary Board [1978] 1 S.C.R. 118, and The Minister of Manpower and Immigration v. Hardayal [1978] 1 S.C.R. 470, have involved construction of the words "required by law to be made on a judicial or quasi-judicial basis" in section 28(1) of the Federal Court Act and have thus necessarily been restricted to a consideration of these words as a basis for the application of the rules of natural justice, but the jurisprudence of the Court, apart from these decisions (which undoubtedly served to reinforce its general tendency) appears to have made the traditional distinction between judicial or quasi-judicial func tions and administrative functions the essential criterion for application of thé rules of natural justice. See, for example, L'Alliance des professeurs catholiques de Montréal v. The Labour Relations Board of Quebec [1953] 2 S.C.R. 140, The Board of Health for the Township of Saltfleet v. Knapman [1956] S.C.R. 877, Calgary Power Ltd. v. Copithorne [1959] S.C.R. 24, Ex parte McCaud [1965] 1 C.C.C. 168, Guay v. Lafleur [1965] S.C.R. 12, Wiswell v. The Metropolitan Cor poration of Greater Winnipeg [1965] S.C.R. 512, Walters v. The Essex County Board of Education [1974] S.C.R. 481, Roper v. Royal Victoria Hospital [1975] 2 S.C.R. 62, Saulnier v. Quebec Police Commission [1976] 1 S.C.R. 572, and Mitch- ell v. The Queen [1976] 2 S.C.R. 570.
3 [1979] 1 S.C.R. 311.
different from the traditional requirements of natural justice and that does not depend for its existence on the distinction between judicial or quasi-judicial functions and administrative func tions. The majority opinion of Laskin C.J.C. con tains several references to commentaries on the duty to act fairly from which it is reasonable, I think, to draw this conclusion. For example, he said [at page 324]: "I accept, therefore, for present purposes and as a common law principle what Megarry J. accepted in Bates v. Lord Hailsham ([1972] 1 W.L.R. 1373), at p. 1378, 'that in the sphere of the so-called quasi-judicial the rules of natural justice run, and that in the administrative or executive field there is a general duty of fair ness'." He also quotes [at page 326] with approval what was said by Lord Pearson in Pearlberg v. Varty, [ 1972] 1 W.L.R. 547, at p. 547: "But where some person or body is entrusted by Parlia ment with administrative or executive functions there is no presumption that compliance with the principles of natural justice is required, although, as `Parliament is not to be presumed to act unfair ly,' the courts may be able in suitable cases (per- haps always) to imply an obligation to act with fairness".
Whether the procedural duty of fairness is to be regarded as something different from natural jus tice or merely an aspect of it, the majority opinion in the Nicholson case seems clearly to indicate that its application is not to depend on the distinc tion between judicial or quasi-judicial and administrative functions. Referring to the "emer- gence of a notion of fairness involving something less than the procedural protection of traditional natural justice", the Chief Justice said [at page 325]:
What rightly lies behind this emergence is the realization that the classification of statutory functions as judicial, quasi-judi cial or administrative is often very difficult, to say the least; and to endow some with procedural protection while denying others any at all would work injustice when the results of statutory decisions raise the same serious consequences for those adversely affected, regardless of the classification of the function in question: see, generally, Mullan, Fairness: The New Natural Justice (1975), 25 Univ. of Tor. L.J. 281.
In view of this decision it is not sufficient in my respectful opinion, when a question is raised as to a duty to act fairly in a procedural sense, to find that the function or power in issue is neither judicial nor quasi-judicial. Counsel for the respondents submitted that the statement of claim does not raise the question of a duty to act fairly as something distinct from natural justice. The pre cise conceptual relationship of a procedural duty to act fairly to the rules of natural justice is not so clear in my opinion that one should make technical distinctions between them the basis for striking out a statement of claim. In my view the statement of claim contains a sufficient allegation of a denial of a "fair hearing" to permit the appellants to invoke the duty to act fairly as a basis of their claim. I do not think that references to natural justice in a case such as this one should preclude reliance on a duty to act fairly'. The specific complaints of the appellants concerning the procedure that was fol lowed are clearly set forth in the statement of claim. The question is whether any or all of them reflect procedural requirements that apply to the Governor in Council when exercising the authority conferred by section 64(1) of the National Trans portation Act.
There is a body of judicial dicta equating natural justice with procedural fairness. See, for example, Lord Reid in Wise- man v. Borneman [1971] A.C. 297 at p. 308: "Natural justice requires that the procedure before any tribunal which is acting judicially shall be fair in all the circumstances ..." ; Lord Morris of Borth-y-Gest in the same case at p. 309: "Natural justice, it has been said, is only 'fair play in action' ", and in Furne!! v. Whangarei High Schools Board [1973] 2 W.L.R. 92 at p. 105: "Natural justice is but fairness writ large and juridically. It has been described as 'fair play in action' "; Laskin C.J.C. in Walters v. The Essex County Board of Education [1974] S.C.R. 481 at p. 486: "... what is conven iently and compendiously called natural justice, a duty of procedural fairness to persons in the, course of lawful interfer ence with various of their interests, including interests in prop erty"; Barwick C.J. in Salemi v. Minister for Immigration and Ethnic Affairs (1977) 51 A.L.J.R. 538 at p. 540: "... once it is concluded that the power of decision or action is dependent on the observance of natural justice, fairness in the particular circumstances will determine what must needs be done to satisfy natural justice."
Procedural fairness, like natural justice, is a common law requirement that is applied as a matter of statutory interpretation. In the absence of express procedural provisions it must be found to be impliedly required by the statute. It is neces sary to consider the legislative context of the power as a whole. What is really in issue is what it is appropriate to require of a particular authority in the way of procedure, given the nature of the authority, the nature of the power exercised by it, and the consequences of the power for the individuals affected. The requirements of fairness must be balanced by the needs of the administra tive process in question.
Section 64(1) of the National Transportation Act, which confers the authority that is in issue in the present case, reads as follows:
64. (1) The Governor in Council may at any time, in his discretion, either upon petition of any party, person or company interested, or of his own motion, and without any petition or application, vary or rescind any order, decision, rule or regula tion of the Commission, whether such order or decision is made inter partes or otherwise, and whether such regulation is gener al or limited in its scope and application; and any order that the Governor in Council may make with respect thereto is binding upon the Commission and upon all parties.
It is to be observed, first of all, that the author ity conferred by section 64(1) is a very general one, applying not only to orders or decisions of the Commission in individual cases, but to rules and regulations of a general nature. It is an authority which the Governor in Council may exercise on his own initiative as well as upon the petition or application of an interested party, person or com pany. It is clear, therefore, that Parliament could not have contemplated that the exercise of the authority would in all cases be subject to the observance of certain minimal procedural require ments. The question is whether it is reasonable to ascribe to Parliament an intention that such requirements should govern an exercise of the authority in a case such as the present one, where the appeal is by an intervener from a decision that may be regarded as having been made inter partes within the meaning of section 64(1).
The decision from which the appeal was brought in this case was a decision of the CRTC in the
exercise of its jurisdiction under sections 320 and 321 of the Railway Act, R.S.C. 1970, c. R-2, to regulate telephone tolls or rates. Such tolls are subject to approval by the Commission, and they must be just and reasonable and free from dis crimination. The rules of procedure governing tele communications proceedings provide for a public hearing of an application for a rate increase at which interveners, such as the appellants, are afforded a full opportunity to present their case. As appears from the allegations of the statement of claim, this procedure was followed with respect to the application of Bell Canada for an increase in its rates. The nature of the decision in such a case, as well as the procedure to be followed, would appear to make it one that may be characterized as at least quasi-judicial in nature. By section 64(2) of the National Transportation Act an appeal lies by leave to this Court from such a decision on a question of law or jurisdiction.
The grounds on which one may appeal to the Governor in Council under section 64(1) are not specified. The section merely provides that the Governor in Council may in his discretion vary or rescind the decision of the Commission. Obviously the discretion is a broad one permitting the Execu tive Government to take into consideration ques tions of general policy, but the considerations on which it may exercise the discretion must presum ably be reasonably related to the purposes or object for which the regulatory jurisdiction with respect to telephone rates is established. The courts have affirmed that there is no such thing as an unlimited discretion, even when conferred upon Ministers of the Crown: Roncarelli v. Duplessis [1959] S.C.R. 121; Padfield v. Minister of Agriculture, Fisheries & Food [1968] A.C. 997. And this doctrine has been applied to hold the exercise of a statutory discretion by a Lieutenant- Governor in Council invalid on the ground that it was based on extraneous considerations: Re Doc tors Hospital and Minister of Health (1976) 68 D.L.R. (3d) 220 5 . Whether in a given case an
As to whether the limits which apply to an exercise of ministerial discretion are properly applicable to a statutory discretion of the Governor in Council, it is interesting to compare what was said by Dixon J., as he then was, in Australian Communist Party v. The Commonwealth 83 C.L.R. 1 at pp. 178-179 and by Holmes J.A. in N.S.W. Mining Co. Pty Ltd. v. A.-G. for New South Wales (1966-67) 67 S.R. (N.S.W.) 341 at pp. 362-363.
exercise of the discretion under section 64(1) can as a practical matter be made effectively review- able is, of course, another question. But the princi ple remains: in exercising the discretion in a case involving the jurisdiction of the CRTC in relation to telecommunications, the Governor in Council is expected to direct his mind to telecommunications policy in the broadest sense and not to consider ations which are clearly foreign to this particular governmental responsibility. Interested parties have a right to assume that this will be the basis on which the discretion is exercised, and to direct their submissions accordingly. Because, however, of the broad scope of the policy considerations that may be relevant to the exercise of discretion, the authority conferred could not by any of the appli cable criteria be characterized as a judicial or quasi-judicial power. The Governor in Council may in a particular case consider the precise issues of fact, law and policy that were before the Com mission but he is not confined to them. He may decide upon the basis of broader considerations of policy.
In this respect the authority conferred by section 64(1) may be contrasted with the power of the Lieutenant-Governor in Council to make Crown grants of land upon "reasonable proof" of certain facts that was held in Wilson v. Esquimalt and Nanaimo Railway Company [1922] 1 A.C. 202 to be a judicial function. This case does serve to emphasize, however, that there is nothing inherent in the nature or composition of the Executive Government, whether it be the Lieutenant-Gover nor in Council or the Governor in Council, or in its manner of reaching decisions, that makes it impos sible or impracticable to require of it in appropri ate cases that within certain limits it should act judicially or fairly. To the authority of the Wilson case on this point may be added the expression of judicial opinion in Border Cities Press Club v. Attorney-General of Ontario [1955] 1 D.L.R. 404, at p. 412, where Pickup C.J.O., delivering the judgment of the Ontario Court of Appeal, said: "I agree with the learned Judge in Weekly Court, for the reasons stated by him, that the power con ferred is conditional upon sufficient cause being shown, and that without giving the respondent an
opportunity of being heard, or an opportunity to show cause why the letters patent should not be forfeited, the Lieutenant-Governor in Council would not have jurisdiction under the statute to make the order complained of."
The appellants referred the Court to reports of decisions of the Governor in Council on appeals from the former Board of Railway Commissioners, in particular, Governments of Manitoba and Sas- katchewan v. Railway Association of Canada (1923) 26 C.R.C. 147 and Re Railway Freight Rates in Canada (1933) 40 C.R.C. 97, as showing the practice that was formerly followed with respect to the hearing of such appeals. Although practice of this kind cannot be the foundation of a legal right to a particular form of procedure, the practice does serve to suggest that there is nothing inherently impossible in a hearing by a committee of the Privy Council.
While the authority conferred by section 64(1) cannot, for the reason indicated, be characterized as judicial or quasi-judicial, I cannot see why the duty to act fairly which was affirmed in the Nicholson case should not in principle be appli cable to the Governor in Council when dealing with an interested party who exercises the right of petition or appeal. The authority is not the general political power of the Cabinet but a specific statu tory authority, which, because it contemplates a right of petition or appeal, is clearly conferred at least in part for the benefit of persons whose interests may be affected by a decision of the Commission. It is reasonable I think, to ascribe to Parliament an intention that such persons should within certain limits be dealt with fairly from a procedural point of view. The question is what those limits must be, having regard to the nature of the Governor in Council or the formal Execu tive, and the manner in which it acts by long- established constitutional convention and practice.
In practice a decision involving an exercise of authority by the Governor in Council is taken by Ministers of the Crown and given legal expression
in the form of advice submitted to the Governor General for his approval by the Cabinet or certain members thereof acting as a committee of the Privy Council 6 . The proceedings of the Cabinet and Privy Council are subject to a principle of secrecy or confidentiality by reason of the oath of secrecy which all members of the Privy Council take.
In view of this well-established character of the proceedings in Cabinet and the Privy Council, it would not in my opinion be reasonable to ascribe to Parliament an intention that the duty to act fairly should impose on the Governor in Council— that is, in effect, on the Cabinet—any particular manner of considering a petition or appeal, any particular limits to the right to consult, or any particular duty of disclosure with respect to intra- governmental submissions. These are all matters which go to the very heart of the Cabinet's need to be the master of its procedure and to receive from governmental sources the advice it requires con cerning policy under the protection of the secrecy which all members of Council have sworn to observe. It is for the Prime Minister to advise the Governor General as to the extent to which Cabi net secrecy is to be relaxed or waived in particular cases. These are fundamental principles of the constitution, and any departure from them could only be justified by a much clearer expression of Parliament's intention than that which may be inferred from the terms of section 64(1). The alleged submissions by the CRTC in this case, whether made directly or through the Minister of Communications, must be seen, I think, as falling into the category of advice to the Governor in Council from governmental sources. Because of the importance of being able to obtain such advice in an uninhibited manner it would require a clear expression of intention from Parliament to justify the imposition of a duty of disclosure on the Cabinet. Such a duty would profoundly change the character of Cabinet deliberations. I am therefore of the opinion that the appellants' complaints that the Governor in Council did not consider the actual submissions of the appellants but only a summary thereof and did not disclose to the appel lants the submissions that he received from gov ernmental sources do not give rise in law to the relief sought.
6 See Mallory, The Structure of Canadian Government, pp. 62-68.
The question whether the appellants were denied a fair opportunity to reply to the submis sions of Bell Canada raises in my opinion an issue of a different order. Here Bell Canada, as one of the parties to the dispute, had been given an opportunity to answer the petition of the appel lants. Was the nature of this answer and the issues raised by it such that fairness required that the appellants be given a reasonable opportunity to reply? If so, was the delay of some two weeks before the decision of the Governor in Council was released a reasonable one in the circumstances? These are obviously questions of fact. Natural justice has not recognized a right of reply as a general principle. It has been treated as depending on what fairness required in the particular circum stances of each case, having regard to the neces sary right of an administrative authority to deter mine when it has heard sufficiently from interested parties to give it a basis for decision. See Forest Industrial Relations Limited v. International Union of Operating Engineers Local 882 [1962] S.C.R. 80; Komo Construction Inc. v. Commission des relations de travail du Québec [1968] S.C.R. 172; Wiseman v. Borneman [1971] A.C. 297; Re Cypress Disposal Ltd. and Service Employees International Union, Local 244 (1975) 50 D.L.R. (3d) 150. The same approach would appear to be appropriate in the case of the duty to act fairly. Since the question is essentially one of fact, one cannot say before the issue has been tried that the statement of claim does not disclose a reasonable cause of action.
For these reasons I would allow the appeal and set aside the order of the Trial Division striking out the statement of claim, with costs in this Court and in the Trial Division.
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PRATTE J.: I agree.
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HEALD J.: I concur.
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