Judgments

Decision Information

Decision Content

A-613-88
The Queen, Attorney General of Canada, Secre tary of State for External Affairs, Minister for International Trade, Minister for National Reve nue (Appellants) (Defendants)
v.
Teal Cedar Products (1977) Ltd. (Respondent) (Plaintiff)
INDEXED AS: TEAL CEDAR PRODUCTS (1977) Lm. v. CANADA (CA.)
Court of Appeal, Pratte, Heald and Mahoney JJ.—Vancouver, September 7; Ottawa, December 6, 1988.
Judicial review — Equitable remedies — Injunctions — Amendment to Export Control List causing closure of forest- products manufacturer — Interlocutory injunction sought — Whether allegation Governor in Council acted on basis of misleading information raising serious issue as to validity of amendment — Where enabling provision empowers Governor in Council to act where "deems it necessary" for certain purposes, does not matter whether opinion right or wrong — Insufficient evidence to contradict purpose expressly stated in Order in Council.
Foreign trade — Red cedar boards — Added to Export Control List by Governor in Council under Export and Import Permits Act — Causing unemployment, closure of business — Interlocutory injunction granted — Set aside on appeal as irrelevant whether or not Governor in Council misled by Regulatory Impact Analysis Statement.
The respondent, a British Columbia forest products manu facturer, had been exporting red cedar boards to the United States. In February 1988, the Governor in Council, acting pursuant to the Export and Import Permits Act, amended the Export Control List to include boards as well as blocks and bolts of red cedar, thereby requiring the respondent to obtain an export permit for its products. The effect of that Order in Council was to cause the closure of the respondent's business, putting its employees out of work.
The respondent attacked the amendment and sought an interlocutory injunction prohibiting the appellants from inter fering with the export of short cedar boards until the trial of an action in which a declaration, injunction and damages were claimed. The Trial Division granted the interlocutory injunc tion, having found that there was a serious issue to be tried and
that both the irreparable harm and balance of convenience tests favoured the respondent. This is an appeal from that decision.
Held, the appeal should be allowed.
The respondent's action brought into question the validity of the Order in Council amending the List. The Order in Council was adopted pursuant to sections 3 and 6 of the Act which authorized the Governor in Council to establish and amend a list of goods the export of which the Governor in Council deems it necessary to control for certain purposes. In this case, two purposes were invoked, one of which was paragraph 3(c): "to ensure that there is adequate supply and distribution of such article in Canada for defence or other needs". The Judge of first instance interpreted "other needs" according to the ejus- dem generis rule and, finding that there was no national emergency of a defence nature, appears to have concluded that the Governor in Council acted on the basis of a wrong interpre tation of the Act. The Judge's interpretation was clearly wrong. "Other needs" refers to needs other than those related to defence.
The Judge of first instance based his conclusion that there was a serious issue to be tried on the finding that the Governor in Council acted on the basis of misleading information. It is clear, however, that whether or not the Governor in Council's opinion, that the Order in Council was necessary for the purposes mentioned in section 3, was based on accurate or misleading information was not relevant to the determination of the validity of that Order in Council. If the Governor in Council deemed the Order in Council necessary for those purposes, it matters not that this opinion be right or wrong.
Since the Order in Council expressly stated the purposes for which it was made, there is no real prospect of being able to prove, on the material available at this time, that the Order in Council was adopted in bad faith in that it was adopted for purposes other than those specified in section 3.
There is no validity to the proposition that opinions or objectives of individual ministers or their staff, which in this case are alleged to be unauthorized, should or could be attribut ed to the Governor in Council.
STATUTES AND REGULATIONS JUDICIALLY CONSIDERED
Export and Import Permits Act, R.S.C. 1970, c. E-17, ss. 3 (as am. by S.C. 1974, c. 9, s. 1; 1987, c. 15, s. 26), (a.1),(c), 6, 7, 13.
Export Control List, C.R.C., c. 601, item 2003 (as added by SOR/86-710; SOR/88-140).
CASES JUDICIALLY CONSIDERED
APPLIED:
Manitoba (Attorney General) v. Metropolitan Stores Ltd., [1987] I S.C.R. 110; American Cyanamid Co. v. Ethicon Ltd., [1975] A.C. 396 (H.L.); McEldowney v.
Forde, [1971] A.C. 632 (H.L.); Reference as to the Validity of the Regulations in relation to Chemicals, [1943] S.C.R. 1; Attorney-General for Canada v. Hallet & Carey Ld., [1952] A.C. 427 (P.C.).
DISTINGUISHED:
Attorney General of Canada v. Inuit Tapirisat of Canada et al., [1980] 2 S.C.R. 735.
COUNSEL:
J. R. Haig, Q. C. for appellants.
J. Gary Fitzpatrick for respondent.
SOLICITORS:
Deputy Attorney General of Canada for appellants.
Davis & Company, Vancouver, for respon dent.
The following are the reasons for judgment rendered in English by
PRATTE J.: This is an appeal from an order of the Trial Division [ [ 1989] 1 F.C. 135] (Muldoon J.) granting an interlocutory injunction prohibiting the appellants from interfering with the respon dent's exportation of red cedar boards. That order, in effect, enjoined the appellants not to enforce an order in council adopted under the Export and Import Permits Act,' a statute which forbids the exportation without a special ministerial permit of goods that the Governor in Council has included in a list called the Export Control List. 2
1 R.S.C. 1970, c. E-17.
2 For the purposes of this case, it is sufficient to have in mind the following provisions of that statute [ss. 3 (as am. by S.C. 1974, c. 9, s. 1; 1987, c. 15, s. 26), (a.l),(c), 6, 7, 13]:
3. The Governor in Council may establish a list of goods, to be called an Export Control List, including therein any article the export of which he deems it necessary to control for any of the following purposes, namely:
(a.1) to ensure that any action taken to promote the further processing in Canada of a natural resource that is produced in Canada is not rendered ineffective by reason of the unrestricted exportation of that natural resource;
(Continued on next page)
On June 26, 1986, the Governor in Council amended the Export Control List [SOR/86-710] by adding the following item:
2003. Blocks and bolts of red cedar.
(All destinations, including the United States)
That amendment was apparently made in order to stop the massive exportation of unprocessed red cedar to the United States which would have otherwise resulted from the imposition by the Gov ernment of that country of a 35% tariff on the importation of Canadian red cedar shakes and shingles.
The respondent is a corporation incorporated under the laws of British Columbia where it manu factures from red cedar a product called short red cedar board. A short red cedar board is a kiln dried machine cut cedar board of uniform thick ness having the same length and width as a red cedar shingle. It is common ground that by a diagonal saw cut over the length of its thickness, a short red cedar board can easily be made to pro duce two wedge-shaped shingles.
In 1987, the respondent exported its short cedar boards to the United States without any hin drance. Early in January 1988, however, it was notified by Canada Customs officials, acting on instructions from high authority, that a permit was required for the exportation of short red cedar boards since that product was considered to come
(Continued from previous page)
(c) to ensure that there is an adequate supply and distri bution of such article in Canada for defence or other needs.
6. The Governor in Council may revoke, amend, vary or re-establish any ... Export Control List ....
7. The Minister may issue to any resident of Canada applying therefor a permit to export goods included in an Export Control List ... in such quantity and of such quality, by such persons, to such places or persons and subject to such other terms and conditions as are described in the permit or in the regulations.
13. No person shall export or attempt to export any goods included in an Export Control List ... except under the authority of and in accordance with an export permit issued under this Act.
within item 2003 of the Export Control List ("Blocks and bolts of red cedar"). The respondent disagreed with that view and immediately com menced an action against the appellants in the Trial Division seeking a declaration that short cedar boards were not included in the Export Control List and could, as a consequence, be exported without a permit. 3 The respondent also sought an interlocutory injunction prohibiting the appellants from interfering with the export of short cedar boards. That application for an interlocutory injunction was about to be heard when, on Febru- ary 12, 1988, the respondent learned that the directive previously given to Customs officials with respect to the requirement of a permit for the export of short red cedar boards had been can celled. The respondent could then resume its exportation to the United States. That situation, however, did not last long.
3 In its statement of claim, the respondent merely alleged that it manufactured short red cedar boards which it used to export to the United States; that it was notified by Canada Customs officials, on January 4, 1988, that short cedar boards could no longer be exported without a permit since the conclu sion had been reached that they were included in item 2003 of the Export Control List; that short cedar boards were not, in fact, included in item 2003, first, because they were neither "blocks" nor "bolts" of red cedar and, second, for the reason stated in paragraph 8 of the statement of claim:
8. Further, short cedar boards cannot be considered within the definition of "blocks and bolts of red cedar" which were added to the Export Control List because that addition was specifically stated to have been made pursuant to paragraph 3(A.1) of the Export and Import Permits Act. Section 3(A.1) is directed toward the elimination of exporting of jobs from Canada by way of natural resources being exported without further processing in Canada. The manufacturing process of the short cedar boards involves the same amount of labour, if not more, as goes into the manufacture of shingles in Canada. The export of short cedar boards does not fall within the purview of what Section 3(A.1) was designed to prevent.
The respondent finally alleged that its inability to export its product to the U.S. had forced it to shut down its business.
On February 22, 1988, the Governor in Council amended the Export Control List by adopting Order in Council P.C. 1988-288 [SOR/88-140], the text of which reads as follows:
Whereas the Governor in Council deems it necessary to control the export of blocks, bolts, blanks, boards and any other material or product of red cedar suitable for use in the manu facture of shakes or shingles in order to:
(a) ensure that any action taken to promote the further processing in Canada of red cedar that is produced in Canada is not rendered ineffective by reason of the unre stricted exportation of red cedar; and
(b) in order to ensure that there is an adequate supply and distribution of red cedar materials and products in Canada for the manufacture of shakes and shingles.
Therefore, Her Excellency the Governor General in Council, on the recommendation of the Secretary of State for External Affairs, pursuant to paragraphs 3(a.1) and (c) and section 6 of the Export and Import Permits Act, is pleased hereby to amend the Export Control List, C.R.C., c. 601, in accordance with the schedule hereto.
SCHEDULE
1. Item 2003 of the Export Control List is revoked and the following substituted therefor:
"2003. Blocks, bolts, blanks, boards and any other ma terial or product of red cedar suitable for use in the manufac ture of shakes or shingles.
(All destinations, including the United States)"
That order in council was published in the Canada Gazette [Part II, Volume 122, No. 5, at pages 1251-1253] together with a document entitled "Regulatory Impact Analysis Statement" which gave information about the background and anticipated effect of the new regulation. The rele vant parts of that statement read thus:
Description
Goods requiring export permits for reasons of national secu rity or domestic policy are listed on the Export Control List (ECL). In June, 1986, the United States imposed a 35% import tariff on shakes and shingles. The Canadian Government responded by placing bolts and blocks of red cedar, which can be further processed into shingles and shakes, on the export control list in order to prevent their export to the U.S. This action was taken to prevent the loss of Canadian jobs in the shakes and shingles manufacturing industry.
Canadian firms are exploiting a loophole in the ECL by exporting red cedar blanks, not explicitly identified on the
Export Control List, suitable for the manufacture of shingles and shakes.
The measure will amend the ECL by adding red cedar blanks, boards and any other material or product of red cedar suitable for use in the manufacture of shakes or shingles, thereby fulfilling the original intent of the regulation. Control ling the export from Canada of these goods supports the Canadian and British Columbian Government programs to promote the further processing of red cedar materials into shingles and shakes within Canada. Legal authority for this action is provided by the Export and Import Permits Act.
Anticipated Impact
DRIE in Vancouver estimates that the further establishment of shakes and shingles manufacturing facilities in the U.S. using Canadian red cedar, as a result of the existing loophole, would result in the loss of 10 to 20% of the 12,000 jobs in the shakes and shingles manufacturing industry. These jobs and the newly created U.S. industry may be difficult to re-transfer to Canada when the 35% duty on shakes and shingles is eventually removed. As a result of the amendment to the Export Control List, all semi-processed materials of red cedar will require an export permit, which would normally be refused for the reasons stated above.
After that amendment to the Export Control List, representatives of the appellants took the position that the respondent's short cedar boards came within the terms of the new item 2003. This prompted the respondent to amend its statement of claim so as to allege that item 2003 of the Export Control List had been amended and to seek, in the prayer for relief, a declaration that the amendment was ultra vires.
The respondent then presented its motion for an interlocutory injunction prohibiting the appellants, until the trial of the action, from interfering with the export of short cedar boards. In support of that motion, the respondent filed affidavits attesting, inter alia, that:
1. Short cedar boards are neither blocks nor bolts of red cedar;
2. There is no less labour involved in the pro duction of short cedar boards than in the pro duction of shingles;
3. The export of short cedar boards will not, in the affiant's belief, endanger there being an
adequate supply or distribution of red cedar for defence or other needs in Canada;
4. That, in January, 1988, before item 2003 of the Export Control List was amended, a Special Assistant to the Minister of International Trade declared to a lawyer representing the respondent during a meeting held for the purpose of discuss ing these proceedings, that the Minister "was concerned that all mills in the shake and shingle industry should be carrying on their business 'on a level playing field' and that no mills should have an unfair advantage over others and for these reasons legislation was required to prohibit the export of short cedar boards."
5. That the inability of the respondent to export short cedar boards forced it to lay off its 75 employees.
Mr. Justice Muldoon heard that application and granted the interlocutory injunction. He first cor rectly stated that the various questions to be con sidered by a court that is asked to suspend tem porarily the application of a legislation or regulatory provision until the court has ruled on the validity of that provision are those mentioned by Mr. Justice Beetz in Manitoba (Attorney Gen eral) v. Metropolitan Stores Ltd., 4 namely:
(a) The seriousness of the plaintiffs claim.
(b) Will there be irreparable harm to the applicant for the injunction if the injunction is not granted?
(c) The balance of convenience.
Mr. Justice Muldoon found that the last two ques tions were to be answered in favour of the respon dent on this appeal (the applicant for the injunc tion). Counsel for the appellants expressly refrained from contesting these findings. He raised only one ground of appeal, namely, that Mr. Jus tice Muldoon had erred in answering the first one of those three questions and deciding that the respondent's action raised a serious question.
4 [1987] 1 S.C.R. 110.
The question raised by the respondent's action was that of the validity of the Order in Council amending the Export Control List. That Order in Council was adopted pursuant to sections 3 and 6 of the Export and Import Permits Act which authorized the Governor in Council to establish and amend "a list of goods ... the export of which he [the Governor in Council] deems it necessary to control for any" of the purposes enumerated in section 3. The Order in Council here in question specified that it was adopted because the Governor in Council deemed it necessary to control the export of product of red cedar suitable for use in the manufacture of shakes and shingles for two of the purposes mentioned in the Act, namely:
3....
(a.1) to ensure that any action taken to promote the further processing in Canada of a natural resource that is produced in Canada is not rendered ineffective by reason of the unrestricted exportation of that natural resource;
(c) to ensure that there is an adequate supply and distribu tion of such article in Canada for defence or other needs.
As I read the reasons of Muldoon J., he held that the question of the validity of the Order of Council was a "serious question" because the respondent had adduced evidence showing that the Governor in Council, when it had amended item 2003 of their Export Control List, had acted on the basis of "misleading information" to the effect that the amendment to the List would save Canadian jobs and was necessary to ensure an adequate supply and distribution of red cedar ma terial in Canada. The Judge expressed himself as follows on this subject [at pages 148-149 and 151-152].
In a nutshell, the plaintiff alleges that the Governor in Council was misled about the regulation's devastating impact on the jobs of its employees, and since paragraph 3(a.1) of the Act is aimed at preserving jobs in Canada, then the passing of P.C. 1988-288 was ultra vires of the Governor in Council. It claims the right to the Court's aid in enjoining the government from enforcing the Export Control List's impugned item 2003 against it until the outcome of this litigation be adjudged.
Since at least the time of the decision of the Supreme Court of Canada in Attorney General of Canada v. Inuit Tapirisat of Canada et al., [1980] 2 S.C.R. 735; (1980), 115 D.L.R. (3d) 1, if not long before, it cannot be said to be unthinkable that decisions of the Governor in Council could be and are subject to judicial review. Mr. Justice Estey who expressed the Supreme Court's judgment is reported at pages 748 S.C.R.; 11 D.L.R., thus:
Let it be said at the outset that the mere fact that a statutory power is vested in the Governor in Council does not mean that it is beyond review. If that body has failed to observe a condition precedent to the exercise of that power, the court can declare that such purported exercise is a nullity.
So it is, that the defendants herein except for Her Majesty the Queen, are not immune from being temporarily restrained by means of an interlocutory injunction if it appears that they failed to observe the provisions of paragraph 3(a.1) of the Act by considering misleading information. That is a serious ques tion to be tried.
In so far as the Supreme Court of Canada in the Metropoli tan Stores case approves the test (page 128) of "a serious question to be tried as opposed to a frivolous or vexatious claim" for "constitutional case where ... the public interest is taken into consideration in the balance of convenience", it is apparent from what has already been reviewed herein that this present case passes that test.
It must be acknowledged that the result would be different if the test were that of a prima facie case. The plaintiff does not challenge Parliament's power to enact section 3 of the Act, but one must still consider whether the actual emplacement of the new item 2003 in the Export Control List be a lawful or otherwise proper exercise of the powers conferred on the Gover nor in Council .... Here, the plaintiff avers it has evidence and argument in law to show that without the demonstrable misin formation which apparently misled the Governor in Council, there was no statutory basis for promulgating item 2003, which has been deadly to the plaintiffs business, and, the defendants tender their contradictory affidavit.
With respect to the question whether the making of the Order in Council was authorized by paragraph 3(c) of the Act, the Judge of first instance, in addition to finding that the Governor in Council had possibly acted on the basis of erroneous information, expressed the view that the Governor in Council had possibly misconstrued that paragraph of the statute and, for that reason, failed to form the required belief. Indeed, the Judge expressed the opinion that the words "other needs" in that paragraph were to be interpreted by applying the "ejusdem generis" rule as referring
only to needs related to defence. As we are not in a state of war, and as red cedar is clearly not necessary for the defence of the country, it would follow, if I understand the Judge's reasons, that the Governor in Council acted on the basis of a wrong interpretation of the statute as well as of misleading information.
I may say immediately that this interpretation of paragraph 3(c) of the Act appears to me to be wrong. The words "other needs" in that paragraph clearly mean what they say, namely, needs other than those related to defence. I do not see any reason to restrict the normal meaning of those words in the manner suggested. I am of the opin ion, therefore, that it cannot be seriously argued that the Governor in Council, in making the Order in Council in question, acted on a wrong interpre tation of the statute.
The question remains, however, whether, for other reasons, the respondent's claim could be said to raise a serious issue. Before answering that question, a few general observations are in order:
1. When Mr. Justice Beetz said in the Metropoli tan Stores cases that the test to be applied in a case like the present one in order to assess the merit of the plaintiff's case is whether there is a serious question to be tried, he clearly meant to adopt the test formulated by Lord Diplock in American Cyanamid Co. v. Ethicon Ltd. 6 It may, therefore, be helpful to have in mind what Lord Diplock said in that case: 7
The grant of an interlocutory injunction is a remedy that is both temporary and discretionary. It would be most exceptional for your Lordships to give leave to appeal to this House in a case which turned upon where the balance of convenience lay. In the instant appeal, however, the question of the balance of convenience, although it had been considered by Graham J. and decided in Cyanamid's favour, was never reached by the Court of Appeal. They considered that there was a rule of practice so well established as to constitute a rule of law that precluded them from granting any interim injunction unless upon the
5 [1987] 1 S.C.R. 110.
6 [1975] A.C. 396 (H.L.). 7 At pp. 405, 407 and 408.
evidence adduced by both the parties on the hearing of the application the applicant had satisfied the court that on the balance of probabilities the acts of the other party sought to be enjoined would, if committed, violate the applicant's legal rights. In the view of the Court of Appeal the case which the applicant had to prove before any question of balance of convenience arose was "prima facie" only in the sense that the conclusion of law reached by the court upon that evidence might need to be modified at some later date in the light of further evidence either detracting from the probative value of the evidence on which the court had acted or proving additional facts. It was in order to enable the existence of any such rule of law to be considered by your Lordships' House that leave to appeal was granted.
Your Lordships should in my view take this opportunity of declaring that there is no such rule. The use of such expressions as "a probability," "a prima facie case," or "a strong prima facie case" in the context of the exercise of a discretionary power to grant an interlocutory injunction leads to confusion as to the object sought to be achieved by this form of temporary relief. The court no doubt must be satisfied that the claim is not frivolous or vexatious; in other words, that there is a serious question to be tried.
It is no part of the court's function at this stage of the litigation to try to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature considerations. These are matters to be dealt with at the trial. One of the reasons for the introduction of the practice of requiring an undertaking as to damages upon the grant of an interlocutory injunction was that "it aided the court in doing that which was its great object, viz. abstaining from expressing any opinion upon the merits of the case until the hearing": Wakefield v. Duke of Buccleugh (1865) 12 L.T. 628, 629. So unless the material available to the court at the hearing of the application for an interlocutory injunction fails to disclose that the plaintiff has any real prospect of succeeding in his claim for a permanent injunction at the trial, the court should go on to consider whether the balance of convenience lies in favour of granting or refusing the interlocutory relief that is sought.
The question that the Court of first instance had to answer therefore, in assessing the merit of the respondent's case, was whether the material avail able to the Court at the hearing of the application for an interlocutory injunction disclosed that the respondent had any real prospect of succeeding in his claim that the Order in Council was ultra vires.
2. My second observation is that, since an inter locutory injunction is a discretionary remedy, a court of appeal is normally reluctant to intervene and set aside a decision granting or refusing to grant an injunction. However, a court of appeal
must intervene if it appears that the court of first instance acted on a wrong view of the law.
3. My last observation is that the respondent chal lenges the validity of the Order in Council amend ing the Export Control List on only one ground, namely, that it is not the kind of Order in Council which the Governor in Council was empowered to make under section 3 of the Export and Import Permits Act. In testing the accuracy of that con tention, one should have in mind the very words of section 3 which require, for the validity of the Order in Council, not that it be really necessary for the purposes stated in the section but, rather, that the Governor in Council be of opinion that it is necessary for those purposes. In McEldowney v. Forde, 8 Lord Diplock had this to say about the validity of regulations adopted under enabling legislation of that kind:
The relevant characteristic of subordinate legislation so described in the words of delegation is the belief of the person empowered to make it that it will achieve the effect described. If he does so believe it is valid. It is only if he does not that it is ultra vires and void. The relevant inquiry which the court has to make when subordinate legislation made under words of dele gation of this kind is challenged is not whether his belief was justified but whether it existed. The absence of such belief may connote mala rides on the part of the maker of the subordinate legislation, i.e., that he has used the delegated power with the deliberate intention of achieving an effect other than that described in the words of delegation, but it does not necessarily do so. He may have honestly misconstrued the words of the statute describing the effect to be achieved and for this reason have failed to form the relevant belief. These are two of the grounds referred to by Viscount Radcliffe in Attorney-General for Canada v. Hallett & Carey Ltd. [1952] A.C. 427, 444, 445, as invalidating subordinate legislation made under words of delegation in which the belief of the subordinate authority in the effect to be achieved by the subordinate legislation is expressly stated to be the characteristic of the legislation which he is empowered to make. But in practice it is seldom possible to distinguish between these two grounds. The subordinate authority is not normally compellable to disclose his own mental processes and the court is powerless to declare the subordinate legislation invalid unless, in the words of Viscount Radcliffe, at p. 450, it is not "capable of being related to one of the prescribed purposes" so that its very terms give rise to the inference that the subordinate authority whether deliberately or
8 [1971] A.C. 632 (H.L.), at p. 660.
as a result of his misconstruing the statute cannot have formed the relevant belief.
In the Reference re Chemical Regulations, 9 the Supreme Court of Canada had to consider the validity of a regulation adopted under an enabling statute of the same kind which empowered the Governor in Council to make such regulations "as he may .. . deem necessary" for the security of the country. Chief Justice Duff expressed himself in the following terms 10 which were later quoted with approval by the Privy Council in Attorney-Gener al for Canada v. Hallet & Carey Ld.: 11
... when Regulations have been passed by the Governor Gener al in Council in professed fulfilment of his statutory duty, I cannot agree that it is competent to any court to canvass the considerations which have, or may have, led him to deem such Regulations necessary or advisable for the transcendent objects set forth. The authority and the duty of passing on that question, are committed to those who are responsible for the security of the country—the Executive Government itself, under, I repeat, its responsibility to Parliament. The words are too plain for dispute: the measures authorized are such as the Governor General in Council (not the courts) deems necessary or advisable.
In the light of this last observation, it is clear that whether the Governor in Council based its opinion that the Order in Council was necessary for the purposes mentioned in section 3 on accu rate or on misleading information is not relevant to the determination of the validity of that Order in Council. If the Governor in Council deemed the Order in Council necessary for those purposes, it matters not that this opinion be right or wrong. Mr. Justice Muldoon based his conclusion that there was a serious question to be tried in the findings that the Governor in Council acted on the basis of misleading information. His conclusion is, therefore, tainted by an error of law. For that reason, this is a case where the Court may inter fere with his exercise of his discretion.
Counsel for the respondent argued that even if Mr. Justice Muldoon was wrong on that point, his
9 Reference as to the Validity of the Regulations in relation to Chemicals, [1943] S.C.R. 1.
10 At p. 12.
11 [1952] A.C. 427, at p. 445.
conclusion could be supported on other grounds. First, said he, the respondent's claim is serious because it may be able to establish at the trial that the Governor in Council acted in bad faith and adopted the Order in Council for purposes other than those specified in section 3. This contention is, in my view, without merit. I do not see how, in a case like the present one, when the Order in Council expressly states the purposes for which it was made, one could prove that it was in fact made for another purpose. In my view, the material available to us at this time "fails to disclose that the plaintiff has any real prospect of succeeding" on this point.
Counsel also argued that, assuming that the bad faith of the Governor in Council itself could not be established, there is nevertheless a real possibility that it could be proved at the trial that the Gover nor in Council acted on the advice of civil servants or officials who were pursuing objectives different from those authorized by section 3 of the Act. The intentions of those persons, according to counsel, must be ascribed to the Governor in Council. In support of that last proposition he referred to the following passage of the reasons for judgment of Estey J. in Attorney General of Canada v. Inuit Tapirisat of Canada et al.: 12
The very nature of the body must be taken into account in assessing the technique of review which has been adopted by the Governor in Council. The executive branch cannot be deprived of the right to resort to its staff, to departmental personnel concerned with the subject matter, and above all to the comments and advice of ministerial members of the Council who are by virtue of their office concerned with the policy issues arising by reason of the petition whether those policies be economic, political, commercial or of some other nature.
I must say that I do not see anything in this passage supporting counsel's view that the opinions entertained and the objectives pursued by some individual ministers or their staff should or could be attributed to the Governor in Council. Coun sel's last argument is founded, in my view, on an untenable legal proposition.
12 [1980] 2 S.C.R. 735, at p. 753.
I would, therefore, allow the appeal, set aside the order made by Mr. Justice Muldoon and dis miss the respondent's motion for an interlocutory injunction, the whole with costs in this Court as well as in first instance.
Before parting with this matter, I must mention that at the outset of the hearing of the appeal, the respondent asked the Court to receive new evi dence in the appeal. The Court then reserved its decision on that motion. It should be dismissed. The new evidence in question is a study prepared by the Coopers and Lybrand consulting group at the request of the federal Government after Mr. Justice Muldoon had pronounced the injunction. This study merely confirms the evidence already put forward by the respondent in support of the application for an injunction showing that the Governor in Council had acted on the basis of incorrect information. The inclusion of that new evidence in the record could not serve any useful purpose.
HEALD J.: I agree. MAHONEY J.: I agree.
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