Date: 20041110
Docket: T-20-03
Citation: 2004 FC 1577
OTTAWA, ONTARIO, NOVEMBER 10, 2004
PRESENT: THE HONOURABLE MADAM JUSTICE MACTAVISH
BETWEEN:
JAMES RICHARDSON INTERNATIONAL LIMITED
Applicant
and
HER MAJESTY THE QUEEN and
THE CANADIAN GRAIN COMMISSION
Respondents
REASONS FOR ORDER AND ORDER
[1] James Richardson International Limited (JRI) is involved in the handling, cleaning and shipping of grain. Amongst its other operations, JRI operates a grain terminal elevator at the Port of Vancouver.
[2] The Canadian Grain Commission (CGC) is the federal agency responsible for establishing and maintaining Canada's grain quality standards. One of its chief purposes is to provide the grain industry with the fair and impartial inspection and grading of grain, to ensure a dependable commodity for domestic and export markets.
[3] JRI is one of five members of the British Columbia Terminal Elevators Operators' Association (BCTEOA). On August 25, 2002, BCTEOA members locked out their unionized employees. At the time that the lockout commenced, JRI had 121 railcars full of grain on its premises, waiting to be unloaded.
[4] During the week of September 2, 2002, JRI advised the CGC that it intended to unload the grain on September 10 and 11. JRI asked the CGC to inspect the grain while it was being unloaded, as required by the Canada Grain Act, R.S.C. 1985, c. G-10 (the Act). Failing that, JRI asked that the CGC grant it an exemption from the inspection and grading requirements under the Act.
[5] The CGC refused to allow its inspectors to cross the picket line that had been established at JRI's Vancouver terminal in order to perform an inspection, citing concerns for the safety of its employees. CGC also refused to exempt JRI from the inspection requirement.
[6] Rather than seeking a mandatory order from the courts compelling the CGC to perform an inspection, JRI went ahead and unloaded the grain on September 10, 2002, using non-union labour. JRI endeavoured to take grain samples and record the weight of the grain using methods and equipment approved by the CGC. The weighing and sampling of the grain was not, however, carried out under the supervision of a CGC inspector, as required under the Canada Grain Act.
[7] The CGC then ordered JRI to show cause why it should not be found to have contravened the Act. Following an exchange of correspondence, the CGC found JRI to have violated the Act, and imposed a penalty of a one-day suspension of JRI's licence. The CGC further ordered that JRI perform a 'weigh-over', or audit, of its grain stocks, and that this weigh-over take place at the earliest opportunity after the labour dispute was over, or earlier, at the discretion of the CGC's Chief of Weighing.
[8] JRI now seeks to judicially review the various decisions made by the CGC in relation to this particular grain shipment. By order of Justice Noël, JRI was granted leave to have these decisions dealt with in one application, on the basis that they are an inter-related series of decisions involving a continuing process related to the same subject matter.
The Issues on This Application
[9] JRI has identified six issues on this application. They are:
1. Whether the CGC acted without or beyond its jurisdiction or erred in law by refusing to carry out its statutory duty under section 30(1) of the Canada Grain Act to make an official inspection and take an official sample of grain upon the application of JRI (the Inspection Refusal);
2. Whether the CGC acted without jurisdiction, contrary to law or in violation of its duty of procedural fairness by refusing to grant JRI an order exempting the Terminal from the official inspection and weighing requirements under the Act (the Exemption Refusal);
3. Whether, in making its order finding JRI to have violated the Canada Grain Act and imposing a penalty, the CGC erred in law by finding that JRI violated the Act, and acted without jurisdiction by failing to satisfy the condition precedent to making the order and thereafter imposing a penalty not authorized by the Act (the November 8 Order);
4. Whether, in making the aforementioned order, the CGC breached the duty of procedural fairness owed to JRI, was biased and lacked impartiality, based its decision on erroneous findings of fact and on irrelevant matters and facts, conflicting facts and evidence and/or in the absence of facts or evidence, and/or erred in law or acted contrary to law;
5. Whether the Chief of Weighing of the CGC, by refusing to carry out and/or unreasonably delaying carrying out the weigh-over of the grain in accordance with the Order, acted without or beyond his jurisdiction and/or refused to exercise his jurisdiction, based his decision on erroneous findings of fact, erred in law or acted contrary to law, and/or breached his duty of fairness to JRI (the Weigh-over Refusal); and
6. Whether the CGC was biased and lacked independence and impartiality in making the Exemption Refusal, the Inspection Refusal, the November 8 Order and the Weigh-over Refusal.
The Preliminary Issues
[10] Before addressing the issues identified by JRI, there are two preliminary issues that must be addressed. Firstly, the respondent submits that as it relates to the Inspection and Exemption Refusals, this application for judicial review was brought well beyond the 30-day period provided for in section 18.1(2) of the Federal CourtsAct, R.S.C. 1985, c. F-7. As a consequence, the respondent says that the Court should decline to entertain these aspects of the application.
[11] Secondly, the respondent submits that this application is moot, insofar as it relates to the Inspection and Exemption Refusals.
Timeliness of this Application as it Relates to the Inspection and Exemption Refusals
[12] The decisions in issue were made on September 9 and 10, 2002. This application for judicial review was not brought until December 9, 2002, approximately three months after the decisions were communicated to JRI.
[13] JRI has always been aware that its application for judicial review was out of time, insofar as the first two decisions of the CGC was concerned. Indeed, JRI specifically requested an order extending the time for bringing this application for judicial review of the Inspection and Exemption Refusals, if necessary, in its application.
[14] CGC did not raise the issue of the timeliness of this application as it relates to the Inspection and Exemption Refusals until shortly before the application was scheduled to be heard. However, as Justice Dawson noted in Hamilton-Wentworth (Regional Municipality) v. Canada (Minister of the Environment), [2000] F.C.J. No. 440, in the normal case, an issue as to the timeliness of an application for judicial review ought to be argued at the hearing of the application, rather than on a preliminary motion to strike.
[15] There is no suggestion that JRI did not have adequate time to prepare to address this issue, or that it was prejudiced in any way by the CGC having only raised the issue late in the day. As a result, I am prepared to consider CGC's submission that this aspect of JRI's application is out of time.
[16] The question then is whether Justice Noël's ruling permitting the various CGC decisions in issue in this case to be dealt with in one application for judicial review precludes me from considering the timeliness of JRI's application, as it relates to the Inspection and Exemption Refusals.
[17] In this regard, it is helpful to review the procedural history of this case. In its initial application JRI sought to judicially review five separate decisions of the CGC (one of the five decisions is no longer in issue). The Court Registry refused to accept the application for filing, because it dealt with more than one decision, contrary to Rule 302 of the Federal CourtRules. JRI redrafted its application, now characterizing the application as a request to judicially review the November 8 Order and a series of related actions or inactions on the part of the CGC.
[18] This time, the Registry accepted the application for filing, but because JRI was still trying to challenge more than one decision in a single application, the Registry referred the matter to Justice Noël for directions immediately after the application was filed.
[19] Justice Noël directed the Registry to inform counsel for JRI that unless valid reasons were given to the Court to justify more than one decision being reviewed in a single application, the application would be dismissed. Justice Noël further stipulated that the CGC should be served with a copy of his direction, if it had already been served with the Notice of Application.
[20] The CGC had not been served with JRI's Notice of Application at this point, and it does not appear that CGC was ever served with a copy of Justice Noël's direction. On January 6, 2003, after receiving submissions from JRI, Justice Noël issued his order allowing JRI to challenge several decisions of the CGC in one application for judicial review.
[21] JRI concedes that the issue of the timeliness of its application for judicial review was not addressed in the submissions that it filed in response to Justice Noël's direction. Indeed, from my review of the record, it appears that the timeliness question was never in issue before Justice Noël at all. Further, the CGC never had the opportunity to raise the issue prior to Justice Noël making his January 6, 2003 Order. As a consequence, I am of the view that it is open to me to consider whether an extension of time for bringing this application should properly be granted.
[22] The jurisprudence is clear: an order under Rule 302 of the Federal CourtRules can be refused where it would allow an applicant to overcome the 30-day limitation period fixed by section 18.1(2) of the Federal CourtsAct: see Lavoie v. Canada (Correctional Service), [2000] F.C.J. No. 1564. The question, then, is whether the continuing nature of the process under scrutiny here should operate to relieve JRI from its obligation to seek judicial review in a timely fashion.
[23] JRI has cited several cases in which the continuing nature of the process in issue was relied upon to grant an extension of time for the issuance of an application for judicial review. In my view, each of these decisions is readily distinguishable from the present situation.
[24] In Krause v. Canada, [1999] 2 F.C. 476 (C.A.), the Court was not concerned with discrete decisions or orders as is the case here with the Inspection and Exemption Refusals. What was under review in Krause were the acts of a Minister in implementing a decision. The Court found that the Minister's alleged breach of a statutory duty in that case was of a continuing nature, arising anew each fiscal year. As a result, the application was not out of time.
[25] In Puccini v. Canada (Director General, Corporate Administrative Services, Agriculture Canada), [1993] 3 F.C. 557 (T.D.), Justice Gibson concluded that the events under scrutiny were more in the nature of a continuing process than specific decisions or orders. In the present case, the Inspection and Exemption Refusals represent two specific and clearly identifiable decisions on the part of the CGC.
[26] Justice Dawson's decision in the Hamilton-Wentworth case previously cited involved a motion to strike an application for judicial review. Because of the context in which the issue arose, Justice Dawson made no determination on the merits as to whether the case involved a continuing process. All she decided was that the applicant's argument was not so bereft of any possibility of success to warrant striking out the application for judicial review.
[27] Finally, Saskatchewan Wheat Pool v. Canada (Canadian Grain Commission), [2004] F.C.J. No. 1568, involved entirely different circumstances to those present here. Further, in that case, the CGC did not object to the extension being granted.
[28] The facts giving rise to the various decisions in issue in this case do indeed arise out of a continuing process, and relate to the same subject matter. As a result, hearing these matters together did allow for the efficient use of judicial resources. However, the Inspection and Exemption Refusals represent two specific, clearly identifiable decisions on the part of the CGC. As a consequence, I am of the view that in determining whether an extension of time should be granted to allow JRI to challenge these decisions, the usual test should apply.
[29] In Canada (Attorney General) v. Hennelly, [1999] F.C.J. No. 846, the Federal Court of Appeal established four criteria which must be satisfied before an extension of time will be granted:
(1) a continuing intention to pursue the application;
(2) that there is a reasonable explanation for the delay;
(3) that no prejudice to the respondent arises as a result of the delay; and
(4) that there is some merit to the application.
The onus is on JRI to establish all four elements in order for an extension of time to be granted.
[30] The first issue, then, is whether JRI demonstrated a continuing intention to pursue this application. In this regard, a review of the record discloses that, in the weeks immediately following the Inspection and Exemption Refusals, there was ongoing communication between JRI and CGC with respect to the grain shipment. This included communications between personnel on the operational side of each organization, as well as communications between in-house legal counsel for both JRI and the CGC relating to the show-cause process.
[31] While this correspondence does demonstrate an ongoing disagreement between the parties with respect to each other's actions regarding the unloading of the grain, the record does not reveal a continuing intention on the part of JRI to pursue this application.
[32] The Hennelly test is conjunctive. That is, an applicant must be able to satisfy all four elements of the test. Given my finding that JRI has failed to establish a continuing intention to pursue this application, it is unnecessary to consider the remaining elements of the test. Accordingly, JRI's application for an extension of time is dismissed.
[33] Given my finding that JRI is not entitled to an extension of time in which to bring its application for judicial review with respect to the Inspection and Exemption Refusals, it is unnecessary to address the CGC's mootness arguments regarding these two decisions.
The Substantive Issues
[34] I turn now to the substantive issues identified by JRI. Given my finding on the timeliness issue, it is unnecessary to address the first two of these issues. There are several parts to JRI's third issue, which relates to the November 8 Order.
[35] JRI's first argument is that the CGC erred in law in finding that it had breached the weighing and inspection provisions of the Canada Grain Act, when the alleged violation occurred as a direct result of the failure of the CGC to perform its statutorily mandated inspection and weighing duties. Secondly, JRI submits that the CGC erred in law in failing to fulfill an essential statutory condition precedent prior to rendering its November 8, 2002 decision. Finally, JRI submits that having found that it was in breach of the Canada Grain Act, the CGC erred in law by imposing a penalty on JRI that was not authorized by the Act.
[36] Each argument will be considered in turn.
Did the CGC Err in Finding that JRI Breached the Canada Grain Act?
[37] JRI admits that on September 10, 2002, it unloaded the grain from the 121 railcars on its premises. JRI further admits that the grain had not been officially inspected or weighed under the supervision of the CGC, as required by section 70 of the Canada Grain Act. It now seeks to justify its conduct by arguing that it was forced to proceed in this fashion because of the failure of the CGC to perform its statutory duty to provide weighing and inspection services.
[38] In my view, this essentially amounts to a collateral attack on the CGC's orders of September 9 and 10, that is the Inspection and Exemption Refusals. Having already ruled that JRI was out of time in bringing its application to review those decisions, I decline to deal with them any further.
In Making its November 8 Order, Did the CGC Err in Law by Finding That JRI Violated the Act, Without Having First Satisfied a Statutory Condition Precedent to Making Such an Order?
[39] On November 8, 2002, the CGC found that JRI had violated section 70 of the Act by receiving grain into its elevator, without the grain having first been officially inspected and weighed.
[40] The CGC's November 8 Order was made pursuant to section 93 of the Canada Grain Act, which provides:
| 93. (1) Where, on receiving the report of an inspector pursuant to section 90 or on making an investigation pursuant to section 91, the Commission believes on reasonable grounds that an offence under this Act has been committed by a licensee of an elevator or by a licensed grain dealer or that a condition referred to in paragraph 90(1)(b), (c), (d) or (e) exists in a licensed elevator, the Commission may, by order,
(a) require a weigh-over of any grain, grain products or screenings in the elevator by the licensee or a person authorized for the purpose by the Commission and, for that purpose, prohibit, for such period not exceeding thirty days as is specified in the order, the receipt into or removal from the premises of the elevator, or both, of any grain, grain products or screenings;
(b) in the case of a condition referred to in paragraph 90(1)(b), (c) or (d),
(i) require that the condition be remedied in such manner and within such time as is specified in the order,
(ii) require that such grain, grain products and screenings in the elevator as are specified in the order be stored or disposed of in such manner as the Commission considers equitable, and
(iii) prohibit, for such period not exceeding thirty days as is specified in the order, any particular use of the elevator or its equipment; and
(c) whether or not the Commission exercises any of the powers conferred by paragraphs (a) and (b), in its discretion, suspend the licence to operate the elevator or the licence to carry on business as a grain dealer for such period not exceeding thirty days as is specified in the order.
(2) Subject to subsection (3), the Commission may not make an order pursuant to subsection (1) unless the Commission has afforded the licensee or a representative of the licensee full and ample opportunity to be heard.
(3) Where, in the circumstances of any particular case, the Commission deems it necessary in the public interest to do so, it may make an order pursuant to subsection (1) without first affording a licensee or a representative of the licensee an opportunity to be heard but, in such event, the Commission shall, as soon as possible after making the order, afford to the licensee a full and ample opportunity to be heard. R.S., 1985, c. G-10, s. 93; 1994, c. 45, s. 30; 1998, c. 22, s. 25(F).
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93. (1) Si elle a des motifs raisonnables de croire à la perpétration d'une infraction à la présente loi par le titulaire d'une licence, soit d'exploitation d'une installation, soit de négociant en grains, ou à l'existence d'un des états visés par les alinéas 90(1)b), c), d) ou e), la Commission peut, par ordonnance, sur réception du rapport d'inspection prévu à l'article 90 ou au cours d'une enquête effectuée au titre de l'article 91_:
a) exiger que le titulaire de licence ou toute autre personne habilitée par elle à cet effet, effectue une pesée de contrôle des grains, produits céréaliers ou criblures qui se trouvent dans l'installation et interdire, à cette fin, pour une période maximale de trente jours fixée par l'ordonnance, toute entrée et sortie de telles marchandises;
b) dans le cas d'un état mentionné aux alinéas 90(1)b), c) ou d)_:
(i) exiger qu'il soit remédié à la situation selon les modalités qu'elle ordonne,
(ii) exiger que les grains, produits céréaliers ou criblures se trouvant dans l'installation et mentionnés dans l'ordonnance soient stockés, ou qu'il en soit disposé, de la manière qu'elle juge équitable,
(iii) interdire, pour une période maximale de trente jours fixée par l'ordonnance, tout usage particulier de l'installation ou de son équipement;
c) suspendre, à son appréciation, qu'elle exerce ou non les pouvoirs que lui confèrent les alinéas a) et b), la licence en cause pour une période maximale de trente jours fixée par l'ordonnance.
(2) Sous réserve du paragraphe (3), la Commission ne peut prendre l'arrêté visé au paragraphe (1) que si elle a donné au titulaire de la licence ou à son représentant toute occasion d'être entendu.
(3) Lorsqu'à son avis l'intérêt public l'exige, la Commission peut prendre un arrêté en application du paragraphe (1) sans que le titulaire ait eu l'occasion de se faire entendre. Elle doit toutefois lui en donner ensuite l'occasion dans les meilleurs délais. L.R. (1985), ch. G-10, art. 93; 1994, ch. 45, art. 30; 1998, ch. 22, art. 25(F). |
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[41] JRI submits that the CGC lacked the jurisdictionor authority to make a finding that it violated the Act, as such an order could not be made without the CGC having first received the report of an inspector pursuant to section 90, or carrying out an investigation pursuant to section 91 of the Act.
[42] Section 91 confers jurisdiction on the CGC to investigate a wide range of matters relating to the transportation and delivery of grain. I do not understand JRI to say that the CGC did not have the necessary jurisdiction to investigate its alleged breach of the Canada Grain Act. Rather, JRI's argument is that the CGC did not carry out such an investigation, and was thus without jurisdiction to make its November 8 Order.
Analysis
[43] In order to address JRI's argument, it is necessary to have some understanding of the process that led up to the CGC's November 8 Order. This process was initiated by a September 11, 2002 letter from Valerie Gilroy, the CGC's Legal Counsel and Corporate Secretary, to Nicholas Fox. Mr. Fox is the Vice-President of Terminal Operations for JRI.
[44] Ms. Gilroy's letter advised Mr. Fox that the CGC had information that JRI's terminal elevator at Vancouver had received grain on September 10 and 11, 2002, without causing it to be officially weighed and inspected, and without authorization, contrary to the provisions of section 70 of the Canada Grain Act. Pursuant to section 93 of the Act, the CGC gave JRI one week to show-cause why its licence should not be suspended for a period of time. The CGC also advised JRI that other penalties, including criminal sanctions, could be imposed.
[45] JRI responded to Ms. Gilroy by means of a September 17, 2002 letter from Marla Altman, JRI's Assistant Corporate Counsel. Ms. Altman's letter set out JRI's position that, in light of the CGC's refusal to carry out its statutory duty to weigh and inspect the grain, it had no alternative but to unload the grain, so as to avoid any deterioration in its quality.
[46] On September 19, 2002, Ms. Gilroy acknowledged receipt of Ms. Altman's correspondence, and went on to advise her that the CGC intended to decide the matter by the end of the following week. Ms. Gilroy then stated:
In matters of this kind, it is the CGC's practice to consider only the written submission(s) of the licencee, as well as the results of its own investigation, and not to hear oral presentations from the licencee. If you have further information to offer or submissions to make, the CGC will accept and consider additional written material until September 25, 2002.
[47] On September 23, 2002, Ms. Altman again wrote to Ms. Gilroy providing further submissions on behalf of JRI. Ms. Altman also raised a number of questions about the fairness of the process that was being followed, about which more will be said further on in this decision.
[48] Two days later, Ms. Gilroy replied to Ms. Altman's September 23 letter. Ms. Gilroy responded to Ms. Altman's comments about the fairness of the process, and further stated that:
With respect to the gathering of facts in this investigation, the Commission asked several senior officials to comment on your letter dated September 17, 2002, as well as your more recent letter, and comments were provided (copies are enclosed).
[49] Enclosed with Ms. Gilroy's letter were a series of memos and e-mails from various CGC personnel providing information with respect to this matter. Included in this package was a "Chronology" prepared by Ken Nash, the CGC's Regional Director for the Pacific Region. Mr. Nash was directly involved in the events taking place at the JRI Terminal in September of 2002. In particular, Mr. Nash had been involved in ongoing discussions with JRI personnel with respect to JRI's request for an inspection and then for an exemption. In addition, Mr. Nash had attended at the JRI premises on September 10 and 11, 2002, and had thus observed the situation on the picket line.
[50] Also provided to JRI were documents prepared by Gordon Mandigo, the CGC's Chief of Weighing, and by Norm Woodbeck, the CGC's Acting Chief Grain Inspector.
[51] JRI was then provided with a further week to respond to this new information, and was also specifically asked to address the issue of penalty, particularly with reference to those penalties provided for in section 93 of the Act.
[52] In the same letter, Ms. Gilroy advised JRI of its right to request a public hearing pursuant to section 98(2) of the Act. Section 98 (2) provides:
| 98(2) Where
(a) this Act requires that any person be given an opportunity to be heard in connection with the issue, refusal to issue, suspension or revocation of a licence or in connection with any investigation into a complaint referred to in paragraph 91(1)(h), and
(b) the applicant for the licence, the licensee or the person who is the subject of the complaint requests a public hearing,
the Commission shall hold a public hearing to hear all persons having an interest in the matter and wishing to be heard in connection therewith. 1970-71-72, c. 7, s. 80. |
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98(2) La Commission tient une audience publique pour entendre toute personne qui le souhaite et don't l'intérêt est en jeu, dans les cas suivants_:
a) la présente loi exige que toute personne ait la possibilité d'être entendue au sujet de la délivrance, du refus de délivrance, de la suspension ou de la révocation d'une licence ou au sujet de toute enquête visée à l'alinéa 91(1)h);
b) le demandeur ou le titulaire de la licence, ou la personne visée par la plainte, demande la tenue d'une audience publique. 1970-71-72, ch. 7, art. 80. |
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[53] On October 10, 2002, Ms. Altman again wrote to Ms. Gilroy, providing further submissions with respect to what had transpired on September 10 and 11. Ms. Altman also made brief submissions as to what, in JRI's view, would constitute an appropriate penalty.
[54] It should be noted that at no time did Ms. Altman request that the CGC hold an oral hearing with respect to this matter.
[55] The next correspondence in this matter is Ms. Gilroy's letter of November 8, 2002 providing JRI with a copy of the CGC's order of the same day.
[56] The parties agree that the question of whether an investigation is a condition precedent to the CGC finding a licencee to have breached the legislation involves the interpretation of the Canada Grain Act and the jurisdiction of the CGC. As a consequence, both agree that the appropriate standard of review on this question is that of correctness.
[57] In the absence of a report having been received or an investigation having been carried out, a question could exist as to whether the CGC had jurisdiction to make a finding that a licencee had breached the Canada Grain Act. Such a question would indeed involve the interpretation of the statute and a consideration of the jurisdiction of the CGC. There is, however, a threshold question of fact that must be addressed prior to embarking on such an analysis. That is, did the CGC actually carry out an investigation prior to issuing its November 8 Order?
[58] Section 91 does not mandate that any particular process be followed by the CGC when carrying out an investigation. From my review of the record, I am satisfied that the exchange of correspondence between Ms. Gilroy and Mr. Fox, and then between Ms. Gilroy and Ms. Altman, between September 11 and November 8, 2002, demonstrates that the CGC did investigate JRI's conduct prior to rendering its November 8 decision finding that JRI breached the provisions of section 70 of the Canada Grain Act.
[59] Having found that an investigation did in fact take place, it is therefore unnecessary to decide whether conducting an investigation is a condition precedent to the CGC making a finding of a statutory breach.
[60] In concluding that an investigation did take place, I make no finding, at this juncture, about the fairness of the investigatory process that was followed. That question will be addressed further on in these reasons.
In Making its November 8 Order, Did the CGC Err in Law by Imposing a Penalty That Was Not Authorized by the Canada Grain Act?
[61] There is no dispute that JRI did unload grain from the 121 railcars without the grain having been officially weighed and inspected under the supervision of the CGC. Indeed, JRI does not challenge the CGC's imposition of a one day licence suspension.
[62] JRI does, however, take issue with the CGC order requiring a 'weigh-over'. In a 'weigh-over', all of the grain in a licencee's terminal is weighed and inspected. It is essentially an audit of the licencee's inventory.
[63] The disputed portion of the November 8 Order mandates:
A weigh-over of any grain, grain products or screenings in the licenced terminal elevator at Vancouver, BC and operated by JRI ... to commence at the earliest opportunity following the settlement of the current labour dispute at the elevator and prior to the start up of operations at the elevator, or earlier, at the discretion of the Chief of Weighing ... and for that purpose, prohibits the receipt into or removal from the premises of the elevator of any grain, grain products or screenings, for the period required to conduct the weigh-over, as determined by the Chief of Weighing.
[64] JRI's argument is based upon the wording of section 93(1)(a) of the Canada Grain Act, which is reproduced again here for ease of reference:
| 93. (1) Where, on receiving the report of an inspector pursuant to section 90 or on making an investigation pursuant to section 91, the Commission believes on reasonable grounds that an offence under this Act has been committed by a licensee of an elevator or by a licensed grain dealer or that a condition referred to in paragraph 90(1)(b), (c), (d) or (e) exists in a licensed elevator, the Commission may, by order,
(a) require a weigh-over of any grain, grain products or screenings in the elevator by the licensee or a person authorized for the purpose by the Commission and, for that purpose, prohibit, for such period not exceeding thirty days as is specified in the order, the receipt into or removal from the premises of the elevator, or both, of any grain, grain products or screenings;
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93. (1) Si elle a des motifs raisonnables de croire à la perpétration d'une infraction à la présente loi par le titulaire d'une licence, soit d'exploitation d'une installation, soit de négociant en grains, ou à l'existence d'un des états visés par les alinéas 90(1)b), c), d) ou e), la Commission peut, par ordonnance, sur réception du rapport d'inspection prévu à l'article 90 ou au cours d'une enquête effectuée au titre de l'article 91_:
a) exiger que le titulaire de licence ou toute autre personne habilitée par elle à cet effet, effectue une pesée de contrôle des grains, produits céréaliers ou criblures qui se trouvent dans l'installation et interdire, à cette fin, pour une période maximale de trente jours fixée par l'ordonnance, toute entrée et sortie de telles marchandises; |
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[65] JRI concedes that it is necessary to prevent the receipt or removal of grain from a terminal during a weigh-over, to allow the weigh-over to be properly carried out. However, JRI points out that section 93(1)(a) limits the period during which a licencee can be barred from receiving or removing grain to no more than 30 days. In this case, JRI argues that at the time the November 8 Order was made, its effect was to prevent JRI from carrying on business for an indeterminate period of time.
[66] As events unfolded, the lockout continued until December 14, 2002. The weigh-over commenced on January 8, 2003, and continued until February 7, 2003. JRI says that, as a result, it was unable to carry on business for some 90 days, far in excess of the 30-day period provided for in the statute.
[67] JRI also submits that the practical effect of the November 8 Order was to suspend JRI's licence to operate the terminal for 90 days, notwithstanding that section 93(1)(c) limits the period of time that the CGC can suspend a licence to a period not exceeding 30 days.
[68] I do not accept JRI's arguments in this regard. While JRI may have been unable to carry on business for some 90 days in late 2002 and early 2003, that state of affairs was, to a large extent, attributable solely to the fact that it had locked out its employees. The only period during which JRI was precluded from carrying on business by virtue of the actions of the CGC was the period between January 8 and February 7, 2003, when the weigh-over was actually being carried out. This period does not exceed the statutory maximum provided for in section 93(1)(a) of the Canada Grain Act.
[69] As a consequence, JRI has failed to persuade me that the CGC erred in making its November 8 Order by imposing a penalty that was not authorized by the Canada Grain Act.
[70] The next question, then, is whether JRI was denied procedural fairness by the CGC in relation to the November 8 Order.
Did the CGC Breach its Duty of Procedural Fairnessto JRI?
[71] JRI submits that it was denied full disclosure of the case that it had to meet, and, as a result, was not given a proper opportunity to be heard by the CGC, prior to the November 8 Order being issued.
[72] Both parties agree that questions relating to procedural fairness are to be reviewed against a standard of correctness, and I concur with that view.
[73] JRI argues first that the CGC erred in requiring it to show cause why its licence should be suspended under section 93 of the Canada Grain Act. According to JRI, notwithstanding that the onus was on the CGC to establish that an offence had been committed, the CGC started with the premise that an offence had been committed, thereby shifting the burden to JRI to justify its conduct.
[74] I am not persuaded that this argument should succeed. There has never been any issue between the parties as to whether or not JRI unloaded grain on September 10 and 11, 2002, without it having first been officially inspected and weighed as required by the legislation. Thus, there has always been a prima facie case that JRI violated the Act. What has been in dispute is whether JRI was justified in doing so by the failure of the CGC to properly perform its statutory responsibilities under the Act.
[75] The next question, then, is whether JRI was given a full opportunity to defend itself. In this regard, JRI submits that as there were facts in dispute, the CGC had an obligation to hold an oral hearing so that questions of credibility could be properly decided. I do not accept this argument. On September 25, 2002, Valerie Gilroy advised JRI of its right to request a public hearing pursuant to section 98 of the Act. Having failed to do so, JRI cannot now assert that it was denied procedural fairness by the CGC in this regard.
[76] The adequacy of the disclosure provided by the CGC is more problematic. As noted earlier in this decision, there was an exchange of correspondence between Ms. Gilroy and Mr. Fox, and then between Ms. Gilroy and Ms. Altman in September and October of 2002. On September 25, 2002, Ms. Gilroy wrote to Ms. Altman, providing copies of the series of memos and e-mails prepared by people identified as 'senior officials' of the CGC . One of these people was Ken Nash, who, it will be recalled, was the CGC's Regional Director for the Pacific Region. Mr. Nash was directly involved in the events taking place at the JRI terminal in September of 2002, and had prepared his 'Chronology', setting out his version of events.
[77] In the same letter, Ms. Gilroy addressed Ms. Altman's concerns with respect to the fairness of the process, stating:
The Commission has not established standard rules for dealing with the wide variety of disputes, claims, complaints and offences that come within its jurisdiction. Rather, it tailors procedures to meet the particular circumstances of the situation, with the objects of limiting delay and expense, but having regard to the duty to be fair. However, as a general rule, the commission does not hear oral evidence or argument.
Ms. Gilroy then goes on to say:
[T]he Commission certainly does take counsel from its lawyer and also its senior officials, whose advice is not relayed to the parties to a dispute, or, as in this case, to a licencee alleged to have contravened the Act. [emphasis added]
[78] It will be recalled that the CGC had previously provided JRI with documentary disclosure of information gathered from a variety of individuals identified by the CGC as "senior officials". At least one of these officials, namely Mr. Nash, was directly involved in the events ultimately giving rise to the November 8 Order.
[79] The CGC then advised JRI that it could "take counsel" from its "senior officials", and that this advice would not be relayed to JRI. Indeed, there is no reference in record to any further communication emanating from the CGC to JRI prior to the issuance of the November 8 Order.
[80] JRI argues that the CGC breached the duty of procedural fairness that it owed to JRI by apparently consulting with witnesses, without disclosing the substance of those discussions to JRI and affording it a reasonable opportunity to respond.
[81] The CGC submits that it is not at all clear that the Commissioners were provided with any additional information from the CGC's senior officials prior to making the November 8 Order. In any event, according to the CGC, there was no obligation on the CGC to share this information with JRI in light of the nature of the regulatory scheme in issue.
[82] There is obviously a distinction to be drawn between receiving advice, and being provided with factual information or evidence. That said, it is troubling that the CGC would potentially be consulting with a senior CGC official, who had been directly involved in the events in dispute, without disclosing to JRI whatever additional information it may have received.
[83] While no documents containing additional information from Mr. Nash or any other senior CGC official have been put before the Court on this application, there is nothing in Ms. Gilroy's letter to suggest that whatever input the CGC would receive from its senior officials would only be in writing.
[84] The concern with respect to the fairness of the disclosure process is compounded when one examines the CGC's reasons for its November 8 Order. In its reasons, the CGC makes mention of facts that were not contained in the material previously provided to JRI. By way of example, on page 3 of its Reasons, the CGC says that the decision not to cross the picket line at JRI's terminal elevator was made "without any motivation to take sides in the dispute", and was not made for "solidarity reasons, or any other reasons". No evidence was provided to JRI that would support these findings. To the contrary, in the Chronology provided to JRI, Mr. Nash stated that he contacted the union because "we wanted to maintain good relations with our employees and their union and keeping communication lines open made sense".
[85] On the assumption that the CGC did not make this finding of fact without any evidentiary foundation for it, it appears that the CGC may have received additional information from its senior officials that was not provided to JRI, and to which JRI had no opportunity to respond.
[86] The content of the duty of procedural fairnessis variable, and depends, amongst other things, on the nature of the rights affected: Baker v. Canada (Minister of Citizenship and Immigration), 174 D.L.R. (4th) 193. As the Supreme Court of Canada noted in Baker, several factors are relevant in determining the content of the duty of fairness in a particular case. These factors include the nature of the decision being made and process followed in making it, the nature of the statutory scheme and the terms of the statute pursuant to which the body operates, the importance of the decision to the individual or individuals affected, the legitimate expectations of the person challenging the decision and the choices of procedure made by the agency itself. This list is not exhaustive.
[87] This case involves the regulatory scheme established under the Canada Grain Act. The purpose of the legislation is to establish and maintain standards of quality for Canadian grain and regulate grain handling, to ensure a dependable commodity for domestic and export markets (see section 13 of the Act).
[88] Although the rights involved in this case are purely economic, the CGC's decision was of considerable importance to JRI. The company was exposed to punitive action by the CGC, which would negatively affect its ability to carry on its business without interruption. This would suggest that a significant level of procedural fairness is required in cases such as this.
[89] Further, the provisions of the Canada Grain Act itself lead to the same conclusion. Section 93(2) of the Act mandates that before making an order against a licencee, the CGC must give the licencee a full and ample opportunity to be heard.
[90] I am of the view that in this case, the CGC breached the duty of procedural fairness that it owed to JRI by apparently receiving additional information from senior officials with respect to the facts of a specific case, which information was not disclosed to JRI. Given the state of the record, it is not possible to discern what information was received, or the extent to which that information may have influenced the Commission's decision. As a result, I am satisfied that the November 8 Order cannot safely stand, and must be set aside.
[91] I should note that I do not accept JRI's submissions insofar as they relate to input from the CGC's legal counsel. The Supreme Court of Canada has been very clear that procedural fairness does not automatically require the disclosure of legal advice: Pritchard v. Ontario (Human Rights Commission), [2004] S.C.J. No. 16. Further, JRI has not persuaded me that Ms. Gilroy or Ms. Altman were really acting as prosecutors, and that any communications that they may have had with the CGC should therefore have been disclosed.
[92] The next issues to consider arise out of the decision of the Chief of Weighing to delay carrying out the weigh-over until after the end of the labour dispute.
The Decision of the Chief of Weighing Not to Conduct the Weigh-over Until After the Labour Dispute Was Over
[93] JRI submits that the decision of the Chief of Weighing not to conduct the weigh-over until after the conclusion of the labour dispute was unlawful. JRI offers several different arguments to support its position in this regard.
[94] Having already determined that the November 8 Order must be set aside, it may not be strictly necessary to address this issue. However, in order to ensure that further errors are not made when this matter is dealt with by the CGC in the future, I felt it appropriate to address JRI's arguments.
[95] JRI's first argument is that the Commission did not have the power to delegate the question of when the weigh-over would actually be carried out to the Chief of Weighing, as such a delegation of authority is not authorized by the Act.
[96] The CGC made no submissions on this point.
[97] A weigh-over order made under section 93(1)(a) of the Canada Grain Act must specify when the weigh-over is to be carried out. Orders under section 93 are to be made by "the Commission". Section 3 indicates that "the Commission" consists of the three Commissioners.
[98] In this case, the Commission ordered that the weigh-over commence "at the earliest opportunity following the settlement of the current labour dispute at the elevator, or earlier, at the discretion of the Chief of Weighing." [emphasis added]
[99] The question, then, is whether determining the timing of the weigh-over was something that could be delegated by the Commissioners to another CGC official.
[100] Section 14(3) of the Act empowers the Commission to delegate, by by-law, any of the powers, duties or functions of the Commission under the Act, with several enumerated exceptions. One Commission power that may not be delegated is the power to make orders.
[101] In my view, in granting the Chief of Weighing the discretion to determine whether the weigh-over could be carried out prior to the resolution of the labour dispute at the Port of Vancouver, the Commission has purported to give the Chief of Weighing the power to decide when JRI would be prohibited from moving grain into and out of the terminal. Under the Act, only the Commissioners can decide this.
[102] JRI also argues that the Chief of Weighing erred in refusing to carry out the weigh-over during the labour dispute.
[103] A review of the record discloses that there was ongoing communication between representatives of JRI and Mr. Mandigo, the CGC's Registrar and Chief of Weighing, with respect to the timing of the weigh-over. On November 26, 2002, Mr. Mandigo advised Mr. Fox of his view that as long as pickets were present, neither the CGC nor JRI could guarantee the safety of the CGC's employees. Mr. Mandigo concluded by stating "We will continually monitor the Vancouver situation through our local office. Should conditions change, such as the removal of pickets, we will be in a better position to consider conducting the weigh-over."
[104] Although the CGC chose not to put any evidence before the Court on this application, there is no dispute that the reason given by the CGC for its refusal to perform the weigh-over before the end of the labour dispute was the CGC's concern for the safety of its employees.
[105] While there is clearly a fundamental disagreement between the parties as to the conditions on the picket line during the lockout, the parties do agree that the issue of whether it was in fact safe to enter the JRI terminal during the lockout is not before me.
[106] The question, then, is not whether it was in fact safe to cross the picket line, but rather whether concern for the safety of the CGC's employees on the part of Mr. Mandigo was an irrelevant or extraneous consideration in his decision as to when to carry out the weigh-over.
[107] I am not persuaded that it was. As a federal employer, the CGC had a statutory duty to protect the health and safety of each of its employees while they were at work: Canada Labour Code, s. 124, R.S. 1985, c. L-2, s. 124. As a result, JRI has failed to persuade me that the CGC erred in this regard.
[108] Because I am sending this matter back to the CGC for redetermination, it is also necessary to address JRI's arguments relating to the institutional independence and impartiality of the CGC. This issue will be considered next.
Was the CGC Biased and Lacking in Independence and Impartiality?
[109] JRI submits that in this case, the CGC acted as investigator, prosecutor and judge. JRI further submits that the two Commissioners who made the November 8 Order were effectively sitting in appeal from their own prior decisions to refuse to conduct the inspection on September 10, 2002, and to refuse to grant JRI an exemption from the inspection requirement.
[110] According to JRI, in making the November 8 Order, the CGC was performing adjudicative or judicial functions. As such, the requirements of impartiality should be similar to those applied to judges. Unless specifically authorized by statute, JRI says that a decision-maker cannot perform overlapping functions of investigation, prosecution and adjudication, nor can they sit on appeal from their own decisions.
[111] JRI also submits that having performed these overlapping functions, a reasonable apprehension of bias existed with respect to the CGC as an institution. Further, JRI says that a reasonable apprehension of bias also arises in relation to the Commissioners individually because it appears that the Commissioners received submissions from its officials and legal counsel, outside the presence of JRI, and without disclosing the substance of these submissions to the company.
[112] JRI's submissions raise questions both as to the institutional structure of the CGC and the impact that this structure has on the impartiality of the Commission, and with respect tohow the CGC dealt with this case.
[113] I will deal first with JRI's arguments relating to the structural issues, and then examine whether a reasonable apprehension of bias arises because of the actions of the individual Commissioners in this case.
Is the CGC Institutionally Impartial?
[114] According to JRI, the nature of the functions that the CGC was performing in this case warrant a degree of impartiality akin to that required of judges. JRI further submits that an administrative tribunal such as the CGC cannot perform overlapping investigative, prosecutorial and adjudicative functions, unless it is specifically authorized to do so by its enabling legislation. JRI cites no authority to support its arguments in this regard, and made only very brief submissions on this point at the hearing.
[115] The Supreme Court of Canada has had occasion to consider the issue of the degree of institutional independence and impartiality required of administrative tribunals performing quasi-judicial functions on several occasions in recent years: see, for example, Ocean Port Hotel v. British Columbia, [2001] 2 S.C.R. 781, Bell Canada v. Canadian Telephone Employees'Association, [2003] 1 S.C.R. 884, Québec Inc. v. Quebec (Régie des permis d'alcool), [1996] 3 S.C.R. 919, Newfoundland Telephone Co. v. Newfoundland (Board of Commissioners of Public Utilities), [1992] 1 S.C.R. 623 and Brosseau v. Alberta Securities Commission, [1989] 1 S.C.R. 301.
[116] Certain principles may be distilled from these decisions. In particular, it is now clear that administrative tribunals, even those deciding questions involving quasi-constitutional human rights, are not required to have the same level of institutional independence and impartiality as will be required of the courts.
[117] Further, the fact that an administrative tribunal may perform multiple functions does not, by itself, give rise to a reasonable apprehension of bias. In this regard, the following comments of the Supreme Court in the Bell Canada case are instructive:
[O]verlapping of different functions in a single administrative agency is not unusual, and does not on its own give rise to a reasonable apprehension of bias (see Régie des permis d'alcool, supra, at paras. 46-48, per Gonthier J.; Newfoundland Telephone, supra, at p. 635, per Cory J.; Brosseau v. Alberta Securities Commission, [1989] 1 S.C.R. 301). As McLachlin C.J. observed in Ocean Port, supra, at para. 41, "[t]he overlapping of investigative, prosecutorial and adjudicative functions in a single agency is frequently necessary for [an administrative agency] to effectively perform its intended role". (at para. 41)
[118] If regard is had to the Ocean Port decision itself, it is noteworthy that Chief Justice McLachlin goes on in the same paragraph quoted above to say: "Without deciding the issue, I would note that such flexibility may be appropriate in a licensing scheme involving purely economic interests." This is, of course, precisely the type of regime in issue in this case.
[119] Further, as the Supreme Court noted in Ocean Port: "[A]bsent constitutional constraints, it is always open to the legislature to authorize an overlapping of functions that would otherwise contravene the rule against bias." (at para. 42). No constitutional arguments have been mounted in this case.
[120] It is therefore necessary to have regard to the statutory scheme established under the Canada Grain Act.
[121] Section 3 of the Act establishes the CGC, stating that it shall consist of three Commissioners. Section 14(1)(c) empowers the CGC to conduct investigations and hold hearings with respect tomatters coming within the powers of the Commission.
[122] The CGC has the power to grant licences to terminal elevator operators (Section 45(2)), and to grant exemptions from the inspection requirement (section 70).
[123] The enforcement mechanisms under the legislation are set out in Part VI of the Act. Section 91 empowers the CGC to investigate matters, including the grading and weighing of grain, as well as any other matter arising out of the performance of the duties of the Commission. As previously discussed, where there are reasonable grounds to believe that an offence has been committed by a licencee, section 93 of the Act allows the CGC to make certain orders, including orders suspending the licence of a terminal elevator operator, as well as orders requiring a weigh-over.
[124] Thus, the legislative scheme in issue here specifically contemplates that the CGC will carry out multiple functions, including licencing, investigation and adjudication. The existence of such a legislative scheme militates against finding the existence of any kind of institutional bias or lack of impartiality.
[125] As noted above, JRI's submissions on this issue consisted of little more than the bare assertion that the institutional structure of the CGCraises a reasonable apprehension of bias, citing no jurisprudence to support its position. JRI has failed to persuade me that, in this case, the CGC lacks sufficient institutional impartiality. As a result, this aspect of JRI's argument is rejected.
[126] This leaves JRI's contention that a reasonable apprehension of bias arises here because of the conduct of the Commissioners leading up to the November 8 Order. This issue will be addressed next.
Did the Actions on the Part of the CGC Commissioners Involved in the November 8 OrderGive Rise to a Reasonable Apprehension of Bias?
[127] JRI submits that by consulting with senior officials with direct knowledge of the events giving rise to the dispute between the CGC and JRI, the CGC engaged in ex parte communications with a witness or witnesses. These communications then give rise to a reasonable apprehension of biason the part of the Commissioners themselves.
[128] The test as to whether a reasonable apprehension of bias exists in a given set of circumstances is well-known. In Committee for Justice and Liberty v. Canada (National Energy Board), [1978] 1 S.C.R. 369, the Supreme Court of Canada described the test as "what would an informed person, viewing the matter realistically and practically - and having thought the matter through - conclude?".
[129] I have already found that the CGCmay well have received information about what went on at JRI's terminal elevator at the Port of Vancouver in September of 2002 from its senior officials. Because this information was not shared with JRI, a denial of procedural fairness resulted. In my view, these circumstances would be sufficient to create a reasonable apprehension of bias on the part of the Commissioners of the CGC who participated in the November 8 Order in the mind of an informed person, viewing the matter realistically and practically, and having thought the matter through.
Remittal to the Canadian Grain Commission
[130] Having determined that the November 8 Order of the CGC must be quashed, the question then arises as to what should happen next.
[131] JRI has already served its licence suspension, and the weigh-over has been carried out. However, the question of whether JRI was justified in unloading the grain in the face of the CGC's refusal to conduct an inspection or to exempt JRI from the inspection requirement remains a live issue between the parties. As a result, the issue of JRI's alleged breach of the Canada Grain Act is remitted to the CGC for redetermination.
[132] Given my conclusion that there was a breach of procedural fairness in the way that this matter was dealt with, and that the actions of the Commissioners involved in this case were such as to create a reasonable apprehension of bias, it would certainly be preferable if others redetermined the case, if at all possible.
[133] There are three Commissioners of the CGC. The Canada Grain Act also provides for the appointment of assistant Commissioners. Only two Commissioners signed the November 8 Order. The parties have not advised me of any concerns relating to quorum. The matter is therefore remitted to Commissioners of the CGC, other than those involved in the November 8 Order, for redetermination.
[134] The parties may make further submissions in the event that any issues arise with respect to the implementation of this order.
ORDER
THIS COURT ORDERS that:
1. JRI's request for an extension of time to allow it to bring this application with respect tothe inspection and exemption refusals is denied;
2. The CGC's November 8 Order is set aside;
3. The issue of JRI's alleged breach of the Canada Grain Act is remitted to Commissioners of the CGC, other than those involved in the November 8 Order, for redetermination;
4. The parties may make further submissions in the event that any issues arise with respect to the implementation of this order; and
5. Each party shall have two weeks to serve and file their submissions in writing regarding costs. The parties will each then have one further week in which to serve and file any reply submissions.
Judge
FEDERAL COURT
NAME OF COUNSEL AND SOLICITORS OF RECORD
STYLE OF CAUSE: JAMES RICHARDSON INTERNATIONAL v.
HER MAJESTY THE QUEEN AND
THE CANADIAN GRAIN COMMISSION
PLACE OF HEARING: WINNIPEG, MANITOBA
DATE OF HEARING: OCTOBER 14, 2004
APPEARANCES:
Winnipeg, Manitoba
Winnipeg, Manitoba
SOLICITORS OF RECORD:
Winnipeg, MB
Morris Rosenberg FOR RESPONDENT(S)
Deputy Attorney General of Canada