A-614-75
In re applications under the National Energy
Board Act for certificates of public convenience
and necessity for construction and operation of a
natural gas pipeline by Canadian Arctic Gas Pipe
line Limited; Foothills Pipe Lines Ltd., Westcoast
Transmission Company Limited and The Alberta
Gas Trunk Line (Canada) Limited; and in re
application for certificate of public convenience
and necessity for construction and operation of
certain extensions to its natural gas pipeline by
Alberta Natural Gas Company Ltd.; and in re
submission by the Alberta Gas Trunk Line Com
pany Limited; and in re application by the Nation
al Energy Board pursuant to subsection 28(4) of
the Federal Court Act
Court of Appeal, Thurlow, Pratte, Urie and Ryan
JJ. and Kerr D.J.—Ottawa, December 8, 9, 10
and 12, 1975.
Judicial review—Mackenzie Valley pipeline—Whether
Chairman of National Energy Board disqualified from being a
member of panel hearing applications—Whether likelihood of
bias—Jurisdiction—Whether question properly determinable
under s. 28(4)—Federal Court Act, s. 28(4).
The National Energy Board referred to the Court the ques
tion whether the Board would err in rejecting objections to the
constitution of the panel hearing applications and in holding
that the Chairman was not disqualified from being a member
of the panel on ground of reasonable apprehension or likelihood
of bias. The basis of the alleged apprehension is that prior to
becoming Chairman, Mr. Crowe, as a director, and later
President, of the Canada Development Corporation actively
participated in deliberations and decisions of a consortium in
carrying out the objectives of the Gas Arctic-Northwest Project
Study Group. The issue appears to be whether Mr. Crowe was
biased in favour of the need for a pipeline.
Held, the question referred should be answered in the nega
tive. Neither actual bias nor financial interest are alleged, and
there is no suggestion of any statement by Mr. Crowe, or any
promise by him to anyone that any particular result will attend
any of the applications. All of the circumstances might give
rise, in a very sensitive conscience, to the uneasy suspicion of
unconscious bias, but that is not the test. Rather, the test is
what an informed person, having viewed the matter realistical
ly, practically and thoroughly, would conclude. The facts
should not cause reasonable persons to have a reasonable
apprehension of bias concerning either the necessity for the
pipeline, or which of the applicants should be granted the
certificate. The Chairman's participation in the Corporation
was essentially in the interests of government; this function
ended on his appointment to the Board some five months before
the filing of the first applications in this matter. There appears
to be no reason for apprehension that he would be likely to be
unable or unwilling to disabuse his mind of preconceptions he
may have in the face of new material pointing to a different
view of matters considered in the course of his participation in
the study group, or that he would be unconsciously influenced
by decisions which he supported as a participant in the group.
The issues before the Board are quite different from those
considered by the group. There is no reason why the Chairman,
who is not fettered by any personal interest in any of the
applicant companies or any proprietary interest in the result of
any decision in which he participated, and is no longer in the
service of the study group, cannot approach these new issues
with equanimity and impartiality.
Regina v. Botting [1966] 2 O.R. 121, discussed. Szilard v.
Szasz [1955] S.C.R. 3, applied.
APPLICATION for judicial review.
COUNSEL:
H. Soloway, Q.C., Ian Blue and R. McGregor
for National Energy Board.
G. W. Ainslie, Q.C., for Attorney General of
Canada.
D. M. M. Goldie, Q.C., and D. G. Gibson for
Canadian Arctic Gas Pipeline Ltd. and
Canadian Arctic Gas Pipeline Group.
R. J. Gibbs, Q.C., for Foothills Pipe Lines.
W. G. Burke- Robertson, Q.C., for Alberta
Gas Trunk Line (Canada) Ltd.
J. Hopwood for Alberta Gas Trunk Line Co.
Ltd.
J. L. DeW. King and L. G. W. Chapman for
Westcoast Transmission Co. Ltd.
B. A. Crane for TransCanada PipeLines Co.
Ltd.
J. H. Farrell and W. J. Miller for Consumers
Gas Co. and Union Gas Ltd.
J. R. Smith, Q.C., for Alberta Natural Gas
Co. Ltd.
W. I. C. Binnie and R. J. Sharpe for Commit
tee for Justice and Liberty.
A. R. Lucas for Canadian Arctic Resources.
T. G. Kane for Consumers Association of
Canada.
SOLICITORS:
Law Branch, National Energy Board for the
National Energy Board.
Deputy Attorney General of Canada for
Attorney General of Canada.
Russell & DuMoulin, Vancouver, for Canadi-
an Arctic Gas Pipeline Ltd. and the Canadian
Arctic Gas Pipeline Group.
McLaws & Company, Calgary, for Foothills
Pipe Lines.
Burke- Robertson, Chadwick & Ritchie,
Ottawa, for Alberta Gas Trunk Line
(Canada) Ltd.
Howard, Dixon, Mackie, Forsyth, Calgary,
for Alberta Gas Trunk Line Co. Ltd.
Macdonald, Affleck, Ottawa, for Westcoast
Transmission Co. Ltd.
Gowling & Henderson, Ottawa, for Trans-
Canada PipeLines Co. Ltd.
Smith, Lyons, Torrance, Stevenson & Myers,
Toronto, for Consumers Gas Co, and Union
Gas Ltd.
MacKimmie, Matthews, Calgary, for Alberta
Natural Gas Co. Ltd.
MacKinnon, McTaggart, Toronto, for the
Committee for Justice and Liberty.
General Counsel, Canadian Arctic Resources
Committee for Canadian Arctic Resources
Committee.
General Counsel, Consumers Association of
Canada for Consumers Association of
Canada.
The following are the reasons for judgment of
the Court delivered orally in English by
THURLOW J.: By its order number PO-1-GH-2-
75 made on October 29, 1975 the National Energy
Board referred to this Court pursuant to subsec
tion 28(4) of the Federal Court Act the following
question:
Would the Board err in rejecting the objections and in holding
that Mr. Crowe was not disqualified from being a member of
the panel on the grounds of reasonable apprehension or reason
able likelihood of bias?
The objections referred to were objections to the
constitution of the panel of the Board hearing the
applications referred to in style of these
proceedings.
The order recited in some 21 paragraphs the
facts leading to the decision to refer this question
to the Court and to the order were attached some
14 exhibits which include correspondence by which
the subject matter was raised before the Board,
documents pertaining to the issue raised by the
question and a transcript of the oral proceedings of
the Board which preceded the making of the order.
In the proceedings before the Board, of some 88
parties recognized as being entitled to be heard,
five objected to Mr. Crowe. The remainder either
expressed no objection or took no position. In this
Court three parties, viz., The Canadian Arctic
Resources Committee, the Committee for Justice
and Liberty Foundation and the Consumers Asso
ciation of Canada took the position that the ques
tion referred should be answered in the affirma
tive. Counsel for Alberta Natural Gas Company
Ltd. took no objection to Mr. Crowe acting as a
member of the panel but submitted that the Court
should decide the question. All other parties repre
sented and heard including the National Energy
Board and the Attorney General of Canada sup
ported a negative answer to the question.
The first matter to be resolved, one that was
raised by the Court, is whether the question
referred is one that can properly be determined on
a reference under subsection 28(4). Counsel for
the National Energy Board, the Attorney General
of Canada and several other parties all supported
the affirmative position. No one supported the
negative.
The matter is not free from difficulty because
the jurisdiction of the Court under subsection
28(4) is not advisory. The difficulty seems to us to
arise largely from the form of the question. Having
regard to the substance of the question presented
we are satisfied that since-the facts on which it is
to be decided are all stated in the order of the
Board and the exhibits thereto and are not in
dispute the question of what inferences are to be
drawn from them and the consequences which flow
from them are questions of law within the meaning
of subsection 28(4) and can properly be deter
mined by the Court. Moreover, if the question
raised is regarded, as we think it may be, as one
going to the jurisdiction of the Board, within the
meaning of the word "jurisdiction" in subsection
28(4)', it appears to us that since no facts other
than those set out in the order and the exhibits
thereto have been put forward by any party the
material before us, on which the question of juris
diction is to be decided, must necessarily lead to
the same result. We are accordingly of the opinion
that the Court has jurisdiction to determine the
question referred to it.
As the title of this proceeding indicates, the
proceedings before the National Energy Board in
which the question arose consisted of a number of
applications under the National Energy Board Act
for certificates of public convenience and necessity
for the construction and operation of pipelines. All
of these applications are in respect of projects
connected with the movement of natural gas from
Arctic regions to southern markets. Some are com
petitive with others.
In April 1975 the Board assigned Mr. Crowe
and two other members to constitute the panel to
hear the several applications and on May 23, 1975
the Board directed that the applications be heard
together, at one public hearing to be held in the
autumn of 1975, and that there be a pre-hearing
conference in accordance with Rules of Practice
and Procedure of the Board commencing on July
8, 1975. The date for the hearing was subsequently
set for October 27, 1975.
On July 9, 1975 counsel for Canadian Arctic
Gas Pipeline Limited, one of the applicants,
expressed to Board counsel concern about the com
position of the panel if Mr. Crowe were a member
on the grounds of reasonable apprehension of bias
in favour of his client. Correspondence ensued and,
some ten days before the hearing commenced,
copies of the correspondence and the materials
now before the Court, including a statement
intended to be read at the hearing by Mr. Crowe,
were sent to all parties recognized as being entitled
to be heard at the hearing.
Compare Regina v. Boiling [1966] 2 O.R. 121 per Laskin
J.A. (as he then was) at page 136.
The basis of the alleged apprehension of bias on
the part of Mr. Crowe, in summary, is that in the
period from October 1972 to October 1973 which
immediately preceded his appointment as Chair
man of the National Energy Board he was at first
a director and later the President of the Canada
Development Corporation and as a representative
of that corporation actively participated in deliber
ations and decisions of a consortium of some 15 to
27 companies, of which the Canada Development
Corporation became one, in carrying out the
objects of what was known as the Gas Arctic-
Northwest Project Study Group under the terms
of an agreement entitled "Joint Research and
Feasibility Study Agreement" and dated June 1,
1972.
Paragraph 2 of Article I of the agreement set
out these objects as follows:
2. The principal purpose of the Study Group shall be: (a) the
conduct of research, experimental and feasibility studies, test
ing and planning to determine whether the construction and
operation of a gas pipeline from Northern Alaska and North
western Canada to locations on the border between Canada and
the lower 48 states of the United States (hereinafter referred to
as the Project) are feasible and desirable in light of relevant
physical, environmental and economic data, terms and condi
tions of available financing, applicable legal requirements and
governmental considerations; and if so, (b) the preparation and
completion of such studies, exhibits and other data as may be
required for the filing of applications with government agencies
in Canada and the United States for authority to construct and
operate the Project; and (c) the filing and prosecution of such
applications. These activities are hereinafter referred to as the
Preconstruction Activities.
In connection with the foregoing the Study Group shall study
and consider all reasonably feasible gas pipeline configurations,
routes and facilities and methods of ownership of any thereof,
including (i) those serving eastern, central and western market
areas, (ii) various routes and facilities appropriate to such
purpose, including wholly new facilities and thé utilization of
the whole or any portion of any presently existing system as it
may now be or as it may be expanded or otherwise adapted for
such purpose and (iii) ownership of such facilities and the
various portions thereof, whether by one or more entities to be
established at the instance of the Participants or at the instance
of other or by the present owner of any portion thereof which is
now in existence or by any combination of thé foregoing, it
being acknowledged by the Participants that in connection with
each such determination as to such ownership the effect thereof
upon financing and future decision-making ability, upon the
effective operation of the overall pipeline system and upon
regulatory matters will be relevant but that at the date hereof
the Participants have made no judgment as to the nature,
extent or significance of such effect.
Other provisions of the agreement provided for
the organization of committees and corporations
for the purpose of implementing the project,
including the filing of applications for requisite
governmental authorizations in the United States
and Canada and constructing, owning and operat
ing the project's pipeline facilities following the
issuance of such authorizations, that no participant
might assign its rights or obligations under the
agreement without the approval of the manage
ment committee except to an affiliate, and that
each participant should be responsible for an equal
share of the obligations incurred by them as mem
bers of the group and would be entitled in equal
shares to the assets of the group.
Pursuant to these provisions Canadian Arctic
Gas Pipeline Limited was incorporated on Novem-
ber 3, 1972.
The Canada Development Corporation, which
had been incorporated by chapter 49 of Statutes of
Canada 1971 became a participant in the group on
November 30, 1972. At that time the government
of Canada owned all the shares of the corporation,
the affairs of the corporation were under the man
agement of a board of some 21 directors and
Marshall Crowe was its president. From that date
until October 15, 1973, when Mr. Crowe resigned
from the corporation and was appointed Chairman
of the National Energy Board, the corporation
contributed to the group amounts totalling some
1.2 million dollars.
The material shows that in the same period,
indeed from October 25, 1972 onward, Mr. Crowe
attended as a representative of the corporation and
participated in meetings and decisions taken by the
Executive Committee of the Management Com
mittee of the Group, the Management Committee,
and the Steering Committee of the Finance Tax
and Accounting Committee. It is plain that he
took part in these meetings and in the decisions
taken, which, undoubtedly, dealt with fairly
advanced plans for implementation of the pipeline
project. The decisions included one that the pipe
line should be one wholly owned by the project
members and would in part parallel, rather than
use, the existing pipeline facilities of Alberta Gas
Trunk Line Company Ltd., which at that time was
a member of the study group.
The objections raised at the joint hearing before
the Board on October 27, 1975 of the several
applications, which are the objections referred to
in the question referred to the Court were the
following:
(1) Canadian Arctic Resources Committee
raised what was referred to as a formal objec
tion, the basis of which was the association of
Mr. Crowe with Canada Development Corpora
tion and in his capacity as an officer of that
corporation his participation in meetings of the
Arctic Gas Study Group.
(2) The same party raised as a further basis of
objection, information said to be contained in a
forthcoming book by Professor Edmond
Dosman, entitled The National Interest con
cerning Canadian northern development policy,
which book had been the subject of a series of
newspaper articles by Mr. David Crain pub
lished shortly before the hearing.
The following is from the statement of counsel
to the Board:
Mr. Crain in one of these articles on October 15, 1975
refers to material in Professor Dosman's book concerning a
meeting held on May 12 of 1970 and involving a number
of senior Federal Public Servants, including Mr. Crowe,
then in his capacity as a senior official of the Privy Council
Office, as he has indicated in his statement read today.
That was prior to his appointment to the Board of CDC.
That meeting, Professor Dosman suggests, was critical in
hammering out the essential content of the 1970 Northern
Pipeline Guidelines which were subsequently approved by
Cabinet, and Professor Dosman suggests that those guide
lines amount to approval in principle for a Mackenzie
Valley gas pipeline. That being the case, Mr. Crowe's past
in May of 1970 would have involved consideration of
technical, financial, economic and environmental viability
of the Mackenzie Valley gas pipeline, the very issues that
are to be determined in relation to the applications now
before the Board. His task at that time would also have
involved close personal contact and association with indus
try groups proposing the Mackenzie Valley pipe line,
including the predecessor organization to the present
applicant.
Now, Mr. Chairman, Professor Dosman's information
sources are not clear.
MR. GOLDIE: The book has not been published.
MR. LUCAS: Our submission is that these matters raised
in the book might well suggest to a reasonable person a
likelihood, or at least raise an apprehension, of bias and
that consequently those activities of 1970 at least require
some explanation.
With respect to this particular basis of objec
tion, the order of the Board referring the matter to
this Court contains a statement that "according to
Mr. Crowe the meeting was not directed to nor
was it critical in hammering out the essential
content of the 1970 Guidelines."
There is nothing in the material before us to
substantiate in any way this basis for the objection
and when, in the course of argument before us,
this was pointed out counsel did not press the
matter further. We regard it as withdrawn.
(3) Counsel for The Committee for Justice and
Liberty Foundation read a statement saying that
the Foundation was not convinced that the ma
terial contained sufficient grounds to support a
reasonable apprehension that Mr. Crowe might
favour the application of Canadian Arctic Gas
Pipe Line Limited over that of Foothills Pipeline
Limited, but that the material did contain suffi
cient grounds for a reasonable apprehension that
Mr. Crowe may be biased in favour of the need
of a pipeline. The statement went on to say that
the Foundation considered this to be the critical
issue in the hearings and to elaborate the basis
for its view that Mr. Crowe should withdraw.
(4) The Consumers Association of Canada did
not formally object, but suggested that the prob
lem be referred to this Court for decision.
(5) The Workgroup on Canadian Energy Policy
purported to reserve the right to raise at some
future time the question as to whether there is a
reasonable apprehension of bias on the Board as
a whole with respect to the need for a frontier
pipeline. We do not regard this as an objection
and do not consider it.
(6) Mr. Ken Rubin objected to Mr. Crowe
being on the panel as Chairman because of an
alleged conflict of interest. As the allegation of a
conflict of interest is not elaborated in or sup
ported by the material before us, the objection is
in our view not sustainable.
In the course of the very painstaking and thor
ough arguments put before us by counsel we were
referred to many expressions of opinion on the
subject of bias and to various ways in which the
test for disqualification has from time to time been
propounded. Some of the variety may be due to
the fact that bias can be established in a variety of
ways. Cases of persons having a financial interest
or who fail to disclose to a party, whose concur
rence in their acting is required, some interest or
association which would affect the likelihood of
such concurrence' are fairly clear cases for dis
qualification. Not quite so clear or automatic is
disqualification in what may be called predetermi
nation cases, cases where there has been some
expression of views indicating a prejudgment.
Among these, cases where there has been a defi
nite promise to an applicant of a particular result,
such as that a licence will be granted, or refused,
afford perhaps the strongest examples. Evert in
such cases it becomes necessary to consider wheth
er there is reason to apprehend that the person
whose duty it is to decide will not listen to the
evidence and decide fairly on it.
Here, neither actual bias nor financial interest
are alleged and there is no suggestion in the evi
dence of any public or private statement by Mr.
Crowe or of any promise by him to anyone that
any particular result will attend any of the
applications.
It is true that all of the circumstances of the
case, including the decisions in which Mr. Crowe
participated as a member of the study group,
might give rise in a very sensitive or scrupulous
conscience to the uneasy suspicion that he might
be unconsciously biased, and therefore should not
serve. But that is not, we think, the test to apply in
this case. It is, rather, what would an informed
person, viewing the matter realistically and practi-
cally—and having thought the matter through—
conclude. Would he think that it is more likely
than not that Mr. Crowe, whether consciously or
unconsciously, would not decide fairly.
On the totality of the facts, which have been
described only in skeletal form, we are all of the
opinion that they should not cause reasonable and
right minded persons to have a reasonable appre-
2 See Szilard v. Szasz [1955] S.C.R. 3.
hension of bias on the part of Mr. Crowe, either on
the question of whether present or future public
convenience and necessity require a pipeline or the
question of which, if any, of the several applicants
should be granted a certificate.
It appears to us that Mr. Crowe's participation
throughout in activities of the study group was not
participation in his own interest but as a repre
sentative of the corporation of which he was presi
dent and in which he had no financial interest.
Since the sole owner of the shares was the Govern
ment of Canada, Mr. Crowe was essentially a
person acting in the interest of the Government of
Canada within the authority conferred on him for
the purpose by the board of directors of the corpo
ration. That function was terminated for all pur
poses upon his resignation from the corporation
and his appointment as Chairman of the National
Energy Board, some five months before the filing
before the Board of the first of the applications
here in question. At no stage did he stand to lose
or to gain by his participation as a representative
of the corporation in the activities of the study
group. He has nothing to gain or lose today by any
decision he may have to reach in the discharge of
duties as Chairman of the Board in connection
with the applications before it, whether such deci
sions are in accord with or different from those
supported by him as a participant in activities of
the study group. There does not appear to be any
reason for apprehension that he would be likely to
be unable or unwilling to disabuse his mind of
preconceptions he may have in the face of new
material pointing to a different view of matters
considered in the course of his participation in
activities of the study group, or that he would be
unconsciously influenced by decisions which he
supported as a participant in the study group.
It must, we think, be borne in mind that two
years have passed since that participation came to
an end and that the issues to be resolved by the
Board, with which there is no reason to think he is
not familiar, are widely different from those to
which the study group devoted its attention. Theirs
were problems of assessing the economic feasibility
of a pipeline project as a method of moving gas
from the Arctic over long distances to southern
markets and planning the project in the interests of
establishing a viable and profitable operation. In
the issues to be considered by the Board the inter
est involved is that of the Canadian public, wheth
er it will be well served by the construction and
operation of such a system and if so which, if any,
among competing applicants should be accorded
the opportunity. On the material before us there
appears to be no valid reason for apprehension that
Mr. Crowe, who is not fettered by any interest of
his own in any of the applicant companies or any
proprietary interest in the result of any decision in
which he participated and is no longer in the
service of the study group or the Canada Develop
ment Corporation, cannot approach these new
issues with the equanimity and impartiality to be
expected of one in his position.
In our view none of the several objections is
sustainable and the question referred to the Court
should be answered in the negative.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.