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T-4668-77
Inuit Tapirisat of Canada and The National Anti- Poverty Organization (Plaintiffs)
v.
His Excellency the Right Honourable Jules Léger, the Right Honourable P. E. Trudeau, the Honour able A. Abbott, W. Allmand, R. Andras, S. R. Basford, M. Bégin, J. J. Blais, J. J. Buchanan, I. Campagnolo, J. Chrétien, F. Fox, A. Gillespie, J. P. Goyer, J. Guay, J. H. Horner, D. Jamieson, M. Lalonde, O. E. Lang, R. Leblanc, M. Lessard, D. J. Macdonald, D. S. Macdonald, A. J. Mac- Eachen, J. Munro, L. S. Marchand, A. Ouellet, R. Perrault, J. Roberts, J. Sauvé, E. F. Whelan (collectively referred to as the Governor in Coun cil), Attorney General of Canada and Bell Canada (Defendants)
Trial Division, Marceau J.—Ottawa, February 14 and March 9, 1978.
Practice Application to strike out Statement of claim alleging breaches of natural justice when Governor in Council considered plaintiffs' petition Plaintiffs seeking certiorari to set aside decisions of Governor General in Council found in two Orders in Council, and alternatively, declaration that Orders in Council invalid because Governor General in Council could not make them without giving plaintiffs a hearing according to the principles of natural justice Whether or not a reasonable cause of action Federal Court Rule 419(1)(a) Railway Act, R.S.C. 1970, c. R-2, s. 320(2) National Transportation Act, R.S.C. 1970, c. N-17, s. 64(1).
This is an application to strike out plaintiffs' statement of claim on the ground that it discloses no reasonable ground of action. Shortly after the CRTC approved a new rate structure for Bell Canada, plaintiffs filed petitions with the Clerk of the Privy Council, pursuant to section 64(1) of the National Transportation Act, requesting defendants to set aside portions of the CRTC's decision relevant to their objections, and to substitute a new order. Plaintiffs, in their statement of claim, alleged that breaches of the rules of nat ral justice occurred when the Governor General in Council as considering the plaintiffs' petition and sought a writ of certiorari to set aside decision as found in two Orders in Council, and alternatively, a declaration that the Orders in Council were invalid because the Governor General in Council could not make them without giving plaintiffs a hearing in accordance with the principles of natural justice.
Held, the application is granted. The orders of the Governor General in Council are not amenable to certiorari; the plaintiffs are not entitled to the first remedy they pray for. The Governor General in Council in exercising the authority conferred by
section 64(1) is under a duty to give a party a hearing in accordance with the rules of natural justice. There is nothing in the relevant statute that could be interpreted as requiring the Governor General in Council to observe the principles of natu ral justice in carrying out the duty therein vested in him. The Governor General in Council's decisions under 64(1) are made on the basis of political accountability and not on a judicial or quasi-judicial basis. To import into the processes of the Gover nor's Council and of the Cabinet the procedural requirements flowing from the audi alteram partem rule is so inconsistent and incompatible with their normal functioning as the execu tive arm of the Government and with the responsibility and accountability of the Ministers of the Crown to the House of Commons, that it cannot be imposed unless the intent of Parliament to that effect is expressed in the governing statute or may be easily derived from the language used therein.
R. v. The Lords Commissioners of the Treasury (1872) L.R. 7 Q.B. 387, applied. Border Cities Press Club v. Attorney-General of Ontario [1955] 1 D.L.R. 404, applied. CSP Foods Ltd. v. Canadian Transport Commis sion [1979] 1 F.C. 3, considered.
APPLICATION. COUNSEL:
Andrew J. Roman for plaintiffs.
G. W. Ainslie, Q.C., and E. A. Bowie for all
defendants except Bell Canada.
E. E. Saunders, Q.C., for defendant Bell
Canada.
SOLICITORS:
Andrew J. Roman, Ottawa, for plaintiffs.
Deputy Attorney General of Canada for all defendants except Bell Canada.
Guy Houle, General Counsel, Bell Canada, for defendant Bell Canada.
The following are the reasons for order ren dered in English by
MARCEAU J.: This is an application, on behalf of all defendants except Bell Canada, pursuant to Rule 419(1)(a) of the General Rules of this Court, for an order striking out the statement of claim on the ground that it discloses no reasonable cause of action.
The allegations of the statement of claim can be summarized as follows.
Pursuant to subsection 320(2) of the Railway Act, R.S.C. 1970, c. R-2,' as amended by item 5 of the Schedule to the Canadian Radio-television and Telecommunications Commission Act, S.C. 1974-75-76, c. 49, Bell Canada applied on the 3rd of November 1976 to the Canadian Radio-televi sion Communication and Telecommunications Commission (CRTC) for approval of a new rate structure. The plaintiffs, two federations of groups, one representing Canadians of Eskimo origin, the other Canadians with low incomes, filed interven tion statements opposing portions of this applica tion. On the 1st of June 1977, following a lengthy hearing throughout which both the plaintiffs par ticipated actively, the CRTC issued its decision.
On the 9th and 10th of June 1977 respectively, both the plaintiffs filed petitions with the Clerk of the Privy Council requesting the defendants, the applicants herein, the Governor General and the members of his Council, to set aside the portions of the decision relevant to their oppositions and to substitute a new order therefor. These petitions were made pursuant to section 64(1) of the Na tional Transportation Act, R.S.C. 1970, c. N-17, which provides as follows:
64. (1) The Governor in Council may at any time, in his discretion, either upon petition of any party, person or company interested, or of his own motion, and without any petition or application, vary or rescind any order, decision, rule or regula tion of the Commission, whether such order or decision is made inter partes or otherwise, and whether such regulation is gener al or limited in its scope and application; and any order that the Governor in Council may make with respect thereto is binding upon the Commission and upon all parties.
On the 29th of June 1977, Bell Canada filed replies to the two petitions with the Clerk of the Privy Council.
On the 14th of July 1977, the Governor General in Council, by Orders in Council P.C. 1977-2026
1 320. . .
(2) Notwithstanding anything in any Act passed before the 7th day of July 1919, all telegraph and telephone tolls to be charged by the company, and all charges for leasing or using the telegraphs or telephones of the company, are subject to the approval of the Commission, and may be revised by the Com mission from time to time; this subsection does not apply to the use of telegraph or telephone wires where no toll is charged to the public.
and P.C. 1977-2027, dealt with the two petitions refusing to vary the decision of the CRTC.
These decisions of the Governor General in Council, goes on the declaration, were arrived at before the plaintiffs had had time to file a reply to the reply of Bell Canada and without their being given an opportunity to be heard. The actual sub missions of the parties were not presented to "the members of the Governor General in Council" but rather, evidence and opinions were obtained from officials of the Department of Communications and the Minister responsible, none of these opin ions being communicated to the plaintiffs. The CRTC was even requested to express its views which were never made available to the plaintiffs. Submitting that "the Defendant Governor General in Council was required to decide these appeals himself and to reach these decisions by means of a procedure which is fair and in accordance with the principles of natural justice", the plaintiffs then pray for the following reliefs:
i) A writ of certiorari removing into this Court a record of the proceedings before the Governor-in-Council, to set aside the decisions of the Governor-in-Council, made or purported to have been made therein, as found in Orders-in-Council PC 1977-2026 and PC 1977-2027.
ii) In the alternative, a declaration that the procedure employed by the Governor-in-Council in these two appeals resulted in:
a) no hearing having been held, or in the alternative,
b) such hearing as was held was not a full and fair hearing, in accordance with the principles of natural justice.
This statement of claim, contends the applica tion, reveals no cause of action since the facts as alleged cannot give rise to the reliefs sought: it should therefore be struck out. A preliminary remark should here be made.
Counsel for the plaintiffs reminded me that the
jurisdiction of the Court under Rule 419(1) (a) 2 ought to be exercised sparingly. I fully agree, although I am not sure all of the English authori ties cited in support of the proposition are here really convincing (see Dyson v. Attorney-General [1911] 1 K.B. 410). A helpful summation of the matter is to be found in Page v. Churchill Falls (Labrador) Corp. Ltd. [1972] F.C. 1141 where the Chief Justice of this Court had this to say (at page 1144):
It is, of course, not appropriate in every case to have a question of law as to the legal position determined as a thresh old matter even though it can be framed as a question based on an assumption of the truth of allegations in the pleadings. Compare Drummond-Jackson v. British Medical Association [1970] 1 W.L.R. 688. In my view, it is not possible to lay down any general rule as to when it is appropriate and when it is not appropriate to adopt such a course. It must be determined, in each case, having regard to all the circumstances of the particu lar case.
The circumstances of this case led me to believe that it was proper for me to entertain the applica tion as made. True, an important question of law was involved which could have been raised by way of defence (as was done by the other party, Bell Canada), or under Rule 474 of the General Rules of the Court. But the question could be easily seen and precisely defined immediately without any possibility of its being altered or qualified by further pleadings and moreover it was debated by all parties in a long and elaborate hearing: I could see no valid reason for refusing to deal with it, bearing in mind of course that, at such an early stage of the proceedings, the order sought was to be granted only if I could come to the conclusion that there was no issue which could be better explored at a trial, the action as it stood being clearly unsustainable.
That being said, I turn now to the merit of the applicants' contention.
The principal relief sought by the action is the issue of a writ of certiorari addressed to the Gover nor General in Council to set aside the decisions
2 Rule 419(1)(a) reads as follows:
Rule 419. (1) The Court may at any stage of an action order any pleading or anything in any pleading to be struck out, with or without leave to amend, on the ground that
(a) it discloses no reasonable cause of action or defence, as the case may be,
found in Orders in Council P.C. 1977-2026 and P.C. 1977-2027. The fact that the proceedings for this prerogative common law remedy can be instituted in this Court by way of a statement of claim (Rule 603 of the General Rules of the Court) does not change or alter its basic nature or purpose. Thé Court is asked to exercise its tradi tional certiorari jurisdiction and to make a certio- rari order against the Governor General in Coun cil. That, in my view, is not possible; the Governor General in Council being the Crown, the Court has simply no jurisdiction to do so. As stated by Cockburn C.J. in The Queen v. The Lords Com missioners of the Treasury (1872) L.R. 7 Q.B. 387 at p. 394, cited with approval so many times since and again recently by Rand J. in Border Cities Press Club v. Attorney-General of Ontario [1955] 1 D.L.R. 404 at p. 414: "The Court cannot claim even in appearance to have any power to command the Crown; the thing is out of the ques tion". No further comments are required: the orders of the Governor General in Council are not amenable to certiorari; the plaintiffs are not en titled to the first remedy they pray for.
This conclusion, however, is far from being deci sive. Indeed, the action seeks an alternative remedy, a declaratory order, and the jurisdiction of the Court to grant such a relief, in the circum stances of the case, can certainly not be discarded in the same way. A declaratory order implies no command. It is well established that, while a Court cannot review a decision of the Governor General in Council made pursuant to a royal prerogative per se, it can no doubt review an act done by the Governor General in Council pursuant to the exer cise of a statutory power (see for instance Border Cities Press Club v. Attorney-General of Ontario [1955] 1 D.L.R. 404; Re Doctors Hospital and Minister of Health (1976) 68 D.L.R. (3d) 220; Re Davisville Investment Co. Ltd. v. City of Toronto (1977) 15 O.R. (2d) 553). Needless to repeat that the Governor General in Council is not above the law and that his statutory powers must be exer cised within the limits, for the purpose of, and according to the law.
I think at this point of my reasoning I should in a parenthetical remark take the opportunity to refer to the alternative submission of the appli cants in their notice of motion to the effect that in an action where a plaintiff is seeking to move against an Order in Council, the Attorney General is the proper party and the only party that need be named in the proceedings. The submission appears to me to be well founded (see Desjardins v. Na tional Parole Board [ 1976] 2 F.C. 539; `B" v. Department of Manpower and Immigration [1975] F.C. 602). However, in view of the general conclusion I have reached, I need not express a definite opinion on the matter.
The plaintiffs' action therefore, in so far as it seeks a declaratory judgment, does not raise a preliminary question of jurisdiction, as does their action for a certiorari order. The action, however, raises an important question of law which must be properly defined.
Taken literally, the declaration sought as formu lated in the prayer for relief is meaningless. At this stage, however, it cannot be isolated and must be understood with reference to the whole of the proceeding. The declaration really sought is that the Orders in Council are invalid because the Governor General in Council could not make them without giving the plaintiffs "a full and fair hear ing, in accordance with the principles of natural justice", which was not done. It must be admitted that all of the allegations of the statement of claim lead to that submission, but at the same time it must be noted that it is the only conclusion to which they lead. No other issue is raised: there is no question of bias, or of lack of good faith, or of improper delegation, or of abuse of power, or of wrong criteria having been applied, to refer to the other most common grounds usually alleged to impugn the order of a public authority. The attack on the two Orders in Council is based on a single legal proposition: in exercising the power entrusted to him by section 64(1) of the National Transpor tation Act, the Governor General in Council is duty bound to give a petitioner the full hearing required to give due effect to the so-called princi ples of natural justice. The proposition being flatly
denied by the application, the question raised becomes simple and clear.
I have come to the conclusion that the answer to the question so put is likewise simple and clear: the Governor General in Council in exercising the au thority conferred by section 64(1) is not under a duty to give a party a hearing in accordance with the rules of natural justice.
There is nothing in the relevant statute that could be interpreted as requiring the Governor General in Council to observe the principles of natural justice in carrying out the duty which is therein vested in him. The right given to an inter ested party to make a petition can in no way be construed as meaning a right to be called for a hearing or to be given an opportunity to offer evidence or argument. Of course, it is well known that a duty to observe the audi alteram partem rule may be implied—regardless of the absence of any express statutory requirements to that effect— when on consideration of the statutory provisions and the nature of the situation to which they apply, it appears that the powers conferred on a tribunal are of a judicial or quasi-judicial nature. But, the Governor General in Council in carrying out his duties under section 64(1), is not, in my view, exercising a judicial or quasi-judicial power.
In a recent judgment rendered on January 30, 1978, in CSP Foods Ltd. v. Canadian Transport Commission [1979] 1 F.C. 3, the Appeal Division of this Court commented on the nature of the power conferred by section 64(1) of the National Transportation Act. Speaking for the Court, Urie J. had this to say [at pp. 9-10]:
With respect, I do not view the exercise of his powers by the Governor in Council pursuant to section 64(1) as being in the nature of a judicial appeal. It provides a means whereby the executive branch of government may exercise some degree of control over the Canadian Transport Commission to ensure that the views of the government as to the public interest in a given case, on the basis of facts established by this tribunal, can be expressed by the executive and such views are implemented by means of directions which it may see fit to give the tribunal, through the Governor in Council. It is a supervisory role, as I see it, not an appellate role. The Governor in Council does not concern himself with questions of law or jurisdiction which is in
the ambit of judicial responsibility. But he has the power to do what the Courts cannot do which is to substitute his views as to the public interest for that of the Commission. (See Re Davis - ville Investment Co. Ltd. v. City of Toronto (1977) 15 O.R. (2d) 553 at 555-556.)
In my view, in making decisions under 64(1), the Governor General in Council makes them on the basis of political accountability and not on a judi cial or quasi-judicial basis. The scheme of the statutes pertaining to telecommunications is that decisions involving broad economic questions are entrusted to the CRTC which is under a strict duty to hold a hearing and to afford the parties a full opportunity to be heard. The Commission may itself at any time review, rescind, change, alter or vary any of its orders or decisions (section 63 of the National Transportation Act), and these orders or decisions, moreover are subject to appeal to, and review by, the Courts (section 64(2) to (7) of the Act). The power to "vary or rescind" en trusted by section 64(1) to the Governor General in Council is, as I understand it, a power of a different nature altogether: it is a political power for the exercise of which the Cabinet is to be guided by its views as to the policy which in the circumstances should be followed in the public interest. Its exercise has nothing to do with the judicial or quasi-judicial process. The party who proceeds to adopt the means of questioning an order or a decision of the CRTC provided by section 64(1) is choosing to resort to a political, not a judicial process.
Referring to some recent English cases, counsel for the plaintiffs argued that it was enough for a competent authority to be under a "duty to act fairly", for it to be bound by the rules of a natural justice and the audi alteram partem principle. The argument, it seems to me, raises a question of terminology rather than a question of substance (see S.A. de Smith, Judicial Review of Adminis trative Action, 3d ed., p. 347). In any event, the so-called "duty to act fairly" must be understood to mean a duty to adopt a fair procedure to give due effect to the audi alteram partem maxim. My reaction is the same. To import into the processes of the Governor's Council and of the Cabinet the procedural requirements flowing from the audi alteram partem rule seems to me to be so incon-
sistent and incompatible with their normal func tioning as the executive arm of the Government and with the responsibility and accountability of the Ministers of the Crown to the House of Com mons, that it cannot be imposed unless the intent of Parliament to that effect is expressed in the governing statute or may be easily derived from the language used therein.
For all these reasons, I think that the attack on the Orders in Council launched by the plaintiffs in their action, on the sole basis that they have not been given a full and fair hearing in accordance with the rules of natural justice, cannot succeed. The motion to strike is therefore well founded and it will be granted. Although Bell Canada chose to raise the legal issue involved here by way of defence, it participated in the hearing of the instant application and asked that it be joined with the other defendants-applicants. The statement of claim will therefore be struck out as against all defendants including Bell Canada and the action dismissed.
ORDER
The application is granted with costs to the applicants.
The statement of claim is struck out as against all defendants and the action is dismissed with costs to all defendants.
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