[1997] 1 F.C. 874
T-554-91
Carpenter Fishing Corporation, Don Johannes, Kaarina Etheridge, White Hope Holdings Ltd., Simpson Fishing Co. Ltd. and Norman Johnson (Plaintiffs)
v.
Her Majesty the Queen in Right of Canada, and Bernard Valcourt, Minister of Fisheries and Oceans (Defendants)
T-974-91
Titan Fishing Ltd. (Plaintiff)
v.
Her Majesty the Queen in Right of Canada and Bernard Valcourt, Minister of Fisheries and Oceans (Defendants)
Indexed as: Carpenter Fishing Corp. v. Canada (T.D.)
Trial Division, Campbell J.—Vancouver, June 24, 25, 26, 28, July 2, 3, 4, 5; November 14, 1996.
Fisheries — Application for declaration current owner restriction (COR), part of formula to determine halibut quota, unlawful — Implementation of COR authorized decision of Department of Fisheries and Oceans (DFO) administration, not Minister — DFO administration having implied delegated authority to decide to implement COR on Minister’s behalf — Minister required to act within purposes, objects of Fisheries Act, s. 43 i.e. proper management, control, conservation of fisheries — Purpose of COR to discriminate against some licence holders to benefit, gain support of others — Defect in jurisdiction as outside allowed purposes, objects, policy.
Administrative law — Judicial review — Declarations — Application for declaration current owner restriction (COR), part of formula to determine halibut quota, unlawful — Halibut Advisory Committee (HAC) proposing implementation of COR without advance notice to anyone outside HAC — Opinions of HAC result of highly managed support building process for outcome DFO wanted i.e. quota system — Failure to give those adversely affected by COR opportunity to be heard before COR implemented breach of natural justice — Tests to determine whether motive improper — Minister acting for improper motive, exceeding jurisdiction — Decision to implement COR nullity.
EDITOR’S NOTE
The Executive Editor has determined that the 49-page reasons for order herein should be reported as abridged. Two portions of the reasons, headed “The Legal Issues” and “Conclusion”, are here published in full text. An Editor’s Note summarizes the material contained in the first 35 pages of His Lordship’s decision, which have not been reproduced.
The plaintiffs were individuals and corporations involved in the West Coast halibut fishery. The problems facing Canada’s Pacific fishery had been identified in the 1982 Commission Report by Dr. Peter Pearce as including “overfishing, conflicts among users, overexpansion of the fishing fleets, and eroding marine and freshwater habitat”. The Report concluded that major, fundamental changes in fisheries policy were needed to correct the situation which had not been helped by a badly managed halibut fishery licensing system. A quota system was advocated as “the only approach … that offers any real promise in dealing with the alarming excess capacity in this fishery …”.
Following consultations with fishermen (more on this later) Departmental officials and the Fisheries Minister made decisions implementing an individual vessel quota (IVQ) system and, as part of that, a current owner restriction (COR). Plaintiffs’ claim was for a declaration that the COR was unlawful and should be severed from the individual vessel quota formula. Their argument was that the program discriminates against recent entrants to the fishery by denying them the same eligibility for catch history calculation as longer term licence holders. The IVQ formula adopted was based 30% on vessel length and 70% on catch history of the licence during the period 1986-1989. Catch history was, however, restricted to the current owner unless the licence was acquired after the start of the 1989 fishery, in which case historical performance was based on the preceding owner’s catch history. The COR had the effect of granting certain licence holders a longer eligibility period, arguably to the detriment of others. The plaintiffs say that the COR does nothing to advance management or conservation of the fishery but was adopted because a group alleged to represent a majority of licence holders pressed for the restriction to the prejudice of the minority who were afforded no opportunity of opposing it.
After the Pearce report was published, the Minister attempted to put in place a quota system for the 1983 halibut season but that had not gone ahead due to lack of industry support. However, in 1988 the quota system idea was revived at the instance of licence holders. The Department was anxious to capitalize on this change of attitude. A strategic decision was taken to downplay Departmental enthusiasm for establishing quotas in the hope of drawing licence holders on side. The Department organized an elaborate consultation process with licence holders. The Court found as a fact “that DFO wanted a quota system to result from the process and managed the process to see that this result occurred”. A middle management government official, one Turris, was given responsibility for stickhandling this initiative to a successful conclusion. Turris was cross-examined at trial as to his personal interest in the outcome of the process—for example, as to whether a successful outcome could mean a promotion. Whether or not such was the case, Campbell J. did make a finding that this official’s involvement with the project had been intensive and prominent and that “he was thoroughly professionally committed to get an agreement”. What was billed as a consultation was in fact a support building process for a quota system to which DFO was committed before the process began.
Licence holders were notified that a Halibut Advisory Committee (HAC) would be established “which is democratic and provides for comprehensive and fair representation”. In thus holding out that decision making would be guided by a form of licence holders’ representative government, DFO assumed an obligation to ensure that the process would be democratic in nature. The primary ingredient of representative government is accountability. Turris did nothing to see that the Committee would live up to the accountability requirement. The letters sent to those selected to the Committee contained no mention that they were to occupy a representative role. It was left up to them to sort out their obligations to their constituents. There was no accountability built into the process. Campbell J. concluded that the process was not only undemocratic but also unreliable in reflecting the views of licence holders. That being the case, no weight could be accorded defendants’ argument that plaintiffs, having participated in the selection of representatives, were bound by the result. His Lordship reviewed the numerous irregularities in naming members to the Committee and found that DFO had broken the rules “because it was considered necessary to do so to reach the planned objective of industry support”.
The current owner restriction—the element of the formula which brought this case to Court— came out of a May 3, 1990 meeting of the HAC. The COR proposal was advanced without notice that it would be on the agenda so that there was neither opportunity for consultation with licence holders not at the meeting nor for its implications to be understood. Even so, it was passed by the Committee with 12 in favour, 3 opposed and 2 abstentions. Turris did not want the Committee to delay in endorsing COR even though he was unable to answer some of the questions of those not in favour. The purpose of COR was to discriminate against new entrants to the halibut fishery for the benefit of certain Committee members and those whose interests they represented. Turris adopted the COR proposal to secure Committee approval of a quota system.
Although adoption of a quota system was put to a vote of all licence holders, the question on the ballot was worded such that voters could not accept or reject the COR provision in isolation to the overall proposal. This was an answer to defendants’ argument that since some of the plaintiffs voted for the IVQ, they were estopped from litigating the COR aspect.
The Court could not find that the Minister had approved the COR. There was no mention of it in the documents signed by him and it did not appear that he was advised about it or of the objections thereto.
Although individual licence holders accepted the IVQ, including COR, as a licensing condition, that should not be taken as an acceptance by them of COR. They had no choice in the matter if they wanted to continue fishing.
Based on the representations made in the course of the support-building process, licence holders had every right to believe that the Minister would make the decision to implement COR. As a matter of good faith, therefore, the decision to implement COR was the Minister’s to make and since he did not make it, the administration should not have made it. But in law, the administration of DFO had implied delegated authority to make the decision to implement the COR on behalf of the Minister.
The Minister had the power to impose the quota system as a condition of licence regardless of the apparent delegation to the Governor in Council under the then applicable Fisheries Act, section 43 to make regulations for the proper management and control of the sea-coast and inland fisheries and respecting the conservation and preservation of fish. But the Minister was still required to act within the purposes, objects and policy of the Act as set out in Act, paragraphs 43(a) and (b). Thus the allowed purposes, objects and policy were only for the proper management and control of the sea-coast and inland fisheries and respecting the conservation and protection of fish. The purpose of COR was to discriminate against some licence holders in order to benefit, and thus gain the support of, others. Section 43 was not intended to be used as a means of attaining this result. COR did not fall within the allowed purposes, objects and policy. There was a defect in jurisdiction.
The common law duty of fairness applies to administrative decisions, except those which are legislative in nature. As the imposition of the COR upon halibut licence holders by way of condition on the licence to fish was not legislative in nature, the plaintiffs were entitled to procedural fairness. The Minister, at the very least, was required to provide to those adversely affected by the COR proposal the right to be heard, either through hearings or written submissions before it was implemented. There was no notice to any licence holder that COR was on the agenda for the meeting when the decision was made by the DFO official to implement COR. And thereafter, before COR was implemented, no opportunity was provided for licence holders to object to it separate from the whole of the individual vessel quota (IVQ) proposal and, specifically, no provision was made for the plaintiffs to object to any adverse effect COR had upon them. There was a breach of natural justice.
To meet the test for wrongful discrimination an act must discriminate in fact, and this discrimination must be carried out with the motive of favouring or hurting one individual and without regard to the public interest. If the latter two features are present, the motive is improper. The decision discriminated in fact and the motive for making the decision was to favour old and hurt new entrants to the fishery. The paramount public interest to be enforced was the principle that public officials must be scrupulously fair and equal in their decision making. Against this standard the decision to implement COR was very unprincipled. The decision was made without regard to the public interest. A second test is that in judging such decisions, it is necessary to see whether one or other of two options exist: good faith in the public interest, or the promotion of some private interest. The decision was made to promote a private interest. The COR failed both tests. In implementing the COR, the Minister acted for improper motive, and therefore exceeded his jurisdiction.
The decision to implement the COR was declared a nullity as were subsequent decisions under subsection 22(1) of the Regulations, which was virtually identical to Act, section 43.
STATUTES AND REGULATIONS JUDICIALLY CONSIDERED
Fisheries Act, R.S.C., 1985, c. F-14, s. 43.
Fishery (General) Regulations, SOR/93-53, s. 22(1).
CASES JUDICIALLY CONSIDERED
APPLIED:
R. v. Harrison, [1977] 1 S.C.R. 238; (1976), 66 D.L.R. (3d) 660; [1976] 3 W.W.R. 536; 28 C.C.C. (2d) 279; 8 N.R. 47; Roncarelli v. Duplessis, [1959] S.C.R. 121; (1959), 16 D.L.R. (2d) 689; Multi-Malls Inc. et al. and Minister of Transportation and Communications et al., Re (1976), 14 O.R. (2d) 49; 73 D.L.R. (3d) 18 (C.A.); Doctors Hospital and Minister of Health et al., Re (1976), 12 O.R. (2d) 164; 68 D.L.R. (3d) 220; 1 C.P.C. 232 (Div. Ct.); Nicholson v. Haldimand-Norfolk Regional Board of Commissioners of Police, [1979] 1 S.C.R. 311; (1978), 88 D.L.R. (3d) 671; 78 CLLC 14,181; 23 N.R. 410; Cardinal et al. v. Director of Kent Institution, [1985] 2 S.C.R. 643; (1985), 24 D.L.R. (4th) 44; [1986] 1 W.W.R. 577; 69 B.C.L.R. 255; 16 Admin. L.R. 233; 23 C.C.C. (3d) 118; 49 C.R. (3d) 35; 63 N.R. 353; Attorney General of Canada v. Inuit Tapirisat of Canada et al., [1980] 2 S.C.R. 735; (1980), 115 D.L.R. (3d) 1; 33 N.R. 304; Homex Realty and Development Co. Ltd. v. Corporation of the Village of Wyoming, [1980] 2 S.C.R. 1011; (1980), 116 D.L.R. (3d) 1; 13 M.P.L.R. 234; 33 N.R. 475; Lacewood Development Company v. City of Halifax and Provincial Planning Appeal Board (1975), 12 N.S.R. (2d) 692; 58 D.L.R. (3d) 383 (C.A.); Scarborough, Township of v. Bondi, [1959] S.C.R. 444; (1959), 18 D.L.R. (2d) 161; Bondi, Re and The Township of Scarborough, [1957] O.W.N. 257; (1957), 7 D.L.R. (2d) 733 (H.C.); Anisminic Ltd. v. Foreign Compensation Commission, [1969] 2 A.C. 147 (H.L.).
AUTHORS CITED
Jones, D. P. and A. S. de Villars. Principles of Administrative Law, 2nd ed. Toronto: Carswell, 1994.
APPLICATION for a declaration that the Current Owner Restriction as implemented as part of a quota imposed on the West Coast halibut fishery was unlawful because of a defect or error in jurisdiction. Motion allowed.
COUNSEL:
Murray L. Smith and David Jones for plaintiffs.
Paul F. Partridge and Nancy E. South for defendants.
SOLICITORS:
Campney & Murphy, Vancouver, for plaintiffs.
Deputy Attorney General of Canada for defendants.
The following are the reasons for order rendered in English by
Campbell J.:
V
THE LEGAL ISSUES
Because of a defect or error in jurisdiction, the plaintiffs claim a declaration that the current owner restriction [COR] as implemented is unlawful. Jones and de Villars[1] provide this very useful overview of the legal issues involved in deciding this claim:
“Jurisdiction” is one of the most elusive concepts in Administrative Law. In its broadest sense, “jurisdiction” means the power to do every aspect of an intra vires action. In a narrower sense, however, “jurisdiction” means the power to commence or embark on a particular type of activity. A defect in jurisdiction “in the narrow sense” is thus distinguished from other errors—such as a breach of natural justice, considering irrelevant evidence, or acting for an improper purpose—which take place after the delegate has lawfully started his activity, but which cause him to leave or exceed his jurisdiction. Lord Reid’s analysis of these difficulties in defining “jurisdiction” in Anisminic Ltd. v. Foreign Compensation Commission ([1969] 2 A.C. 147 at 171), is particularly useful;
It has sometimes been said that it is only where a tribunal acts without jurisdiction that its decision is a nullity. But in such cases the word “jurisdiction” has been used in a very wide sense, and I have come to the conclusion that it is better not to use the term except in the narrow and original sense of the tribunal being entitled to enter on the inquiry in question. But there are many cases where, although the tribunal had jurisdiction to enter on the inquiry, it has done or failed to do something in the course of the inquiry which is of such a nature that its decision is a nullity. It may have given its decision in bad faith. It may have made a decision which it has no power to make. It may have failed in the course of the inquiry to comply with the requirements of natural justice. It may in perfect good faith have misconstrued the provisions giving it power to act so that it failed to deal with the question remitted to it and decided some question which was not remitted to it. It may have refused to take into account something which it was required to take in account. Or it may have based its decision on some matter which, under the provisions setting it up, it had no right to take into account. I do not intend this list to be exhaustive. But if it decides a question remitted to it for decision without committing any of these errors it is as much entitled to decide the question wrongly as it is to decide it rightly. I understand that some confusion has been caused by my having said in Reg. v. Governor of Brixton Prison, Ex parte Armah [1968] A.C. 192, 234 that if a tribunal has jurisdiction to go right it has jurisdiction to go wrong. So it has, if one uses “jurisdiction” in the narrow original sense. If it is entitled to enter on the inquiry and does not do any of those things which I have mentioned in the course of the proceedings, then its decision is equally valid whether it is right or wrong subject only to the power of the court in certain circumstances to correct an error of law. I think that, if these views are correct, the only case cited which was plainly wrongly decided is Davies v. Price [1958] 1 W.L.R. 434. But in a number of other cases some of the grounds of judgment are questionable.
It is important to remember that virtually all grounds for judicial review of administrative action depend upon an attack on some aspect of the delegate’s jurisdiction to do the particular activity in question. Consequently, it is equally important to remember that any behaviour which causes the delegate to exceed his jurisdiction is just as fatal as any error which means that he never had jurisdiction “in the narrow sense” even to commence his or her action.
(A) Was there a defect in jurisdiction “in the narrow sense”?
(1) Was the administration of DFO authorized to implement COR?
Having found as a fact that the implementation of the current owner restriction was an authorized decision of the administration of DFO [Department of Fisheries and Oceans], the legal issue arises as to whether it had authority to make it.
In the course of the support-building process, there was a consistent message provided as to who would be the decision maker. For example, in the discussion paper sent with the early support-building mailing to licence holders on September 11, 1989, the following statement appears in the first paragraph:
Decisions regarding changes in the management of the halibut fishery will be made by the Minister of Fisheries and Oceans following extensive industry consultation and input from DFO personnel.[2]
And in the program proposal which was included with the letter of June 4, 1990 asking each licence holder to vote on acceptance or rejection, the following introductory paragraph appeared:
This paper outlines a proposal for allocating, implementing, managing, and enforcing individual vessel quotas (IVQ’s) in the halibut fishery. The proposed IVQ program is the product of extensive consultation between DFO and the halibut fishing industry during the last twelve months. Following your consideration of this proposal the Department will advise the Minister of Fisheries and Oceans of halibut licence holders’ input and level of support and recommend to him whether or not individual quotas should be implemented in the halibut fishery. However, decisions regarding changes in the management of the halibut fishery are solely those of the Minister.[3] [Emphasis mine.]
On the representations made, there is no question that licence holders had every right to believe that the Minister would make the decision to implement COR. As a matter of good faith, therefore, the decision to implement COR was the Minister’s to make and since he did not make it, the administration should not have made it. But apart from whether the administration should have breached the faith, could it do so as a matter of law?
An early end to this analysis would come if I were to decide that because the Minister himself did not make the decision to implement COR, then the decision was made by the administration without jurisdiction in the narrow sense. I was not strongly urged to make this finding by Mr. Smith for the plaintiffs, I think because it provides too simple an answer to a very complex legal problem.
Mr. Partridge, on behalf of the defendants, urged me to accept the position that the decision made by the administration was authorized as if it were a decision of the Minister on the basis of implied authority. This argument went substantially unanswered by the plaintiffs.
To make the point, the defendants rely on the authority of the Supreme Court of Canada in R. v. Harrison, [1977] 1 S.C.R. 238, where at pages 245-246 Dickson J. [as he then was] said:
In my opinion there is implied authority in the Attorney General to delegate the power to instruct, in s. 605(1). I do not think that s. 605(1) requires the Attorney General personally to appeal or personally to instruct counsel to appeal in every case. Although there is a general rule of construction in law that a person endowed with a discretionary power should exercise it personally (delegatus non potest delegare) that rule can be displaced by the language, scope or object of a particular administrative scheme. A power to delegate is often implicit in a scheme empowering a Minister to act. As Professor Willis remarked in “Delegatus Non Potest Delegare”, (1943), 21 Can. Bar Rev. 257 at p. 264:
… in their application of the maxim delegatus non potest delegare to modern governmental agencies the Courts have in most cases preferred to depart from the literal construction of the words of the statute which would require them to read in the word “personally” and to adopt such a construction as will best accord with the facts of modern government which, being carried on in theory by elected representatives but in practice by civil servants or local government officers, undoubtedly requires them to read in the words “or any person authorized by it”.
See also S. A. DeSmith, Judicial Review of Administrative Action, 3d ed., at p. 271. Thus, where the exercise of a discretionary power is entrusted to a Minister of the Crown it may be presumed that the acts will be performed, not by the Minister in person, but by responsible officials in his Department: Carltona Ltd. v. Commissioner of Works ([1943] 2 All E.R. 560 (C.A.)). The tasks of a Minister of the Crown in modern times are so many and varied that it is unreasonable to expect them to be performed personally. It is to be supposed that the Minister will select deputies and departmental officials of experience and competence, and that such appointees, for whose conduct the Minister is accountable to the Legislature, will act on behalf of the Minister, within the bounds of their respective grants of authority, in the discharge of ministerial responsibilities. Any other approach would but lead to administrative chaos and inefficiency.
On the basis of this authority I find that, in law, the administration of DFO could make the decision to implement the current owner restriction on behalf of the Minister. Thus, from this point, I will consider the decision to be that of the Minister.
(2) What was the Minister’s jurisdiction to impose a quota system?
The Minister chose not to implement the quota system by way of regulation but simply imposed it as a condition of licence. The plaintiffs admit that the Minister had power to do this, regardless of the apparent delegation to the Governor in Council under the then applicable section 43 of the Fisheries Act (the Act),[4] the pertinent portions of which read as follows:
43. The Governor in Council may make regulations for carrying out the purposes and provisions of this Act and in particular, but without restricting the generality of the foregoing, may make regulations
(a) for the proper management and control of the sea-coast and inland fisheries;
(b) respecting the conservation and protection of fish;
…
(g) respecting the terms and conditions under which a licence and lease may be issued;
But in so doing, I find that the Minister was still required to operate within the limits of his jurisdiction.
(3) What were the limits of the Minister’s jurisdiction to impose a condition of licence?
The discretion granted to the Minister is not unlimited. Almost forty years ago in Roncarelli v. Duplessis, [1959] S.C.R. 122, the Supreme Court of Canada affirmed the right of the courts to limit the exercise of ministerial discretion to the purpose and objects of the statute granting the discretion. Rand J. set out the scope of absolute discretion at page 140 as follows:
The field of licensed occupations and businesses of this nature is steadily becoming of greater concern to citizens generally. It is a matter of vital importance that a public administration that can refuse to allow a person to enter or continue a calling which, in the absence of regulation, would be free and legitimate, should be conducted with complete impartiality and integrity; and that the grounds for refusing or cancelling a permit should unquestionably be such and such only as are incompatible [sic] with the purposes envisaged by the statute: the duty of a Commission is to serve those purposes and those only. A decision to deny or cancel such a privilege lies within the “discretion” of the Commission; but that means that decision is to be based upon a weighing of considerations pertinent to the object of the administration.
In public regulation of this sort there is no such thing as absolute and untrammelled “discretion”, that is that action can be taken on any ground or for any reason that can be suggested to the mind of the administrator; no legislative Act can, without express language, be taken to contemplate an unlimited arbitrary power exercisable for any purpose, however capricious or irrelevant, regardless of the nature or purpose of the statute. Fraud and corruption in the Commission may not be mentioned in such statutes but they are always implied as exceptions. “Discretion” necessarily implies good faith in discharging public duty; there is always a perspective within which a statute is intended to operate; and any clear departure from its lines or objects is just as objectionable as fraud or corruption. Could an applicant be refused a permit because he had been born in another province, or because of the colour of his hair? The ordinary language of the legislature cannot be so distorted. [Emphasis mine.]
A more recent application of the “purposes” and “objects” aspect of Roncarelli is Multi-Malls Inc. et al. and Minister of Transportation and Communications et al., Re (1976), 14 O.R. (2d) 49 (C.A.). In Multi-Malls, the Ontario Minister of Transportation and Communications bowed under political pressure to stop the development of a shopping centre by refusing to issue necessary road access and entrance permits. The Ontario Court of Appeal set aside the Minister’s decision and referred the matter back for reconsideration on proper principles. In the judgment leading to this result, Lacourcière J.A. cited Roncarelli and, at pages 62-63 said:
I am of [the] opinion that the Minister of Transportation and Communications allowed himself to be influenced by extraneous, irrelevant and collateral considerations which should not have influenced him in the exercise of his discretion to refuse the entrance permit. It seems clear that the purpose of the Act in general is not to ensure proper land use planning but generally to control traffic.
In addition, the Ontario Court (General Division) applied Roncarelli in Doctors Hospital and Minister of Health et al., Re (1976), 12 O.R. (2d) 164 where orders in council were declared invalid which revoked approval for a number of hospitals on the basis that it was necessary to reduce expenditures. Addressing the challenge by the hospitals to the validity of the orders, Cory J. (as he then was), at pages 175-176 said:
We have then determined from a review of the Public Hospitals Act and its history that it is regulatory in nature. Section 4(5) was not designed or intended to be used as a means of closing hospitals for financial or budgetary considerations.
It was apparent from the material before us, that the decision of the Lieutenant-Governor in Council to revoke the approval of the hospitals was based upon financial considerations. The Lieutenant-Governor in Council was acting, not pursuant to royal prerogative, but by the statutory authority contained in s. 4(5) of the Public Hospitals Act.
We repeat and emphasize that the Court would not and could not, per se, review a decision made pursuant to royal prerogative. However, in the absence of clear words to the contrary in the Act in question, the Court can review the decision of the Lieutenant-Governor in Council to ensure that the discretion to revoke had only been exercised in pursuance of the objects and policy of the Act.
Since the Lieutenant-Governor in Council in its decision took into account financial considerations, it considered extraneous matters that were beyond the objects and policy of the Public Hospitals Act. [Emphasis mine.]
These decisions allow me to find in the case at bar that the Minister, when exercising statutory discretion, must act within the purposes, objects and policy of the Act. Therefore, I find that these features within which the Minister might have exercised his discretion to impose the current owner restriction as a condition of licence were found within paragraphs 43(a) and (b) of the Act. Thus, the allowed purposes, objects and policy were only for the proper management and control of the sea-coast and inland fisheries and respecting the conservation and protection of fish.
(4) Does COR fall within the allowed purposes, objects and policy?
I have found that the purpose of COR was to discriminate against some licence holders in order to benefit, and thus gain the support of, those who held the self-interest reflected by Mike Bazilli. It is clear to me that section 43 of the Act was not designed or intended to be used as a means of attaining this result. The answer on this issue is no.
Accordingly, I find there was a defect in jurisdiction “in the narrow sense”.
(B) Did the Minister make an error which caused him to leave or exceed his jurisdiction?
Even if it can be said that there was no defect of jurisdiction in the narrow sense, then the question arises as to whether, on the considerations suggested by Jones and de Villars, the Minister breached natural justice or acted in a discriminatory manner, with improper motive. A finding that either of these events occurred will result in a declaration that the implementation of the current owner restriction is unlawful.
(1) Was there a breach of natural justice?
(a) Were the plaintiffs entitled to procedural fairness?
In Nicholson v. Haldimand-Norfolk Regional Board of Commissioners of Police, [1979] 1 S.C.R. 311, at pages 324-325, Chief Justice Laskin recognized that the common law duty of fairness applies to administrative decision making:
The emergence of the notion of fairness involving something less than the procedural protection of traditional natural justice has been commented on in de Smith, Judicial Review of Administrative Action [3rd ed. 1973] at p. 208, as follows:
That the donee of a power must “act fairly” is a long-settled principle governing the exercise of discretion, though its meaning is inevitably imprecise. Since 1967 the concept of a duty to act fairly has often been used by judges to denote an implied procedural obligation. In general it means a duty to observe the rudiments of natural justice for a limited purpose in the exercise of functions that are not analytically judicial but administrative ….
What rightly lies behind this emergence is the realization that the classification of statutory functions as judicial, quasi-judicial or administrative is often very difficult, to say the least; and to endow some with procedural protection while denying others any at all would work injustice when the results of statutory decisions raise the same serious consequences for those adversely affected, regardless of the classification of the function in question.
In Cardinal et al. v. Director of Kent Institution, [1985] 2 S.C.R. 643, the Supreme Court clarified the extent of the duty owed where, at page 653 Le Dain J. stated:
… there is, a general common law principle, a duty of procedural fairness lying on every public authority making an administrative decision which is not of a legislative nature and which affects the rights, privileges or interests of an individual.
Thus, administrative decisions which are legislative in nature are excluded from the duty of fairness. The definition of a legislative decision is found within the following passage written by Mr. Justice Estey in Attorney General of Canada v. Inuit Tapirisat of Canada et al., [1980] 2 S.C.R. 735, at pages 758-759:
Where … the executive branch has been assigned a function performable in the past by the Legislature itself and where the res or subject matter is not an individual concern or a right unique to the petitioner or appellant, different considerations may be thought to arise …. In such a circumstance the Court must fall back upon the basic jurisdictional supervisory role and in doing so construe the statute to determine whether the Governor in Council [the Cabinet] has performed its functions within the boundary of the parliamentary grant and in accordance with the terms of the parliamentary mandate. [Emphasis mine.]
On this definition, the imposition of the current owner restriction upon halibut licence holders by way of a condition on the licence to fish is not an administrative decision which is legislative in nature. Therefore, the plaintiffs were entitled to procedural fairness.
(b) To which specific procedural fairness rights were the plaintiffs entitled?
Mr. Justice Le Dain in Cardinal, at page 654 confirmed that the specific procedural rights that will discharge the duty of fairness depend on the context of the case:
The question, of course, is what the duty of procedural fairness may reasonably require of an authority in the way of specific procedural rights in a particular legislative and administrative context and what should be considered to be a breach of fairness in particular circumstances.
To answer the above question, Mr. Justice Dickson [as he then was] in Homex Realty and Development Co. Ltd. v. Corporation of the Village of Wyoming, [1980] 2 S.C.R. 1011, at pages 1051-1052, provides the guidance that it is first necessary to decide where on the spectrum a particular case lies:
In Martineau it was said that review by certiorari was available whenever a public body has power to decide “any matter affecting the rights, interests, property, privileges, or liberties of any person” (at p. 628). Once it is clear that rights are being affected it is necessary to determine the appropriate procedural standard that must be met by the statutory body. Above all, flexibility is required in this analysis. There is, as it were, a spectrum. A purely ministerial decision, on broad grounds of public policy, will typically afford the individual little or no procedural protection …. On the other hand, a function that approaches the judicial end of the spectrum will entail substantial procedural safeguards, particularly when personal or property rights are targetted, adversely and specifically. [Emphasis mine.]
In Homex, a village council and a land developer were embroiled in a dispute, and without notice to the developer, the council passed a by-law which seriously affected the developer’s rights in the subject-matter of the dispute. Upon deciding where on the spectrum the case lay, at pages 1052-1053, Dickson J. then stipulated which procedural safeguards should have been provided:
What we have here is not a by-law of wide and general application which was to apply to all citizens of the municipality equally. Rather, it was a by-law aimed deliberately at limiting the rights of one individual, the appellant Homex. In these circumstances, I would hold that Homex was entitled to some procedural safeguards. This does not mean that the municipality was under a duty to observe the procedures appropriate to a court of law. But, at a minimum, it was under a duty to give Homex notice of the proposed by-law and the opportunity to be heard.
In the case at bar, there was no notice to any licence holder that a current owner restriction would be on the agenda for the 3rd of May meeting when the decision was made by Bruce Turris to implement COR. And thereafter, before COR was implemented, there was no opportunity provided for licence holders to object to it separate from the whole of the IVQ [individual vessel quota] proposal and, specifically, no provision was made for the plaintiffs to object to any adverse effect COR had upon them. The HAC [halibut advisory committee] process was so flawed that it cannot be considered a means of providing procedural fairness to the plaintiffs or other licence holders adversely affected by COR, and the appeal process specifically excluded the impact of COR as a consideration. On these facts, at a minimum, under what duty was the Minister?
In my opinion, at the very least, the Minister had a duty to provide those adversely affected by the current owner restriction proposal the right to be heard, either through hearings or written submissions before it was implemented. Because the plaintiffs did not have the opportunity to exercise this procedural fairness right, I find that there was a breach of natural justice.
(2) Did the Minister act for an improper motive?
As found, the current owner restriction is discriminatory. The defendants argue that even if COR is discriminatory, the Minister did not make an error which caused him to leave or exceed his jurisdiction. In this respect, the defendants argue that the test for such an error is that cited in Lacewood Development Company v. City of Halifax and Provincial Planning Appeal Board (1975), 12 N.S.R. (2d) 692 (C.A.), where MacKeigan C.J. states, at page 708:
Wrongful discrimination involves two elements, both of which must be present before a bylaw should be condemned on this ground:
(1) The bylaw must discriminate in fact. To use the words of Middleton, J., in the “classic definition”, bylaws discriminate if they “give permission to one and refuse it to another”.
(2) The factual discrimination must be carried out with the improper motive of favouring or hurting one individual and without regard to the public interest.
On this authority, I find that to meet the test for wrongful discrimination an act must discriminate in fact, and this discrimination must be carried out with the motive of favouring or hurting one individual and without regard to the public interest. If these latter two features are present, the motive can be termed improper.
In order to extend the test further, however, the defendants have asked me to consider Lacewood in context with an earlier decision of the Supreme Court of Canada which it follows, being Scarborough, Township of v. Bondi, [1959] S.C.R. 444. At page 706 of Lacewood, MacKeigan C.J. makes the following observation:
In my respectful opinion Bondi lays at rest the idea that a court can presume to interfere with an otherwise valid enactment of a municipality or, in this case, of a planning appeal board, merely because it treats one person differently than another. Undoubtedly “arbitrary or unjust discrimination” (Newcombe, J., in Read supra) can invalidate a by-law, but such discrimination I conceive occurs only when a bylaw favouring or hurting an individual has been passed in bad faith for that purpose and without regard to the public interest.
As a result of this observation, I have been urged to interpret MacKeigan C.J.’s words “improper motive” in his two-part test as meaning “bad faith”.
MacKeigan C.J.’s observation is a restatement of the following sentence in Bondi [Bondi, Re and The Township of Scarborough, [1957] O.W.N. 257 (H.C.)] found, at page 260 of that case:
In a case of this kind I think the matter must be approached from the point of view of whether or not the Municipal Council in passing the By-law acted in good faith in the public interest or acted to promote some private interest.
I believe that the correct interpretation of this sentence from Bondi is that in judging the decision of a municipal council it is necessary to see if one or other of two options exist; good faith in the public interest, or the promotion of some private interest. Thus, I think that MacKeigan C.J.’s observation is a misinterpretation of the sentence in Bondi and I do not find, therefore, that his words can be given the weight the defendants have asked me to place on them.
I am, however, willing to judge the current owner restriction according to both the two-part test provided by MacKeigan C.J. in Lacewood, and the options test from Bondi.
As I have found, the purpose for implementing COR was to discriminate against some licence holders in order to benefit, and thus gain the support of, those who held the self-interest reflected by Mike Bazilli. On the Bondi test, there is no doubt that the decision was made to promote a private interest. On the Lacewood test, there is no question that the decision is discrimination in fact. There is also no question that the motive for making the decision was to favour old and hurt new entrants to the fishery. The only question that remains is whether doing so was without regard to the public interest.
I suppose it can be said that, with regard to the public interest, the ends of getting the IVQ formula implemented, including the current owner restriction, justify the means of promoting a private interest through a discriminatory decision. But, in my opinion, this argument does not reflect the values that most Canadians expect of the Government of Canada.
As a representative of the Government of Canada, Mr. Turris was conducting the quota system initiative to act in the best interests of not only the fishery but also the licence holders as those most affected. From this standpoint, I would expect that he would be cautious to ensure that the greatest care possible be taken to protect licence holders’ interests in the radical change contemplated. I would think that if one licence holder was aggrieved by this change that this should be cause for great concern.
From this point of view, I would expect Bruce Turris to have shunned any suggestion that would benefit some licence holders to the detriment of others, particularly when the benefit derived would be based in pure self-interest, or greed, to uncut the language.
He did not do this, but rather turned from facilitator of the ideas of licence holders to an advocate for a certain group who would personally benefit by the COR decision reached. As I have said, Bruce Turris should have known that the “democratic process” which he designed was unreliable. Thus, he should have been extremely careful in agreeing to, much less advocating, something which was so much in the self-interest of the few at the table on the 3rd of May when so many were outside with absolutely no knowledge of what was being decided.
Bruce Turris should have listened to the strong statements of concern made by Art Sterrit, who spoke not only on behalf of Aboriginal fishers, but really also on behalf of the then unidentified 44 licence holders who would be detrimentally affected by the decision. This objection alone should have caused him to pause to reflect, to get the information and statistics requested, to have adjourned the meeting then in its eleventh hour, to have consulted his superiors and possibly the Minister on the precise details of COR before anything was done, and then to have reconvened HAC after this careful analysis and expressed the concerns of DFO, if there were any.
But most of all, he should have consulted with those licence holders who would be detrimentally affected and given their opinions on the subject much greater weight than those of Mr. Bazilli and others who adopted his opinion.
The decision to implement the current owner restriction should not have been made as it was because it was remarkably unfair and unequal to do so. I find the paramount public interest in this case to be enforced is the principle that public officials must be scrupulously fair and equal in their decision making. Against this standard, unfortunately, the decision to implement COR was very unprincipled. On the whole of the evidence, therefore, I am left with no doubt that the decision was made without regard to the public interest.
I, therefore, find that the current owner restriction fails both the Lacewood and Bondi tests. Accordingly, I find that in implementing COR, the Minister acted for an improper motive. As a result, he left or exceeded his jurisdiction.
VI
CONCLUSION
(A) What relief should be granted?
As found, the Minister made one jurisdictional error in the narrow sense and two which caused him to leave or exceed his jurisdiction. As a result, I have no hesitation in granting the primary relief claimed by the plaintiffs, being a declaration that the Minister’s decision in 1990 to implement the current owner restriction is unlawful, and I so declare. As a result, on the basis of Lord Reid’s decision in Anisminic Ltd. v. Foreign Compensation Commission [[1969] 2 A.C. 147 (H.L.)] as quoted by Jones and de Villars above, I declare the decision to implement the current owner restriction is a nullity.
It is important to note that the powers of the Minister under section 43 of the Act were made specific by regulation in February, 1993,[5] and now the Minister’s authority is limited by subsection 22(1) of that Regulation which reads:
22. (1) For the proper management and control of fisheries and the conservation and protection of fish, the Minister may specify in a licence any condition that is not inconsistent with these Regulations or any of the Regulations listed in subsection 3(4) and in particular, but not restricting the generality of the foregoing, may specify conditions respecting any of the following matters:
(a) the species of fish and quantities thereof that are permitted to be taken or transported;
The quota system, including the current owner restriction has been continued since 1990 under a succession of ministers acting under both section 43 of the Act and subsection 22(1) of the current Regulations. Because the wording of the two provisions is virtually identical, I find that the limits of the Minister’s jurisdiction are the same under each authority. Thus, since the 1990 decision to implement the current owner restriction is unlawful, and is therefore a nullity, I declare that each similar decision made up to the present day is also unlawful and is also a nullity.
As set out in the overview above, by agreement, the issues to be decided at trial have been split into two parts. The trial days to date have focussed on the issue of whether the decision to implement the current owner restriction is unlawful. Since I have decided for the plaintiffs on this issue, the trial must continue in order to determine what further relief should be granted to them as a result.
I request both Mr. Smith and Mr. Partridge to work with the Registrar to allow me to set a mutually agreeable date for the continuation of the trial.