A-590-78
Shell Canada Limited (Applicant)
v.
Minister of Energy, Mines and Resources and
Petroleum Compensation Board (Respondents)
Court of Appeal, Jackett C.J., Le Dain J. and
MacKay D.J.—Toronto, April 25 and 26; Ottawa,
June 27, 1979.
Judicial review — Jurisdiction — Petroleum Compensation
Board decision resulting in recalculation of amount of com
pensation and payment of an amount less than the sum
originally approved — Whether the Board's decision is
administrative or quasi-judicial — Whether Court has juris
diction to review — If the Court has jurisdiction, whether or
not the Board has the power to revise its determination of the
amount payable — Appropriation Act No. 1, 1974, S.C. 1974,
c. 1, Schedule, Vote 11b — Appropriation Act No. 3, 1974,
S.C. 1974-75-76, c. 2, Schedule B, Vote 52a — Petroleum
Administration Act, S.C. 1974-75-76, c. 47, ss. 67, 70, 72(1),
73, 75, 76, 78 — Imported Oil and Petroleum Products
Compensation Regulations, SOR/74-232, s. 3(1) — Oil Import
Compensation Regulations, SOR/74-627, ss. 4(1), 6(4),(5) —
Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 28.
This is a section 28 application to set aside a decision of the
Petroleum Compensation Board whereby the Board re-calculat
ed the claim of the applicant previously approved by the Board
and authorized a lesser payment in respect of the claim. The
problem raised by this application arises out of the operation of
a statutory scheme for "import compensation" payments to
refiners and other importers of crude oil and petroleum prod
ucts. The issues are whether the authorization by the Board of
the payment of compensation in an amount determined by the
Board in accordance with the Regulations is a decision required
by law to be made on a judicial or quasi-judicial basis, and if it
is, whether the Board had the power to revise its determination
of the amount payable.
Held, the application is dismissed.
Per Jackett C.J.: Whether the Board's decision was quasi-
judicial or merely administrative depends on whether the Board
at the original payment stage had power to adjudicate on
claimant's entitlement or was only performing an administra
tive function involving pre-payment procedures. An eligible
importer is, subject to the various statutory conditions prece
dent, entitled to be paid import compensation by reason of a
quantity of petroleum in an amount to be determined in
accordance with the Regulations. The Board, after satisfying
itself that a claimant is an eligible importer who is so entitled to
import compensation in a certain amount, is to authorize
payment of that amount. The payment follows as a matter of
course. This section 28 application must be dismissed for lack
of jurisdiction in this Court for the decision attacked is not one
required by law to be made on a judicial or quasi-judicial basis.
Per Le Dain J.: Although the decision is of a quasi-judicial
nature and as such subject to the review of the Court, the
application must be dismissed on the ground that the Board,
pursuant to section 76 of the Act and section 9 of the Regula
tions, had the authority to make the reassessment. A determi
nation by the Board of the amount of import compensation to
be authorized is a condition of entitlement to a particular
amount of compensation. It is not merely an administrative
application of statutory provisions and regulations which them
selves create an entitlement to a particular amount of compen
sation. The subject-matter of the Board's decision, the criteria
or conditions that are to be applied and the effect of the
decision are such as to make the decision one which must be
made on a judicial or quasi-judicial basis. Section 76 of the Act
provides for the right of the Crown to recover an amount to
which an importer is not entitled, and section 9 of the Regula
tions provides for an undertaking by the importer to permit the
Board to examine and copy material related to a payment and
to repay the Receiver General any amount to which he is not
entitled. It is a necessary implication of these provisions that, as
a statutory authority which must determine the amount to be
paid as compensation, the Board has the power, after a pay
ment has been authorized and made, to determine that an
importer has been paid an amount to which he is not entitled.
APPLICATION for judicial review.
COUNSEL:
D. K. Laidlaw, Q.C. and M. Royce for
applicant.
E. A. Bowie and P. Barnard for respondents.
SOLICITORS:
McCarthy & McCarthy, Toronto, for appli
cant.
Deputy Attorney General of Canada for
respondents.
The following are the reasons for judgment
rendered in English by
JACKETT C.J.: This is a section 28 application to
set aside a decision of the Petroleum Compensa
tion Board made on or before April 25, 1978,
whereby the Board re-calculated the claim of the
applicant numbered SHL-054 previously approved
by the Board, and purported to authorize payment
in respect of the claim in the amount of $28,788
less than the amount originally approved by the
Board with respect to the claim.
Claim SHL-054 is one of some 38 claims in
respect of which the relevant facts are the same
and there is a similar section 28 application in
respect of each of the other claims. The disposition
of those section 28 applications will follow the
disposition of this section 28 application (herein-
after referred to as "the section 28 application").
The Board referred to in the section 28 applica
tion was created, under the name the "Energy
Supplies Allocation Board", by the Energy Sup
plies Emergency Act, chapter 52 of the Statutes of
Canada 1973-74 (assented to on January 14,
1974), the long title of which reads:
An Act to provide a means to conserve the supplies of
petroleum products within Canada during periods of national
emergency caused by shortages or market disturbances
affecting the national security and welfare and the economic
stability of Canada, and to amend the National Energy
Board Act
That statute provides, inter alla, for allocation
programmes to be created by the Governor in
Council (sections 11(1) and 19(1)) and contem
plates that they will be administered by the Board
"under the instructions of the Governor in Coun
cil" (section 10(1)). While the relevant part of the
statute was temporary in nature (section 37), in so
far as the constitution of the Board is concerned, it
was subsequently extended (section 68 of the
Petroleum Administration Act) and the name of
the Board was changed to "Petroleum Compensa
tion Board" by section 7 of chapter 24 of the
Statutes of Canada 1978 which came into force on
April 20, 1978. The 1974 Act does not appear to
confer on the Board any powers to be exercised on
a judicial or quasi-judicial basis and does not
appear to have any bearing on the problems raised
by this application except that it created the
Board.'
' That the Board was intended to be a purely administrative
agency would seem to be indicated by section 10, which
required that the Board shall act under the "instructions" of
the Governor in Council and "report" to the Minister of
Energy, Mines and Resources. A review of modern legislation
creating bodies called Boards will show that the word "Board"
has not infrequently been used with reference to a purely
administrative agency created to carry on some branch of
government work intended to be temporary or some branch of
government work intended to be carried on in accordance with
procedures less formal than those applicable to ordinary gov
ernment departments (e.g., war contract boards and harbour
administration boards). The use of the word Board does not
necessarily imply a tribunal with powers to adjudicate or to
create (grant) rights.
The problem raised by this section 28 applica
tion arises out of the operation of a statutory
scheme for "import compensation" payments to
refiners and other persons who import crude oil
and petroleum products, which scheme is author
ized by Votes constituting parts of various appro
priation Acts and the Petroleum Administration
Act, chapter 47 of the Statutes of Canada 1975.
The scheme appears to be designed to provide
compensation for maintaining certain levels of
prices for petroleum products for a period begin
ning with 1974. While I do not propose to review
the provisions that so indicate, as it appears to me,
the various statutes and regulations confer a statu
tory right or entitlement to compensation and do
not merely authorize ex gratia payments to be
made in accordance with an arbitrary discretion.
This view is basic to the conclusion that I have
reached.
I propose to refer to the highlights of the history
of the legislation to the extent necessary, in my
view, to consider the problem that has to be decid
ed on this section 28 application.
The scheme was originally authorized by Vote
1 1 b under the heading "ENERGY, MINES AND
RESOURCES" in the Schedule to Appropriation
Act No. 1, 1974, S.C. 1974, c. 1 (assented to
March 28, 1974), which vote reads:
11b Mineral and Energy Resources—Payments, in accordance
with and subject to regulations made by the Governor in
Council, to refiners and other persons who import crude oil
and petroleum products, as prescribed in the regulations
(a) from outside Canada,
(b) for consumption within Canada,
such payments being for the restraint of prices of petroleum
products to consumers during the period commencing on
January 1, 1974 and ending on March 31, 1974, primarily in
the Atlantic provinces, Quebec and that part of Ontario east
of the line known as the Ottawa Valley line 240,000,000
Pursuant to the authority contained therein, the
Governor in Council (P.C. 1974-806 dated April 9,
1974) made the Imported Oil and Petroleum
Products Compensation Regulations [SOR/74-
232].
Section 3(1) of those Regulations reads:
3. (1) Upon application therefor to the Minister by an
eligible importer who establishes that he qualifies for import
compensation by reason of the purchase by him of a quantity of
petroleum, the Minister may, subject to these Regulations,
authorize the payment to the eligible importer of import com
pensation pursuant to these Regulations in an amount deter
mined by the Minister in respect of that purchase of petroleum.
An "eligible importer" is defined (sections 2 and
4) to be a person who, inter alia, "in the period
from January 1, 1974 to March 31, 1974" import
ed "petroleum into Canada ...". Section 5 pro
vides that the amount of import compensation that
may be authorized by the Minister to be paid to an
eligible importer "shall be the aggregate, as deter
mined by the Minister" of the amounts described
therein. Section 9 makes it a condition precedent
to any such payment that the eligible importer
undertake, inter alia, that "he will repay to the
Receiver General any amount paid ... as or on
account of any import compensation to which he
was not entitled, or that is not authorized [by or]
under these Regulations." [The italics are mine.]
For a period, the scheme was authorized by
Governor in Council Warrants (section 23 of the
Financial Administration Act, R.S.C. 1970, c.
F-10).
Schedule B to the Appropriation Act No. 3,
1974, S.C. 1974-75-76, c. 2 (assented to on Octo-
ber 30, 1974) contained Vote 52a under the head
ing "ENERGY SUPPLIES ALLOCATION BOARD",
which reads:
52a Energy Supplies Allocation Board—Payments, in accord
ance with and subject to regulations made by the Governor
in Council, to refiners and other persons who import crude
oil and petroleum products, as prescribed in the regulations,
(a) from outside Canada,
(b) for consumption within Canada,
such payments being for the restraint of prices of petroleum
products to consumers primarily in the Atlantic provinces,
Quebec and that part of Ontario east of the line known as the
Ottawa Valley Line, and to authorize the Energy Supplies
Allocation Board
(c) from and after November 1, 1974 to administer the said
regulations, and
(d) to perform such other duties and functions in connection
with the said regulations and the Petroleum Products Com-
pensation Program as the Minister may require ....
Pursuant to the authority contained therein, the
Governor in Council (P.C. 1974-2419 dated
November 5, 1974) made regulations, effective
November 5, 1974, called Oil Import Compensa
tion Regulations [SOR/74-627]. Section 4(1) of
these Regulations reads:
4. (1) Upon application therefor to the Board by an eligible
importer who establishes that he qualifies for import compensa
tion by reason of the purchase by him of a quantity of
petroleum, the Board may, subject to these Regulations,
authorize the payment to the eligible importer of import com
pensation pursuant to these Regulations in an amount deter
mined by the Board in respect of that purchase of petroleum.
An eligible importer under these Regulations must
be a person who imports "on or after November 1,
1974" (section 5). These Regulations follow the
general scheme of the earlier Regulations (sub-
stituting the Board for the Minister) but section 6,
which is the counterpart of section 5 of the old
Regulations, contains additional subsections, read
ing:
(4) Where an eligible importer's contractual arrangements
are such that it is impossible to measure the amounts referred
to in paragraph 3(a), (b) or (c), the Board may deem those
amounts to be such amounts as it thinks fit.
(5) In addition to applying to applications for compensation
under these Regulations, subsections (3) and (4) shall apply to
all applications for compensation in respect of quantities of
petroleum imported into Canada by persons who were eligible
importers under the Imported Oil and Petroleum Products
Compensation Regulations or under guidelines made for the
purposes of Special Warrants issued by the Governor in Coun
cil under Orders in Council P.C. 1974-1176 of May 22, 1974,
P.C. 1974-1519 of June 27, 1974, P.C. 1974-1697 of July 25,
1974, P.C. 1974-1943 of August 28, 1974 and P.C. 1974-1973
of September 4, 1974; and to the extent that the amount of
compensation paid or payable to any such person pursuant to
the said Regulations or guidelines is less than the amount of
compensation calculated according to subsections (3) and (4),
the Board may authorize the payment of additional or other
compensation to such persons to the extent of the difference.
Section 9 of these Regulations requires inter alia
the same undertaking as that required by the same
section in the earlier Regulations.
On June 19, 1975, the Petroleum Administra
tion Act, chapter 47 of the Statutes of Canada
1975, was assented to. Part IV of this Act is
headed "COST COMPENSATION". The more impor
tant provisions thereof read:
Administration
67. Subject to the regulations, the Energy Supplies Alloca
tion Board shall administer the compensation programs estab
lished by this Part and shall perform such other duties and
functions as the Minister may assign to it.
70. The Board shall act under the directions of the Minister
and report to the Minister from time to time upon its activities
under this Part.
DIVISION I
Importation of Petroleum
72. (1) Upon application therefor to the Board by an eli
gible importer who establishes that he qualifies for import
compensation by reason of the purchase by him of a quantity of
petroleum, the Board may, subject to this Division and the
regulations thereunder, authorize the payment to the eligible
importer of import compensation pursuant to this Division in an
amount determined by the Board in respect of that purchase of
petroleum.
73. The amount of import compensation that may be author
ized by the Board to be paid to an eligible importer in respect
of a quantity of petroleum shall be determined by the Board in
accordance with the regulations.
75. Where the Board authorizes the payment of any import
compensation pursuant to this Division, or the payment of any
amount on account of any such compensation, the amount so
authorized shall be paid on the requisition of the Minister.
76. Where a person has received a payment under this
Division as or on account of any import compensation to which
he is not entitled or in an amount in excess of the amount to
which he is entitled, the amount thereof or the excess amount,
as the case may be, may be recovered from that person at any
time as a debt due to Her Majesty in right of Canada or may
be retained in whole or in part out of any subsequent compen
sation payable to that importer under any provision of this Act.
The transitional provision in section 78 is of
special importance. It reads:
78. (1) Any payment to a person made or authorized by any
regulations made pursuant to Energy, Mines and Resources
Vote No. 11b of Appropriation Act No. 1, 1974 in respect of
the importation of a quantity of petroleum shall be deemed to
have been made or authorized, as the case may be, as import
compensation in respect of the importation of that quantity of
petroleum and all the provisions of this Division apply mutatis
mutandis in respect thereof.
(2) Any payment to a person made or authorized under any
guidelines or regulations made, respectively,
(a) for the purposes of Special Warrants issued by the
Governor in Council for
(i) $200,000,000 on May 22nd, 1974 under Order in
Council P.C. 1974-1176,
(ii) $80,000,000 on June 27th, 1974 under Order in Coun
cil P.C. 1974-1519,
(iii) $50,000,000 on July 25th, 1974 under Order in Coun
cil P.C. 1974-1697,
(iv) $70,000,000 on August 28th, 1974 under Order in
Council P.C. 1974-1943, or
(v) $70,000,000 on September 4th, 1974 under Order in
Council P.C. 1974-1973;
(b) pursuant to Energy Supplies Allocation Board Vote No.
52a of Appropriation Act No. 3, 1974, Statutes of Canada
1974-75;
(c) pursuant to Energy Supplies Allocation Board Vote No.
53c of Appropriation Act No. 5, 1974, Statutes of Canada
1974-75; or
(d) pursuant to Energy Supplies Allocation Board Vote No.
65 of Appropriation Act No. 2, 1975, Statutes of Canada
1974-75
in respect of the importation of a quantity of petroleum shall be
deemed to have been made or authorized, as the case may be,
as import compensation in respect of the importation of that
quantity of petroleum and all the provisions of this Division
apply mutatis mutandis in respect thereof.
(3) Where an eligible importer qualifies for import compen
sation in respect of a quantity of petroleum loaded in the period
commencing on January 1, 1974 and ending on the day
immediately preceding the commencement of this Part that is
delivered to the importer in Canada or at a point of entry for
Canada after December 31, 1974, the Board may authorize
import compensation to the importer for that quantity of
petroleum in the same amount that he would have received had
the petroleum been so delivered to him and import compensa
tion authorized to be made before that day.
Between February 6, 1975 and March 6, 1976,
the applicant submitted to the Board 38 claims
with respect to crude oil that it had imported
between January 1, 1974 and March 11, 1975.
These claims initiated the matters that ultimately
gave rise to the decision attacked by the thirty-
eight section 28 applications now under consider
ation. While the claims as submitted were not
based on the method of calculation set out in the
various Regulations, the Board, on April 24, 1975,
decided to accept the method that had been adopt
ed in their preparation and the claims were, there
fore, approved and paid.
Subsequently, after the Petroleum Administra
tion Act came into force, the Board became per
suaded that, in approving the 1974-75 claims, it
had not determined the amounts authorized in
accordance with the Regulations, and it purported
to "rework" each claim and determine the amount
payable with regard thereto at such amounts that
the aggregate of the amounts that had been paid in
respect of the thirty-eight claims exceeded the
newly determined amounts by over $1,000,000.
Each of the thirty-eight section 28 applications
is an application to set aside the "decision" of the
Board whereby it purports to fix the amount pay
able under one of those claims at an amount less
than that which was originally determined and
paid with regard thereto.
It is common ground that this section 28
application must be dismissed for lack of jurisdic
tion in this Court unless the decision attacked
thereby was a decision that was required by law to
be made on a judicial or quasi-judicial basis. 2 I
have come to the conclusion that it must be dis
missed on that ground and I will now give my
reasons for that conclusion.
By virtue of section 78 of the Petroleum
Administration Act, the payments authorized and
made in respect of the 1974-1975 importations are
"deemed to have been made or authorized, ... as
import compensation ..." and all the provisions of
Division I of Part IV of that Act including
section 76 "apply mutatis mutandis in respect
thereof." Section 76 is repeated here, for conve
nience, viz.:
76. Where a person has received a payment under this
Division as or on account of any import compensation to which
he is not entitled or in an amount in excess of the amount to
which he is entitled, the amount thereof or the excess amount,
as the case may be, may be recovered from that person at any
time as a debt due to Her Majesty in right of Canada or may
2 See section 28(1) of the Federal Court Act, R.S.C. 1970
(2nd Supp.), c. 10, which reads:
28. (I) Notwithstanding section 18 or the provisions of
any other Act, the Court of Appeal has jurisdiction to hear
and determine an application to review and set aside a
decision or order, other than a decision or order of an
administrative nature not required by law to be made on a
judicial or quasi-judicial basis, made by or in the course of
proceedings before a federal board, commission or other
tribunal, upon the ground that the board, commission or
tribunal
(a) failed to observe a principle of natural justice or
otherwise acted beyond or refused to exercise its
jurisdiction;
(b) erred in law in making its decision or order, whether or
not the error appears on the face of the record; or
(c) based its decision or order on an erroneous finding of
fact that it made in a perverse or capricious manner or
without regard for the material before it.
be retained in whole or in part out of any subsequent compen
sation payable to that importer under any provision of this Act.
It is clear that what the Board did here in
respect of each claim was take action to show that
it had concluded that the applicant had received
an amount deemed to be under Division I as or on
account of import compensation in excess of the
amount to which the applicant was "entitled". The
question, as I see it, is whether that action
(a) was a purely administrative operation
whereby there was shown on the government
books an indebtedness from the applicant to the
government, the existence of which indebtedness
as a legal liability would depend upon the
application of the appropriate regulations to the
facts by any court in which it had to be estab
lished, or
(b) was the exercise of a statutory power (or an
assumed statutory power) to adjudicate the
amount to which the claimant was "entitled" in
respect of the claim, in which event there would
have been a decision by the Board upon which
the Government could rely in court proceedings
unless the decision had been annulled or was
found to be a nullity.
I see that as the question to be decided (in
considering whether this is a section 28(1) matter)
because
(a) if what is attacked was a purely administra
tive operation that would have to be supported
on the facts and law if it came into question in
court proceedings, the Board's action would
have decided nothing except that a claim was
being asserted on behalf of the government; and,
in my view, it would not be a case where the law
would imply that the decision involved has to be
made on a judicial or quasi-judicial basis, and
(b) if it was, or purported to be, an exercise of a
statutory power to adjudicate the claimant's
entitlement, it would be a case where the law
would imply a requirement that the decision be
made on a judicial or quasi-judicial basis.
(In my opinion, such distinction follows so clear
ly from the decided cases that this view does not
require to be developed.)
The answer to that question, in my opinion,
depends on whether the Board, in processing the
1974-75 claims, had exercised a power to adjudi
cate on the claimant's entitlement or whether it
had merely carried out pre-payment procedures
required before payments can be made out of
public monies in respect of claims for "import
compensation", of the same character as adminis
trative steps that must be taken before any pay
ment can be made out of government monies in
respect of a claim for payment in respect of what
is asserted and accepted as a legal liability of the
government. (In other words: Did the Board at the
original payment stage have power to adjudicate
or was it only performing an administrative
function?)
In my view, a conclusion has to be reached on
the latter question because:
(a) if the Board, in the first instance, exercised
a power to adjudicate the applicant's entitle
ment, a subsequent action by the Board whereby
the amount thereof was varied, would operate to
change the applicant's entitlement; and
(b) if the Board, in the first instance, did no
more than satisfy itself that there was an
amount payable in respect of import compensa
tion and authorize payment accordingly (with-
out exercising any power to adjudicate as to the
applicant's entitlement), a subsequent action
setting up a claim for repayment of an overpay-
ment would have no effect on the claimant's
legal entitlement.
I approach the problem by first examining the
scheme as it was put into statutory form by the
Petroleum Administration Act on June 19, 1975.
Looking at the Board's function with regard to
authorizing payments of import compensation
under the Petroleum Administration Act, the first
thing to be noted is that Part IV under the heading
"ADMINISTRATION" provides that the Board shall
"administer" the compensation programmes (sec-
tion 67) "under the directions of the Minister"
(section 70). Secondly, it is to be noted that, upon
application, the Board may "authorize" payment
of import compensation (section 72(1)) and that
where the Board authorizes payment "the amount
so authorized shall be paid on the requisition of
the Minister" (section 75). These provisions, in my
view, point to a purely administrative function. On
the other hand, Division I says that the amount
authorized shall be "determined" by the Board in
accordance with the Regulations (section 73) and
the use of the verb "determine" suggests that the
Board is to exercise a statutory power of fixing
(adjudicating) the amount of the payment. The
framing of the provisions in question so that the
statutory entitlement to import compensation is
expressed in language that also sets out the rules
for processing claims for payment thereof is con
fusing and makes the role of the Board ambiguous.
The better view, as I read the provisions in ques
tion, is that
(a) an eligible importer is, subject to the various
statutory provisions precedent, entitled to be
paid import compensation by reason of the pur
chase of a quantity of petroleum in an amount
to be determined in accordance with the Regula
tions, and
(b) the Board, after satisfying itself that a
claimant is an eligible importer who is so en
titled to import compensation in a certain
amount, is to authorize payment of that amount,
which payment follows as a matter of course.
While on a cursory reading of section 72(1), the
Board would seem to have an express power to
"determine" the amount of compensation but no
express power to "determine" whether the appli
cant is an "eligible importer" or has qualified for
import compensation, reading the provisions as a
whole, I am of the view that the Board has a
responsibility, before authorizing a payment, to
satisfy itself concerning all conditions precedent to
that payment and that what it is required to
"determine" under the Regulations is the amount
of import compensation that it can authorize to be
paid 3 and not the amount of the applicant's enti
tlement to import compensation. In other words, in
my view, an applicant who satisfies the conditions
is entitled to an amount to be determined in
accordance with the Regulations and, if the matter
gets before the courts in the event of a dispute as
to the amount, the Court is not bound by the
Board's determination.
3 See section 73, which provided that "The amount of import
compensation that may be authorized by the Board to be paid
... shall be determined by the Board in accordance with the
regulations." [The italics are mine.]
This view is the only view of the matter that I
can see that leaves any practical scope for the
operation of section 76 as an integral part of the
ordinary operation of this statutory scheme. That
provision provides inter alia that, where a person
has received "a payment under this Division ... in
an amount in excess of the amount to which he is
entitled", the excess may be recovered as a debt
due to Her Majesty (i.e., by an ordinary action in
the courts). However, the only amount that may
be paid, "under this Division", is an amount
authorized by the Board. It follows, that, if the
Board's authorization is, in effect, an adjudication
of the claimant's entitlement, there can never be a
payment "under this Division" that is "in excess of
the amount to which he is entitled". I cannot
accept as a reasonable interpretation of section 76
that it was made a part of the statutory scheme to
provide for the remote case of proceedings having
been taken to have a court set aside an adjudica
tion by the Board awarding a claimant an exces
sive amount. The possibility of such proceedings
by the claimant is, I should have thought, too
unlikely to inspire such a provision and the possi
bility of such proceedings instituted by a govern
ment agency or a third person would seem to be
equally unlikely. Section 76 would-have an obvious
role to play, even if the Board's authorization did
involve an adjudication as to entitlement, if the
Board had been given authority to reconsider such
adjudication. If that had been the statutory intent,
I should have thought that the necessity of
expressly conferring authority to reconsider would
have been obvious; and, that being so, I am
inclined to agree with the applicant that it cannot
be implied.
It is not inappropriate to add that I am
influenced in my interpretation of this ambiguous
aspect of this statutory scheme by the fact that, as
it seems to me, the view that I have adopted is the
one that is best designed to achieve the statutory
intent as I understand it. In my view, the provi
sions in question create a legal right to compensa
tion and define such right in detail. The general
rule is that disputes as to legal rights are decided
by the courts. Special tribunals are set up to
adjudicate on matters that cannot be made the
subject of precise legal definition or that, for some
other reason, call for the exercise of a non-legal
judgment. I see no reason why this legal entitle-
ment calls for a special tribunal. Moreover, while
the applicant would, if the Board has adjudicative
powers, have an extra basis for maintaining its
entitlement at the higher level (because there
would be no authority to reduce it even if the
Board's original decision awarded an amount in
excess of that provided for by the Regulations), a
claimant would have no remedy, if the Board has
such powers, where there is a grievance based on
the contention that the Board had authorized less
than what was authorized by the Regulations.
While there are differences between the wording
of the provisions of the respective Regulations and
the provisions of the Petroleum Administration
Act that bear on this problem, I do not find any
differences that lead me to a different conclusion
with regard thereto when it arises with reference
to a claim that was originally allowed under one or
other of the different sets of Regulations.
For the above reasons, I am of the view that the
Board had no power to adjudicate 4 the applicant's
entitlement in respect of the claim and that there
was, therefore, no legal requirement that its deci
sion to-re-calculate that entitlement be made on a
judicial or quasi-judicial basis.
I am, therefore, of the view that the section 28
application should be dismissed for lack of juris
diction and I do not propose to discuss the other
questions that were raised by the parties, which
questions, if I am right on the jurisdiction ques
tion, are academic.
* * *
MACKAY D.J.: I agree.
* * *
The following are the reasons for judgment
rendered in English by
LE DAIN J.: The applicant attacks a decision of
the Petroleum Compensation Board purporting to
be made under the Petroleum Administration Act,
S.C. 1974-75-76, c. 47 and the Oil Import Com-
4 I have used the word "adjudicate" throughout because, in
my view, what we are considering is a precisely defined right
concerning which disputes have to be settled. What is involved
is not, in my view, an imprecise right to claim compensation
that has to be granted.
pensation Regulations of November 5, 1974
whereby the Board recalculated the amount of
import compensation payable to the applicant in
respect of petroleum imported by it and authorized
payment of a lesser amount than that which had
been previously authorized by the Board when it
was the Energy Supplies Allocation Board as
established by the Energy Supplies Emergency
Act, S.C. 1973-74, c. 52.
The legislative background has been set out in
the reasons of the Chief Justice. By reason of
section 78 of the Petroleum Administration Act
the compensation that was originally authorized
by the Board is deemed to have been authorized as
import compensation under the provisions of the
Act, and all the provisions of Division I of Part IV
thereof apply to such authorization mutatis
mutandis. In so far as the power of the Board to
determine compensation is concerned, the central
provision of the Act is section 72(1), which reads:
72. (1) Upon application therefor to the Board by an eli
gible importer who establishes that he qualifies for import
compensation by reason of the purchase by him of a quantity of
petroleum, the Board may, subject to this Division and the
regulations thereunder, authorize the payment to the eligible
importer of import compensation pursuant to this Division in an
amount determined by the Board in respect of that purchase of
petroleum.
Section 73 of the Act provides:
73. The amount of import compensation that may be author
ized by the Board to be paid to an eligible importer in respect
of a quantity of petroleum shall be determined by the Board in
accordance with the regulations.
The regulations that the Board was required to
apply to the application for compensation in the
present case were the Oil Import Compensation
Regulations made by the Governor in Council on
November 5, 1974 pursuant to Vote 52a of the
Appropriation Act No. 3, 1974 (Order in Council
P.C. 1974-2419, SOR/74-627). Section 4(1) of
the Regulations is, in so far as the function of the
Board is concerned, in terms similar to those of
s. 72 of the Petroleum Administration Act. Sec
tion 5 of the Regulations states who is an eligible
importer. One of the conditions is that the import
er or the persons for whom he imported the
petroleum must have "voluntarily maintained the
levels of prices for petroleum products obtained
from imported petroleum at the levels suggested
from time to time by the Government of Canada."
Essentially the same condition is to be found in
section 72(2) of the Act. Section 6 of the Regula
tions, which is the provision that had to be applied
by the Board to determine the amount of compen
sation to be authorized, is as follows:
6. (1) The amount of import compensation that may be
authorized by the Board to be paid to an eligible importer in
respect of a quantity of petroleum shall be the aggregate, as
determined by the Board, of
(a) the amount of the allowance calculated in accordance
with subsection (3) for increased tanker bunker costs
incurred by or charged to the importer in the transportation
of that petroleum to its port of entry for Canada; and
(b) the lesser of
(i) the aggregate of
(A) any additional costs to the importer attributable to
the increase in the host government take, incurred or
deemed by the Board to have been incurred, since
November 30, 1973, and
(B) any additional costs to the importer attributable to a
change in the host government participation, or deemed
by the Board to have been attributable to a change in
host government participation, since November 30,
1973, and
(ii) the amount of any increase in the amount of the f.o.b.
costs incurred or deemed by the Board to have been
incurred by or charged to the importer since November 30,
1973.
(2) In calculating the amount of import compensation pur
suant to subsection (1), there shall be excluded from the
quantity of petroleum
(a) any portion thereof sold or supplied for export from
Canada;
(b) any portion thereof sold or supplied to any person for use
as fuel in an aircraft or ship not registered in Canada; and
(c) any portion thereof consumed or lost in the processing or
refining of that petroleum to produce any petroleum product
referred to in paragraph (a) or (b).
(3) For the purposes of paragraph (I )(a), the amount of the
allowance for increased tanker bunker costs incurred by or
charged to the importer in the transportation of a quantity of
petroleum to its port of entry for Canada is the least of
(a) the amount of any actual increase in the cost of trans
porting that quantity of petroleum over the cost of transport
ing a similar quantity imported on September 4, 1973;
(b) the amount of the increase in the cost of transporting
that quantity of petroleum attributable to the increased cost
of bunker fuel oil over the cost of transporting a similar
quantity imported on September 4, 1973; and
(e) the amount of the increase in the cost of transporting
that quantity of petroleum determined by using the method
for calculating the bunker element of freight published by
the International Tanker Nominal Freight Scale Association
and known as the Worldscale Bunker Index that, in the
opinion of the Board, produces the most equitable amount.
(4) Where an eligible importer's contractual arrangements
are such that it is impossible to measure the amounts referred
to in paragraph (3)(a), (b) or (c), the Board may deem those
amounts to be such amounts as it thinks fit.
(5) In addition to applying to applications for compensation
under these Regulations, subsections (3) and (4) shall apply to
all applications for compensation in respect of quantities of
petroleum imported into Canada by persons who were eligible
importers under the Imported Oil and Petroleum Products
Compensation Regulations or under guidelines made for the
purposes of Special Warrants issued by the Governor in Coun
cil under Orders in Council P.C. 1974-1176 of May 22, 1974,
P.C. 1974-1519 of June 27, 1974, P.C. 1974-1697 of July 25,
1974, P.C. 1974-1943 of August 28, 1974 and P.C. 1974-1973
of September 4, 1974; and to the extent that the amount of
compensation paid or payable to any such person pursuant to
the said Regulations or guidelines is less than the amount of
compensation calculated according to subsections (3) and (4),
the Board may authorize the payment of additional or other
compensation to such persons to the extent of the difference.
(6) The Board may, with respect to quantities of petroleum
imported on or after November 1, 1974, from time to time
prescribe deductions from the amount of import compensation
calculated pursuant to subsection (1) to provide an offset for
any change by the Government of Canada of the levels of prices
referred to in subsection 5(1).
The issue that led to the Board's recalculation of
the amount of import compensation payable was
the proper application of section 6 of the Regula
tions to petroleum which had been carried to the
Caribbean in large vessels and transhipped there
by smaller vessels. The Board had decided in the
first instance to determine the increased tanker
bunker costs upon the basis that the petroleum
would be deemed to have been carried for the
entire voyage in the smaller vessels. Upon receiv
ing advice that such an approach was not in
accordance with the Regulations the Board recal-
culated the amount of import compensation pay
able in an amount less than that which had origi
nally been authorized and paid. The difference was
retained out of subsequent compensation payable,
purportedly in the exercise of the right conferred
by section 76 of the Petroleum Administration
Act, which reads:
76. Where a person has received a payment under this
Division as or on account of any import compensation to which
he is not entitled or in an amount in excess of the amount to
which he is entitled, the amount thereof or the excess amount,
as the case may be, may be recovered from that person at any
time as a debt due to Her Majesty in right of Canada or may
be retained in whole or in part out of any subsequent compen
sation payable to that importer under any provision of this Act.
A section 28 application attacking the exercise of
this right was dismissed for lack of jurisdiction on
the ground that it was not a decision required by
law to be made on a judicial or quasi-judicial
basis. The issue as to whether the Board did in fact
lack authority under the Regulations to make its
original determination upon the basis that it did
was not clearly put before the Court, and I express
no opinion on it. It is sufficient, I think, for
purposes of the issues that are raised by this
application that the Board made its recalculation
upon the assumption that its original determina
tion was not in accordance with the Regulations
and the importer had received an amount of com
pensation in excess of that to which it was entitled.
The issues on this section 28 application are
whether the authorization by the Board of the
payment of compensation in an amount deter
mined by the Board in accordance with the Regu
lations is a decision required by law to be made on
a judicial or quasi-judicial basis within the mean
ing of section 28 of the Federal Court Act, and if
it is, whether the Board had the power to revise its
determination of the amount payable.
On the first question I regret that I must differ
from the conclusion reached by the Chief Justice.
In my opinion a determination by the Board of the
amount of import compensation to be authorized is
a condition of the entitlement to a particular
amount of compensation. I am unable to see it as
merely an administrative application of statutory
provisions and regulations which themselves create
an entitlement to a particular amount of compen
sation. That the Board has an adjudicative func
tion is, I think, indicated by the role which its own
judgment is to play in the application of the Regu
lations. For example, paragraph (b) of subsection
6(1) of the Regulations provides for the inclusion
in the calculation to be made by the Board of costs
"deemed by the Board" to have been incurred or
to be attributable to a particular factor. Paragraph
(c) of subsection 6(3) provides that the Board shall
consider the method for calculating the bunker
element of freight that "in the opinion of the
Board, produces the most equitable amount." Sub
section 6(4) provides that "Where an eligible
importer's contractual arrangements are such that
it is impossible to measure the amounts referred to
in paragraph (3)(a), (b) or (c), the Board may
deem those amounts to be such amounts as it
thinks fit." By subsection 6(6) the Board has
power to prescribe deductions from the amount of
compensation calculated in accordance with sub
section (1) to offset a change in the price levels to
be maintained by the importer or the persons for
whom he imports the petroleum. All of this indi
cates, in my view, that the Board, as a specialized
tribunal, has been given the power to determine, in
accordance with the Regulations, the amount of
compensation that is to be paid to an importer as a
matter of legal entitlement. I do not see the Regu
lations as providing for a relatively straight-for
ward set of calculations but rather for what may
be in some cases a fairly complex determination
involving the exercise of judgment by the Board.
In view of the role to be played by the Board I do
not see how an action could be brought directly in
the courts for the recovery of a particular amount
of compensation without prior recourse to the
Board. The Board could, of course, be compelled
to exercise its authority in a particular case, and
its determination would be subject to review.
Although the Board's function is expressed as one
of determination and "authorization", the authori
zation by the Board of the payment of compensa
tion in a particular amount is, for all practical
purposes, the whole of the decision with respect to
such payment. Section 75 of the Petroleum
Administration Act provides that where the Board
authorizes payment of import compensation "the
amount so authorized shall be paid on the requisi
tion of the Minister." This is a further indication, I
think, that it is the determination and authoriza
tion by the Board that creates the entitlement to
compensation in a particular amount.
In my opinion the subject-matter of the Board's
decision, the criteria or conditions that are to be
applied, and the effect of the decision are such as
to make the decision one which must be made on a
judicial or quasi-judicial basis. It is a decision the
purpose of which is to compensate an importer for
maintaining certain price levels despite increased
costs, and it involves the application of the Regula
tions to questions of fact which lend themselves to
an adjudicative process. I am, therefore, of the
opinion that this Court has jurisdiction to enter
tain an application under section 28 of the Federal
Court Act to set aside an authorization by the
Board of the payment of import compensation in
an amount determined by it.
It is necessary, then, to consider the second issue
raised by the section 28 application: whether the
Board had jurisdiction to revise its determination
of the amount payable to the importer in this case.
Section 76 of the Act, which has been quoted
above, provides for the right of the Crown to
recover an amount to which an importer is not
entitled. Section 9 of the Regulations provides for
an undertaking by the importer to permit the
Board to examine and copy material related to a
payment and to repay to the Receiver General any
amount to which he is not entitled. It reads:
9. No payment shall be made under these Regulations to an
eligible importer unless he has
(a) undertaken in writing to the Board that
(i) he will allow any person designated by the Board to
enter any premises of the eligible importer in order to
examine and copy any record, book, paper or other docu
ment found thereon that, in the opinion of that person,
relates to the payment of import compensation to that
eligible importer, and
(ii) he will repay to the Receiver General any amount paid
to the eligible importer as or on account of any import
compensation to which he was not entitled or that is not
authorized under these Regulations; and
(b) certified in writing to the Board that
(i) all information submitted by him to the Board is
correct as to fact and fair and reasonable as to estimates,
and
(ii) except as may be permitted by the Minister pursuant
to section 8, he has complied with all the requirements of
an eligible importer set out in subsection 5(1) or (2), as the
case may be.
In my opinion it is a necessary implication of
these provisions of the Act and the Regulations
that, as the statutory authority which must deter
mine the amount to be paid as compensation, the
Board has the power, after a payment has been
authorized and made, to determine that an import
er has been paid an amount to which he is not
entitled.
For the foregoing reasons I am of the opinion
that the section 28 application must be dismissed.
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.