A-1024-82
Restrictive Trade Practices Commission and O.
Gerald Stoner (Appellants) (Respondents)
v.
Director of Investigation and Research, Combines
Investigation Act (Respondent) (Applicant)
Court of Appeal, Pratte, Urie and Ryan JJ.—
Ottawa, March 1, 2 and 7, 1983.
Combines — Director requesting subpoenas during Com
mission hearing under s. 47 — Commission refusing — Com
mission not obliged to issue subpoena on Director's demand in
s. 47 hearing — Director's main responsibility to hold in
quiries, under either s. 8 or s. 47 — S. 8 inquiry leading to s.
18 hearing under Commission's exclusive control — S. 47
inquiry more general — Director to hold initial s. 47(1)
inquiry, as if s. 8 inquiry — Only after may Commission hold
s. 47(2) hearing for further evidence — Director cannot con
duct his inquiry at Commission's hearing — Commission
controls s. 47(2) hearing — Director cannot determine evidence
— Only Commission has power to issue subpoena — Power
involves discretion, not purely administrative — Duty to avoid
unfairness and oppression — Issuance purely administrative in
courts only because of court rules — Combines Investigation
Act, R.S.C. 1970, c. C-23 (as am. by S.C. 1974-75-76, c. 76,
ss. 4, 6, 9, 25), ss. 8, 9, 10, 12, 17, 18, 19, 21, 27(1), 47 —
Inquiries Act, R.S.C. 1970, c. 1-13, ss. 4, 5.
Following a private inquiry which he conducted pursuant to
section 47 of the Combines Investigation Act, the Director
submitted to the Chairman of the Commission a statement of
the evidence collected. The Commission decided to hold public
hearings, also under section 47, to obtain further evidence. In
the course of those hearings, the Director asked the Commis
sion to issue subpoenas directed to the heads of five petroleum
companies. The Commission refused. On application by the
Director, the Trial Judge ordered the Commission and its
Chairman to comply with the Director's request. The Commis
sion and its Chairman appealed.
Held, the appeal is allowed, and the Director's application is
dismissed. The Commission is not obliged to issue a subpoena
whenever the Director, in a hearing before the Commission
under section 47, so requests. Under the Act, the main respon
sibility of the Director is to conduct inquiries. This is done
pursuant to either section 8 or section 47. A section 8 inquiry
does not directly involve the Commission, but it may result in a
situation wherein section 18 applies. Under section 18, the
Commission takes over the inquiry, and must hold a hearing.
This hearing is subject to the Commission's exclusive control;
consequently, the Director has no authority to decide what
evidence the Commission will hear. The situation is similar in
the case of a section 47 proceeding, which comprises an inquiry
of a more general nature. Under subsection 47(1), the Director
is to hold an initial, private inquiry, and to conduct it as if it
were a section 8 inquiry. After—and only after—he has com
pleted his investigation and transmitted the evidence collected
to the Commission, the Commission may decide to hold hear
ings under subsection 47(2), in order to obtain further evidence.
The Director does not have the option of conducting his inquiry
in front of the Commission, at its hearings. Accordingly, it is
the Commission which is master of those hearings, not the
Director, and thus, again, the Director cannot determine what
evidence the Commission will receive. In any event, though, the
Commission is the body with the power, pursuant to section 21,
to summon witnesses. Nowhere in the Act is the Director given
such authority. This power is not purely administrative.
Instead, it involves the exercise of discretion, the Commission
being under a duty not to use the power in an unfair or
oppressive manner. While the issuance of a subpoena is an
entirely administrative act in most courts, this is so only
because there are rules in those courts which make it such. No
comparable rules have been adopted by the Commission.
COUNSEL:
B. C. McDonald and J. M. Belanger for
appellants (respondents).
G. F. Henderson, Q.C., G. E. Kaiser and G.
N. Addy for respondent (applicant).
C. L. Campbell, Q.C. and M. E. Barrack for
cross-appellants Gulf Canada Ltd. and John
L. Stoik.
J. L. McDougall, Q.C. for cross-appellant R.
W. D. Hanbidge, President of B.P. Canada
Inc.
A. McN. Austin for C. W. Daniel, President
of Shell Canada Ltd.
SOLICITORS:
Lang, Michener, Cranston, Farquharson &
Wright, Toronto, for appellants (respond-
ents).
Gowling & Henderson, Ottawa, for respond
ent (applicant).
McCarthy & McCarthy, Toronto, for cross-
appellants Gulf Canada Ltd. and John L.
Stoik.
Fraser & Beatty, Toronto, for cross-appellant
R. W. D. Hanbidge, President of B.P. Canada
Inc.
Weir & Foulds, Toronto, for C. W. Daniel,
President of Shell Canada Ltd.
The following are the reasons for judgment
rendered in English by
PRATTE J.: This is an appeal from an order of
the Trial Division [[1983] 1 F.C. 520] directing
the Restrictive Trade Practices Commission and
its Chairman to accede to a request made by the
Director of Investigation and Research under the
Combines Investigation Act [R.S.C. 1970, c.
C-23] and issue subpoenas requiring the presidents
or chief executive officers of five petroleum com
panies to attend and give evidence in an inquiry
conducted before the Commission.
There is only one issue to be resolved: has the
Commission the duty, when an inquiry is held
before it pursuant to section 47 of the Combines
Investigation Act [as am. by S.C. 1974-75-76, c.
76, s. 25], to issue all the subpoenas that the
Director may request? The Trial Division
answered that question affirmatively. First, it held
that the responsibility for the conduct of the inqui
ry before the Commission was vested in the Direc
tor who, as a consequence, had the right to deter
mine the witnesses to be subpoenaed. Second, it
held that the issuance of a subpoena by the Com
mission was a purely administrative act which did
not involve the exercise of any discretion.
Under the Combines Investigation Act, the main
responsibility of the Director is to make inquiries.
Those inquiries are made either pursuant to sec
tion 8 or under section 47.
Section 8 [as am. by S.C. 1974-75-76, c. 76, s.
4] provides that the Director must make an inqui
ry whenever there is reason to believe that:
8.(b)...
(i) a person has contravened or failed to comply with an
order made pursuant to section 29, 29.1 or 30,
(ii) grounds exist for the making of an order by the
Commission under Part IV.1, or
(iii) an offence under Part V or section 46.1 has been or is
about to be committed ....
In those cases, the Director must inquire "into all
such matters as he considers necessary to inquire
into with the view of determining the facts." That
inquiry is conducted in private (subsection 27 (1)
[as enacted by S.C. 1974-75-76, c. 76, s. 9]) and
the Commission takes no part in it. The members
of the Commission, however, may be called upon
to make orders so as to enable the Director, in the
course of his inquiry, to compel the production of
evidence or the attendance of witnesses. Indeed,
the Director does not have the power, under the
statute, to compel the production of evidence or to
summon a witness. If the Director needs to exer
cise those powers during the course of an inquiry,
he must make an ex parte application to a member
of the Commission and obtain an order as provided
in sections 9, 10, 12 and 17.
A section 8 inquiry may lead to four possible
outcomes: the Director may realize that the matter
does not justify a further inquiry and decide to
discontinue the inquiry; he may form the view that
grounds exist for making an order under Part IV.1
of the Act, in which case he will apply for such an
order; he may refer the matter to the Attorney
General of Canada; finally, if the evidence
obtained discloses an offence under Part V, the
Director must report his findings to the Commis
sion, and then sections 18 [as am. by S.C. 1974-
75-76, c. 76, s. 6] and 19 of the Act come into
play. These two sections read as follows:
18. (1) At any stage of an inquiry,
(a) the Director may, if he is of the opinion that the evidence
obtained discloses a situation contrary to any provision in
Part V, and
(b) the Director shall, if the inquiry relates to an alleged or
suspected offence under any provision of Part V and he is so
required by the Minister,
prepare a statement of the evidence obtained in the inquiry
which shall be submitted to the Commission and to each person
against whom an allegation is made therein.
(2) Upon receipt of the statement referred to in subsection
(1), the Commission shall fix a place, time and date at which
argument in support of such statement may be submitted by or
on behalf of the Director, and at which such persons against
whom an allegation has been made in such statement shall be
allowed full opportunity to be heard in person or by counsel.
(3) The Commission shall, in accordance with this Act,
consider the statement submitted by the Director under subsec-
tion (1) together with such further or other evidence or ma
terial as the Commission considers advisable.
(4) No report shall be made by the Commission under
section 19 or 22 against any person unless such person has been
allowed full opportunity to be heard as provided in subsection
(2).
19. (1) The Commission shall, as soon as possible after the
conclusion of proceedings taken under section 18, make a
report in writing and without delay transmit it to the Minister.
(2) The report under subsection (1) shall review the evidence
and material, appraise the effect on the public interest of
arrangements and practices disclosed in the evidence and con
tain recommendations as to the application of remedies pro
vided in this Act or other remedies.
As, under section 18, the Commission may
clearly become involved in an inquiry, section 21
confers on the Commission and its members "all
the powers of a commissioner appointed under
Part I of the Inquiries Act", including, of course,
the power to summon witnesses.'
So much for the inquiries held by the Director
pursuant to section 8. Apart from the inquiries
held for the purposes mentioned in that section,
the Director may also hold inquiries of a more
general nature under section 47. That section,
which is the only one which expressly regulates
that kind of inquiry, reads as follows:
47. (1) The Director
(a) upon his own initiative may, and upon direction from the
Minister or at the instance of the Commission shall, carry
out an inquiry concerning the existence and effect of condi
tions or practices relating to any product that may be the
subject of trade or commerce and which conditions or prac
tices are related to monopolistic situations or restraint of
trade, and
(b) upon direction from the Minister shall carry out a
general inquiry into any matter that the Minister certifies in
the direction to be related to the policy and objectives of this
Act,
' Sections 4 and 5 of the Inquiries Act, R.S.C. 1970, c. I-13,
read as follows:
4. The commissioners have the power of summoning before
them any witnesses, and of requiring them to give evidence
on oath, or on solemn affirmation if they are persons entitled
to affirm in civil matters, and orally or in writing, and to
produce such documents and things as the commissioners
deem requisite to the full investigation of the matters into
which they are appointed to examine.
5. The commissioners have the same power to enforce the
attendance of witnesses and to compel them to give evidence
as is vested in any court of record in civil cases.
and for the purposes of this Act, any such inquiry shall be
deemed to be an inquiry under section 8.
(2) It is the duty of the Commission to consider any evidence
or material brought before it under subsection (1) together with
such further evidence or material as the Commission considers
advisable and to report thereon in writing to the Minister, and
for the purposes of this Act any such report shall be deemed to
be a report under section 19.
It is common ground that the inquiry during
which the Commission refused to issue the sub
poenas requested by the Director was held pursu
ant to section 47. It related to the petroleum
industry in Canada and had been commenced by
the Director in 1973. Until 1981, it had been
conducted in private in accordance with the provi
sions of the statute relating to section 8 inquiries.
On February 27, 1981, the Director sent to the
Chairman of the Commission a voluminous state
ment of the evidence collected during the course of
that inquiry, together with the following covering
letter:
Pursuant to section 47 of the Combines Investigation Act, I
am submitting to you in English and in French, a Statement of
Evidence and Material collected in the above inquiry so that,
pursuant to the said section, the Restrictive Trade Practices
Commission can consider it together with such further evidence
or material as you consider advisable and report thereon in
writing to the Minister of Consumer and Corporate Affairs.
Following the receipt of that letter, the Commis
sion decided to hold public hearings to receive
further evidence on the same subject. It is in the
course of those hearings that the Commission
rejected the Director's request for the issuance of
subpoenas.
It may not be necessary, in order to dispose of
this appeal, to determine whether the inquiry that
was being held by the Commission when it refused
to issue the subpoenas was under the responsibility
of the Director or of the Commission. However, I
feel obliged to say that I cannot agree with the
opinion expressed by the learned Judge of first
instance that that inquiry was under the direction
and responsibility of the Director.
If the inquiry in question had been held by the
Commission pursuant to section 18, following the
submission of a statement of the evidence obtained
by the Director during a section 8 inquiry, there
would have been no doubt, in my view, as to the
characterization of that inquiry. Until the submis-
sion of a statement of evidence pursuant to section
18, a section 8 inquiry is a private inquiry made by
the Director and the Commission is not involved in
it. However, once a statement of evidence is filed
pursuant to section 18, that situation changes.
Then the Commission takes over: it must give the
Director an opportunity to submit argument in
support of the statement; it must give to all those
against whom allegations are made in the state
ment an opportunity to refute those allegations; it
must hear "such further or other evidence" as it
considers advisable; it must, finally, make a report
pursuant to section 19. It is clear, in my view, that
when the Commission decides, under section 18, to
hold hearings to obtain "further or other evi
dence", those hearings are under its sole control.
Those hearings are not conducted by the Director,
who therefore does not have the power to decide
the evidence that the Commission will hear.
Counsel for the respondent submitted, however,
that the situation is different when an inquiry is
held pursuant to section 47. That section contem
plates, said he, an inquiry to be made by the
Director and in the course of which evidence is
brought before the Commission. It follows, accord
ing to that submission, that the Commission has
the duty to hear all the evidence that the Director
wishes to adduce before it in the course of that
inquiry. In that sense, the inquiry before the Com
mission would be under the control of the Director.
This submission rests entirely on the wording of
subsection 47(2), which imposes on the Commis
sion the duty "to consider any evidence or material
brought before it under subsection (1) ...." As
subsection 47 (1) does not indicate how the evi
dence gathered by the Director during the course
of his inquiry must be brought before the Commis
sion, counsel for the respondent infers from those
words in subsection 47(2) that the Director may
choose to bring the evidence before the Commis
sion by making his inquiry in the presence of the
Commission during its public hearings.
I must confess that the manner in which subsec
tion 47(2) is drafted lends some credibility to the
respondent's contention. However, I cannot accept
it. Section 47 provides for inquiries in which both
the Director and the Commission play a part. The
part of the Director is described in subsection
47(1): he must carry out an inquiry which, for the
purposes of the Act, is deemed to be a section 8
inquiry. Now, an inquiry by the Director is not, as
I understand it, an inquiry before the Commission;
it is a private inquiry which is conducted as if it
were a section 8 inquiry. I cannot interpret subsec
tion 47(1) as giving the Director the power to
decide to make his inquiry before the Commission.
The part to be played by the Commission in a
section 47 inquiry is described in subsection 47(2):
it must consider the evidence "brought before it
under subsection (1) together with such further
evidence or material as the Commission considers
advisable" and "report thereon ... to the Minis
ter". In my view, the use of the words "any
evidence . .. brought before it under subsection
(1)" does not support the inference that the Direc
tor may choose to bring that evidence before the
Commission by making his inquiry in its presence.
The only inference that, in my view, can be drawn
from those words is that section 47 contemplates
that the Director will, after he has completed his
investigation, bring the evidence that he has col
lected before the Commission for its consideration.
This does not imply that the inquiry be made
before the Commission but, rather, that the evi
dence already obtained by the Director in the
course of his private inquiry will be transmitted to
the Commission.
My conclusion, therefore, is that when the Com
mission, after having been informed by the Direc
tor of the evidence collected by him during a
section 47 inquiry, decides to hold hearings to hear
further evidence, those hearings are those of the
Commission and are in no way under the control
of the Director. It follows that the Director cannot
tell the Commission what kind of evidence should
be adduced at those hearings.
The crucial point in this case, however, is not
the characterization of the inquiry that was being
held when the Commission refused to issue the
subpoenas; it is the characterization of the power
of the Commission to summon witnesses. Was the
Trial Division right in holding [at page 523] that
the issuance of a subpoena by the Commission is a
purely administrative act "analogous to the issu
ance of a subpoena by the courts of the land"? In
my opinion, it was not.
The power to summon witnesses belongs to the
Commission by virtue of section 21, which confers
on the Commission and its members all the powers
of a commissioner appointed under Part I of the
Inquiries Act. I do not know any authority sup
porting the proposition that the power to summon
witnesses is purely ministerial and does not involve
the exercise of a discretion. If that proposition
were true, the Commission would have to accede
to any request to summon witnesses, however abu
sive it might be. This, of course, is unacceptable.
The Commission has a duty not to use its power in
an unfair or oppressive manner. It is true that
under the rules of most courts, the issuance of
subpoenas is a purely administrative act. However,
this is so because, under those rules, subpoenas are
to be issued on demand by officers of the court. It
is the rules of the courts which make the issuance
of subpoenas a purely administrative function.
Here, no such rules have been adopted by the
Commission.
Counsel for the respondent argued that, in
refusing to issue subpoenas, the Commission pre
vented the Director from adducing evidence which
he had the right to adduce. This argument presup
poses, however, that the Director has the right to
determine the evidence that will be heard by the
Commission during its hearings. I have already
indicated that, in my view, the Director has no
such right.
I would, for these reasons, allow the appeal, set
aside the order of the Trial Division and, pro
nouncing the judgment that the Trial Division
should have pronounced, I would dismiss the
respondent's application. I would make no order as
to costs.
URIE J.: I agree.
RYAN J.: I agree.
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.