A-832-90
Canadian Cable Television Association — Asso
ciation canadienne de télévision par câble
(Applicant)
v.
American College Sports Collective of Canada,
Inc., Border Broadcasters' Collective, Canadian
Broadcasters Retransmission Rights Agency Inc.,
Canadian Retransmission Collective, Canadian
Retransmission Right Association, Composers,
Authors and Publishers Association of Canada
Limited, Copyright Collective of Canada, FWS
Joint Sports Claimants, Major League Baseball
Collective of Canada, Inc., and Performing Rights
Organization of Canada Limited (Respondents)
INDEXED AS: CANADIAN CABLE TELEVISION ASSN V. AMERI-
CAN COLLEGE SPORTS COLLECTIVE OF CANADA, INC. (CA.)
Court of Appeal, Mahoney, MacGuigan and
Linden JJ.A.—Montréal, May 13, 14, 15, 16 and
17; Ottawa, June 3, 1991.
Judicial review — Applications to review — Application to
set aside Copyright Board's decision imposing royalties for
retransmission of distant television signals in Canada for
breach of principles of natural justice — Dissenting member
receiving information outside hearing process — Audi alteram
partem principle not violated — Possibility of prejudice essen
tial issue — Information received not adverse to applicant's
position — Information not influencing majority — No "reli-
ance" on information — Inconsequential error of law not
ground for judicial reversal — No reasonable apprehension of
bias — Dissenting member had no stake in outcome.
Copyright — Copyright Board imposing royalties for
retransmission of distant television signals and adding interest
factor to royalties payable under power to establish terms and
conditions related to royalties under Copyright Act, s.
70.63(1)(a)(ii) — Board implicitly empowered to include inter
est factor to compensate for late payment of royalties — Ss.
70.62 to 70.67 remedial, objects of which to establish regime
for royalty payments for retransmissions after January 1, 1990
— Interest necessary to compensate for late payment of royal
ties caused by delays in approval process — Explicit provision
of right to interest not required.
Construction of statutes — Copyright Act, s. 70.63(1)(a)(ii)
giving Copyright Board power to impose terms and conditions
related to royalties — Board adding interest factor to royalties
payable — Objects of ss. 70.62 to 70.67 to establish regime for
royalty payments for retransmissions after January 1, 1990 —
Interpretation Act, s. 12 requiring fair, large and liberal
construction as best ensures attainment of objective — Powers
of administrative tribunal may exist by necessary implication
from wording of Act, structure and purpose — Parliament
intending royalty regime to take effect January 1, 1990
regardless of when scheme established — Board discharging
statutory mandate by including interest to compensate for late
approval of tariffs.
This was an application to set aside, for failure to observe
principles of natural justice, a decision of the Copyright Board
imposing annual royalties for the retransmission of distant
television signals in Canada. Alternatively, the applicant sought
an order varying the statement of royalties to be paid by
deleting the royalties referable to interest. The Copyright Act
was amended in 1988 to provide for the payment of copyright
royalties for the retransmission of distant radio and television
broadcast signals. In 1989 statements of proposed royalties
were filed with the Board. The applicant objected to those
statements. After the close of the hearing, the dissenting Board
member obtained certain public information as well as the
opinions of CRTC staffers. None of this information was
adverse to the applicant's position. Two Board members, but
not the Chairman, were aware that he had obtained additional
information, but were unaware of its content.
The applicant argued that the principle of audi alteram
partem had been violated by the receipt of evidence outside the
hearing process, evidence of which it had learned only acciden
tally after the Board's decision and to which it had had no
opportunity to respond. It submitted that the existence of
actual prejudice was not essential to establish breach of the
principle, and that a possibility of prejudice was sufficient. The
applicant argued that it had, in any event, suffered actual
prejudice, not by any adverse effect, but by being denied the
opportunity to exploit in its favour the evidence received. The
respondents' submission was that the information obtained was
either already in the record, known to the parties or in the
public domain; that it was in the applicant's favour; that the
dissenting member's efforts did not influence and were not
known to the majority; and that the principle did not apply to
information which affects only a dissenting member of a
tribunal.
Applicant's further submission was that the Board had
violated the principle nemo judex in sua causa debet esse (no
one may be a judge in his own cause), a rule as to the
impartiality required of deciders of issues which forbids both
actual bias and a reasonable apprehension of bias.
Acting under its power to establish terms and conditions
related to the royalties it had set under Copyright Act, subpara-
graph 70.63(1)(a)(ii), the Board added an interest factor to the
royalties payable because the Act provided that the tariffs
would take effect on January 1, 1990, but they were not
approved until much later. The interest factor was not estab
lished separately by the tariffs as interest payments, but was
merged into the royalties paid. The Board applied the Bank of
Canada rate so as not to penalize retransmitters, who were not
responsible for the delay in certifying tariffs. The applicant
argued that to award interest on royalties accrued prior to
publication of any tariff exceeded the Board's powers, as the
Act did not specifically empower it to compel the payment of
interest by retransmitters. Since a requirement respecting inter
est is a substantive right, it should be expressly provided for in
the governing legislation.
Held, the application should be dismissed.
The principle of audi alteram partem had not been violated.
Even if the dissenting member's actions could be attached to
the entire Board, any error attributable to the Board would be
inconsequential, and should not be a basis for judicial reversal.
The Board acted fairly towards the applicant.
The question of the possibility of prejudice was the funda
mental issue. There had to be a real possibility that the result
was affected. As to the possibility of prejudice herein, much of
the information received by the dissenting member was repeti
tive of, or supplementary to, the hearings, and not a matter of
denial of natural justice. The notion of adverse effect is central
to audi alteram partem. Even the applicant alleged only the
lack of a positive opportunity to exploit favourable information,
not the absence of an occasion to respond to unfavourable
information. None of the information received by the dissenting
member had any influence on the decision of the majority. He
was off on a frolic of his own. It must be shown that the Board
"placed at least some reliance on the information". There was
no such reliance herein. An inconsequential error of law, or
even a number of them, which could have no effect on the
outcome do not require this Court to set aside a decision under
Federal Court Act, paragraph 28(1)(b).
There was no reasonable apprehension of bias. A reasonable
apprehension of non-pecuniary bias must arise from "a connec
tion with the case or with the parties". It must amount to an
"interest in the subject-matter of the proceedings." It comes
into play only when the tribunal member appears to have some
stake in, or predisposition toward, a particular outcome of the
adjudication. However unfortunate his mistake in seeking
extra-hearing information, the dissenting member's motivation
was pure and he had no stake in the outcome beyond the best
possible decision.
The issue as to the award of interest on royalty payments
relating to the transitional period is one of statutory interpreta
tion of subparagraph 70.63(1)(a)(ii). The case law does not go
so far as to say that a right to interest must be provided for
explicitly. Sections 70.62 through 70.67 are remedial legisla
tion, the objects of which include the establishment of a regime
for royalty payments for retransmissions after January 1, 1990.
The Interpretation Act, section 12 requires that legislation be
given such fair, large and liberal construction as best ensures
the attainment of its objects. The powers of an administrative
tribunal may exist by necessary implication from the wording
of the Act, its structure and its purpose. Whatever is reasonably
necessary for the proper discharge of a duty is impliedly
authorized by it. Section 149 of the Canada-United States Free
Trade Agreement Implementation Act indicates Parliament's
manifest intention that the royalty scheme should take effect
January 1, 1990, regardless of how much later the scheme
might be established. It can only be supposed that it wanted to
give the Board the right to make royalty recipients whole as of
that day if it considered it appropriate. The Board deemed an
interest factor necessary because the length of the hearings had
prevented it from approving the tariffs until much later. It had
included an interest factor to discharge its statutory mandate.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Canada-United States Free Trade Agreement Imple
mentation Act, S.C. 1988, c. 65, ss. 65, 149.
Copyright Act, R.S.C., 1985, c. C-42, ss. 66 (as am. by
R.S.C., 1985 (4th Supp.), c. 10, s. 12), 70.61 (as
enacted by S.C. 1988, c. 65, s. 65), 70.63 (as enacted
idem).
Federal Court Act, R.S.C., 1985, c. F-7, s. 28.
Interpretation Act, R.S.C., 1985, c. I-21, s. 12.
Radio Retransmission Tariff, Can. Gaz. Part I, Supp.,
Oct. 6, 1990, s. 14.
Television Retransmission Tariff, Can. Gaz. Part I,
Supp., Oct. 6, 1990, s. 19.
CASES JUDICIALLY CONSIDERED
APPLIED:
R. v. Schiff et al., Ex parte Trustees of Ottawa Civic
Hospital, [1970] 3 O.R. 476; (1970), 13 D.L.R. (3d) 304
(C.A.); Kane v. Board of Governors (University of British
Columbia), [1980] 1 S.C.R. 1105; (1980), 110 D.L.R.
(3d) 311; [1980] 3 W.W.R. 125; 18 B.C.L.R. 124; 31
N.R. 214; IWA v. Consolidated-Bathurst Packaging
Ltd., [1990] 1 S.C.R. 282; (1990), 73 O.R. (2d) 676
(note); 68 D.L.R. (4th) 524; 42 Admin. L.R. 1; 90 CLLC
14,007; 38 O.A.C. 321; Re Cardinal Insurance Co. and
Minister of State (Finance) (1982), 138 D.L.R. (3d) 693;
[1982] I.L.R. 1-1541; 44 N.R. 428 (F.C.A.); Canadian
Union of Public Employees (Civic Employees' Union,
Local 21) and Murray v. Regina (City) et al. (1989), 81
Sask. R. 16 (Q.B.); Hecla Mining Company of Canada v.
Cominco Ltd. and Canada (Minister of Indian Affairs
and Northern Development) (1988), 116 N.R. 44
(F.C.A.); Canadian Pacific Ltd. v. British Columbia
Forest Products Ltd., [1981] 2 F.C. 745; (1980), 34 N.R.
209 (C.A.); Schaaf v. Minister of Employment and
Immigration, [1984] 2 F.C. 334; [1984] 3 W.W.R. 1;
(1984), 52 N.R. 54 (C.A.); Martineau v. Matsqui Insti
tution Disciplinary Board, [1980] 1 S.C.R. 602; (1979),
106 D.L.R. (3d) 385; 50 C.C.C. (2d) 353; 13 C.R. (3d)
1; 15 C.R. (3d) 315; 30 N.R. 119; Bateman v. McKay et
al., [1976] 4 W.W.R. 129 (Sask. Q.B.); Re Gooliah and
Minister of Citizenship and Immigration (1967), 63
D.L.R. (2d) 224; (1967), 59 W.W.R. 705 (Man. C.A.);
Bell Canada v. Canada (Canadian Radio-television and
Telecommunications Commission), [1989] 1 S.C.R.
1722; (1989), 60 D.L.R. (4th) 682; 97 N.R. 15; Perform
ing Rights Organization of Canada Ltd. v. Canadian
Broadcasting Corporation (1986), 7 C.P.R. (3d) 433; 64
N.R. 330 (F.C.A.); Banca Nazionale del Lavoro of
Canada Ltd. v. Lee-Shanok (1988), 88 CLLC 14,033; 87
N.R. 178 (F.C.A.).
DISTINGUISHED:
Spence v. Spencer and Prince Albert Board of Police
Commissioners (1987), 53 Sask. R. 35; 25 Admin.
L.R. 90 (C.A.); Yukon Conservation Society v. Yukon
Territory Water Board and Cyprus Anvil Mining Corp.
(1982), 45 N.R. 591 (F.C.T.D.); Committee for Justice
and Liberty et al. v. National Energy Board et al., [1978]
1 S.C.R. 369; (1976), 68 D.L.R. (3d) 716; 9 N.R. 115.
CONSIDERED:
Pfizer Co. Ltd. v. Deputy Minister of National Revenue,
[1977] 1 S.C.R. 456; (1975), 68 D.L.R. (3d) 9; 24 C.P.R.
(2d) 195; 6 N.R. 440; 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; Energy Probe v. Atomic Energy Control Board,
[1985] 1 F.C. 563; (1984), 15 D.L.R. (4th) 48; 11
Admin. L.R. 287; 13 C.E.L.R. 162; 56 N.R. 135 (C.A.);
WMI Waste Management of Canada Inc. v. Municipality
of Metropolitan Toronto (1981), 34 O.R. (2d) 708; 24
L.C.R. 204; 23 R.P.R. 257 (H.C.); Northern & Central
Gas Corp. Ltd. v. Kidd Creek Mines Ltd. (1988), 66
O.R. (2d) 11; 53 D.L.R. (4th) 123; 29 C.P.C. (2d) 257;
30 O.A.C. 146 (C.A.).
REFERRED TO:
Frome United Breweries Co. v. Bath Justices, [1926]
A.C. 586 (H.L.); R. v. British Columbia Labour Rela
tions Board, Ex parte International Union of Mine, Mill
& Smelter Workers (1964), 45 D.L.R. (2d) 27
(B.C.C.A.); In re Anti-dumping Tribunal and re trans
parent sheet glass, [1972] F.C. 1078; (1972), 30 D.L.R.
(3d) 678 (T.D.); Liverpool Corporation v. Maiden
(Arthur), Ltd., [1938] 4 All E.R. 200 (K.B.D.).
AUTHORS CITED
Canadian Radio-television and Telecommunications
Commission. More Canadian Programming Choices,
Ottawa, November 30, 1987.
COUNSEL:
Michael K. Eisen and Stephen G. Rawson for
applicant Canadian Cable Television Associa
tion.
Gilles M. Daigle for respondent Border
Broadcasters' Collective.
David W. Kent for respondent Canadian
Broadcasters Retransmission Rights Agency
Inc.
Hank G. Intven for respondent Canadian
Retransmission Collective.
Jacques R. Alleyn, Q.C. and Peter E. Robin-
son for respondent Canadian Retransmission
Right Association.
Y. A. George Hynna for respondents Compos
ers, Authors and Publishers Association of
Canada Limited and Performing Rights
Organization of Canada Limited.
Glenn A. Hainey and Michael S. Koch for
respondent Copyright Collective of Canada.
Daniel R. Bereskin, Q.C. and Greg A. Pia-
setzki for respondent FWS Joint Sports
Claimants.
Richard Storrey for respondent Major
League Baseball Collective of Canada, Inc.
J. Aidan O'Neill for Canadian Satellite Com
munications Inc. and Cl Cablesystems.
Mario Bouchard for Copyright Board.
SOLICITORS:
Morris/Rose/Ledgett, Toronto, for applicant
Canadian Cable Television Association.
Gowling, Strathy & Henderson, Ottawa, for
respondent Border Broadcasters' Collective.
McMillan Binch, Toronto, for respondent
Canadian Broadcasters Retransmission
Rights Agency Inc.
McCarthy, Tétrault, Toronto, for respondent
Canadian Retransmission Collective.
Canadian Broadcasting Corporation, Ottawa,
for respondent Canadian Retransmission
Right Association.
Gowling, Strathy & Henderson, Ottawa, for
respondents Composers, Authors and Publish
ers Association of Canada Limited and Per
forming Rights Organization of Canada
Limited.
Smith, Lyons, Torrance, Stevenson & Mayer,
Toronto, for respondent Copyright Collective
of Canada.
Rogers, Bereskin & Parr, Toronto, for
respondent FWS Joint Sports Claimants.
Goodman & Goodman, Toronto, for respond
ent Major League Baseball Collective of
Canada, Inc.
Johnston & Buchan, Ottawa, for Canadian
Satellite Communications Inc. and CI
Cablesystems.
Legal Services, Copyright Board, Ottawa, for
Copyright Board.
The following are the reasons for judgment
rendered in English by
MACGUIGAN J.A.: This section 28 [Federal
Court Act, R.S.C., 1985, c. F-7] application is
brought by the applicant, a non-profit organization
whose members include over 545 licensed opera
tors of cable television systems across Canada,
against a decision of October 2, 1990, by the
Copyright Board ("the Board"). The tariffs imple
menting the Board's decision were published in the
Supplement to the Canada Gazette, Part I, Octo-
ber 6, 1990, as the Television Retransmission
Tariff and the Radio Retransmission Tariff.
The Board was established pursuant to section
66 of the Copyright Act ("the Act"), R.S.C.,
1985, c. C-42 [as am. by R.S.C., 1985 (4th Supp.),
c. 10, s. 12], a section which was proclaimed in
force as of February 1, 1989. By subsection 66(3)
the chairman of the Board is required to be a
judge, either sitting or retired, of a superior,
county or district court. The Chairman, Justice
Donald Medhurst of the Alberta Court of Queen's
Bench, was a member of the Board panel in this
case, as were Vice-Chairman Michel Hétu
("Hétu"), Dr. Judith Alexander ("Alexander"),
and Michel Latraverse ("Latraverse"). Board
Member Latraverse was the only dissenting
member of the panel.
Following the Canada-United States Free Trade
Agreement, the Act was amended by the Canada-
United States Free Trade Agreement Implemen
tation Act, S.C. 1988, c. 65, section 65 to provide
for the payment of copyright royalties for the
retransmission of distant radio and television
broadcast signals. In June of 1989, pursuant to
section 70.61 [as enacted by S.C. 1988, c. 65, s.
65] of the Act, eleven copyright collectives, acting
as collecting bodies, filed with the Board state
ments of proposed royalties for the retransmission
of such signals. The applicant was one of the three
parties to file objections to those statements with
the Board. The Board hearing, which began on
November 27, 1989, occupied 57 days. In its deci
sion of October 2, 1990, the Board imposed annual
royalties for the retransmission of distant televi
sion signals in Canada of approximately $51 mil
lion in each of 1990 and 1991. The "proxy"
(prototype or analogue) which the Board adopted
as a useful starting point for its computation of
royalties was the wholesale price charged by the
American satellite specialty service Arts & Enter
tainment ("A & E"), with the proviso that the
differences between A & E and distant broadcast
signals had to be kept in mind (Decision, at pages
25-36):
B. THE LARGE SYSTEMS: 1 - THE VALUE OF DISTANT SIGNALS
Four comparisons were advanced during the hearing for
valuing copyright works. Three of them are based on the
economic value of services similar to those provided on distant
signals or of benefits which have been lost through the use of
distant signals; the last establishes a direct comparison with
conditions in the United States. They are listed and reviewed as
follows:
(i) the value of comparable services
(ii) the value of displaced programming
(iii) the value of lost licence fees
(iv) comparison with the U.S. regime
(i) The Value of Comparable Services
The Board is charged with setting a price for distant signals;
the price of a similar good in another market could provide
useful information. If that analogous market were a competi
tive market, the price could be taken as a proxy for the value of
distant signals.
CCC [Copyright Collective of Canada] claimed that the rates
charged by CANCOM [Canadian Satellite Communications
Inc.], the resale carrier, were a measure of the benefit of
distant signals to cable systems. The price for the first distant
signal delivered by CANCOM is as high as $1.70.. .
MLB [Major League Baseball Collective of Canada, Inc.]
proposed the U.S. sports service, ESPN, as a proxy for the
sports programming on distant signals, and specifically, for
baseball programming.
CRC [Canadian Retransmission Collective] collected data in
1989 on the monthly wholesale rates charged to Canadian cable
systems for specialty services. Prices ranged from highs of
$1.05 and 88¢ for the Réseau des sports (RDS) and The Sports
Network (TSN) to lows of 8¢ for MuchMusic and nothing for
Vision TV. The unweighted average of these fees was 34¢. Both
CCC and CRC claimed that among the services listed, YTV
and Arts and Entertainment Network (A & E) are those whose
content most resembles that of distant signals. It was argued
that their wholesale rates of 31¢ and 250 respectively should be
treated as a measure of the minimum value of distant signals.
The rate for A & E is a market price, and that for YTV is
regulated; hence, the price of A & E might be a better proxy
for the value of distant signals.
A functioning market is only one requirement for a service to
be a good proxy for a comparable service. A & E has a price
that is determined in a functioning market, but it suffers from
other deficiencies as a proxy.
(ii) The Value of Displaced Programming
CRC proposed the value of programming services displaced by
programs on distant signals as a measure of the harm to the
collecting bodies. CRC estimated that the presence of distant
signals prevents the creation of at least one more national
broadcast service.
(iii) The Value of Lost Licence Fees
CRC also suggested that the value of a program is reduced
with each opportunity to watch it. As already discussed, no
harm results to copyright owners where programs are simul
taneously substituted, but other duplication may reduce licence
fees and even prevent an additional sale. CRC used a figure of
$4,000 per broadcast hour as a conservative estimate of that
harm.
(iv) Comparison with the U.S. Regime
The projected retransmission royalties in the United States for
1990 are in the order of U.S. $200 million. CCTA [Canadian
Cable Television Association, the applicant herein] proposed
the "rule of ten": given that the U.S. population is approxi
mately ten times that of Canada, the royalties in Canada
should be ten per cent of those generated in the United States.
This is about Can. $24 million.
The royalties set by the Board apply only to retransmitters in
Canada, although they are paid to copyright owners in other
countries. Inter-country comparisons of any kind are fraught
with difficulties: industry structure, relative prices, income
levels and cultures are different. At least four quantifiable
differences exist between the markets in the two countries.
(v) The Board's Conclusions
The Board concludes that the comparable services approach is
sound and that the wholesale price charged for A & E is a
useful starting point, so long as the differences between A & E
and distant signals are recognized.
Programs on distant signals are simultaneously substituted
while those on A & E are not; accordingly, the Board considers
that the value of a distant signal should be discounted by 20 per
cent.
The market in which a signal is distant calls for different cost
recovery considerations than the subscription market of special
ty services. It follows that the distant signal seller would be
prepared to accept a lower price for the product in that market.
The level of penetration of distant signals is higher than that of
A & E. To achieve the same level of penetration, A & E's price
would have to be lower.
Distant signals are packaged in many combinations and this
may have an impact on their value. Even if the price of A & E
is an appropriate proxy for the price of a first distant signal, it
may be too high for one of many signals in the same package.
Considering all the differences, the Board finds that an average
price of I5¢ per distant signal is reasonable.
The statutory authority on which the Board
proceeded in making its decisions is contained in
section 70.63 [as enacted by S.C. 1988, c. 65, s.
65] of the Act, which reads as follows:
70.63 (1) On the conclusion of its consideration of the
statements of royalties, the Board shall
(a) establish, having regard amongst others to the criteria
established under subsection (4),
(i) a manner of determining the amount of the royalties to
be paid by each class of retransmitter, and
(ii) such terms and conditions related to those royalties as
the Board considers appropriate;
(b) determine what portion of the royalties referred to in
paragraph (a) is to be paid to each collecting body;
(c) vary the statements accordingly; and
(d) certify the statements as the approved statements,
whereupon those statements become for the purposes of this
Act the approved statements.
(2) For greater certainty, neither the Board, in establishing a
manner of determining royalties under paragraph (1)(a) or in
apportioning them under paragraph (1)(b), nor the Governor in
Council, in varying any such manner under section 70.67, may
discriminate between copyright owners on the ground of their
nationality or residence.
(3) The Board shall cause the approved statements to be
published in the Canada Gazette as soon as practicable and
send a copy of each approved statement, together with reasons
for the Board's decision, to each collecting body and to any
person who filed an objection under section 70.62.
(4) The Governor in Council may make regulations estab
lishing criteria to which the Board must have regard in estab
lishing under paragraph (1)(a) a manner of determining royal
ties that are fair and equitable.'
The applicant, which, as the Board's reasons for
decision indicate, had proposed the fourth com
parison for valuing copyright works, viz., compari
son with the U.S. regime, sought to set aside the
Board's decision for failure to observe principles of
natural justice. In the alternative, the applicant
sought an order varying the statement of royalties
to be paid for the retransmission of distant televi
sion and radio signals in Canada during 1990 and
1991 by eliminating section 19 of the Television
Retransmission Tariff, section 14 of the Radio
Retransmission Tariff, and any related liability,
thereby deleting the royalties referable to interest
accrued prior to publication of the tariff.
It was common ground that the Board is required
to act in a quasi-judicial manner and is therefore
subject to the full requirements of natural justice.
No such regulations have been made by the Governor in
Council.
It was also common ground that, subsequent to
the close of the Board hearings, Board member
Latraverse had attempted to obtain information
concerning Canadian and U.S. specialty services
from staff members of the Canadian Radio-televi
sion and Telecommunications Commission
("CRTC"), and had made use of some of the
material so obtained. On August 15, 1990,
Latraverse met, at his request, with CRTC staff
members Wayne Charman ("Charman"), Janet
Yale ("Yale"), and Randolph Hutson ("Hutson")
to obtain information and documents about spe
cialty services. Each of the four parties to that
meeting swore an affidavit, those by the three
CRTC staff members being submitted by the
applicant; all of the affidavits were in agreement
on all essential points. In addition, Ms. Yale was
cross-examined on her affidavit.
At the meeting of August 15, 1990, Charman
handed Latraverse a copy of the CRTC publica
tion of November 30, 1987, More Canadian Pro
gramming Choices ("Programming Choices").
There were also three telephone conversations
after the meeting between Charman and
Latraverse by way of follow-up to matters raised
at the meeting, and Latraverse subsequently
received a chart indicating the rates paid in the
United States for specialty services.
All of the evidence was to the effect that only
three issues were canvassed in these CRTC con
versations: (1) specialty services in Canada; (2)
specialty services in the United States; and (3) the
use of specialty services as a proxy. Latraverse
advised Board members Hétu and Alexander of
the fact that he had obtained these documents. He
did not so advise Chairman Medhurst, who might
have been expected to take a dim view of this way
of proceeding.
In addition to these conversations and docu
ments, Latraverse also independently gathered
more complete statistics on the cable industry than
were available from the exhibits. He also referred
in his dissenting reasons to the fact that he had
"been able to determine that a very substantial
percentage of [A & E's] programming is repeated
several times during the same month" and that
"this information was not established in evidence"
(Decision, at page 112). Since this is a fact obvious
to any casual reader of the A & E monthly pro
gramming guide, and certainly to every subscriber
to the service, I cannot attach any legal signifi
cance to Latraverse's use of it. Latraverse also
stated that "Another percentage of its program
ming, also not established in evidence, is `blacked-
out' because the Canadian broadcast rights could
not be cleared by A & E" (ibid). I also cannot
attach legal significance to the fact it was not
established in evidence how much of its program
ming was blacked-out, since the absence of evi
dence establishes no more one way than the other.
Finally, while CCTA's [Canadian Cable Televi
sion Association's] panel of cable television opera
tors was testifying, Mr. Latraverse placed a tele
phone call to his broker to ask the broker about
certain evidence that had been given by panel
members. He then used the financial information
that he apparently obtained from his broker to
question two of the panelists. During the question
ing, Mr. Latraverse directed the following com
ments to Mr. Linton of Rogers Cable TV:
a) "You kept mentioning that bank loans total $37 million on
the Consolidated Balance Sheet which is peanuts [for Rogers
Communications]".
b) "What I want to emphasize is: Looking at your numbers and
at how sharp and remarkable an operator and how well you
take care of your own affairs, it is very difficult for me to start
crying for Rogers Communications because of its bank debt
load".
c) "You just mentioned that you lost $25 million on the Home
Shopping Channel. This is no big deal to [Rogers
Communications]".
d) "Maybe you [either Rogers Communications or Mr. Linton]
are a super businessman, but there is something mysterious in
your approach". [Transcript, v. 45, February 22, 1990, at pages
7815-7838.]
In my view, the use of privately obtained infor
mation to make such obvious comments is too
trivial for serious consideration, 2 and I do not
propose to deal with it further. However, the natu
ral justice issues must be faced with respect to the
other incidents.
The common law embraces two principles in its
concept of natural justice, both usually expressed
in Latin phraseology: audi alteram partem (hear
the other side), which means that parties must be
made aware of the case being made against them
and given an opportunity to answer it; and nemo
judex in sua causa debet esse (no one may be a
judge in his/her own cause), a rule as to the
impartiality required of deciders of issues which
forbids both actual bias and a reasonable appre
hension of bias. The applicant in this case invoked
both principles, which I shall accordingly consider
in turn.
II
It was alleged by the applicant that Latraverse and
the Board violated the principle of audi alteram
partem by receiving evidence outside the hearing
process, evidence of which it learned only acciden
tally after the Board's decision through a conversa
tion between one of its officers and Charman, and
to which it had therefore no opportunity to
respond. In my opinion, despite his excellent
motive of attempting better to equip himself to
decide the case, Latraverse's seeking information
outside the hearing process was a serious mistake
of judgment which could certainly have had the
effect of invalidating the Board's decision for lack
of fairness. If it did not in this instance entail that
consequence, it could only be as a result of adven
titious circumstances, as urged by the respondents.
The respondents argued: (1) that the informa
tion Latraverse obtained was either already in the
record, known to the parties or in the public
domain; (2) that it was in fact in the applicant's
favour, not to its detriment; (3) that Latraverse's
2 It was also apparently disclosed at the hearing and no
objection was taken at the time.
efforts did not influence and were not known to the
majority; and (4) that the principle does not apply
to information which affects only a dissenting
member of a tribunal. The first three allegations
are primarily factual, the latter a matter of law.
As I have indicated, the evidence from the vari
ous sources was congruent as to the matters dis
cussed. First, with respect to specialty services in
Canada, Latraverse brought with him to the meet
ing a copy of a chart (introduced into evidence at
the Board hearing by Peter Grant ("Grant"), an
expert witness), as to the prices paid in Canada for
specialty services. The data contained in the chart
were drawn from CRTC policies and decisions,
and Latraverse had questions as to the background
and rationale, the carriage rules and the prices
(Charman affidavit, paragraph 4(b), Yale affida
vit, paragraph 6(a), Latraverse affidavit, para
graphs 8 and 11). Much of this information was
provided by the handing-over of a copy of Pro
gramming Choices, a seminal CRTC policy state
ment available to, and universally known by, par
ticipants in the cable industry such as the
five-hundred-odd members of the applicant.
Although it was not formally introduced into evi
dence before the Board, the document was used as
a basis of questioning during the hearings and was
referred to directly by Grant (Transcript, at pages
2626 and 2637).
With respect to specialty services in the United
States, the evidence showed that Latraverse was
especially interested in how the prices for these
services were established (Charman affidavit,
paragraphs 4(c) and 6, Hutson affidavit, para
graphs 2, 3(a), and 3(b), Yale affidavit, paragraph
6(b), Latraverse affidavit, paragraphs 8, 12, 17, 18
and 19). The account which was given by
Latraverse in his affidavit was fully supported by
the others:
12. During the meeting, Mr. Charman, commenting on the
second object of my approach, i.e. whether there were any
CRTC decisions or policies relating to the price paid by
Canadian cable operators for U.S. specialty signals, stated that
the CRTC is not involved in the determination of those rates.
He offered to verify for me whether any other available docu
mentation existed in this regard.
19. The last conversation took place on 21 or 22 August, 1990.
Mr. Charman confirmed that he had not found any published
documentation on the price paid by Canadian cable operators
for U.S. specialty signals, the information being provided by
cable companies on a "lump sum" basis rather than for
individual services. He also stated that such information was
provided to Statistics Canada on a confidential basis. Mr.
Charman offered to fax me a chart, excerpted from the 30
April, 1990 issue of Cable TV Programming, an American
newsletter which is available to the public at the CRTC library.
The chart indicates the rates paid in the United States for
specialty services. I received this chart on the morning of 23
August, 1990; it is attached as Exhibit "C" to this affidavit.
The upshot was that the only new information
obtained by Latraverse on this subject was the
chart referred to as Exhibit C. The chart was
largely irrelevant to the issues before the Board.
The little that was relevant was duplicative of
information already presented in the Board hear
ings, particularly the 11-cent a customer a month
basic cable network fee for 1989 for A & E in the
United States, a figure which was cited by the
applicant itself to the Board, and was also referred
to by a witness (Kain examination, March 19,
1990, at pages 9256-9257).
With respect to the use of specialty services as a
proxy, Charman refused to express an opinion
(affidavit, paragraph 4(d)), whereas both Hutson
(affidavit, paragraphs 4(c) and 4(d)) and Yale
(affidavit, paragraph 6(c)) expressed negative
opinions. Ms. Yale told him that "the prices for
specialty services would not be a good proxy in
that regard since they were established for a dif
ferent purpose than copyright considerations."
Hutson's expressed view was that making use of
the prices charged for U.S. specialty services in
either the United States or Canada "would be like
comparing apples and oranges."
Latraverse possibly was influenced by these
opinions, for he wrote in his dissent (Decision, at
page 132):
My colleagues rely solely on the rate of an optional American
service, A & E, as the unit of measure. It is a marginal service
whose content is not typical; therefore it is not an appropriate
benchmark for establishing the value of distant signals general
ly retransmitted in Canada.
Nevertheless, his rejection of the majority's
approach did not lead him to the standard pro
posed by the applicant, but rather to an approach
based on the equivalent costs of Canadian pro
gramming which caused him to propose a global
annual royalty for each of 1990 and 1991 which
was some $36 million higher than that adopted by
the majority.
Latraverse also plainly acknowledged the use of
the additional statistics he obtained from Statistics
Canada. In his dissenting reasons for decision he
stated (Decision, at page 102):
One of the collectives, PROCAN-CAPAC, provided to us
during the course of the hearing CRTC documentation on the
costs of programming of the private television, pay television
and cable industries. [PROCAN-CAPAC-TV-8]. To obtain
more complete statistics on the cable industry, I obtained from
Statistics Canada the required information for the years miss
ing from the documentation provided. It should be noted that I
ignored the figures for CBC/SRC in the figures for television:
otherwise, costs as a percentage of revenues would have been
considerably higher but would have skewed the statistics.
The applicant argued that Latraverse may well
have obtained more extra-hearing information
than he—or the others—explicitly acknowledged,
but with respect to the meeting of August 15,
1990, that not only runs counter to the tenor of all
of the affidavits, but also to the direct evidence of
Ms. Yale on her cross-examination (Cross-Exami
nation, April 29, 1991, at pages 7-8):
Q. Okay. Now in addition let me ask you, having gone
through the three areas that you discussed [i.e., speciality
services in Canada, speciality services in U.S., the use of
speciality services as proxies], you say in paragraph five
that you cannot remember, there are things you can't
remember regarding the details of the discussion, and
what I would like to ask you is, is it possible there was
anything significant, any significant or substantial topic
that was discussed in addition to the three you have
enumerated there?
A. To the best of my knowledge those were the three identi
fied things, were the things that we spent most of our
time discussing.
Q. And—
A. And just to be complete, if there was anything else
significant, I think I would have remembered it.
To suppose that there was more would be an
entirely gratuitous assumption.
The applicant also attempted to establish that
Latraverse (and hence his extra-hearing knowl
edge) influenced the deliberations of his col
leagues, and in fact went so far at one point in oral
argument as to argue actual bias. The first ground
of this contention was his reference in paragraph 3
of his affidavit to participation in the decision:
3. J'ai participé à la décision de la Commission qui fait l'objet
de la présente affaire.
The English translation provided with the affidavit
reads, quite correctly, as follows:
3. 1 participated in the decision which is the object of these
proceedings.
This assertion immediately follows (English trans
lation) these first two statements:
1. 1 am a member of the Copyright Board ("the Board").
2. I have knowledge of the matters hereinafter deposed to.
In the context, therefore, I believe "participated"
must be taken as meaning only an acknowledge
ment of having "sat on" the matter, not as having,
in some unstated way, worked with the majority to
produce a partially collective result. In my opinion
the sense of the original French text would be to
the same effect.
It is true, as urged by the applicant, that
Latraverse indicated a small measure of agree
ment with his colleagues. As he put it (Decision, at
page 98):
DISSENT OF MEMBER LATRAVERSE
Preamble
I do not agree with the guiding principles adopted by my
colleagues for establishing the global amount of royalties, nor
do I agree with their analysis of or conclusions on the evidence,
as expressed in part 3B of the majority decision, "The Royalties
to be Paid for Television Retransmission; The Large Systems I;
The Value of Distant Signals". In addition, I am of the opinion
that the compilation claim should be recognized, in principle,
with a nominal allocation.
The tariff formula and other parts of the decision were pre
pared jointly by all members of the Board and I am completely
satisfied with them, except as to the amounts themselves, and
certain remarks that I make regarding compilation. [Emphasis
added.]
Latraverse's agreement on the tariff formula, etc.,
amounted really to an agreement on the arithmeti
cal correctness of the majority's conclusion in -the
light of its hypotheses, with which he disagreed.
On my reading there is no suggestion of any
combining of effort in the production of the
majority decision, certainly not on the aspect
which is in issue before this Court. Finally, the
applicant asserted (memorandum of fact and law,
paragraph 31):
31. In his affidavit, Mr. Latraverse does not deny that he was
influenced by or relied on the information and documents that
he obtained from the CRTC. Neither does Mr. Latraverse deny
that the other members of the Copyright Board were influenced
by or relied on that information and those documents.
Latraverse himself probably was influenced by and
relied on the information he had received outside
the hearing process, but, while it was hardly his
place to give evidence as to the majority's state of
mind, his failure to advert to a matter on which he
was not questioned (but might have been, on his
affidavit) cannot be taken as the foundation for a
conclusion even as to his view of the majority's
knowledge, let alone as to theirs. In my opinion
there is simply no basis for speculating that the
members of the Board majority had any knowl
edge whatsoever of the content of his information
(and in the case of the Chairman, no knowledge
that he had even made such extra-hearing enqui
ries). If there was anything of which they were
aware, it could only have been the two documents,
Programming Choices and the chart.
What we have, then, amounts to this, viz., that
the dissenting member of the Board received a
report of which both he and the applicant might
already have been made aware in the hearings, a
chart the relevant part of which was referred to in
the hearings, statistical information which appears
to be of no particular significance, and two opin
ions which influenced him in rejecting the majori-
ty's approach and in that sense in the applicant's
favour, although he, ultimately, came to an even
more negative opinion from the applicant's point
of view. All of the information (except for the
opinions) was public information. None of it, not
even the opinions, was adverse to the applicant's
position.
The applicant did not, in fact, argue that it was
adversely affected by the extra-hearing evidence,
but rather that, in dealing with a complaint based
on evidence received outside the hearing process, a
Court will not inquire into whether the evidence
did work to the prejudice of one of the parties; it is
sufficient if it might have done so. A court was
said to be concerned, not with proof of actual
prejudice, but rather with the possibility or the
likelihood of prejudice in the eyes of reasonable
persons.
The applicant further argued that it was in fact
actually prejudiced in all of the circumstances, not
by reason of any adverse effect, but rather by
being denied the opportunity to exploit in its
favour the evidence received. Thus it had no
chance to rely on and further explore the opinion
of two senior CRTC officials as to the inappropri-
ateness of using the wholesale price paid for spe
cialty services as a proxy for valuing the copyright
component of distant broadcast signals.
These arguments necessitate a review of the case
law.
A number of cases deal with aspects of the issue
raised in the case at bar. In R. v. Schiff et al., Ex
parte Trustees of Ottawa Civic Hospital, [1970] 3
O.R. 476 (C.A.), where a board, for purposes of
an arbitration award, without notice to the parties,
relied upon material researched by itself and not
derived directly from the parties to the arbitration,
Aylesworth J.A. said for the Court at pages
479-480:
Finally, and as an additional ground for refusal of the
remedy sought, it is abundantly apparent that the material
complained of and to which the board of its own motion, as it
were, resorted, was material from publicly known government
sources, and entirely supplemental in its nature and kind to the
very material the parties themselves supplied to the board. The
board complained of the fragmentary nature of the material
supplied by the parties which was in the nature of statistics,
collective bargaining agreements with other hospitals and the
like, and it was natural that the board should look to such
further material, and should be expected to look to it in view of
that expressed dissatisfaction made known to the parties and in
view of the board's intention expressed to them that it was
going to seek further data of its own volition. Having regard to
the highly informal method of procedure adopted by the parties
in the hearing before the board of arbitration and, as I have
said, to the nature of the material and the kind of presentation
made with respect to that material as well as to the nature of
the public material resorted to by the board, we fail to perceive
any failure to afford natural justice to the trustees in what the
board did in that respect.
Perhaps also it is desirable, although unnecessary, to add to
what has been said that, upon the peculiar facts of this case,
what the board did with respect to getting the kind of material
it did get after the hearing, and with respect to the use to which
the board put it, really was very much akin to what frequently
is resorted to in the regular Courts of law wherein those Courts
take judicial notice of well-known public facts, knowledge and
information. We think what has already been said illustrates
that similarity and demonstrates that in fact there was no
denial of natural justice.
It therefore appears that a board's referring to
material from publicly known government sources,
and entirely supplemental in its nature and kind to
the very material the parties themselves applied to
the board, will not of itself violate the principles of
natural justice.
In Canadian Pacific Ltd. v. British Columbia
Forest Products Ltd., [1981] 2 F.C. 745 (C.A.),
where the Canadian Transport Commission had
failed to give an opportunity to respond to evidence
obtained by it after the close of the hearing, this
Court said (at page 757):
Under subsection 23(4) of the National Transportation Act,
it is essential that there be a hearing before the Commission
may find that a "rate" is prejudicial to the public interest. Such
a hearing, in our view, would require that at least the minimum
elements of natural justice in respect of the right to be heard
must be observed. Because of the failure to give the appellants
an opportunity to respond to the results of the Commission's
post-hearing investigation into the Duncan Bay diversion, these
minimum requirements were not observed. Accordingly, not
only was natural justice denied, but the statutory mandate to
proceed by way of a hearing was not complied with. The
consequence is that the decision of the Commission is invalid.
From this last-noted material fact it would appear
that a tribunal must have relied on the evidence it
received subsequent to the hearing.
The authorities most favourable to the applicant
are Pfizer Co. Ltd. v. Deputy Minister of National
Revenue, [1977] 1 S.C.R. 456 and Kane v. Board
of Governors (University of British Columbia),
[1980] 1 S.C.R. 1105. In Pfizer, Pigeon J. said
shortly for the Court (at page 463): "It is clearly
contrary to those rules [the rules of natural jus
tice] to rely on information obtained after the
hearing was completed without disclosing it to the
- parties and giving them an opportunity to meet it."
In Kane, a case involving a disciplinary suspension
of a university professor, the issue was much more
fully canvassed. The university president, who had
initially imposed the suspension, attended the
appeal hearing as a member of the Board of
Governors, and provided additional information to
the board in response to questions after the close of
the hearing, although he did not participate in
deliberations or vote on the decision. The board
affirmed the suspension.
Dickson J. (as he then was), after enunciating
the principle that "[a] high standard of justice is
required when the right to continue in one's profes
sion or employment is at stake" (at page 1113),
went on to state (at pages 1113-1116):
5. It is a cardinal principle of our law that, unless expressly
or by necessary implication, empowered to act ex parte, an
appellante [sic] authority must not hold private interviews with
witnesses ... or, a fortiori, hear evidence in the absence of a
party whose conduct is impugned and under scrutiny. Such
party must, in the words of Lord Denning in Kanda v. Govern
ment of the Federation of Malaya ([1962] A.C. 322), at p.
337, " ... know the case which is made against him. He must
know what evidence has been given and what statements have
been made affecting him: and then he must be given a fair
opportunity to correct or contradict them .... Whoever is to
adjudicate must not hear evidence or receive representations
from one side behind the back of the other." ...
6. The court will not inquire whether the evidence did work
to the prejudice of one of the parties; it is sufficient if it might
have done so. Kanda v. Government of the Federation of
Malaya, supra, at p. 337. In the case at bar, the Court cannot
conclude that there was no possibility of prejudice as we have
no knowledge of what evidence was, in fact, given by President
Kenny following the dinner adjournment .... We are not here
concerned with proof of actual prejudice, but rather with the
possibility or the likelihood of prejudice in the eyes of reason
able persons.
It seems clear that the first assertion in point 6
in the above quotation cannot be given its full
extension, and that the two parts of the first
sentence are intended to be read together. A court
will not inquire whether the evidence did work to
the prejudice of one of the parties when it might
have done so. Or, put another way, it will inquire
whether the evidence might have worked to the
prejudice of one of the parties. A showing either of
actual prejudice or of the possibility of prejudice is
sufficient to constitute a violation of audi alteram
partem. That seems indeed to be the basis on
which the Court acted in Kane: "[i]n the case at
bar, the Court cannot conclude that there was no
possibility of prejudice as we have no knowledge of
what evidence was, in fact, given by President
Kenny." As Ritchie J., in dissent, emphasized in
analyzing the facts, the appellant considered that
the facts as given in the President's statement
"could be construed adversely to him and he had
no opportunity to answer" (at page 1121, emphasis
added).
The notion of adverse effect is in fact central to
audi alteram partem. In the words of Gonthier J.
for the majority in IWA v. Consolidated-Bathurst
Packaging Ltd., [1990] 1 S.C.R. 282, at page 339:
Since its earliest development, the essence of the audi
alteram partem rule has been to give the parties a "fair
opportunity of answering the case against [them]": Evans, de
Smith's Judicial Review of Administrative Action, [4th ed.
1980], supra at p. 158. It is true that on factual matters the
parties must be given a "fair opportunity ... for correcting or
contradicting any relevant statement prejudicial to their view":
Board of Education v. Rice, [1911] A.C. 179, at p. 182; see
also Local Government Board v. Arlidge, [1915] A.C. 120, at
pp. 133 and 141, and Kane v. Board of Governors of the
University of British Columbia, supra, at p. 1113. [Emphasis
added.]
Certainly, this Court in Re Cardinal Insurance
Co. and Minister of State (Finance) (1982), 138
D.L.R. (3d) 693 saw prejudicial effect on a party
as essential. In that case the Minister had held a
meeting, in the absence of an insurance company,
with a reinsuring company in an effort to obtain a
settlement. Immediately after quoting Dickson J.'s
fifth point from Kane, supra, Urie J.A. wrote for
the Court at pages 706-707:
Certainly there can be no quarrel with that proposition but,
in my opinion, there was no breach thereof by the Minister in
this case. No evidence was taken nor was anything done at the
meeting which prejudicially affected Cardinal. As has been
stated, what was done was an endeavour to persuade Union to
honour its treaties or to make a settlement with Cardinal which
would preclude the necessity for action by the Minister. He had
already heard the evidence and representations of all con
cerned. What Union said at the meeting was, as far as the
record shows, merely a repetition of what it had said before. I
do not think that his failure to include Cardinal in the settle
ment discussions with Union ought, in the circumstances, to
vitiate the whole proceeding.
Unlike the Tariff Board in Pfizer Co. Ltd. v. Deputy Minis
ter of National Revenue for Customs & Excise (1975), 68
D.L.R. (3d) 9, [1977] S.C.R. 456, 24 C.P.R. (2d) 195, where
the board referred to two texts in its decision which were not
put in evidence or referred to at the hearing before the board,
no evidence not known to Cardinal was elicited in this case.
The same comment applies in respect of R. v. Deputy
Industrial Inquiries Com'r, Ex p. Jones, [1962] 2 Q.B. 677,
and Kanda v. Government of Federation of Malaya, [1962] 2
A.C. 322, in both of which evidence was received by the
tribunal which was prejudicial to the person concerned, without
their being made aware of it and being given an opportunity to
respond. If any new evidence was heard by the Minister at the
February 16th meeting, and it does not appear that there was,
it was not predjucial to Cardinal. In fact the opposite is true.
The efforts of the Minister and his officials were directed to
attempting to negotiate a settlement. An offer of settlement
was in fact obtained and was conveyed to Cardinal and rejected
by it. Such efforts cannot be characterized as prejudicial.
Hence the Court found no violation of audi
alteram partem.
A Saskatchewan court seems to have come to a
similar interpretation of Kane: Canadian Union of
Public Employees (Civic Employees' Union, Local
21) and Murray v. Regina (City) et al. (1989), 81
Sask. R. 16 (Q.B.). In that case Armstrong J. held
(at page 21):
In my view the improperly received evidence might well have
prejudiced Murray in this case. In fact if the opinion of Dr.
Abdulla means what the applicants think it means (and I do
not know that it does) the Tribunal must have been influenced
by the material improperly before it, to decide as it did.
That was also the line taken by this Court in Hecla
Mining Company of Canada v. Cominco Ltd. and
Canada (Minister of Indian Affairs and Northern
Development) (1988), 116 N.R. 44, where Hugess-
en J.A. wrote (at page 45):
We did require submissions from the respondents on the
applicant's allegation that the Minister had failed to follow the
rules of natural justice. We find that allegation to be substan
tiated. The record shows that, after the parties had completed
their submissions, the Minister received a letter from the
Mining Recorder which contained a number of assertions of
fact and opinions which were incorporated by the Minister into
his decision almost verbatim. That letter was never com
municated to the parties prior to the decision. It was largely
unfavourable to the applicant's pretentions.
In the circumstances, following Cardinal et al. v.
Director of Kent Institution, [1985] 2 S.C.R. 643,
the Court refused to try to conclude that the
ministerial decision might in any event have been
to the same effect, and accordingly struck it down.
In my opinion, this review of the case law
indicates the fallacy of the applicant's argument.
Contrary to its contention that a court will not
inquire into the question of prejudice, all of the
authorities which focus on the matter show that
the question of the possibility of prejudice is the
fundamental issue: Kane, Consolidated-Bathurst,
Cardinal Insurance, Civic Employees' Union, and
Hecla Mining.
If the possibility of prejudice must be looked to,
what, then, do the facts show in the case at bar?
Much of the information Latraverse received was
repetitive of, or supplementary to, the hearings,
and so, as in Schiff, not a matter of denial of
natural justice. Even the applicant alleged only the
lack of a positive opportunity to exploit favourable
information, not the absence of an occasion to
respond to unfavourable information. The authori
ties, moreover, have taken "prejudicial" in the
sense of "adverse effect".
The largest factor, however, militating against
the applicant's argument is that there is not a
shred of evidence that any of the information
received by Latraverse had any influence whatso
ever on the Board's decision, that is to say, on the
decision of the Board majority. Two of the Board
majority appear to have been aware that he had
obtained some additional information, but not of
its content. There is not a single reference in the
Board's decision, direct or indirect, to any extra-
hearing evidence. Latraverse simply was off on a
frolic of his own, which seems not to have im
pinged at all on the minds of the majority.
Not only is there no case law which holds that
the separate activities of a dissenting Board
member can, without more, taint the deliberations
of the majority, but I believe the Canadian Pacific
case in this Court stands for the proposition that
an applicant must show that the Board "placed at
least some reliance on the information" in question
(at page 757). Here there is no evidence at all of
such reliance. Indeed, quite the contrary.
If a final word needs to be said, let it be that an
inconsequential error of law, or even a number of
them, which could have no effect on the outcome
do not require this Court to set aside a decision
under paragraph 28(1)(b) of the Federal Court
Act. In Schaaf v. Minister of Employment and
Immigration, [1984] 2 F.C. 334, at page 342,
Hugessen J.A., after setting out the text of subsec
tion 28(1), commented as follows:
In my view, nothing in the words used makes them other than
attributive of jurisdiction. They create the power in the Court
to set aside decisions which offend in one of the stated ways but
do not impose a duty to do so in every case.
This appears also, I would suggest, from the wording of
section 52, which describes the dispositions which are open to
the Court on a section 28 application. The opening words are:
"The Court of Appeal may...." They are clearly permissive
and nowhere is there a suggestion that the Court must act
whenever it finds an error of law.
This is not to say that the Court is entitled to decline to
exercise the jurisdiction which is given to it by sections 28 and
52, but simply that there is nothing in the language of the
statute obliging the Court to grant the remedy sought where it
is inappropriate to do so. While it can no doubt be argued that
the statute creates certain rights for the litigant, it does so by
granting powers to the Court and the latter must remain the
master of whether or not they are to be exercised in any
particular case.
In my view, the Board made no error of law by
infringing the principle of audi alteram partem in
this case, but if, hypothetically, the actions of
Latraverse could somehow be attached to the
whole of the Board, I think any error attributable
to the Board would be inconsequential, a mere
technical breach, and should not be a basis for
judicial reversal. The authorities have all required
a real possibility that the result was affected.
As it was put by Dickson J. (as he then was) in
Martineau v. Matsqui Institution Disciplinary
Board, [1980] 1 S.C.R. 602, at page 631:
8. In the final analysis, the simple question to be answered is
this: Did the tribunal on the facts of the particular case act
fairly toward the person claiming to be aggrieved? It seems to
me that this is the underlying question which the courts have
sought to answer in all the cases dealing with natural justice
and with fairness.
I have no doubt that in the case at bar the Board
acted fairly towards the applicant.
III
The applicant also alleged that the Board had
violated the rule of natural justice against a
reasonable apprehension of bias by reason of
Latraverse's receiving of extra-hearing informa
tion. The authority principally relied upon is
Spence v. Spencer and Prince Albert Board of
Police Commissioners (1987), 53 Sask. R. 35
(C.A.).
On the facts of that case a police constable had
been dismissed after having been found guilty at
two separate hearings of, first, falsifying a claim
for overtime and, second, various disciplinary
infractions with respect to alcohol. Both meetings
were chaired by the Mayor. After the charges had
been laid, one of the principal witnesses on the
second set of charges had come to the Mayor's
office to talk about her motives for lodging the
complaints, and had responded affirmatively to the
Mayor's question as to whether the constable had
done the things alleged against him. Another
member of the Board of Police Commissioners had
withdrawn from the second hearing because his
daughter was to be a witness against the constable
on the second infraction, but continued on the first
hearing.
Vancise J.A. stated for the Court (at pages
41-43):
The law is well settled that a quasi-judicial tribunal like the
Police Commissioners is subject to the rules of natural justice
which are, after all, only "fair play in action": (Ridge v.
Baldwin, [1962] 1 All E.R. 834, at 850). The rule against bias
is one of the most fundamental elements of natural justice. A
person accused is entitled to have his cause determined by an
impartial tribunal which is untainted with the knowledge of
facts or with a predisposition to a particular point of view
which might affect the result. The policy underlying this princi
ple is that justice must not only be done but must manifestly
and undoubtedly be seen to be done. (See R. v. Sussex Justices
Ex parte McCarthy, [1924] 1 K.B. 256.) A breach of the rule
against bias will generally result in the statutory delegated
authority losing jurisdiction and will render the administrative
action void and subject to judicial review. The respondent
submits that there is no real or apprehended bias by reason that
the chairman did not discuss "specific" allegations against the
appellant.
The chambers judge in considering this matter found that no
actual bias was established and concluded that there was "no
real likelihood of bias". In arriving at that conclusion he
considered a number of factors, including the following:
(1) Mr. Spencer was not sitting alone. He was a member of a
panel;
(2) He did not seek out Miss Ahenakew;
(3) She did not go into all the facts;
(4) The meeting with the chairman was initiated by Miss
Ahenakew and was a "chance encounter";
(5) The chairman was not actually engaged in the investiga
tion of the allegations made against the appellant;
(6) There was nothing in the evidence to indicate a pre-dispo
sition or partiality or prejudice.
With respect, that approach begs the question.
It is not necessary to demonstrate that the chairman was
actually biased. The test is whether there was a reasonable
apprehension of bias.
The test is whether a reasonable person would believe there is a
real danger of bias or whether there would be a reasonable
suspicion of bias even though unintended. As the Chief Justice
stated, "This test is grounded in a firm concern that there be no
lack of public confidence in the impartiality of adjudicative
agencies ..." The public policy consideration which requires
the appearance of justice focuses on perceptions. A perception
of a reasonable apprehension of bias, even though there is no
real likelihood of bias, is all that is required to cause the Police
Commissioners to lose jurisdiction. Here, the person who pro
vided the information to the Police Department which started
the inquiry, the principal witness before the Commission, met
privately with the chairman in advance of the hearing. In that
meeting she discussed the allegation contained in the charge in
a general way, but what is significant is that when asked by the
chairman whether the allegations were true, she answered in
the affirmative. In my opinion, the facts in this case constitute
in law a reasonable apprehension of bias. A reasonable well-
informed person would have a reasonable apprehension of bias
where the chairman has spoken privately with a principal
witness in a cause. Dickson, J., speaking for the authority [sic]
in Kane v. Board of Governors of University of British
Columbia ... considered this very question.
He concluded that there was a breach of the rules of natural
justice and that the Court did not have to inquire into whether
the evidence obtained in the private interview did work to the
prejudice of one of the parties. It was sufficient if it might have
worked to the prejudice of one of the parties. In the present
case, we have no knowledge of what was specifically said by
Miss Ahenakew to the chairman because her evidence was
vague and she could not remember what she said. It is clear,
however, that she did talk about the complaint and equally
clear that she stated the allegations in the charge were true. In
my opinion, the chambers judge erred in deciding that there
was no reasonable apprehension of bias and no breach of the
rules of natural justice.
The appellant alleges that the participation by the chairman
and Norman McCallum in the first hearing in view of the fact
that Mr. McCallum's daughter was a witness at the second
hearing and that the mayor had spoken privately to the princi
pal witness of the second hearing, and that both decisions were
rendered on the same date, raises a reasonable apprehension of
bias in the first as well as the second decision.
As previously noted, it is not necessary to show that partici
pation by those two members or the participation by one or
either of them affected the results. It is enough if there is an
apprehension that the "judge" might not act in an impartial
manner. Mr. McCallum disqualified himself on the second of
the hearings presumably on the ground that his daughter was to
be a witness. Even though she was not to be a witness at the
first hearing and the issue was different, it was still related to
the professional conduct of the appellant. There is a reasonable
apprehension that the participation by his daughter in the
misconduct alleged to have been committed by the appellant
could have affected his impartiality in deciding the charge. The
same comments apply to the chairman. The appellant alleges
that there is a reasonable apprehension the two commissioners
did not judge him in a fair and impartial manner by reason of
the prior knowledge. He alleges a "probability or reasoned
suspicion of bias and judgment, unintended though it be".
(Rand, J. in Szilard v. Szasz, supra, p. 373.) I agree. In both
cases, the possibility of these members of the Police Commis
sion obtaining information concerning the appellant prior to the
hearing from these witnesses which could affect their impartial
appraisal of the issues is sufficient to raise a reasonable appre
hension of bias and a denial of natural justice.
Although I have no doubt that Spence v. Spencer
was correctly decided, I find it necessary to enter
two caveats. First, Dickson J. in Kane seems to
have addressed his remarks to the audi alteram
partem rule rather than to the neuro judex
principle. 3 Second, as I have already established,
Dickson's words must be understood to require
judicial scrutiny as to the possibility of prejudice.
In Spence v. Spencer, in the case of the Mayor
(which is the closer to the facts in the case at bar),
the witness's affirmation that the constable had
committed the act alleged was a statement highly
prejudicial to him, going to the very heart of the
case. In those circumstances, since the principle of
reasonable apprehension of bias requires essential
ly a judgment on appearances from the viewpoint
of a reasonable person, the Court correctly found a
reasonable apprehension of bias to exist even in the
absence of any evidence as to the effect on the
Mayor. In my view, however, this conclusion rests
on the foundation of prejudicial evidence.
It was common ground to the parties that bias
need not be pecuniary. As was said by Hughes J.
in Bateman v. McKay et al., [1976] 4 W.W.R. 129
(Sask. Q.B.), at pages 143-144 quoting Freedman
J.A. (as he then was) in Re Gooliah and Minister
3 Dickson J. pointed out (at p. 1110) that at Trial "[t]he
main thrust of the case advanced on behalf of Dr. Kane was
that no man could be a judge in his own cause...." The Court
of Appeal upheld the Chambers judge in rejecting an argument
based upon that principle. Dickson J. went on to say (at pp.
1110-l111):
Rejected also [by the Court of Appeal] was a second submis
sion, apparently not advanced expressly in the Court of first
instance, impugning the presence and conduct of the Univer
sity President during the deliberations of the Board, after Dr.
Kane and his counsel had withdrawn. This argument rested
upon the fact that the President testified or gave evidence
during the postprandial session in the absence of Doctor
Kane. It is contended that this amounted to a breach of the
principles of natural justice and a failure to observe the rule
expressed in the maxim audi alteram partem. It is to that
argument that I now turn because, in my view, it is one to
which the University can give no compelling answer. If this
ground of appeal succeeds, as I think it must, it is unneces
sary to address the argument resting upon the dual role of
the President, the maxim neuro judex in causa sua, and the
ramifications of the King, French and Ringrose decisions.
of Citizenship and Immigration (1967), 63 D.L.R.
(2d) 224 (Man. C.A.) at pages 227-228:
"Bias may be of two kinds. It may arise from an interest in
the proceedings. That indeed is the kind of bias which is most
frequently encountered in cases coming before the Courts.
Sometimes it is a direct pecuniary or proprietary interest in the
subject-matter of the proceedings. A person possessing such an
interest is disqualified from sitting as a judge thereon. Some
times the interest is not financial but arises from a connection
with the case or with the parties of such a character as to
indicate a real likelihood of bias.
This brings us to the second kind of bias—namely, actual bias
in fact."
A reasonable apprehension of non-pecuniary bias 4
must arise from "a connection with the case or
with the parties." It has to amount to an "interest
in the subject-matter of the proceedings." In other
words, it can come into play only when the tri
bunal member appears to have some stake in, or
predisposition toward, a particular outcome of the
adjudication. In Bateman the tribunal member
was exonerated because "the party who did the
talking with the ultimate chairman was not some
one directly concerned in the matter" (at page
142). The information there was at most enough
"to allow him to form a tentative point of view as
he stood on the threshold of the hearing" (at page
145).
That requirement identified in Bateman is
wholly absent from the facts in the case at bar.
However unfortunate his mistake in seeking extra-
hearing information, Latraverse's motivation was
pure and he had no stake in the outcome beyond
the best possible decision. The most that could be
said for the applicant's case is that the opinions of
the two CRTC staff members may have given
Latraverse, not a predisposition, but what I might
4 In Energy Probe v. Atomic Energy Control Board, [1985] 1
F.C. 563 (C.A.), at p. 580, Marceau J.A. (concurring) includes
in non-pecuniary bias "emotional type interests ... such as
kinship, friendship, partisanship, particular professional or
business relationship with one of the parties, animosity towards
someone interested, predetermined mind as to the issue
involved, etc."
call a post-disposition, to reject specialty services
as proxies. But this is a post-disposition favourable
to the applicant's argument, and in my opinion it
cannot be heard to object to it.
I would agree with the applicant that, if one
member of a tribunal is disqualified for bias, the
decision of the tribunal must be set aside even if
the other members are without bias. That principle
was established by Frome United Breweries Co. v.
Bath Justices, [1926] A.C. 586 (H.L.). R. v.
British Columbia Labour Relations Board, Ex
parte International Union of Mine, Mill & Smelt
er Workers (1964), 45 D.L.R. (2d) 27 (B.C.C.A.),
and In re Anti-dumping Tribunal and re trans
parent sheet glass, [1972] F.C. 1078 (T.D.) are to
the same effect. In the British Columbia Labour
Relations Board case the Court fastened on the
fact that the impugned member "retired with the
other members and remained with them while they
discussed and made their decision" (at page 29).
But that means nothing if no member of a
tribunal is disqualifiable for bias. In Yukon Con
servation Society v. Yukon Territory Water Board
and Cyprus Anvil Mining Corp. (1982), 45 N.R.
591 (F.C.T.D.), five members of a tribunal held
private meetings with a corporation seeking a
change in its licensing arrangements, thus involv
ing themselves in the preparation of the very
application they would later have to judge on its
merits. Addy J. found (at page 599):
The Five Members have become so involved in the application
as to put themselves in the position of being considered gratui
tous consultants of Cyprus Anvil and the application, to some
limited extent at least, becomes their own. The principle of
nemo judex in causa sua debet esse might well be considered
applicable.
This is one kind of case in which courts have found
a reasonable apprehension of bias to exist, viz., one
where a member of a tribunal met with a party
affected and discussed the matter to be determined
in the hearing. The result is the same if the
meeting is with a key witness, as in Spence v.
Spencer. The other type of case is one in which a
member of a tribunal has had a past relationship,
or has a present one, with a party appearing before
it: Committee for Justice and Liberty et al. v.
National Energy Board et al., [1978] 1 S.C.R.
369. Neither of these categories fits the case at
bar, for the reasons I have given. I can therefore
find no reasonable apprehension of bias on the
facts of this case.
Iv
The issue as to the award of interest on royalty
payments relating to the transitional period be
tween January 1 and August 31, 1990, is one of
statutory interpretation, relating to subparagraph
70.63 (1) (a) (ii), which reads as follows:
70.63 (1) On the conclusion of its consideration of the
statements of royalties, the Board shall
(a) establish ...
(ii) such terms and conditions related to those royalties as
the Board considers appropriate;
Acting under this power to establish such terms
and conditions related to the royalties it had set,
the Board considered transitional provisions appro
priate (Decision, at pages 87-88):
(xv) Transitional provisions [Television tariff, s. 19; radio
tariff, s. 14]
The transitional provisions are necessary because the Act pro
vides that the tariffs will take effect on January 1, 1990 while
they were, in fact, approved much later. Two main principles
inform these provisions.
First, the provisions are meant to account for the opportunity
cost associated with the late payment of royalties. An interest
factor has been added, starting on the date an amount would
have become due had a retransmitter known the provisions of
the tariffs. This interest is equal to the Bank of Canada rate;
retransmitters are not responsible for the delay in certifying the
tariffs. This provides collecting bodies with fair compensation
and does not penalize retransmitters.
Second, the Board wanted to avoid each retransmitter having to
calculate the interest factors for the retroactive period. This
would have imposed an unnecessary burden on the retransmit-
ters, and would have entailed errors. For these reasons, the
board has calculated in advance an interest factor by which the
amount owed must be increased. This factor is suitable for most
retransmitters; only those that are not small systems and did
not retransmit a distant television signal for the whole period
will have to calculate the interest. Even these retransmitters
will find that the television tariff states the interest rates to be
applied for the relevant months.
The provisions containing precalculated interest ignore any
fluctuations in the number of premises served by a retransmit-
ter during the period. In the Board's opinion, the imprecision
that might result from this is small.
The interest factors that the Board went on to
establish for both radio and television were not
established separately by the tariffs as interest
payments, but rather were merged into the royal
ties paid.
The applicant conceded that the Board's deci
sion that interest be paid on retransmission royal
ties not received by the due date may be a proper
exercise of the jurisdiction under this provision,
but argued that its award of interest on royalties
accrued prior to publication of any tariff repre
sents the exercise of a substantive authority
beyond the Board's powers.
This contention is based in part upon the old
principle that no pecuniary burden is to be
imposed upon a subject except upon clear and
distinct legal authority: Liverpool Corporation v.
Maiden (Arthur), Ltd., [1938] 4 All E.R. 200
(K.B.D.). But that, I believe, is a principle of law
that applies between sovereign and subject, rather
than between subject and subject. It is also based
in part on the fact that there is no explicit statu
tory provision in the Act specifically empowering
the Board to compel the payment of interest by
retransmitters. The power would have to be
implied, and, since a requirement respecting inter
est is a substantive right, it was said that it should
be expressly provided for in the governing
legislation.
However, the authorities do not go so far as to
say that any right to interest must be provided for
explicitly. WMI Waste Management of Canada
Inc. v. Municipality of Metropolitan Toronto
(1981), 34 O.R. (2d) 708 (H.C.), which might be
thought to do so, is explained by Northern &
Central Gas Corp. Ltd. v. Kidd Creek Mines Ltd.
(1988), 66 O.R. (2d) 11 (C.A.) as taking the
position that, where a statute provides a complete
code as to interest payments, then the explicit
provision of interest on compensation awards, and
failure to provide for interest on costs, must be
taken as excluding the latter.
Indeed, sections 70.62 through 70.67 are
remedial legislation, the objects of which include
the establishment of a regime for royalty payments
for retransmissions after January 1, 1990. The
transitional provisions were deemed necessary by
the Board only because the length of the hearings
prevented it from approving the tariffs until much
later, and it therefore attempted to live up to its
statutory mandate by including an interest factor
to make up for the late payment of royalties
caused by the delays in the approval process. The
Interpretation Act, R.S.C., 1985, c. I-21, section
12, requires that legislation be given such fair,
large and liberal construction as best ensures the
attainment of its objects.
In Bell Canada v. Canada (Canadian Radio-
television and Telecommunications Commission),
[1989] 1 S.C.R. 1722, at page 1756, Gonthier J.
said:
The powers of any administrative tribunal must of course be
stated in its enabling statute but they may also exist by
necessary implication from the wording of the act, its structure
and its purpose. Although courts must refrain from unduly
broadening the powers of such regulatory authorities through
judicial law-making, they must also avoid sterilizing these
powers through overly technical interpretations of enabling
statutes.
Accordingly, in that case, the Supreme Court held
that a power to make interim orders necessarily
implied the power to revise the period during
which interim rates were in force. A similarly
broad interpretation was given by this Court in
Performing Rights Organization of Canada Ltd. v.
Canadian Broadcasting Corporation (1986), 7
C.P.R. (3d) 433 (F.C.A.), where the majority of
the Court adopted the conception that whatever is
reasonably necessary for the proper discharge of a
duty is impliedly authorized by it. In Banca
Nazionale del Lavoro of Canada Ltd. v. Lee-
Shanok (1988), 88 CLLC 14,033 (F.C.A.), a
power to award interest was held by this Court to
be impliedly authorized by a power to do anything
equitable to remedy or counteract a dismissal.
The Board set the interest rate for the transi
tional period at one percent less than the rate
generally determined in the tariff for defaulting
payments, to allow for the fact that retransmitters
were not responsible for the delay in making the
payments.
Parliament's intention was clearly that the roy
alty scheme should take effect as of January 1,
1990, regardless of how much later that scheme
might actually be established. In that respect sec
tion 149 of the Canada-United States Free Trade
Agreement Implementation Act provides as fol
lows:
149. For greater certainty, the royalties in the first state
ments certified under paragraph 70.63(1)(d) of the Copyright
Act become effective on January 1, 1990 regardless of when the
statements are so certified.
Section 149 is described in the heading as the
transitional provision of the Act. In the light of
Parliament's manifest determination to make the
royalty scheme effective on January 1, 1990, it can
be supposed only that it would have wanted to
make the royalty recipients whole as of that day,
or at least to give the Board the right to do so if it
considered it appropriate, especially since subpara-
graph 70.63(1)(a)(ii) was also enacted by the
Canada-United States Free Trade Agreement Im
plementation Act.
It was argued by the applicant that an interest
penalty for late payment imposed by the Board is
unnecessary in the light of the Act's provisions
that all copyright holders face either liability for
copyright infringement or an action to recover
outstanding royalties, and indeed that it is counter
productive, by making it difficult to determine at
what point a retransmitter is in breach of its
obligations. If the payment of interest is not a
proper part of the retransmission royalty tariff, it
was contended that interest should not be con
strued as being within the "terms and conditions
related to those royalties." However, it seems to
me that any such argument is vitiated by the fact
that the Board was taking account of the unique
situation where the retransmitters were not them
selves responsible for the delay in certifying the
tariffs.
I must therefore conclude that the applicant has
failed to establish that the Board committed an
error of law or jurisdiction.
V
In the result the section 28 application must be
dismissed.
MAHONEY J.A.: I agree.
LINDEN J.A.: 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.