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A-617-75
Burnbrae Farms Limited (Applicant)
v.
Canadian Egg Marketing Agency (Respondent)
Court of Appeal, Jackett C.J., Urie J. and MacKay D.J.—Toronto, January 6 and 7, 1976.
Judicial review—Decision by CEMA revoking applicant's grading station operator's licence—Whether Agency failed to follow principles of natural justice in refusing to grant adjournment—Whether panel members biased—Whether panel had previously decided to form intent to revoke— Whether panel erred in assuming prior decision valid—Farm Products Marketing Agencies Act, S.C. 1970-71-72, c. 65, ss. 2, 17, 18, 23(1)—Canadian Egg Licensing Regulations, ss. 3, 8, 9, 10.
Applicant, holder of a grading station operator's licence issued by respondent, CEMA, failed to collect levies from other producers and to pay levies as a producer itself. This failure was a form of protest against the manner in which the market ing plan was being administered. Notice of intention to revoke its licence was given October 2, 1975, notice of hearing fol lowed on October 17, and the hearing, at which the licence was revoked, occurred October 24. Applicant claims that the deci sion failed to follow principles of natural justice in that a request for adjournment was refused, certain members of the panel were biased, and that there was a real apprehension or likelihood of bias. Applicant further alleges that the panel included the Executive of the Board of CEMA which had previously made a formal decision to form an intent to revoke, and that the panel erred in law in proceeding on the assumption that the prior decision was valid.
Held, the application is dismissed. Applicant's last point is dependent upon reading sections 9 and 10 of the Regulations as requiring two quasi-judicial decisions as a condition precedent to suspension or revocation. Section 10 is merely a procedural safeguard to ensure the licensee fair opportunity to respond before revocation or suspension, and is purely administrative. As to refusal to adjourn, a statutory tribunal has a wide discretion to decide if and when a properly convened hearing will be adjourned. Supervisory jurisdiction under section 28 can be exercised only if such refusal has deprived a complainant of reasonable opportunity of meeting the case against him. Appli cant's desire for more time to prepare is irrelevant; the period allowed from the giving of the show cause notice to the date of the hearing was adequate. As to bias, under the statutory scheme, an apprehension of bias based only on the fact that some panel members have, by virtue of the area from which they come, a business background with economic interests which conflict with those of a particular licensee cannot be a disqualification. Nor is there evidence of actual bias, but only an expressed intention to carry out the statutory function.
Participation in the administrative action under section 10 did not involve forming any view as to what action should be taken under section 9, and in no way disqualified the members. And, the consulting of counsel for CEMA by panel members did not constitute the taking of evidence by one party in the absence of the other. There is no suggestion of possible miscarriage of justice by reason of the advice taken, and the procedure was proper.
APPLICATION for judicial review. COUNSEL:
H. Turkstra for applicant.
F. Lemieux and K. L. Boland for respondent.
SOLICITORS:
Turkstra and Dore, Hamilton, for applicant.
Herridge, Tolmie, Gray, Coyne & Blair, Ottawa, for respondent.
The following are the reasons for judgment delivered orally in English by
JACKETT C.J.: This is a section 28 application to set aside a decision of the Canadian Egg Market ing Agency dated October 24, 1975, revoking the Grading Station Operator's Licence, Number 1240, that had been issued to the applicant.
The matters necessary to understand the ques tions raised by the application may be summarized as follows:
1. The Farm Products Marketing Agencies Act (S.C. 1970-71-72, c. 65), which came into force early in 1972, provided inter alia (section 17) for a proclamation of the Governor in Council to establish an "agency" with powers relating to any of certain farm products. An agency so established is a body corporate. Such a procla mation must (section 18), inter alia, set out the terms of a "marketing plan" that the agency is empowered to implement, fix the number of members of the agency "at least a majority of whom shall be primary producers", and deter mine the manner of appointment of such mem bers. An agency so established has power, inter alia (section 23(1)), to "make such orders and
regulations as it considers necessary" in connec tion with the marketing scheme, by order, to require persons engaged in the marketing of the product "to deduct from any amount pay able... to any other person engaged in the production or marketing of such ... product any amount payable to the agency by such other person by way of licence fees, levies or charges" provided for in the marketing plan and to remit amounts so deducted to the agency, and to do all other things necessary or incidental to the exer cise of its powers or the carrying out of its functions. The "marketing plan" which must be set out in the proclamation is (section 2(e)) "a plan relating to the promotion, regulation and control of the marketing of any regulated prod uct in interprovincial or export trade", that includes "provision" for all or any of certain features, one of which is "a system for the licensing of persons engaged in the ... produc tion of the ... product for, or the marketing thereof in, interprovincial or export trade" (including provision for certain fees payable to the agency and "for the cancellation or suspen sion of any such licence where a term or condi tion thereof is not complied with"), and another of which is "the imposition and collection by the ... agency of levies or charges from persons engaged in the ... production of the ... product or the marketing thereof".
2. The Canadian Egg Marketing Agency Proc lamation was made by the Governor in Council on December 19, 1972, pursuant to the Farm Products Marketing Agencies Act. This procla mation established the respondent, the Canadian Egg Marketing Agency (hereinafter referred to as "CEMA"), consisting of ten members, to exercise powers in relation to eggs from domes tic hens produced anywhere in Canada and had attached to it a schedule setting out inter alia the manner of appointment of CEMA's mem bers and the terms of the marketing plan to be implemented by CEMA. Leaving aside the pre-
liminary period, that schedule provided that "The Commodity Board for each province," which was defined, "may from time to time appoint a Canadian citizen who is a resident of the province for which that Board is established to be a member of the Agency" (section 2(2)). The schedule also
(a) set out a detailed "marketing plan",
(b) required CEMA to establish a system for licensing of persons engaged in the marketing of eggs in interprovincial or export trade (and incidentally thereto, to prescribe the terms and conditions to which each licence is subject "including a condition that the person to whom the licence is issued shall at all times ... comply with orders and regulations of the Agency"), and
(c) authorized CEMA, by order or regula tion, to impose levies and charges on persons engaged in the production or marketing of eggs.
3. In May, 1973, CEMA enacted the Canadian Egg Licensing Regulations. These regulations (section 3) prohibit any person from engaging in the marketing of eggs in interprovincial or export trade, as a producer, grading station operator, producer-vendor or processor, unless he holds a licence under the regulations and pays a prescribed annual fee; they provide (sec- tion 8) that every licence shall be issued subject, inter alia, to the condition that "the licensee shall at all times ... comply with orders and regulations of the ... Agency"; and they further provide (section 9), "The Agency may suspend, revoke or refuse to issue a licence ... where the applicant or licensee has failed to observe, per form or carry out any condition of the licence". This latter provision must be read with a proce dural provision (section 10), which provides that "Where the Agency intends to suspend or revoke a licence, the Agency shall give to the licensee by registered mail ... notice of its intention to suspend or revoke the licence, ... and such notice shall fix a time of not less than 14 days from the mailing thereof for the licensee to show cause why the licence should not be
suspended or revoked ...."
4. The 1972 proclamation was amended on Sep- tember 15, 1975, inter alia to increase the mem bership of CEMA by two members appointed by the Governor in Council.
5. CEMA required payment of levies by pro ducers to be collected by grading station opera tors and paid over to CEMA through duly con stituted agencies.
6. On May 1, 1975, a grading station operator's licence was issued to the applicant (presumably by way of renewal of previous licences).
7. The applicant should, under the statutory scheme, have collected levies from others, who were producers, and paid them to CEMA, and should, as a producer, have paid levies to CEMA, but it wilfully failed to do either of those things.
8. A document dated October 2, 1975, entitled "Notice of Intention to Revoke Grading Station Operator's Licence No. 1240" and signed by the General Manager of CEMA was sent to the applicant. This document reads:
The Canadian Egg Marketing Agency on the 1st day of May, 1975 issued to you a grading station operator's licence pursuant to the Canadian Egg Licensing Regula tions authorizing you to engage in the marketing of eggs as a grading station operator in interprovincial or export trade and authorizing you to engage in the selling and/or buying of eggs in interprovincial or export trade.
It is a condition of your licence that you shall at all times during the term of the licence comply with orders and regulations of the Agency.
You are aware of the terms of the Canada Egg Pur chasing Levies Order and the Canada Interim Egg Levies Order which impose levies on producers. The levies cur rently imposed are 3.5 cents per dozen. By the terms of these Orders where the eggs are sold to a grading station the levies are to be collected by the grading station to whom such eggs are delivered by deducting the amount of the levy from the moneys payable to the producer. In addition, by the terms of the Levies Orders cited above you are to pay such moneys collected from the producers to the
Ontario Egg Producers Marketing Board.
It is alleged against you that you are refusing to collect from producers the levies imposed pursuant to the Levies Orders referred to above and are refusing to pay such levies to the Ontario Fowl and Egg Producers Marketing Board in accordance with their direction. Pursuant to section 9 of the Canadian Egg Licensing Regulations the Agency may revoke a licence where a licensee has failed to observe any condition of the licence.
TAKE NOTICE THEREFORE that pursuant to section 10 of the Canadian Egg Licensing Regulations the Canadian Egg Marketing Agency gives you notice of its intention to revoke the grading station operator's licence which it has issued to you and hereby gives you notice of such intention.
Pursuant to the provisions of section 10 the Canadian Egg Licensing Regulations, you are given until the 16th day of October, 1975 to show cause why your grading station operator's licence should not be revoked. This is an opportunity for you to provide the Agency with any facts or arguments which may have a bearing on the question. Revocation of your licence has the result that you are prohibited from marketing eggs as a grading station opera tor in interprovincial and export trade and authorizing you to engage in the selling or buying of eggs in interprovincial trade.
9. A document dated October 17, 1975, and entitled "Notice of Hearing" was sent to the applicant. This document reads:
TAKE NOTICE that the Canadian Egg Marketing Agency at a hearing to be held on Friday the 24th of October, 1975 at 1:00 p.m. in the Gatineau Room, Conference Centre, in the City of Ottawa will consider whether your grading station operator's licence authorizing you to engage in the marketing of eggs in interprovincial or export trade should be revoked on the grounds that you have violated a condition of such licence in that you have failed to comply with the terms of the Canada Egg Pur chasing Levies Order, as amended and the Canada Interim Levies Order as amended, by not collecting such levies from the following producers: Ed Becker, Kaiser Lake Farms, Embury Bros. Farm Ltd., Hemlock Park Co-Op Farm Ltd., Richard Paddle (Sillcrest), Aeggco Ltd., J. Burman, Joe David, R. McEwen, Burnbrae McCallum, Joe Hudson.
AND FURTHER TAKE NOTICE that you may adduce such evidence in respect of the matter as you or your counsel may be advised and you may either in person or through counsel make such further and other submissions beyond the opportunity accorded to you by letter of October 2nd, 1975.
AND FURTHER TAKE NOTICE that if you do not attend at this hearing, the Agency may proceed in your absence and you will not be entitled to any further notice in the proceedings.
10. CEMA held the hearing on October 24, 1975, at which it was represented by counsel who put forward evidence against the applicant, and the applicant was represented by counsel who put forward evidence including the appli cant's own testimony.
11. An order bearing date October 24, 1975, was made by CEMA. This order reads:
It is ordered that, Burnbrae Farms Limited having failed to collect and remit levies as required by the Canada Egg Purchasing Levies Order and the Canada Interim Egg Levies Order, the Licence of Burnbrae Farms Limited issued pursuànt to the Canadian Egg Licencing Regula tions, being a Grading Station Operator's Licence author izing that' company to engage in the selling and/or buying of eggs as a Grading Station in interprovincial or export trade, is hereby revoked effective immediately.
This latter order is the subject matter of this section 28 application.
Certain points are not in dispute, viz:
1. No attack has been made on the validity of the Proclamations made by the Governor in Council or the validity of the licensing regula tions or levy order made by CEMA and no determination of their validity has to be made; for the purpose of this application, it is common ground that their validity must be assumed.
2. The applicant concedes
(a) that the licence that is the subject matter of the order under attack was issued condi tional upon compliance with CEMA's orders and regulations; and
(b) that CEMA had made an order requiring the applicant to remit certain levies and that the applicant had, prior to the making of the order under attack, failed to comply with such orders.
Indeed, it is quite clear that the applicant had deliberately flouted the orders for payment of levies to CEMA as a form of protest against the manner in which the marketing plan that CEMA
was charged with implementing was being admin istered and that the applicant made it quite clear at the licence cancellation hearing that it intended to continue to flout such orders until some vague undefined changes in the administration of that plan were made. It is also clear that the applicant and others who shared his point of view had embarked on a programme of action calculated to frustrate the marketing plan as it was being imple mented by CEMA and that such programme included
(a) the non-payment of levies,
(b) the defence against the licence-cancellation proceedings, and
(c) various legal proceedings, including this sec tion 28 application.
I mention this programme of action not as an indication as to how this or any other legal pro ceeding should be decided but to underline the obvious fact that, where the applicant has deliber ately chosen to defy the legal requirements flowing from the Farm Products Marketing Agencies Act, no matter how justified such defiance of the law may be from his point of view, the courts and other tribunals involved must carry out their duties of rendering such decisions as are required by the law in the circumstances.
It is against that background, in my view, that the applicant's attacks on the order made by CEMA under date of October 24, 1975, must be considered.
The attacks so made by the applicant on the order of October 24, 1975, are with one exception summarized by the memorandum filed by the applicant in this Court as follows:
The applicant submits that the decision dated October 24, 1975 (whenever it was, in fact, made) should be set aside on the following grounds:
(a) CEMA failed to follow the principles of natural justice in that it:
(i) Refused a reasonable and necessary request for an adjournment, thus preventing the Applicant from obtain ing a fair and proper hearing;
(ii) Proceeded to hold a hearing by a panel which included members who were biased against the Applicant because they either directly, or as representatives of other persons,
had a proprietary interest in having Burnbrae Farms removed from the Montreal market;
(iii) Conducted the hearing notwithstanding that there was a real apprehension of and likelihood of bias against Burnbrae Farms as an eastern Ontario egg producer and agitator for reform of the national plan. The existence of such bias was evidenced by the Directors' administration of the national egg plan, by the timing and manner of the October proceedings, by the conduct of the staff of the Agency in the period immediately preceding the hearing, all of which clearly showed that CEMA's actions were designed to crush the eastern Ontario opposition to its administration for the protection of the interests of the other provinces;
(iv) The panel of Directors who sat on October 24th included the Executive of the Board of CEMA who had previously made a formal decision to form an intention to revoke the licence and who had sat for that purpose on a previous occasion with John Hyde, a Director with acknowledged bias against the Applicant;
(b) The hearing of October 24th was a show cause hearing which required for its validity a prior valid decision to revoke. There is no evidence that the Executive of CEMA is authorized to make the decision required for CEMA to form that intention and the formation of that intention was a decision which was made without notice and is in its absence and is in law void. The panel sitting on October 24th erred in law in proceeding on the assumption that the prior decision of the Executive was valid.'
I find it convenient to deal first with the last of these attacks. This attack is based upon an inter pretation that the applicant puts upon sections 9 and 10 of the Canadian Egg Licensing Regula tions, which I quote in full at this point, for convenience:
9. The Agency may suspend, revoke or refuse to issue a licence where the applicant or licensee is not qualified by experience, financial responsibility or equipment to engage properly in the business for which application is made or where the applicant or licensee has failed to observe, perform or carry out any condition of the licence.
10. Where the Agency intends to suspend or revoke a licence, the Agency shall give to the licensee by registered mail addressed to him at his address recorded in the books of the Agency notice of its intention to suspend or revoke the licence, as the case may be, and such notice shall fix a time of not less than 14 days from the mailing thereof for the licensee to show
Paragraph 6(a)(v) of section 2 of the applicant's memoran dum was withdrawn by counsel for the applicant during the course of argument.
cause why the licence should not be suspended or revoked, as the case may be.
The applicant's attack based upon these sections is dependent upon reading them as requiring two decisions to be made by CEMA on a quasi-judicial basis as a condition precedent to suspension or revocation of a licence, viz:
(a) a decision under section 10 forming an intention to suspend or revoke the licence, and
(b) a decision under section 9 to suspend or revoke the licence.
While section 10 has not been framed as felicitous- ly as it might have been, it is quite clear to me that a fair reading of the two sections requires that section 10 be regarded as being merely a proce dural provision designed to ensure that the licensee be given a fair opportunity of answering what is alleged against him before suspension or revoca tion action is taken against him under section 9. The result in my view is that what is contemplated is
(a) purely administrative action under section 10 to put the licensee in a position to answer that which is alleged against him, which proce dural action requires no prior opportunity to be heard and is of a kind that can quite properly be delegated to an executive body or appropriate officials (and, in the absence of challenge by the Agency itself, must be assumed to have been so delegated when an executive body or an official of the Agency purports to have taken the con templated action); and
(b) actual suspension or revocation under sec tion 9, which must be carried out by the Agency itself on a quasi-judicial basis.
I turn now to the attacks based upon the alleged failure of CEMA to follow the principles of natu ral justice before making the order under attack. These attacks fall under two main heads, viz:
(a) a refusal to grant the applicant an adjourn ment of the hearing on the licence revocation question, and
(b) bias or apprehension of bias.
In my view, there is no basis for complaint in the refusal of an adjournment in this case. Generally speaking, as I understand it, a statutory tribunal is, subject to any special requirements established by law, the master of its own proceedings and, in particular, has a very wide discretion to decide if and when a properly convened hearing will be adjourned and, if adjourned, for how long it will be adjourned. Again, speaking very generally, a supervisory jurisdiction such as is conferred by section 28 of the Federal Court Act can only be exercised to set aside a decision of such a tribunal for refusal to grant an adjournment if, as a result of such refusal, the person concerned has been deprived of a reasonable opportunity of answering the case that is being put against him. In the present case, the applicant was given a show cause notice shortly after October 2 by which it was given some two weeks to show cause and, then, it was given notice of a hearing to be held on Octo- ber 24. Prima facie, this was ample time for preparation of any answer that it might have had to the rather simple case that was being put against it. Its complaint is, however, that it had chosen to use much of that time in connection with legal proceedings that it was embarking on, as I see it, in the course of the programme of opposi tion against the marketing plan as it was being implemented, to which I have referred, and that it required, after receiving the notice of hearing, time to organize a case that it desired to put before the Agency, the purpose of which was to convince the Agency that the Agency was implementing the marketing plan in a way that was inequitable to the applicant and persons in a like position. Not only is the case that the applicant desired more time to prepare completely irrelevant, in my opin ion, to the subject matter of the hearing, but, as it seems to me, the period allowed from the time the show cause notice was given to the date of hearing was not inadequate for its preparation. 2 I can see no basis in the refusal of the adjournment for setting aside the order under attack.
2 The only arguable relevance of such a case is that it might have tended to show that the licence should not have been revoked at all or should only have been suspended. In my view, a case based on unevenness of enforcement as between the applicant and others was completely irrelevant to that question as long, at least, as the applicant persisted in its own refusal to pay the levies.
I come to the allegations of bias or apprehension of bias. As I appreciate the various forms in which such allegations are formulated, they are based on facts which, in my view, fairly regarded, can be described as follows:
(a) members of CEMA who sat at the hearing leading to the decision under attack were repre sentative of producers in provinces other than Ontario, where the applicant carries on business, and whose economic interests accordingly con flict with those of the applicant and others in the same position as the applicant, and
(b) the expressed intention of persons acting on behalf of CEMA to enforce the legal require ments of the marketing plan against those who had wilfully breached such requirements by way of protest against the way the plan was being implemented by the majority decisions of the members of CEMA.
In so far as the representative character of the members of CEMA is concerned, when the stat ute, the proclamation and the licensing regulations (all of which are accepted as valid for the purpose of this section 28 application) are read together, it appears
(a) that, of the 12 members of CEMA, at least 9 must be persons appointed by commodity boards established for provinces other than Ontario and "at least" 7 must be primary producers,
(b) that it is the Agency so constituted that is charged with implementing the marketing plan, an essential part of which is the levies the payment of which is a condition to the holding of a licence, and
(c) that it is the Agency so constituted that is charged with the responsibility of enforcing such condition, inter alia, by suspending or revoking licences.
Furthermore, in the absence of any special provi sion concerning a quorum, at least one-half of the members of CEMA must participate in any deci sion that must be made by the Agency itself. (See section 21 of the Interpretation Act, R.S.C. 1970, c. I-23.) In such a statutory scheme, it does not appear to me that an apprehension of bias that is based only on the fact that some of the members
have, by virtue of the part of the country from which they come, a business background with eco nomic interests that conflict with those of a par ticular licensee whose licence is in jeopardy can be regarded as a disqualification.
In so far as actual bias is concerned, I have not found any evidence that shows that any member who participated in the decision under attack was subject to any such disqualification. Certainly, in my view, an expressed intention by members of CEMA or its staff to carry out their statutory function of implementing the marketing plan by compelling members who flout its orders to comply therewith cannot be taken as evidence of bias having regard to CEMA's obligation to implement the statutory scheme created by the statute, proc lamation and regulations, all of which, as I have said, are accepted as valid for the purpose of these proceedings.
A special comment is required with reference to the attack summarized in the applicant's memo randum, as follows:
The panel of Directors who sat on October 24th included the Executive of the Board of CEMA who had previously made a formal decision to form an intention to revoke the licence and who had sat for that purpose on a previous occasion with John Hyde, a Director with acknowledged bias against the Applicant;
In so far as the members of CEMA who, as members of the Executive, participated in the action under section 10 of the Canadian Egg Licensing Regulations are concerned, for the rea sons already given, I am of the view that what they did was purely administrative, in no way involved forming any view as to what action should be taken under section 9, and in no way disqualified them from participating in the Agency's decision under section 9. With reference to their participa tion with Mr. Hyde in the taking of action under section 10, even if he had an "acknowledged bias against the Applicant", nothing involved in the section 10 action would, in my view, infect them with such bias and, in any event, I do not find any evidence in the record to support the statement that he had "acknowledged bias against the Appli cant". I do not overlook those parts of the evidence of Mr. Hudson in which he expressed a belief that Mr. Hyde was biased against him but, on the reasoning that I have endeavoured to expound with
reference to the general question, there was, in my view, no reasonable basis for such belief.
Finally, I should refer to a belated attack, not reflected in the applicant's memorandum, that is based on minutes of CEMA's proceedings that came to the attention of the applicant after its memorandum was filed. Briefly, the complaint is that a member of the bar who was of counsel for CEMA during the hearing was consulted by the members who constituted the panel that par ticipated in the hearing as to whether an alleviat ing provision could legally be inserted in the revo cation order. By analogy to other classes of cases, it was contended that this constituted the taking of evidence or listening to submissions of one party in the absence of the other. Such questions must, of course, be decided in each case by reference to the particular legal system that has been set up. This is not a case where there is a tribunal that has, to decide a case between two opposing parties. In my view, this is a case of the class where a statutory authority has a duty to exercise a power of its own motion but only after giving the person concerned an opportunity to be heard, and by its very nature—whether it is a government department or other statutory authority—can only be expected to operate and take decisions with the help of profes sional or other staff. Such an authority must be able to resort to 'appropriate staff help in the working out of its decisions after it has given the person concerned his opportunity to be heard. There is no suggestion in this case of a possibility of a miscarriage of justice by reason of the particu lar advice taken and the procedure followed is the very procedure contemplated by the long line of cases concerning public departments and bodies going back at least as far as the Arlidge case.'
In my opinion, this section 28 application should be dismissed.
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URIE J. concurred.
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MACKAY D.J. concurred.
3 [1915] A.C. 120.
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