A-512-79
Association for Public Broadcasting in British
Columbia (Appellant)
v.
Canadian Radio-television and Telecommunica
tions Commission, Comox Reception Limited,
Courtenay-Comox Television Limited, CableNet
Limited, Comox Valley Cablevision Limited
(Respondents)
Court of Appeal, Une and Ryan JJ. and MacKay
D.J.—Toronto, June 2; Ottawa, July 16, 1980.
Broadcasting — Appeal from CRTC's dismissal of appel
lant's motion asking the Commission to withhold its decision
re application for a new licence and a transfer of assets
between C.-C.T.V. and CVC pending the filing of such an
application by the appellant — Submission by appellant that
the Commission restricted the exercise of its discretion by not
permitting it to file a competitive application — Whether s. 19
of the Broadcasting Act requires the Commission to hear the
applications received from all the parties seeking new licences
— Broadcasting Act, R.S.C. 1970, c. B- II, ss. 3, 15, 17(1),
19(1),(2),(3) and (7), 24(1).
This is an appeal from a decision of the Canadian Radio-
television and Telecommunications Commission which
approved a transfer of assets from C.-C.T.V. to Comox Valley
Cablevision Limited (CVC) and an application for a new
licence made by the latter, but denied appellant's motion asking
the Commission to withhold said decision pending the filing
and the consideration of an application for licence to be made
later by appellant. The appellant, an intervener before the
Commission, argues that the Commission restricted the exer
cise of its discretion in granting or refusing the issuance of a
licence by refusing to permit the appellant to prepare and
present a competitive application. The question is whether
section 19 of the Broadcasting Act requires that the public
hearing envisaged by the section must include hearings on the
application received from all parties desiring to obtain the
licence for the area sought and not just that of a proposed
purchaser of the assets of any existing licensee.
Held, the appeal is dismissed. The only duty on the Commis
sion in connection with the issuance of a licence or the revoca
tion of an existing one, is to hold a public hearing as required
by section 19 for the purpose of ensuring that the broadcasting
policy enunciated by the Act is adhered to, part of which policy
is to ensure continuity of and quality of service. Here, the
Commission gave notice of a public hearing with respect to the
application before it, granted the appellant intervener status
which gave it the right to make submissions regarding the
application, and in its decision, dealt with the application and
the appellant's preliminary motion. That the Commission's
policy not to call for competitive applications is not rigidly or
slavishly adhered to in all cases is shown by the fact that it
heard appellant's preliminary motion, reserved its decision
thereon and while it ultimately rejected it, it did not do so
without considering its merits.
APPEAL.
COUNSEL:
A. Roman for appellant.
Miss A. Wylie and A. Cohen for respondent
Canadian Radio-television and Telecommuni
cations Commission.
T. Heintzman for respondent companies.
SOLICITORS:
The Public Interest Advocacy Centre,
Toronto, for appellant.
General Counsel, Canadian Radio-television
and Telecommunications Commission for
respondent CRTC.
McCarthy & McCarthy, Toronto, for
respondent companies.
The following are the reasons for judgment
rendered in English by
URIE J.: This is an appeal, with leave of the
Court, from a decision of the Canadian Radio-
television and Telecommunications Commission
(hereinafter referred to as "the Commission")
issued on December 1, 1978 as No. 78-724 [4
C.R.T. 507].
Briefly the relevant facts follow. The respond
ents Comox Reception Limited and Courtenay-
Comox Television Limited (hereinafter referred to
as "the Vendors") carried on a television receiving
undertaking in British Columbia, in equal partner
ship under the firm name of C.-C.T.V. The part
nership had originally commenced operations in
1957 with about 300 subscribers and by 1978 had
some 7,159 subscribers. At the time of the events
giving rise to the appeal, the Vendors held a
licence issued by the Commission which author
ized them to operate a cable television system in
the Comox-Cumberland area of British Columbia
for the term from April 1, 1978 to March 31,
1981.
In the summer of 1978 the Vendors and the
respondent CableNet Limited, a subsidiary of
Agra Industries Limited, entered an agreement
under which the assets of the Vendors would be
transferred to a new company to be incorporated,
and the shares of that company would be trans
ferred from the Vendors to CableNet Limited.
Since, under Commission practice, the existing
licence could not be transferred from the holder
thereof to another person, the parties agreed to
cause an application to be made to the Commis
sion by one Ronald Douglas Ellis (a shareholder
and officer of the Vendors) on behalf of a com
pany to be incorporated for the approval of the
following proposed transaction:
(a) the acquisition by the company to be incor
porated, namely Comox Valley Cablevision
Limited (a respondent herein and hereinafter
referred to as "CVC") of the cable television
undertaking of the Vendors;
(b) an application by CVC for a broadcast
receiving licence for the cable television under
taking upon the surrender of the current licence
held by the Vendors; and
(c) an application by CVC in accordance with
conditions to be contained in its licence, for
authority to transfer effective control of CVC
through the transfer, following incorporation, of
all its issued and outstanding shares to Cable-
Net Limited.
All of the above has been referred to throughout
the proceedings as the Ellis application. On Sep-
tember 1, 1978 the Commission published a notice
of public hearing to consider the three-pronged
application to be held in Vancouver on October 24,
1978.
On October 3, 1978 the appellant sent a telex to
the Commission stating that it wished to have "the
opportunity to submit an application for the
licence" which is "being surrendered by the cur
rent licensee". It requested that the public hearing
be adjourned for twelve months in order to give it
an opportunity to prepare and submit an applica
tion for the licence. By telex dated October 6,
1978 the Commission advised the appellant that it
was unable to comply with its request but granted
it the status of an intervener on the Ellis
application.
On October 13, 1978, appellant's counsel, by
letter, sought clarification of the Commission's
telex with particular reference as to whether the
Commission was refusing to entertain the appel
lant's application or whether it was merely refus
ing to allow the adjournment. Counsel for the
Commission on October 16, 1978 replied to the
letter stating that "the undertaking which you
request, i.e. that a competitive application by
APBBC [the Appellant] will be heard, is not one
open to the staff of the Commission to give." It
was suggested that counsel for the appellant raise
his concerns by way of a preliminary motion at the
Vancouver hearing of the Ellis application.
At the public hearing on October 25, 1978
counsel for the appellant withdrew the appellant's
request for an adjournment of the hearing and
requested instead that the Commission should
complete the hearing on the Ellis application but
withhold its decision thereon pending the filing
and consideration of an application for licence to
be made later by the appellant. The Commission
reserved its decision on the motion and proceeded
with the Ellis application. Counsel for the appel
lant took no further part in the proceedings, not
withstanding the fact that having been granted
intervener status, it was, in accordance with the
Commission's Rules of Procedure, entitled to make
representations for the purpose of supporting,
opposing or modifying the application.
By Decision CRTC 78-724 dated December 1,
1978 the Ellis application was approved and appel
lant's motion was denied. It is from this decision
that the appellant appeals.
Stripped to its essentials, the sole issue of any
consequence raised by the appeal is whether, when
an application is made to the Commission for the
issuance of a new licence, section 19 of the Broad
casting Act, R.S.C. 1970, c. B-11 requires that the
public hearing envisaged by the section must
include hearings on the applications received from
all parties desiring to obtain the licence for the
area sought and not just that of a proposed pur
chaser of the assets of any existing licensee. In
appellant's view the Commission fettered the exer
cise of its discretion in granting or refusing the
issuance of a licence by refusing to permit the
appellant sufficient time to file its application for a
licence thus leaving only the Ellis application
before it for its consideration.
To determine the validity of appellant's submis
sions the scheme of the Broadcasting Act should
be examined. Section 3 declares the broadcasting
policy for Canada. For purposes of this appeal the
relevant paragraphs thereof are the following:
3. It is hereby declared that
(a) broadcasting undertakings in Canada make use of radio
frequencies that are public property and such undertakings
constitute a single system, herein referred to as the Canadian
broadcasting system, comprising public and private elements;
(b) the Canadian broadcasting system should be effectively
owned and controlled by Canadians so as to safeguard,
enrich and strengthen the cultural, political, social and eco
nomic fabric of Canada;
(c) all persons licensed to carry on broadcasting undertak
ings have a responsibility for programs they broadcast but
the right to freedom of expression and the right of persons to
receive programs, subject only to generally applicable stat
utes and regulations, is unquestioned;
(h) where any conflict arises between the objectives of the
national broadcasting service and the interests of the private
element of the Canadian broadcasting system, it shall be
resolved in the public interest but paramount consideration
shall be given to the objectives of the national broadcasting
service;
and that the objectives of the broadcasting policy for Canada
enunciated in this section can best be achieved by providing for
the regulation and supervision of the Canadian broadcasting
system by a single independent public authority. [Emphasis
added.]
The single independent public authority selected
for carrying out the objectives is the Commission.
Section 15 of the Act provides in part that
... the Commission shall regulate and supervise all aspects of
the Canadian broadcasting system with a view to implementing
the broadcasting policy enunciated in section 3 of this Act.
[Emphasis added.]
Section 16 details the powers exercisable by the
Commission. Subsection (1) provides that in fur
therance of its objects, the Commission, on the
recommendation of the Executive Committee, may
prescribe classes of broadcasting licences, make
regulations applicable to all persons holding broad
casting licences of one or more classes and revoke
any broadcasting licence other than one issued to
the Canadian Broadcasting Corporation.
The relevant portions of section 17 are impor
tant and read as follows:
17. (1) In furtherance of the objects of the Commission, the
Executive Committee, after consultation with the part-time
members in attendance at a meeting of the Commission, may
(a) issue broadcasting licences for such terms not exceeding
five years and subject to such conditions related to the
circumstances of the licensee
(i) as the Executive Committee deems appropriate for the
implementation of the broadcasting policy enunciated in
section 3, and
(b) upon application by a licensee, amend any conditions of
a broadcasting licence issued to him;
(c) issue renewals of broadcasting licences for such terms
not exceeding five years as the Executive Committee consid
ers reasonable and subject to the conditions to which the
renewed licences were previously subject or to such other
conditions as comply with paragraph (a);
(d) subject to this Part, suspend any broadcasting licence
other than a broadcasting licence issued to the Corporation;
Subsections 19(1),(2),(3) and (7) provide for
public hearings and the procedure in relation
thereto. They read as follows:
19. (1) A public hearing shall be held by the Commission
(a) in connection with the issue of a broadcasting licence,
other than a licence to carry on a temporary network opera
tion; or
(b) where the Commission or the Executive Committee has
under consideration the revocation or suspension of a broad
casting licence.
(2) A public hearing shall be held by the Commission, if the
Executive Committee is satisfied that it would be in the public
interest to hold such a hearing, in connection with
(a) the amendment of a broadcasting licence;
(b) the issue of a licence to carry on a temporary network
operation; or
(c) a complaint by a person with respect to any matter
within the powers of the Commission.
(3) A public hearing shall be held by the Commission in
connection with the renewal of a broadcasting licence unless
the Commission is satisfied that such a hearing is not required
and, notwithstanding subsection (2), a public hearing may be
held by the Commission in connection with any other matter in
respect of which the Commission deems such a hearing to be
desirable.
(7) The Commission has, in respect of any public hearing
under this section, as regards the attendance, swearing and
examination of witnesses thereat, the production and inspection
of documents, the enforcement of its orders, the entry of and
inspection of property and other matters necessary or proper in
relation to such hearing, all such powers, rights and privileges
as are vested in a superior court of record.
Section 24 is the only other section requiring
consideration for purposes of this appeal. It reads:
24. (1) No broadcasting licence shall be revoked or suspend
ed pursuant to this Part,
(a) except upon the application or with the consent of the
holder thereof; or
(b) in any other case, unless, after a public hearing in
accordance with section 19, the Commission in the case of
the revocation of a licence or the Executive Committee in the
case of the suspension of a licence, is satisfied that
(i) the person to whom the broadcasting licence was issued
has violated or failed to comply with any condition thereof,
or
(ii) the licence was, at any time within the two years
immediately preceding the date of publication in the
Canada Gazette of the notice of such public hearing, held
by any person to whom the licence could not have been
issued at that time by virtue of a direction to the Commis
sion issued by the Governor in Council under the authority
of this Act.
It is clear from the foregoing that the Commis
sion has been endowed with powers couched in the
broadest of terms for "the supervision and regula
tion of the Canadian broadcasting system", which,
of course includes cablevision systems, with a view
to implementing the broadcasting policy enunciat
ed in section 3 of the Act. Part of the regulatory
mandate is to prescribe classes of broadcasting
licences and, as well, includes the procedure to be
followed to effect the issuance, revocation, suspen
sion or renewal of such licences.
It will be noted that Parliament, by the enact
ment of subsection 24(1) of the Act, directed that
no broadcasting licence is to be revoked or sus
pended "except upon the application or with the
consent of the holder thereof ...". Clearly what
was sought in the Ellis application was a revoca
tion of the Vendors' existing licence with their
consent to its revocation to be effective only if the
transfer of their assets to CableNet Limited was
approved by the Commission. If it was not
approved then the application for revocation of the
licence was to be withdrawn. That certainly was
the purport of their application and I am unable to
appreciate appellant counsel's submission that
such an application constituted a surrender of the
licence which could not have attached to it the
condition respecting withdrawal of the application
if the proposed transfer of assets was not approved.
In my view, an applicant for revocation, which the
Vendors here were, is entitled to ask the Commis-
sion to consider that the applicant's consent be
conditioned on the Commission approving of the
transfer of the applicant's assets to another person.
To permit such a conditional application is con
sistent with what we were told was the Commis
sion's policy of not depriving a licensed area of
cablevision service. An area might well be so
deprived if the revocation had first to be accepted
and if, thereafter, approval to the proposed trans
fer was for any reason refused. Part of the broad
casting policy is the right of persons to receive
programs. Concomitant with that right must be
the duty of the licensee to provide the service to
ensure programs are received. That responsibility
could not be carried out if the licence was permit
ted to be surrendered without reference to a
replacement licence being assured.
The appellant's further submission was that
since a new licence, under the Ellis application,
was required to be issued, any person seeking the
licence had the right to apply therefor at a public
hearing. In its view, moreover, the Commission
was not entitled to issue the new licence without
and until giving notice to all interested parties that
applications would be received for such a licence,
and that all of the applications therefor had been
dealt with by the Commission. I do not agree.
Aside entirely from the fact that no application
has ever been submitted by the appellant, it having
only expressed to the Commission the desire to
submit one, the only duty on the Commission in
connection with the issuance of a licence or the
revocation of an existing one, is to hold a public
hearing as required by section 19 for the purpose
of ensuring that the broadcasting policy enunciat
ed by the Act is adhered to, part of which policy is
to ensure continuity of and quality of service.
In this case the Commission gave notice of a
public hearing on the Ellis application, granted the
appellant intervener status which gave it the right
to make submissions in respect thereof, held the
public hearing at which it heard the submissions of
the appellant that no decision should be made on
the application until it had disposed of the pro
posed application by the appellant and in its deci
sion dealt with both the Ellis application and
appellant's preliminary motion. In respect of the
latter the Commission had this to say [at pages
508-509]:
At the hearing, counsel for the intervener, Association of Public
Broadcasting in British Columbia (APBBC), made a prelim
inary motion that the Commission allow APBBC time to
prepare and present a competitive application for the licence,
on the basis that the Commission lacks the authority to confine
or restrict the class of those who may apply for a new licence to
the party who has been nominated by the outgoing licensee.
The Commission heard argument on the motion and reserved
its decision.
In Decision CRTC 77-275 of April 15, 1977, the Commission
denied a similar motion by the Canadian Broadcasting League,
raised in connection with an application for the approval of the
transfer of control of a licensee company. The Commission
stated that it relied upon sections 17, 15 and 3 of the Broad
casting Act, for its authority to regulate and to approve the
transfer of effective control of corporate licensees. It also found
support for its view in the decision of the Federal Court of
Appeal in the case of John Graham & Co. Ltd. v. CRTC (1976)
68 D.L.R. (3d) 110 [[1976] 2 F.C. 82].
Counsel for APBBC submitted that the present application
could be distinguished on the basis that it dealt with a transfer
of assets and a proposed surrender of licence, whereas the
former case concerned a transfer of control by means of
acquisition of shares in the licensee company.
The Commission has decided that for purposes of the discharge
of its authority in the present case, the above distinction has no
relevance. The motion is accordingly denied.
The Commission, in my view, clearly did what
the statute required it do in respect of the Ellis
application.
Undoubtedly it has been part of the policy of the
Commission in applications similar to the Ellis
application not to call for competitive applications.
However, that such a policy is not rigidly or
slavishly adhered to in all cases is shown by the
fact that it heard the appellant's preliminary
motion, reserved its decision thereon and while it
ultimately rejected it, it did not do so without
considering its merits as its reasons disclose. The
Commission, thus, did not, as I see it, fetter its
discretion in making a decision by adhering rigidly
to a fixed policy.
de Smith, in Judicial Review of Administrative
Action' had this to say about self-created rules of
' 3rd ed., at pp. 275-276. For a further discussion of the
relevant principles see Canadian National Railways Company
v. The Bell Telephone Company of Canada [1939] S.C.R. 308.
policy by a tribunal:
The relevant principles were well stated by Bankes L.J. in a
case in which the Port of London Authority had refused an
application for a licence to construct certain works, on the
ground that it had itself been charged with the provision of
accommodation of that character:
There are on the one hand cases where a tribunal in the
honest exercise of its discretion has adopted a policy, and,
without refusing to hear an applicant, intimates to him what
its policy is, and that after hearing him it will in accordance
with its policy decide against him, unless there is something
exceptional in his case ... if the policy has been adopted for
reasons which the tribunal may legitimately entertain, no
objection could be taken to such a course. On the other hand
there are cases where a tribunal has passed a rule, or come to
a determination, not to hear any application of a particular
character by whomsoever made. There is a wide distinction
to be drawn between these two classes.
It is obviously desirable that a tribunal should openly state any
general principles by which it intends to be guided in the
exercise of its discretion.
In my opinion, the Commission had the right to
determine that, in the circumstances of this case, it
ought not to accede to the appellant's request to
depart from its usual policy in relation to granting
or refusing approval of the sale of assets of a
licensee to another, for the reasons which it gave.
In rejecting the request, it was not in breach of the
Act. It had the obligation to hold a hearing and it
did so. The nature of the hearing was for it to
determine as the independent public authority
charged with the regulation and supervision of the
Canadian broadcasting system.
Appellant's counsel made a number of addition
al submissions with which I think it is unnecessary
to deal since, in my opinion, they are devoid of
merit.
No error in the application of the provisions of
the Act and Regulations having been demonstrat
ed, I would, therefore, dismiss the appeal.
* * *
RYAN J.: I concur.
* * *
MACKAY D.J.: I agree.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.