Date: 20050210
Docket: T-1069-04
Citation: 2005 FC 208
Ottawa, Ontario, February 10, 2005
PRESENT: THE HONOURABLE MR. JUSTICE BEAUDRY
BETWEEN:
ATTORNEY GENERAL OF CANADA
Applicant
and
SAM LÉVY ET ASSOCIÉS INC., Trustee in Bankruptcy
and
SAMUEL S. LÉVY, Trustee in Bankruptcy
Respondents
REASONS FOR ORDER AND ORDER
[1] This is an application under subsection 18.1(4) of the Federal Courts Act, R.S.C. 1985, c. F-7, for judicial review of a decision of a disciplinary administrative tribunal, by a delegate of the Superintendent in Bankruptcy (the Delegate), dated May 4, 2004. In that decision, the Delegate granted a stay of proceedings pending a decision of the Federal Court on the applications for judicial review in dockets T-2473-03 and T-75-04.
ISSUES
[2] The issues are the following:
1. Did the Delegate have authority to stay the disciplinary proceeding he was conducting pending the result of judicial review proceedings in this Court challenging the constitutional validity of provisions of the enabling legislation?
2. If the Delegate had this authority, should he nevertheless have refused to stay the proceeding?
[3] For the following reasons, my answer is positive to the first question and negative to the second. Accordingly, I will dismiss this application for judicial review.
FACTUAL CONTEXT
[4] In August 2001, the respondents were given notice of a disciplinary hearing under sections 14.01 and 14.02 of the Bankruptcy and Insolvency Act (Act). This disciplinary hearing was scheduled for a five-week period, from September 29 to October 30, 2003.
[5] On July 28, 2003, about two months before the scheduled date for the commencement of the disciplinary hearing, the respondents asked the Delegate to postpone the hearing on the ground that the Quebec Court of Appeal had reserved judgment in Métivier v. Mayrand, [2003] R.J.Q. 3035 (Que. C.A.) (Métivier). In that case, the trustee Métivier was arguing that sections 14.01 and 14.02 of the Act were inconsistent with paragraph 2(e) of the Canadian Bill of Rights (the Bill of Rights).
[6] By a decision dated July 28, 2003, the Delegate granted the respondent's request and scheduled the hearing for November 11, 2003.
[7] On October 30, 2003, the Quebec Court of Appeal issued its judgment in Metivier and held that sections 14.01 and 14.02 of the Act were consistent with paragraph 2(e) of theBill of Rights.
[8] A few days before the hearing, the respondents filed a number of preliminary motions with the Delegate, including a motion to have sections 14.01, 14.02 and 14.03 of the Act declared of no force or effect in view of section 7 of the Canadian Charter of Rights and Freedoms (the Charter) and paragraphs 1(a) and 2(e) of the Bill of Rights, notwithstanding the decision of the Quebec Court of Appeal in Métivier.
[9] The applicant challenged the Delegate's authority to decide such a motion. However, in a decision issued on December 4, 2003, the Delegate found that he had jurisdiction to rule on the issues raised by this motion. The applicant filed an application for judicial review of this decision in docket T-2473-03. On February 3, 2005, my colleague Mr. Justice Martineau dismissed this application (2005 FC 171).
[10] The Delegate heard the respondents' motion on the constitutional issues on December 10 and 11, 2003, and dismissed it on December 19, 2003. This decision is attacked by the respondents by way of judicial review in docket T-75-04 and is to be determined shortly.
[11] On April 30, 2004, the senior analyst asked the Delegate to schedule the disciplinary hearing. The respondents challenged this request and asked the Delegate to stay the disciplinary hearing until this Court had ruled on the applications for judicial review in dockets T-2473-03 and T-75-04.
[12] By a decision dated May 4, 2004, the Delegate allowed the respondents' request for a stay of proceedings. It is this decision that is the subject matter of the present judicial review.
IMPUGNED DECISION
[13] The Delegate concluded that it was preferable to stay the disciplinary hearing until the constitutional questions were determined by the Federal Court. Although the Delegate was of the opinion that this case had been open for a long time, he thought the balance of convenience favoured the respondents since the questions raised were important and had already been argued in the courts in Quebec and Ontario. The disciplinary hearing was scheduled to last for five weeks. In his view, the stay was within his case management authority. If the respondents were ultimately successful in the Federal Court, he thought, a serious injustice would have been done to them in terms of time and money by proceeding with the disciplinary hearing.
ANALYSIS
1. Did the Delegate have authority to stay the disciplinary proceeding he was conducting pending the result of judicial review proceedings in this Court challenging the constitutional validity of provisions of the enabling legislation?
Standard of review
[14] Reflecting the tests laid down by the Supreme Court of Canada in Dr. Q. v. College of Physicians and Surgeons of British Columbia, [2003] 1 S.C.R. 226, a pragmatic and functional approach is to be taken in determining the appropriate standard of review. Four factors must be examined:
1. Is there a privative clause or a right of appeal;
2. The tribunal's expertise;
3. The purpose of the legislation as a whole and the particular provision;
4. The nature of the question.
Privative clause or right of appeal
[15] In the case at bar, there is no privative clause and a right of appeal is provided in subsection 14.02(5). This indicates a relatively exacting standard of review.
Tribunal's expertise
[16] The Act gives the Superintendent the power to issue trustee licences (paragraph 5(3)(a) of the Act), to issue directives concerning the practice of the trustees (paragraph 5(4)(b) of the Act) and to conduct investigations into their conduct (paragraph 5(3)(e) of the Act). In some circumstances, he may also suspend or cancel a licence after giving the trustee in question an opportunity to be heard (subsections 13.2(5) and 14.01(1) of the Act). He may even take conservatory measures in regard to certain estates where he believes that they must be protected (section 14.03 of the Act).
[17] The Delegate conducts the trustee disciplinary hearing under the aegis of the Act and not of another professional body. He must assess the credibility of the witnesses and the conduct of the trustee and apply his knowledge of the administration of the Act in determining whether or not there is an offence. This requires some specialized skills. He must have solid experience in a specific field. This factor militates in favour of considerable deference.
Purpose of the legislation as a whole and the particular provision
[18] The Act gives the Superintendent the power to review the administration of trustees' affairs and estates. It allows him to take administrative and conservatory measures for the protection of the public. This factor suggests greater deference by the reviewing court (Dr. Q., supra, paragraph 31).
Nature of the question
[19] Depending on the question raised, any one of the three known standards of review may apply: correctness, reasonableness simpliciter or patent unreasonableness. For example, if the tribunal has to interpret legislation that is outside its field of expertise, the standard is correctness. On the other hand, if it is a question of mixed law and fact, the standard is reasonableness simpliciter. Finally, the standard is patent unreasonableness where a question of fact has been raised.
[20] The applicant argues that the Delegate's decision to stay the proceeding pending a decision on the constitutional questions by the Federal Court raises a jurisdictional question. The respondents, on the other hand, submit that it is a purely factual question, involving a consideration of purely material factors. My own opinion is that it is a question of mixed law and fact.
[21] Taking into account the four factors, I conclude that the applicable standard of review is reasonableness simpliciter.
[22] The applicant does not dispute the fact that an administrative tribunal, such as the Superintendent's Delegate, is master of its own procedure and may grant adjournments for the purpose of ensuring the proper functioning of the proceeding and procedural fairness. For example, the applicant does not dispute the Delegate's authority to adjourn the hearing of a case in order to adhere to the principles of natural justice (e.g., a party, witness or counsel might be ill). However, he does dispute the Delegate's authority to stay a hearing.
[23] In support of his argument, the applicant cites the doctrine that in some circumstances a stay of proceedings pending the result of a civil proceeding is contrary to the duty to act expeditiously. Referring to the case law, he argues that acting in this way amounts to deciding not to decide, and thus declining to exercise his jurisdiction.
[24] He cites in particular Anheuser-Busch, Inc. v. Carling O'Keefe Breweries of Canada Limited and Registrar of Trade-Marks, [1983] 2 F.C. 71, in which the Federal Court of Appeal held that the Registrar of Trade-marks did not have jurisdiction to stay the proceeding pending the outcome of a decision in the Federal Court. In that case, the Registrar's powers were set out in section 44 of the Trade-marks Act (now section 45). I reproduce this section as well as section 14.02 of the Act for purposes of comparison:
| OLD SECTION 44 (now section 45) of the Trade-Marks Act
44. (1) The Registrar may at any time and, at the written request made after three years from the date of the registration of a trade-mark by any person who pays the prescribed fee shall, unless the Registrar sees good reason to the contrary, give notice to the registered owner of the trade-mark requiring the registered owner to furnish within three months an affidavit or a statutory declaration showing, with respect to each of the wares or services specified in the registration, whether the trade-mark was in use in Canada at any time during the three year period immediately preceding the date of the notice and, if not, the date when it was last so in use and the reason for the absence of such use since that date. |
|
ANCIEN ARTICLE 44 (aujourd'hui l'article 45) de la Loi sur les marques de commerce
|
|
|
|
|
| 44.(1) Le registraire peut, à tout moment, et doit, sur la demande écrite présentée après trois années à compter de la date de l'enregistrement par une personne qui verse les droits prescrits, à moins qu'il ne voie une raison valable à l'effet contraire, donner au propriétaire inscrit un avis lui enjoignant de fournir, dans les trois mois, un affidavit ou une déclaration statutaire indiquant, à l'égard de chacune des marchandises ou de chacun des services que spécifie l'enregistrement, si la marque de commerce est employée au Canada et, dans la négative, la date où elle a été ainsi employée en dernier lieu et la raison de son défaut d'emploi depuis cette date.(2) The Registrar shall not receive any evidence other than the affidavit or statutory declaration, but may hear representations made by or on behalf of the registered owner of the trade-mark or by or on behalf of the person at whose request the notice was given. |
|
(2) Le registraire ne doit recevoir aucune preuve autre que cet affidavit ou cette déclaration statutaire, mais il peut entendre des représentations faites par ou pour le propriétaire inscrit de la marque de commerce, ou par ou pour la personne à la demande de qui l'avis a été donné. |
|
|
|
|
| (3) Where, by reason of the evidence furnished to the Registrar or the failure to furnish any evidence, it appears to the Registrar that a trade-mark, either with respect to all of the wares or services specified in the registration or with respect to any of those wares or services, was not used in Canada at any time during the three year period immediately preceding the date of the notice and that the absence of use has not been due to special circumstances that excuse the absence of use, the registration of the trade-mark is liable to be expunged or amended accordingly. |
|
(3) Lorsqu'il apparaît au registraire, en raison de la preuve à lui fournie ou de l'omission de fournir une telle preuve, que la marque de commerce, soit à l'égard de la totalité des marchandises ou services spécifiés dans l'enregistrement, soit à l'égard de l'une quelconque de ces marchandises ou de l'un quelconque de ces services, n'est pas employée au Canada, et que le défaut d'emploi n'a pas été attribuable à des circonstances spéciales qui le justifient, l'enregistrement de cette marque de commerce est susceptible de radiation ou modification en conséquence. |
|
|
|
|
| (4) When the Registrar reaches a decision whether or not the registration of a trade-mark ought to be expunged or amended, he shall give notice of his decision with the reasons therefor to the registered owner of the trade-mark and to the person at whose request the notice referred to in subsection (1) was given. |
|
(4) Lorsque le registraire en arrive à une décision sur la question de savoir s'il y a lieu ou non de radier ou de modifier l'enregistrement de la marque de commerce, il doit notifier sa décision, avec les motifs pertinents, au propriétaire inscrit de la marque de commerce et à la personne à la demande de qui l'avis a été donné. |
|
|
|
|
| (5) The Registrar shall act in accordance with his decision if no appeal therefrom is taken within the time limited by this Act or, if an appeal is taken, shall act in accordance with the final judgment given in the appeal.
***** |
|
(5) Le registraire doit agir en conformité de sa décision si aucun appel n'en est interjeté dans le délai prévu par la présente loi ou, si un appel est interjeté, il doit agir en conformité du jugement définitif rendu dans cet appel.
***** |
|
|
|
|
| SECTION 14.02
Notice of proposed decision to trustee 14.02 (1) Where the Superintendent intends to exercise any of the powers referred to in subsection 14.01(1), the Superintendent shall send the trustee written notice of the powers that the Superintendent intends to exercise and the reasons therefor and afford the trustee a reasonable opportunity for a hearing. |
|
ARTICLE 14.02
Avis au syndic 14.02 (1) Lorsqu'il se propose de prendre l'une des mesures visées au paragraphe 14.01(1), le surintendant envoie au syndic un avis écrit et motivé de la mesure qu'il entend prendre et lui donne la possibilité de se faire entendre. |
|
|
|
|
| Procedure at hearing (2) At a hearing referred to in subsection (1), the Superintendent |
|
Procédure de l'audition (2) Lors de l'audition, le surintendant : |
|
|
|
|
| (a) has the power to administer oaths; |
|
a) peut faire prêter serment; |
|
|
|
|
| (b) is not bound by any legal or technical rules of evidence in conducting the hearing; |
|
|
|
|
|
|
| b) n'est lié par aucune règle juridique ou procédurale en matière de preuve;(c) shall deal with the matters set out in the notice of the hearing as informally and expeditiously as the circumstances and a consideration of fairness permit; and |
|
c) règle les questions exposées dans l'avis d'audition avec célérité et sans formalisme, eu égard aux circonstances et à l'équité; |
|
|
|
|
| (d) shall cause a summary of any oral evidence to be made in writing. |
|
d) fait établir un résumé écrit de toute preuve orale. |
|
|
|
|
| Record (3) The notice referred to in subsection (1) and, where applicable, the summary of oral evidence referred to in paragraph (2)(d), together with such documentary evidence as the Superintendent receives in evidence, form the record of the hearing and the record and the hearing are public, unless the Superintendent is satisfied that personal or other matters that may be disclosed are of such a nature that the desirability of avoiding public disclosure of those matters, in the interest of a third party or in the public interest, outweighs the desirability of the access by the public to information about those matters. |
|
Dossier et audition (3) L'audition et le dossier de l'audition sont publics à moins que le surintendant ne juge que la nature des révélations possibles sur des questions personnelles ou autres est telle que, en l'espèce, l'intérêt d'un tiers ou l'intérêt public l'emporte sur le droit du public à l'information. Le dossier de l'audition comprend l'avis prévu au paragraphe (1), le résumé de la preuve orale visé à l'alinéa (2)d) et la preuve documentaire reçue par le surintendant. |
|
|
|
|
| Decision (4) The decision of the Superintendent after a hearing referred to in subsection (1), together with the reasons therefor, shall be given in writing to the trustee not later than three months after the conclusion of the hearing, and is public. |
|
Décision (4) La décision du surintendant est rendue par écrit, motivée et remise au syndic dans les trois mois suivant la clôture de l'audition, et elle est publique. |
|
|
|
|
| Review by Federal Court (5) A decision of the Superintendent given pursuant to subsection (4) is deemed to be a decision of a federal board, commission or other tribunal that may be reviewed and set aside pursuant to the Federal Courts Act. |
|
Examen de la Cour fédérale (5) La décision du surintendant, rendue et remise conformément au paragraphe (4), est assimilée à celle d'un office fédéral et comme telle est soumise au pouvoir d'examen et d'annulation prévu à la Loi sur les Cours fédérales. |
|
|
|
|
[25] In my opinion, the provisions of section 44 are much more coercive than those in subsection 14.02(2), with the use of the word "shall" in several places. Under section 44, the Registrar shall follow the steps - it is a very precise process; while in subsection 14.02(2), there is nothing of the sort. In fact, the Delegate is granted much greater discretion and latitude than the Registrar.
[26] The respondents argue that in paragraph 14.02(2)(c) of the Act, the words "shall deal with the matters set out..." explicitly give the Delegate the power to stay the disciplinary hearing. If the Court were to find that there are no explicit powers, the respondents argue, the Delegate has implicit authority to do what he did. Since the Delegate has the power to suspend or cancel a trustee's licence, he may certainly stay the disciplinary hearing.
[27] I am of the opinion that the parameters of paragraph 14.02(2)(c) give the Delegate the authority to stay the proceeding taking into account the circumstances and considerations of fairness. Of course, he proceeds expeditiously and informally, but he has the power to adjourn or stay the proceeding depending on the particular circumstances of each case.
[28] I also agree with the respondents' argument that if the Delegate can rule on constitutional questions, he must surely have the power to postpone hearings (stay proceedings). My colleague Mr. Justice Martineau, at paragraph 23 of his decision of February 3, 2005 between the same parties (2005 FC 171), expressed the following view of the tribunal's power to rule on the constitutional validity of the statutory provisions at issue:
For the reasons set out above, I am of the opinion, therefore, that the tribunal has jurisdiction to determine any question of law arising from the application of the statutory provisions at issue. Consequently, the tribunal is presumed to have the concomitant power to rule on the constitutional validity of the provisions of its enabling legislation. Furthermore, in my opinion, there is no provision in the Act that overturns this presumption. Thus the tribunal has the power to rule on the constitutional validity of the provisions at issue. [Emphasis in original]
[29] To conclude on this question, in my view the Delegate could stay the proceeding until the Federal Court had ruled on the two applications for judicial review.
2. If the Delegate had this authority, should he nevertheless have refused to stay the proceeding?
[30] The applicable tests for deciding whether to grant a stay of proceedings were developed in Manitoba (Attorney General) v. Metropolitan Stores Ltd., [1987] 1 S.C.R. 110 and RJR-Macdonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311:
1. there must be a serious question to be tried;
2. the applicant must establish that he will suffer irreparable harm if the relief is denied him; and
3. an assessment of the balance of convenience.
The first test is a preliminary and tentative assessment of the merits of the case. The traditional way consists in asking whether the litigant who seeks the interlocutory injunction can make out a prima facie case. A more recent formulation holds that all that is necessary is to satisfy the court that there is a serious question to be tried as opposed to a frivolous or vexatious claim. The "serious question" test is sufficient in a case involving the constitutional challenge of a law where the public interest must be taken into consideration in the balance of convenience. The second test addresses the question of irreparable harm. The third test, called the balance of convenience, is a determination of which of the two parties will suffer the greater harm from the grant or refusal of an interlocutory injunction, pending a decision on the merits. (Manitoba (Attorney General) v. Metropolitan Stores Ltd., [1987] 1 S.C.R. 110)
(a) Serious question to be tried
[31] The applicant argues that the proceeding raises no serious question since the Quebec Court of Appeal, in Métivier, has already held that sections 14.01 and 14.02 of the Act are consistent with the Bill of Rights.
[32] The respondents, for their part, argue that the question is serious since it bears directly on the powers of the Delegate. The question pending in the Federal Court concerns the constitutional validity of the sections in question. This goes to the very heart of the Delegate's jurisdiction.
[33] As was said in Metropolitan Stores, supra, constitutional questions are serious questions. Consequently, I am of the opinion that the questions raised support the respondents' argument on the first test.
(b) Irreparable harm
[34] The applicant contends that the respondents have failed to demonstrate that they would suffer irreparable harm should the disciplinary proceeding continue. The respondents say that not only would they lose time and money in the preparation and five-week hearing, but they might have their licence suspended or cancelled. In R.J.R.-Macdonald, supra, the word "irreparable" was defined at paragraph 59:
"Irreparable" refers to the nature of the harm suffered rather than its magnitude. It is harm which either cannot be quantified in monetary terms or which cannot be cured, usually because one party cannot collect damages from the other. Examples of the former include instances where one party will be put out of business by the court's decision.... [Emphasis added]
[35] In my opinion, the respondents meet this test since they might be put out of business by the cancellation or suspension of their licence.
(c) Balance of convenience
[36] Weighing the inconvenience of a stay of the hearing for the parties, I think the greater inconvenience is to the respondents.
[37] In Metropolitan Stores, supra, the Supreme Court of Canada states that when a legislative provision is challenged, the public interest must be taken into consideration. The Court's analysis should not be restricted to the application of traditional criteria which govern the granting or refusal of stays in civil cases.
[38] The applicant argues that the stay of the hearing would cause irreparable harm to the public interest and that it should be set aside. He quotes the remarks of Beetz J. in Metropolitan Stores, supra, at paragraphs 55 and 56:
Whether or not they are ultimately held to be constitutional, the laws which litigants seek to suspend or from which they seek to be exempted by way of interlocutory injunctive relief have been enacted by democratically-elected legislatures and are generally passed for the common good, for instance: the providing and financing of public services such as educational services, or of public utilities such as electricity, the protection of public health, natural resources and the environment, the repression of what is considered to be criminal activity, the controlling of economic activity such as the containing of inflation, the regulation of labour relations, etc. It seems axiomatic that the granting of interlocutory injunctive relief in most suspension cases and, up to a point, as will be seen later, in quite a few exemption cases, is susceptible temporarily to frustrate the pursuit of the common good.
While respect for the Constitution must remain paramount, the question then arises whether it is equitable and just to deprive the public, or important sectors thereof, from the protection and advantages of impugned legislation, the invalidity of which is merely uncertain, unless the public interest is taken into consideration in the balance of convenience and is given the weight it deserves. As could be expected, the courts have generally answered this question in the negative. In looking at the balance of convenience, they have found it necessary to rise above the interests of private litigants up to the level of the public interest, and, in cases involving interlocutory injunctions directed at statutory authorities, they have correctly held it is erroneous to deal with these authorities as if they have any interest distinct from that of the public to which they owe the duties imposed upon them by statute. [Emphasis added]
[39] In my opinion, it is important to distinguish between legislation designed to protect a public interest such as health, education, and public services, and legislation addressed to a clearly defined sector such as the Act at issue here. A procedure has specifically been set up to discipline trustees who breach their obligations. So it must be asked whether the public interest was considered by the Delegate when he decided to grant the stay. Here is how he expressed himself, at page 4 of his decision:
... In the case now before me, the Respondents have been enjoined by the Superintendent from taking new cases. This order remains in effect, and their practice is therefore restricted to the completion of cases now on hand. Furthermore, even this right is subject to certain conservatory measures, including the necessity to have an official cosign all cheques issued by the trustees. The public is therefore protected, and this removes some of the urgency. Nor can I overlook the fact, as was argued before me, that preparation for the hearing on the merits, as well as the hearing itself, would not only be time consuming but also very costly, and not just for the Respondents. [Emphasis added]
[40] I am satisfied that the public interest was considered and assessed by the Delegate as part of the balance of convenience. The conservatory measures are still in effect. The respondents are fettered and no longer authorized to open new files. They must obtain a co-signature in order to issue cheques. I agree with the Delegate, therefore, that there is less urgency to proceed with the hearing of the disciplinary investigation.
[41] That being said, I am of the opinion that the Delegate did not commit any reviewable error in his application of the three tests underlying the stay. Consequently, this application for judicial review is dismissed with costs to the respondents.
ORDER
THE COURT ORDERS that the application for judicial review be dismissed with costs to the respondents.
"Michel Beaudry"
Judge
Certified true translation
Peter Douglas
FEDERAL COURT
SOLICITORS OF RECORD
DOCKET: T-1069-04
STYLE OF CAUSE: ATTORNEY GENERAL OF CANADA
and
SAM LÉVY ET ASSOCIÉS INC., Trustee in Bankruptcy and
SAMUEL S. LÉVY, Trustee in Bankruptcy
PLACE OF HEARING: Québec, Quebec
DATE OF HEARING: December 15, 2004
REASONS FOR ORDER
AND ORDER: Beaudry J.
DATE OF REASONS: February 10, 2005
APPEARANCES:
Bernard Letarte FOR THE APPLICANT
Daniel Des Aulniers FOR THE RESPONDENTS
SOLICITORS OF RECORD:
John H. Sims, Q.C. FOR THE APPLICANT
Deputy Attorney General
of Canada
Ottawa, Ontario
Grondin, Poudrier, Bernier FOR THE RESPONDENTS
Québec, Quebec